Strategy and international management Honda motors The WritePass Journal

Strategy and international management Honda motors Introduction Strategy and international management Honda motors IntroductionReferences:Related Introduction This essay is about the potential objective of the multinational company of entry in to the new market for expanding business and maximizing profit in new explored market, and will highlights possible insinuation of a global company in host country economy. In this essay Auto car manufacturing Company will be critically highlighted that why multinational auto manufacturing company expands business to other regions and discover new market places and what are the grounds behind that step. The chosen company for this critical essay is Honda Motors. Before discussing Honda motors foreign direct investment (FDI), its motives of investing abroad from its home country, and the home country policies regarding FDI. It is vital to provide company background first and its history. Honda is sustaining a global point of view, and is devoted in supplying products of the uppermost excellence keeping in view a reasonable price for worldwide buyer’s satisfaction. Honda Motor Company Limited is possibly best branded as an auto maker. Among the car manufacturing companies in Japan Honda is second and fifth biggest and successful car manufacturing company in the world. Today Honda is renowned for its innovation, excellence, well-built and advanced engineering which combine to get the best possible output in auto market and that is the reason why Honda has strong image among leading car manufacturing companies. Honda is a Japan based company, which has made its name in the manufacturing of cars in very short period of time. Honda Motor Company was founded by Soichiro Honda and his partner, Takeo Fujisawa (Source, www.honda.com). Innovative strength of mind is obvious in the absolute name of their business, which is  Honda  Technology Research Institute Compan y Limited. Honda is considered to be the primary producer of engines across the world in terms of the complete volume of the engines it manufactures annually. Honda endeavoured into the Japanese  car industry  after 1960 with the T360 (Source, www.honda.com). In this essay I will focus Honda Motors investment in Pakistan. Honda Atlas Cars Pakistan Limited is a mutual enterprise between Honda Japan Motors and the Atlas Group Pakistan. Honda Company was established in 1992 and combined agreement was signed in 1993. The inauguration ceremony was held on 17th of April 1993 and within a very small time of 11 months, construction and erection of machinery was completed. Honda invested in Pakistan because of numerous reasons which can be called the perfect location for investment. As per Dunning the location, owner specific and internalisation advantages are three basic fundamentals for multinational company to invest across the border. Pakistan got strategic importance because of its prominent geography. Indian Ocean on one side and very close of Persian Gulf which is very significant for trade import and export purpose. Pakistan is like a gate way for Middle East, for Central Asia to China and India. Pakistan is at number 9 with a population of 140 million, so it is clear that Pakistan has got a vast market and around 40 million hard working cheap labour. Road and rail infrastructure of Pakistan is reasonable well dev eloped and it is developing time by time. Because of its link with Persian and Arabian Sea export processing zone is working from 1980 and because of large demand three more export processing zones have started working in Sialkot, Risalpur and Saindak. Honda invested in Pakistan because Pakistani economy usually showed sensitivity and possible aptitude to convene exogenous blows and minimize risk (Source:- www.unescap.com). Pakistan got very strategic place in term of foreign direct investment (FDI) as per economic survey of Pakistan FDI is increasing from 2006-2007 from 6 billion US dollar which is almost 48% higher than last year. According to figures there are around 3.9 million auto cars on the roads of Pakistan, and the demands for vehicles individually and combined are increasing rapidly, and prominent figure is calculated of 300,000 as an annual demand. Multinational companies from Japan, Europe and Korea have invested around 1.5 billion dollars in Auto industry of Pakistan (Source:- www.unescap.com). It is the matter of fact that developed markets drench with the passage of time, keeping this point companies still want to preserve expansion. Honda keeps a strong point of expanding their business to areas which are less saturated. Most of the certain saturated markets may welcome variety from other developed economies and companies attempt to invest in those markets to capture market share. Pakis tan government has eased up the investment policy environment foreign private investment. For welcoming and encouraging foreign direct investment in export-oriented industries, an Export Processing Zone (EPZ) is set up in Karachi. The government of Pakistan has also ratify a wide set of investment incentives including credit facilities, fiscal incentives, and visa policy. Foreign controlled manufacturing companies exporting 50% or more of their production can now borrow working capital without any limit. Other foreign-controlled manufacturing companies including those not exporting and selling in the domestic market can borrow rupee loans equal to their equity without prior permission of the State Bank of Pakistan. Foreign investment in Pakistan is sheltered through the Constitution (Article 24) as well as through specific laws. Section 8 of the Protection of Economic Reforms Act 1992 provides legal cover to foreign investment in Pakistan. Honda established its unit in Pakistan due to several factors which they believe that will maximise their profit by investment abroad like abundant low cost land and natural resources, vast cheap and technical working people, increasing local market, reasonably developed infrastructure and important and critical location. As According to