Running head: MANAGING IN GLOBAL ENVIRONMENT
1
Managing in Global Environment
Country Study
8/27/2017
Lei Zhang
Introduction
The decision for any business to expand internationally should be handled carefully.
Before deciding on the country to expand to, the business needs to conduct a research in
order to ensure that they benefit from the expansion while safeguarding its investment. The
business should also ensure that it has built a solid foundation in its home country before
expanding to any other country (Verbeke, 2013). The timing for the expansion is also very
key in ensuring the success of the expansion exercise. Macy's is one of the world's leading
store that sells fashion clothing and accessories for both men and women and is looking to
expand internationally.
Economic
The company has been having plans of expanding to the African market and the
country suggested is South Africa. The GDP Per capita for the country in the year 2016 was
estimated to be $13, 500 while the GDP for the real growth rate was estimated to be 0.5% in
the year 2016. The unemployment rate is estimated to be 26%. The labor force of the country
by occupation is estimated to be 71.9% for the service sector as per the year 2014 (CIA,
2014). South Africa also had commodities imports estimated to be $85.03 billion while those
of partners were for the US was 7.1%. The country also had exports of $83.16 billion for the
US partners the export was 7.6%. Industries within the country have been growing at a rate of
1% per year (Baker & Phillips, 2014).
MANAGING IN GLOBAL ENVIRONMENT
2
Geographic
The country is full of natural resources like gold, gem diamonds and copper among
others. It is also easy to access raw materials within the country or import from neighboring
countries at affordable rates. The climate is mostly semi-arid with sunny days and cool
nights. The land is the country is mostly agricultural with very little forest cover (CIA, 2014).
Natural hazards within the country are prolonged droughts and volcanism. The current
environmental issues facing the country relate to the lack of arterial rivers leading to water
shortages due to limited supply and pollution.
Political- Legal
South Africa is a parliamentary type of republic whose leaders are chosen in elections
held after five years. The country has been stable politically although there have been
controversies linked to the current president. A foreign company that wants to invest in the
country should be registered in the country within 21 days and it should also register at the
tax office. The company must also acquire approval under the exchange control regulations.
Labor and employment law must be adhered to by any foreign company that invests in the
country. Foreign companies within the country get support from the Department of Trade
and Industry that has various incentives. The payment of tax is determined by whether the
company is regarded as a resident or non-resident.
Summary
Since South Africa is one of the most developed countries in the African continent,
the choice by Macy's to expand in this country will benefit it greatly. The country alone
accounts for close to 49% of the entire continents industrial output and close to 25% of the
continents GDP. Based on this, the business will be able to break even and make profits
should it expand to the country (Baker & Phillips, 2014). The country’s economy has also
been growing steadily in the recent years and it has also been strengthened by improved
MANAGING IN GLOBAL ENVIRONMENT
3
domestic expenditure. The country also has one of the most modern and extensive transport
infrastructure which makes transportation easy. Some of the challenges that the business
might experience when it expands to South Africa is one to do cases of political instability
and strikes. Even though these have reduced in the recent past, it is important for the
company to be prepared. There are also a number of regulatory factors that affect foreign
companies negatively (Baker & Phillips, 2014). The company will also need to come up with
ways of dealing with a mature and competitive market. Water scarcity also remains to be one
of the challenges that most businesses face due to insufficient water supply. When all factors
have been considered I would recommend that the expansion is to be done in South Africa.
MANAGING IN GLOBAL ENVIRONMENT
4
References
Baker, L., Newell, P., & Phillips, J. (2014). The political economy of energy transitions: The
case of South Africa. New Political Economy, 19(6), 791-818.
CIA, C. (2014). CIA World Factbook. Washington, DC: United States Central Intelligence
Agency (CIA).
Verbeke, A. (2013). International business strategy. Cambridge University Press.
Running head: INTERNATIONAL STRATEGY
1
Managing in a global environment
9/24/2017
Introduction
Macy’s is seeking to venture into a new country and thus should come up with a good
international strategy and organizational structure. These will be the key determinants of
Macy’s success as it ventures into South Africa. It is worth noting that Macy’s has also taken
a wise step to research on South Africa before it expands to the country. With information
from this research, it is going to be easier to come up with an international strategy as well as
an organizational structure for Macy’s. The strategy and structure should be those that will
ensure that Macy’s gets optimum results in its venture but also secure its investments at the
same time.
