Risk Tolerance and Risk Propensity - Assignment Example

WORKSHOP ANSWERS STUDENT’S NAME: INSTITUTION: INSTRUCTOR’S NAME: DATE: Week 5 1. Use of nonverbal behaviors in communication Guerrero (2005) explains that in our day to day life, communication is an important aspect of ensuring that people understand each other by passing information from one place to another. However, there is one case whereby we stop using the verbal aspect in communication and opt for the nonverbal. The nonverbal aspect happens in many scenarios where the verbal is not applicable. We, therefore, use non-verbal in order to express emotions and also where the audience feels that the message being communicated verbally is untrustworthy. Another situation of using is when dealing with human relations where one cannot conclude what could be wrong, it is; therefore, appropriate to use gestures, touches and facial emotions. Understanding the impact of these nonverbal gestures of the culture of different people is, therefore, important before communicating the intended message (Feldstein 2013). 2. Risk tolerance and Risk propensity Risk tolerance is an important aspect when it comes to people managing their financial issues and their investments. The psychometric risk tolerance used around the world with different language pot rays the difference in risk tolerance among people. It defines the trends used by both men and women in managing risk. There is a sex difference in risk tolerance and also it has been analyzed that cultural factors determine the rate of risk tolerance (Yoe, 2011). When making decisions it is important to consider the risk as a factor in the aspect of uncertainty. The nature of risk propensity stipulates that the risk propensity is an individual trait which contributes towards an individual view of risk-averse and risk-seeking nature. The ability of an individual to be risk tolerant contributes towards the state of handling risk propensity. Risk propensity helps in decision making because it enables one to decide on whether to avoid the risk or face it and handle the consequences (Noyes, 2012). 3. Negotiations with German When negotiating with the Germans, I expect to have an idea that the Germans operate under appointments that are scheduled in advance and, therefore, it is important to book an appointment so as to negotiate (Moore, 2010). I also expect to use fluent English in the negotiation process because Germans use English when negotiating professional matters. Aside from fluent English I also expect that the Germans are presentable and that I should also be presentable with the use of good communication skills. Germans are also ambitious and, therefore, it is important to be able to tackle their nature by answering all the questions they ask in a more professional manner. Germans endorse their negotiations through a handshake and they also respect the opinions of their superiors. They also do not rush into a conclusion, but instead they rely on thorough research of the issue before reaching a conclusion (Smyser, 2003). Week 6 1. Merits of entry strategies Exporting The export products are manufactured in the country, thus there will be no issues associated with overseas It provides an opportunity for the exporting country to learn the foreign markets It helps the exporting country to avoid risks that are associated with operating in a foreign country. Turnkey projects Turnkey projects are good because they allow countries who export to pass their know-how to other countries (Limbersky, 2008). It also helps the country to earn higher returns from exchanging the technical know-how Wholly owned subsidiaries They have a tight control on the technical know-how and, therefore, they will not pass it to other foreign countries. They are the best in technology because they have the know-how and, therefore, the country that requires their technical competence will have to seek the wholly owned subsidiaries. They are best in controlling operations and, therefore, when a firm needs to transact globally, they will rely on the wholly owned subsidiaries because they will monitor and control economic operations (Peng, 2008). 2. Opportunities and threats Opportunities There is an opportunity of earning foreign exchange which will improve the returns of the firm that goes for global operations There is an opportunity to use capacities and, therefore, it is a way of avoiding competition of the domestic markets. The firm will also be able to withstand market fluctuations because their operations are wide and not centrally located. There is also another opportunity of penetrating deeper into the foreign markets and, therefore, the ability to acquire new business ideas and strategies (Schaffer, 2011). Threats There is a threat of corruption upon operating globally because the firm is dealing with competition all over the world. Other markets globally have a basis of corruption. Terrorism is another threat that has placed many international businesses at the risk of having their operations being affected by terror attacks. Fraud is also another threat facing firms that have invested globally, this comes in the form of insecurity around the foreign countries that will place the firm at risk (Bailey, 2002). 3. Entry strategy for culturally closed market The Koreans drive cars made in their country because it has a closed entry of other business to their country (Rohn, 2009). This is based on the culture and also the fact that they are able to manufacture their own products without many dependants on imports. Their entry into the market is limited by the fact that they consume their own manufactured products. The main strategy of market entry into this culturally-closed market is to understand their culture and their political strengths. This will help other countries to plan on how to influence their culture towards embracing other cultures and therefore accepting to conduct international trade with them. The political strength will also aid in evaluating the aspects that form the government and whether there is an opportunity for international trade (Neubert, 2013). Week 7 1. Mergers There is an increase in the number of mergers in different industries because of the complementary businesses they operate; this will enable the industries to help each other. Industries that are merged have a great opportunity towards globalization because they can combine their efforts and decide to operate their business globally. Let’s take an example of an insurance company that merges with a bank, this occurs because they deal with the same customers in the form of services they provide. Therefore, the firms can merge even though they do not have complementary product and service provisions. There are also a great number of industries merging together because of the believe that merging will result in the formation of a large company which will be multipurpose and, therefore, the industries that merged will each have an opportunity to use the large company that is formed (Nerver, 1969). 2. Sources of incompatibility in cross-border alliances Incompatibility in cross-border alliances occurs when one company is more powerful than the other, this will result to draining of the powerful company and it will result to incompatibility. Inequality in financial control is another source that results in incompatibility, therefore, one company will feel they are denied the power to control finance (Tamer, 2012). Another source is the expectations of the alliances, this occurs when both the companies have more and different expectations; this will lead to incompatibility because one company will want their expectations to be met before the other one. When there is even split of ownership among the alliances it will be successful in its operations because they will feel a sense of financial belonging and, therefore, effective management. Cross-border alliances always succeed when there is the willingness to work beyond the expectations of both the companies. Equality in power is another strategy to avoid incompatibility and it is achieved when companies at the same lever form an alliance (Shuler, 2004). 