Dunning (2008) company invest abroad because of suitable climate, proximity to relevant markets, availability of raw materials and minerals, and availability of low cost advantages such as cheap labour. Honda invests overseas to lessen revelation to one market. This gives Honda international diversification and leads to benefits for Honda. As the global economy changes over the time and recession is affecting one area some time another economy in different region is practicing a boom, so operating in different countries instability can be less experienced by companies. According to Dunning (2008), It has to be more gainful for the company to develop its resources in overseas, rather than in domestic, locations. Honda chose site in Lahore, Honda current location in Lahore Pakistan is near to Allama Iqbal International Airport Lahore which can be easily and affordably accessed adding to this it can be easily access from motorway which connect main cities of Pakistan and nearly 90 km from Faisalabad international dry port.   Honda is enjoying economical delivery of cars with its well managed delivery set-up all over Pakistan. Pakistan government policies are very much in favour for investors of auto makers to invest in Pakistan. Honda invested huge amount of investment in Pakistani market so that to get more benefit and capturing more international reputation from the cheapest cost of production in Pakistan economy, as there is availability of cheap and skilled labour as it is fact that companies with labour intensive production processes have a larger incentive to invest overseas and thus benefit from these cost efficiencies. T his gives host country many advantages like increase in export, boost in economy and linkage with other countries. According to Lipsey (2002), FDI has a great influence on any host country economy and increases the interaction of countries and export from the host country increases as well. Customers who are interested in new models are manufactured in the local country (Japan) and as well as manufactures in Pakistan, is another, verdict weighty factor and gives a extra advantage to Honda FDI policy. Dunning (2000), said that market seeking factor is appropriate in the FDI decision making process. One of the reasons why Honda invests abroad is diversification. By diversifying, it reduces risk and by diversifying worldwide, one can reduce the risk further. International investing provides investors the opportunity to spread risks over more than one market. Due to rise in oil prices that increases transportation cost of vehicles from one country to other country so the prices of impor ted vehicles are normally are very high than the cars which are manufactured and assembled in home country. Honda is enjoying this case by establishing its manufacturing and assembling unit in host country as to maximise its markets shares and reduce risk. High import duties make imported cars prices higher and unaffordable. Market saturation and increased competition at home have lead automakers to the evident termination that future growth will occur in investing abroad where population is more and where the demand of cars is much. Honda motors have domination over its firm specific advantages and can exploit them abroad, ensuing in a higher trivial return or lower trivial cost than its opponents, and thus in more profit. This was said by Cantwell (2000), that advantage in technology might be used to increase international expansion and this can be motivating factor as well for companies. The subsistence of a particular know-how or core ability is an asset that can give rise to ec onomic rents to Honda. These rents are gathering by Honda by licensing the Firm Specific Advantages to another firm, exporting products using Specific Advantages as an input, or amendment subsidiaries abroad. Honda has its unbeaten technological power and innovation in their manufacturing and this makes it the successful car manufacturing company in the competition. There were and still there are competitors for Honda in Pakistan as some companies started well before than Honda in Pakistan, they know how the market and environment is. According to Hymer’s (1966), to compete in the overseas market foreign companies must possess some kind of advantage. Such advantage can be of many different types, but the most obvious is size and market power.  Ã‚  A business intend to build up a firm precise advantage in international market and development tends to be completed in the market because of localisation feature like trading hurdles, expensive carrying costs, company mostly adop t this criteria by investing out from its home country in their own services to a certain extent than through, let take a example of a licensing or agreements. The more insubstantial the company exact advantage is much stronger that propensity would be. To do business with intangible assets are very tricky and difficult to handle. There is some significant argument is that transnational corporation exist because information crossways boundaries can be moved much powerfully in the corporation rather than among independent industry, the reason is not of market collapse. That extracted that in common intangible asset can be taken as a demanded asset, but can rarely be separated from the company itself and it is impossible to be taken as a community good (Source, www.ousest.com). As the oil prices are increasing day by day so to afford heavy cars are getting tougher so trends towards small and local manufactured cars are increasing and that is the reason why Pak Suzuki Motors enjoys a domination in the car market with 40.2% of car market share and Honda has 14.7% of market share and trying its level best by deploying the new and advanced technology to its cars with affordable price (Source:- www.ousest.com). Honda has transferred nearly all its advanced technology to the unit working in Pakistan so that to facilitate the customers with innovation and advance technology with low prices as exporting cars from Japan to Pakistan becomes more expensive and unaffordable for buyers to grab the car of their