International Strategy
Currently, Macy's has a store in the United States, Hawaii and Puerto Rico. It is
therefore not the first time for the company to expand. Macy’s also has a very reliable supply
and distribution chain that ensures all its store are constantly well stocked with the required
men and women’s clothing depending on the country. The international strategy used for
expansion can however not be the same as each country has different cultures, policies, and
preferences (Hitt, Li & Xu, 2016). There are three types of international strategies that can be
available to Macy's as it expands. The first is multi-domestic. Using this international strategy
will mean that Macy's will have to forego efficiency and instead focus on the consumers and
their specific needs (Hitt, Li & Xu, 2016). The second is a global strategy whereby Macy’s
will disregard the unique needs of the South Africans and instead focus on distributing the
same products it provides in other countries (Collis, 2014).
INTERNATIONAL STRATEGY
2
The final strategy and the one I strongly feel that Macy's should take up is the
transnational strategy. This is because Macy's will be able to combine the benefits of global
and multi-domestic strategies. With the transnational strategy, Macy's will be able to make
available the clothes it sells to other people in the world to South Africans and at the same
time, make available clothes that South African people prefer (Collis, 2014).
This strategy will make Macy’s venture successful for many reasons. The first is that
the consumers’ needs will be addressed. Since Macy’s will make available both customized
and also the general clothes, then they will accommodate a larger number of consumers and
in turn earn more (Collis, 2014). The consumers will also become repeat customers since they
can find what they like in the store.
Organizational Structure
The current organizational structure used by Macy's is the hierarchical structure. In
this case, it means that instructions always comes from the top to bottom and employees have
superiors. Macy's also uses the departmental structure because it has several divisions such as
the sales, marketing, and human resource department. The organizational structure that I
would recommend for Macy's to take up is the flatter organizational structure. This structure
lies between the hierarchical structure and the flat organizational structure (Ashkenas, Ulrich,
Jick & Kerr, 2015).
In the flatter structure, as much as there is still a hierarchy, there are fewer levels
(Ashkenas, Ulrich, Jick & Kerr, 2015). Employees can also communicate with their bosses as
well as collaborate with them (Ashkenas, Ulrich, Jick & Kerr, 2015). This increases the
chances of innovation and employee satisfaction. The flatter organizational structure will be
good for Macy's in its new venture because there is a need for innovation and optimum
productivity that will come from employee satisfaction. In terms of their organizational
INTERNATIONAL STRATEGY
3
culture, Macy's has an annual Thanksgiving day parade in New York. Macy's also sponsors
the annual 4th of July fireworks display.
Conclusion
Macy’s international expansion venture is most likely to be successful. This is
because of adequate preplanning in terms of research. The transnational strategy and the
flatter organizational structure will suit Macy’s goal to achieve optimum results. The two will
ensure that Macy’s get a huge customer base, be more innovative, increase productivity and
ultimately make a lot of profits. Macy will thus be able to have a smooth transition into South
Africa.
INTERNATIONAL STRATEGY
4
References
Ashkenas, R., Ulrich, D., Jick, T., & Kerr, S. (2015). The boundaryless organization:
Breaking the chains of organizational structure. John Wiley & Sons.
Collis, D. (2014). International strategy: Context, concepts, and implications. John Wiley &
Sons.
Hitt, M. A., Li, D., & Xu, K. (2016). International strategy: From local to global and
beyond. Journal of World Business, 51(1), 58-73.
Running head: MANAGING IN A GLOBAL ENVIRONMENT
1
Managing in a Global Environment
Socio-cultural Analysis
9/10/2017
Introduction
Expanding business to international countries can be quite challenging and eventually
unsuccessful if adequate research is not conducted (Dunning, 2013). Doing business in one’s
home country is definitely easier than in a foreign country. Some of the challenges that
businesses can face are language barriers, different business practices and organizational
structure and cultural differences (Dunning, 2013). Adequate research goes a long way in
helping to discover these challenges and addressing them. The transition will, in turn, be a
smooth one. Research provides in depth knowledge of customer preferences, regulations that
should be followed, potential markets and suppliers (Dunning, 2013). The decision of Macy’s
to expand into South Africa is a smart one. This paper outlines some of the factors that
Macy’s will need to be aware of as they set up in South Africa.