3. Effect of national culture on strategic implementation When there is an unstable national culture, the strategic implementation process will be affected because the company will have to dissolve the strategies and form new strategies that will fit the national culture. Some national cultures do not accept any business operations, especially when it is believed that the intention of the business will affect their culture (Donald, 2013). National cultures form the external environment of the business and, therefore, they stipulate the rules and policies of operating in the nation. Mittal Steel has managed to overcome the variables caused by national culture on strategic implementation by developing strategy's assumptions. These assumptions help the company to succeed in the strategic implementation because the business will operate under these assumptions. The assumptions are based on the national culture and the future variation in the culture, therefore, the strategic implementation can be achieved when these assumptions are predicted (Jochanan, 2009). Week 8 1. Need for MNC “be global and act local” Multinational Corporation needs to be global and act local because of the fact that they base their operations in their local countries; they, therefore, need a strong strategy to enable them to maintain the local markets because these markets are the basis of the global markets. The decisions made in the local markets affect the global markets, therefore, the need to remain local and be global at the same time (Walter, 2008). They should also act locally so as to keep in phase with the local competition and thus enabling them to prosper globally. They should also act locally so as to maintain their image internationally since they will be audited basing on the development they have brought in their local firms. They also need to act locally by providing employment and developing their local countries economically, this will act as an example in the global level (Cooke, 2003). 2. Suggestions for restructuring of the firm As an international manager, I would suggest restructuring of the firm when there is are changes in the nature of businesses such that these changes are likely to cause a negative impact to the position of the firm (Vance, 2009). Another suggestion is to update the management of the firm, this occurs through the fact that the changing business environment results to changes in management operations, which require the restructuring of the firm to fit the updated managerial operations. Changes in technology are also another reason for the need to restructure the firm; this is done so that the firm can keep in phase with the competing markets while being advanced technologically. Direct monitoring should be done through supervision of the firm operations to ensure complete implementation. Indirect monitoring should be done through designing control measure that will enable the subordinates to be responsible in their duties (Donaldison, 1994). 3. Transnational organization Transnational organization is a combination of companies that are formed with the aim of achieving global efficiency, being responsible nationally, developing the knowledge and exploitation. Companies operate internationally as multi-domestic and, therefore, providing a chance of high freedom of entry into their markets while controlling their decisions (Barlett, 2002). Due to the involvement of transnational organization, many multinational companies are moving towards embracing transnational. This means that there will be more opportunities, especially hiring of more professionals to work in the multinational sector, it is a privilege because, at some certain point, I will have the opportunity to work there. This will be an opportunity because it will expand my career specialization by exposing me to the multinational ideas. It will also sharpen my professional skills since I will be able to interact with people globally and hence the ability to share meaningful business ideas. It is a great feeling to work in a multinational company. Week 9 1. Role of HRM It is obvious that the role of human resource manager is to deal with the employees in the organization. Their role becomes more and more complex depending on the level of business such that, in large organizations, their role is complex because they have to address all the employees and manage their issues (Barney, 1997). The performance of the employees is highly dependent on the ability of human resources manager to deliver appropriate skills. HRM is an important department in any organization because we all know that the success of the organization depends on the morale of employees and therefore HRM is responsible for ensuring employees’ performances. When it comes to the international context, the role of HRM becomes more complex because they have to deal with employees from different dimensions and, therefore, it is complex to design a strategy of managing employees who have different opinions due to their diverse nature (Mark, 2003). 2. Common causes of expatriate failure Family stress; this is one of the common causes of the managers failing to deliver their competence and skills. This is caused by the family stress, which will put pressure on the newly posted manager and, therefore, his managerial skills will be impaired (Early, 2003). Inflexibility in culture; when the managers are posted to another country, they will find it hard to adapt to the culture because they are not flexible; this causes expatriate failure because the manager will take time in adjusting to a new culture. Emotional immaturity; when managers are posted to international places of jobs, they tend to find it difficult to handle international demands of employees. This is because they are used to handling small scale based business which did not expose them to be mature emotionally and have the knowledge on handling large number of people (Menipaz, 2011). Overload in responsibilities is also another contribution of expatriate failure. 3. What it takes to make a good expatriate Yes, I have what it takes to be a good expatriate because I believe I have good skills and competence together with the experience of working in a multinational company. Being a good expatriate entails one’s ability to be able to easily adapt to any environment and being able to handle the pressure resulting from working with people from different diversities. My strengths include the ability to adapt to different environmental conditions. I am also flexible when it comes to adjusting to new working conditions, this will help me in handling subordinates from different diversities and being able to understand their culture. I am also good in adjusting to the culture of any environment. The aspects that need improvement to avoid expatriate failure are such issues as enabling application for leave so that one can be able to relax, motivating by providing hardship allowance. Reference Bailey, A. (2002). Risky business:corruption,fraud,terrorism & other threats to global business. Kogan page. Barlett, C. (2002). Managing Across borders: The transnational solution. Harvard business press. Barney, e. a. (1997). On becoming a strategic partner: the role of human resource in gaining a competitive advantage. Centre of advanced human resource studies. Colin, S. (2005). Organizational psychology in cross cultural perspective. NYU Press. Cooke, W. (2003). Multinational companies and global Human Resources Strategies. 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How Germans negotiate: Logical goals,practical solutions. US Institute of peace press. Vance, D. (2009). Corporate Restructuring: from cause analysis to execution. Springer. Walter, A. (2008). Analyzing the global political economy. Princeton University press. Yoe, C. (2011). Principles of risk analysis: Decision making under uncertainity. CRC Press. Read More