dream and also buyers tends to buy relative cheap and locally manufactured and assembled cars so to reduce the factor of losing customers Honda makes sure that market must be in hand by investing more in host country. According to Dunning firm must have some owner ship advantages to penetrate in any country and capturing the market through that ownership advantages. Initially Honda was emphasizing on investments in countries where political situation were stable and government policies were in favour of foreign investment to reduce barriers in their investment and returns, Pakistan political matters were never been much stable but the policies and climate are always in a favour of foreign investment, Honda neglected the political factor and invested hugely in Pakistan to capture the uprising car market of Pakistan. This showed the interest of Honda as an active market seeking FDI. Economic prosperity is the main ingredient to the country’s progress and advancement. Foreign investment gives the strong base for economic development.   FDI added notably in the human resources development, capital formation, and organizational and managerial skills of the people in the country. One of the positive spillover effects was that the occurrence of foreign firm helps in enlargement infrastructure facilities, which makes it easier and profitable for local firms to crowd-in (Lemi, 2004). In developing countries like Pakistan FDI is helpful to narrow down the Saving-Investment gap. The economic benefits of FDI were extensive ranging, it unlock new opportunities of knowledge, transfer of technology, training of manpower, market networking and externalities in the host countries. The potential advantages of the FDI on the host economy are it facilitates the use and utilization of local raw materials, it bring in modern techniques of management and marketing, it eases the access to new technologies, Foreign inflows could be used for financing current account deficits, it increases the stock of human capital via on the job training. The local ventures are able to learn by watching if the economic structure is suitable (Bhagwati, 1994) also it stimulates the investment in RD (Calvo and Robles, 2003). Although there is huge positive impact of FDI on host country economy there is some negative implication that results due to FDI. Often seen that host country faces problems with FDI, government has less control over the foreign companies which are operating in the country and this results in not adopting the economic policies of the host country. Defence of the country has to face some risk due to incoming foreign investment. Foreign firms deploy its home country policies in the host country firm which sometimes are not suitable for the workers of the host country. Inflation rate increases in a considerable amount in host country. One of the main negative impacts of FDI is that the economically backward section of the host country is always inconvenienced when the stream of foreign direct investment is negatively affected (Source:- economywatch). Honda is providing advanced and innovated cars to the its customers mostly in affordable price and playing important role in the economy of the country as well. Honda investment resulted not only in maximizing their profit but resulted in opening of thousands of jobs and also pays taxes to the government. Honda successful investment and increase in profit motivated other companies to invest in Pakistan which will be again beneficial to locals and to government. But going to the depth of Honda investment, Honda is getting more than their investment but Honda is still not able to provide more employment opportunities by expanding their units to other cities in Pakistan. Although the unit is fully working in Pakistan but still car prices are not in a range of middle class community which could be in affordable price if Honda management reduces a small percentage from their profit. Highly technical staffs are still called from Japan and avoiding local technical staffs to remain where the y are, Honda must send host country technical staff to trainings abroad so that human resource of host country can go further up in the company making more opportunity for others. This will in return reduces Honda cost and will be helpful for host country human resource. References: Bhagwati, J.N. (1994), â€Å"Free trade: Old and new challenges†, Economic Journal, 104, pp.231-246. Cantwell. J. (2000). A survey of theories of international production:   the Nature of the transitional firm, London: Routledge. Dunning, J.H. (2000). â€Å"The Eclectic Paradigm as an Envelope for Economic and Business Theories of MNE Activity†, International Business Review,9, pp. 163-190. Dunning electic paradigm, information available ousest.com/internalis, accessed on 4th March 2011. Hymer, H. (1979). The Multinational Corporation: a Radical approach, New York: Press Syndicate of the University of Cambridge. Information available on www.ousest.com, website accessed on 21st April 2011. Information available on www.honda.com, website accessed on 2nd March 2011. Information available on   adb.org, website accessed on 22ndFebuary 2011 Information available on www.dawn.com, website accessed on 1st March 2011. Information available on www.honda.com.pk, website accessed on 2nd March 2011. Information available on www.economywatch.com, accessed on 5th March 2011. Investment Policy, Information available on www.sbp.gov.pk, accessed on 5th March 2011.  ·Ã‚  Information available on www.unescap.org/tid/publication/part_two2223_pak.pdf, accessed on 7th April 2011.  ·Ã‚  Information available on ousest.com/transact.html, accessed on 7th April 2011. Lemi, A. (2004).â€Å"Foreign Direct Investment, Host country productivity and export: The case of US and Japanese multinational affiliates†, Journal of Economic Development, 29. Lipsey, R. E. (2002). â€Å"Home and Host country effects of FDI†, NBER Working Paper No W92923, available on www.ssrn,com, accessed on 27thFebuary 2011. Pakistan Research Repository, information available on www.eprints.hec.gov.pk, accessed on 1st March 2011. .