Demographic Trends
The annual population growth rate in South Africa is 1.6%. Majority of the people in
this country are below the age of 65 and the median age is 26.8 years. The life expectancy is
57 years. More than half of the population in this country have not acquired the required
education levels. The government and UNICEF have however set up programs to make
education accessible to both children and adults (Bond, 2014).
Cultural Analysis
MANAGING IN A GLOBAL ENVIRONMENT
2
The main business language in this country is English despite there being 11 official
languages. South Africans have a rich cultural heritage. Colonization by the British, however,
caused some of these cultures to diminish and some of the British customs adopted
(Comaroff, 2013). These customs include taking tea in the afternoon and using forks and
knives while eating. There are however some communities that have retained their traditions
like the Zulu who are well known for their beadwork (Comaroff, 2013). South Africans also
believe that not finishing served food is not good manners (Comaroff, 2013). They also
believe in carrying gifts when visiting each other’s homes. These gifts include wine and
chocolates.
Social Institutions
According to Hofstede’s dimension, South Africa scores differently in various
categories. In power distance, it scores 49. This shows that a majority of people that power
has been distributed equally among the people. When it comes to individualism, South
Africans mainly believe in only being concerned about their personal welfare and that of their
families. It is thus a highly individualized country and scores 65. Competitiveness and being
the best in their fields of work is what mainly motivates South Africans as opposed to the
quality of life. The country thus scores 65 in the masculinity category (Bond, 2014).
In terms of uncertainty and avoidance, South Africans are not keen to control the
future. They are more inclined to let things just happen and the country scores 49. With
regards to long-term orientation, the country has a high preference to keep practicing their
traditions and norms. Here South Africa scores 34. Indulgence is the final category. South
Africans are very indulgent and have minimal restraint upon them. They advocate for
optimism and value leisure time. The country thus scores a 63.
MANAGING IN A GLOBAL ENVIRONMENT
3
The family structure of this country consists of two parents and children. Polygamy is
legal but rarely practiced due to poverty. A majority of the country's population are
Christians. The minority religions are Muslim and Hindu. The country also legalized trade
unions and employees have the right to be unionized and to participate in industrial actions.
The International Labour Organization also advocates for fair employment practices in the
country.
Informal Trade Barriers
There are minimum informal trade barriers in South Africa. This is because most
South Africans adopted the customs of the British. They are therefore more liberal especially
in the big cities such as Cape Town, to the extent that gay marriages have been legalized
(Bond, 2014). Communication should not pose a challenge since English is the main business
language. In terms of negotiations, they are usually done in a relaxed manner. South African's
prefer to be addressed by their surnames. They also shake foreigners, hands. One is expected
to be punctual and to maintain eye contact throughout the negotiations. South African's do
not like bargaining thus they usually reach decisions that are mutually favorable. During
negotiations, one should avoid raising their voices as this shows disrespect. Marketing in
South Africa is mainly done via social media in order to reach a big number of potential
customers.
There is no limited time for one to be an employee in this country. Employees’ rights
are protected in the Employment act. The employees are entitled to benefits and fair working
conditions. They also have a right to a good working environment. This means that their
human rights are protected. Any violation of these rights leads to a breach of the law. The
South Africans also value friendliness when it comes to business practices. This is because
MANAGING IN A GLOBAL ENVIRONMENT
4
forming a good rapport establishes trust among people. Score cards are also used to rate the
performance of businesses. Failure to meet the required threshold ultimately attracts
penalties.
Conclusion
South Africa is a good country to set up business in, especially because the natives are
very friendly. They also encourage foreigners to be exuberant. A research on demographic
trends, cultural analysis, social institutions, and informal trade barriers give Macy’s a better
view of South Africa. With this information, what to do and what not to do becomes clearer.
Macy’s is thus likely to have a smooth transition into South Africa. The difficulties that were
likely to be experienced have been greatly reduced.
MANAGING IN A GLOBAL ENVIRONMENT
References
Dunning, J. H. (2013). Multinationals, Technology & Competitiveness (RLE International
Business) (Vol. 13). Routledge.
Comaroff, J. (2013). The body of power, the spirit of resistance: The culture and history of a
South African people. University of Chicago Press.
Bond, P. (2014). Elite transition: From apartheid to neo-liberalism in South Africa.