Social Media Policy How to Make Yours Thorough to Avoid Emergencies

Social Media Policy How to Make Yours Thorough to Avoid Emergencies When it comes to social media, how companies set internal policies can be a gray area. For example, questions like, â€Å"Am I allowed to be on Facebook at work?†Ã‚  are becoming as common as â€Å"how much time do I get off a year?† Being able to easily answer those questions is where having a clear and easy-to-follow social media policy comes into play. By clearing up ambiguity and defining in black and white what is acceptable social media behavior for your organization, you can answer those questions before they come up, and avoid costly social media mistakes. In this post, we’ll help clear up those murky waters by showing you: How to create social media guidelines for your business. Having guidelines will help your employees understand what is acceptable social behavior. Knowing what’s appropriate and not appropriate will help avoid those blunders that could not only create a scandal for the company but cost an employee their job. How to create a living social media policy document.  Having a living social media policy document is the key to keeping your company’s social media image healthy and stable. Not only that but having a document that is constantly updated with the most recent social media guidelines will give your employees something to rely on when it comes to answering those ever-changing social media questions. How to approach the conversation about social media policy with your employees.  Having a conversation about social media and its reach inside and outside company time is hard. However, establishing those guidelines and having those conversations are what will help your employees and your company avoid disasters later down the road. How To Build a Thorough Social Media Policy to Prevent EmergenciesBefore We Start: Grab Your Free Social Media Policy Template Before you continue reading, download our Social Media Policy Template, which will walk you through how to create your own social media policy. By the time you’re done,   you’ll have your own policy to hand off to your employees. Start By Explaining Why You Need a Social Media Policy The first thing that you are going to see when you open your social media policy template is a section dedicated to answering the following question: Why does this social media policy exist and why should your employees care about it? Outlining why you have your policy will help your employees understand what they can do to help promote the company, help them avoid creating social media disasters, and make sure that you don’t lose a potentially great employee based on one instance of poor judgment. In your social media template, we’ve outlined a basic answer to the â€Å"why does this policy exist?† question. However, feel free to adjust your answer based on your company guidelines and expectations. Who Are We On Social Media? Your company probably has a set of core values or guiding principles that you operate by. These values are at the heart of everything you do. Those values don’t have to stop once your employees leave the office, either. They can be a part of their personal social media posts as well. At we live by: Being passionate about our product Never settling for good enough Getting sh*t done Thinking big Great design Personalized customer service Those core values can translate into social media guiding principles. How can you do that? By asking yourself, â€Å"How are your core principles going to drive your interactions on social media?† For example, at we are passionate about our product. How does that drive our employee’s social media interactions? We talk about our product. We’re proud of what we created and therefore we share information about it. It could be a new update, a new feature or a significant use case. To create these guidelines each one of your core principles should have an actionable item attached. How To Set Expectations For Your Employees The best way for your employees to understand what they can and cannot post on social is to be as clear as possible with your expectations. For the next part of your social media policy template, we’re going to focus on how to clearly define those expectations. Determining What Your Employees Should Post Determining what your employees should post is crucial to the success of your social media presence. When you’re thinking of what your employees should post, be as clear and specific as you can. The more you explain, the fewer questions you’ll have down the road. So for an example, let’s pretend a hypothetical theater company was working on a list of appropriate topics their employees could post. It might look something like this: Upcoming auditions Upcoming shows Company news (once approved by board for release to public) Job or artistic openings Industry news Rehearsal photos Company outings Local events Local theater productions Behind the scenes/ backstage photos Each one of these examples is something an employee can post about the company and not have to worry about checking in with the social media team to make sure it’s okay. In fact, we would encourage our employees to post about these topics! Recommended Reading: How to Curate Content For Social Media to