5
Running head: MANAGING IN A GLOBAL ENVIRONMENT
1
Managing in a Global Environment
Socio-cultural Analysis
9/10/2017
Introduction
Expanding business to international countries can be quite challenging and eventually
unsuccessful if adequate research is not conducted (Dunning, 2013). Doing business in one’s
home country is definitely easier than in a foreign country. Some of the challenges that
businesses can face are language barriers, different business practices and organizational
structure and cultural differences (Dunning, 2013). Adequate research goes a long way in
helping to discover these challenges and addressing them. The transition will, in turn, be a
smooth one. Research provides in depth knowledge of customer preferences, regulations that
should be followed, potential markets and suppliers (Dunning, 2013). The decision of Macy’s
to expand into South Africa is a smart one. This paper outlines some of the factors that
Macy’s will need to be aware of as they set up in South Africa.
Demographic Trends
The annual population growth rate in South Africa is 1.6%. Majority of the people in
this country are below the age of 65 and the median age is 26.8 years. The life expectancy is
57 years. More than half of the population in this country have not acquired the required
education levels. The government and UNICEF have however set up programs to make
education accessible to both children and adults (Bond, 2014).
Cultural Analysis
MANAGING IN A GLOBAL ENVIRONMENT
2
The main business language in this country is English despite there being 11 official
languages. South Africans have a rich cultural heritage. Colonization by the British, however,
caused some of these cultures to diminish and some of the British customs adopted
(Comaroff, 2013). These customs include taking tea in the afternoon and using forks and
knives while eating. There are however some communities that have retained their traditions
like the Zulu who are well known for their beadwork (Comaroff, 2013). South Africans also
believe that not finishing served food is not good manners (Comaroff, 2013). They also
believe in carrying gifts when visiting each other’s homes. These gifts include wine and
chocolates.
Social Institutions
According to Hofstede’s dimension, South Africa scores differently in various
categories. In power distance, it scores 49. This shows that a majority of people that power
has been distributed equally among the people. When it comes to individualism, South
Africans mainly believe in only being concerned about their personal welfare and that of their
families. It is thus a highly individualized country and scores 65. Competitiveness and being
the best in their fields of work is what mainly motivates South Africans as opposed to the
quality of life. The country thus scores 65 in the masculinity category (Bond, 2014).
In terms of uncertainty and avoidance, South Africans are not keen to control the
future. They are more inclined to let things just happen and the country scores 49. With
regards to long-term orientation, the country has a high preference to keep practicing their
traditions and norms. Here South Africa scores 34. Indulgence is the final category. South
Africans are very indulgent and have minimal restraint upon them. They advocate for
optimism and value leisure time. The country thus scores a 63.
MANAGING IN A GLOBAL ENVIRONMENT
3
The family structure of this country consists of two parents and children. Polygamy is
legal but rarely practiced due to poverty. A majority of the country's population are
Christians. The minority religions are Muslim and Hindu. The country also legalized trade
unions and employees have the right to be unionized and to participate in industrial actions.
The International Labour Organization also advocates for fair employment practices in the
country.
Informal Trade Barriers
There are minimum informal trade barriers in South Africa. This is because most
South Africans adopted the customs of the British. They are therefore more liberal especially
in the big cities such as Cape Town, to the extent that gay marriages have been legalized
(Bond, 2014). Communication should not pose a challenge since English is the main business
language. In terms of negotiations, they are usually done in a relaxed manner. South African's
prefer to be addressed by their surnames. They also shake foreigners, hands. One is expected
to be punctual and to maintain eye contact throughout the negotiations. South African's do
not like bargaining thus they usually reach decisions that are mutually favorable. During
negotiations, one should avoid raising their voices as this shows disrespect. Marketing in
South Africa is mainly done via social media in order to reach a big number of potential
customers.
There is no limited time for one to be an employee in this country. Employees’ rights
are protected in the Employment act. The employees are entitled to benefits and fair working
conditions. They also have a right to a good working environment. This means that their
human rights are protected. Any violation of these rights leads to a breach of the law. The
South Africans also value friendliness when it comes to business practices. This is because
MANAGING IN A GLOBAL ENVIRONMENT
4
forming a good rapport establishes trust among people. Score cards are also used to rate the
performance of businesses. Failure to meet the required threshold ultimately attracts
penalties.
Conclusion
South Africa is a good country to set up business in, especially because the natives are
very friendly. They also encourage foreigners to be exuberant. A research on demographic
trends, cultural analysis, social institutions, and informal trade barriers give Macy’s a better
view of South Africa. With this information, what to do and what not to do becomes clearer.
Macy’s is thus likely to have a smooth transition into South Africa. The difficulties that were
likely to be experienced have been greatly reduced.
MANAGING IN A GLOBAL ENVIRONMENT
References
Dunning, J. H. (2013). Multinationals, Technology & Competitiveness (RLE International
Business) (Vol. 13). Routledge.
Comaroff, J. (2013). The body of power, the spirit of resistance: The culture and history of a
South African people. University of Chicago Press.
Bond, P. (2014). Elite transition: From apartheid to neo-liberalism in South Africa.
5
Running head: MANAGING IN GLOBAL ENVIRONMENT
1
Managing in Global Environment
Country Study
8/27/2017
Introduction
The decision for any business to expand internationally should be handled carefully.
Before deciding on the country to expand to, the business needs to conduct a research in
order to ensure that they benefit from the expansion while safeguarding its investment. The
business should also ensure that it has built a solid foundation in its home country before
expanding to any other country (Verbeke, 2013). The timing for the expansion is also very
key in ensuring the success of the expansion exercise. Macy's is one of the world's leading
store that sells fashion clothing and accessories for both men and women and is looking to
expand internationally.
Economic
The company has been having plans of expanding to the African market and the
country suggested is South Africa. The GDP Per capita for the country in the year 2016 was
estimated to be $13, 500 while the GDP for the real growth rate was estimated to be 0.5% in
the year 2016. The unemployment rate is estimated to be 26%. The labor force of the country
by occupation is estimated to be 71.9% for the service sector as per the year 2014 (CIA,
2014). South Africa also had commodities imports estimated to be $85.03 billion while those
of partners were for the US was 7.1%. The country also had exports of $83.16 billion for the
US partners the export was 7.6%. Industries within the country have been growing at a rate of
1% per year (Baker & Phillips, 2014).
MANAGING IN GLOBAL ENVIRONMENT
2
Geographic
The country is full of natural resources like gold, gem diamonds and copper among
others. It is also easy to access raw materials within the country or import from neighboring
countries at affordable rates. The climate is mostly semi-arid with sunny days and cool
nights. The land is the country is mostly agricultural with very little forest cover (CIA, 2014).
Natural hazards within the country are prolonged droughts and volcanism. The current
environmental issues facing the country relate to the lack of arterial rivers leading to water
shortages due to limited supply and pollution.
Political- Legal
South Africa is a parliamentary type of republic whose leaders are chosen in elections
held after five years. The country has been stable politically although there have been
controversies linked to the current president. A foreign company that wants to invest in the
country should be registered in the country within 21 days and it should also register at the
tax office. The company must also acquire approval under the exchange control regulations.
Labor and employment law must be adhered to by any foreign company that invests in the
country. Foreign companies within the country get support from the Department of Trade
and Industry that has various incentives. The payment of tax is determined by whether the
company is regarded as a resident or non-resident.
Summary
Since South Africa is one of the most developed countries in the African continent,
the choice by Macy's to expand in this country will benefit it greatly. The country alone
accounts for close to 49% of the entire continents industrial output and close to 25% of the
continents GDP. Based on this, the business will be able to break even and make profits
should it expand to the country (Baker & Phillips, 2014). The country’s economy has also
been growing steadily in the recent years and it has also been strengthened by improved
MANAGING IN GLOBAL ENVIRONMENT
3
domestic expenditure. The country also has one of the most modern and extensive transport
infrastructure which makes transportation easy. Some of the challenges that the business
might experience when it expands to South Africa is one to do cases of political instability
and strikes. Even though these have reduced in the recent past, it is important for the
company to be prepared. There are also a number of regulatory factors that affect foreign
companies negatively (Baker & Phillips, 2014). The company will also need to come up with
ways of dealing with a mature and competitive market. Water scarcity also remains to be one
of the challenges that most businesses face due to insufficient water supply. When all factors
have been considered I would recommend that the expansion is to be done in South Africa.
MANAGING IN GLOBAL ENVIRONMENT
4
References
Baker, L., Newell, P., & Phillips, J. (2014). The political economy of energy transitions: The
case of South Africa. New Political Economy, 19(6), 791-818.
CIA, C. (2014). CIA World Factbook. Washington, DC: United States Central Intelligence
Agency (CIA).
Verbeke, A. (2013). International business strategy. Cambridge University Press.
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