Help Boost Your Reach Determining Post Topics Your Employees Should Avoid Most of the items that you would encourage your employees to be cautious posting about are pretty self-explanatory and should be common sense areas to avoid. However, clear instructions will help guide your employees and create fewer questions down the road. So let’s go back to our social media policy template and see what an example looks like: Politics Religion Sensitive audition information Company finances Costumes or set photos (unless permission has been given by the designer) Speculations about upcoming season shows Negative reviews of actors, directors or other artists Negative reviews of local theaters Gossip or other inflammatory language Derogatory language about someone’s gender, religion, heritage, sexual orientation or disability Most of these are pretty obvious but there is one point that you need to clearly define within  your social media policy document. The definition of derogatory language. That line is so easy to cross, and what your company defines as derogatory language may be different from another. For this example our theatre company would define derogatory language as *It is important to note that derogatory language is defined at Change Theatre Company as anything that degrades, insults, or implies that an individual that belongs to one of those groups is anything less than a human being with their own unique experiences and perspectives. At Change Theatre Company we strive to accept and respect all perspectives and people, no matter who they are. The more you can draw that line in the sand, the better. Freedom Of Speech Versus Company Policy: Which One Wins? Trying to tell employees what they can post on their social accounts is the definition of a gray area. It is their personal account, after all, they are entitled to their own opinions. Well, while you are entitled to your own opinions, that doesn’t mean that you or your employees are free from the backlash of a poorly worded tweet. Yes, freedom of speech is important, but just like in the real world where you represent your company at all times, you also represent your company on social media at all times. You represent your company on social media at all times.So how do you navigate this particular gray area? Sharing opinions on touchy topics will vary by company, industry and more. For example, our theoretical theatre company encouraged our employees to tread carefully when it comes to posting about hot button topics like religion and politics. However, both of those topics may come up as themes around different shows, therefore it would be completely reasonable for employees to engage in discussion about them.   Another conflict example could be if you work for a news organization. These traditionally taboo topics come up daily for reports, they can’t just ignore them and continue on with their day. So what’s the fix? It’s vital that when you create your company’s social media policy, you take its public position into account. If your organization is centered around politics, it would probably be okay for your employees to post about them, but again it all depends. While you can encourage employees to stay away from discussing certain topics on social media, it is important to note that you cannot, according to the National Labor Relations Board, restrict people from discussing things like wages or working conditions among other things. If you’re in doubt about something, consult your legal team. You never want to feel like you’re squashing your employees with your social media policy, but you also want to protect yourself, and them! Now there’s a trend that says if you put a disclaimer in your bio like â€Å"opinions are my own† or  Ã¢â‚¬Å"retweets do not equal endorsements† then your content is safe from employer backlash and your company is safe from public backlash. Those tiny bits of legal jargon do absolutely nothing to protect you or your company. They are nice to have, but don’t rely on them to save you or your company if a situation arises. All of this information is not meant to scare you or to encourage you to create a policy that is locked down so tight it discourages your employees from posting online. Rather, the policy is there to help guide your employees and help them avoid mistakes, not shut down their social media posting. A #social #media #policy should help employees avoid mistakes.Social Media At Work The next part of your social media policy template is a section dedicated to identifying appropriate social media usage at the office and during work hours.   Some companies will have a very strict, no social media browsing while at the office, while some companies will be more relaxed and allow employees to browse social media as long as it doesn’t distract from their work. The policy that is in this example is strict but how your company determines your policy will be up to you. The Enforcement Of Your Social Media Policy The rules of your social media policy need to be enforced. What that enforcement process looks like needs to be set up in your social media policy. It is better for your employees to know what is coming if rules are broken, then to sit and wonder what will happen. For this example, I broke down enforcement into three categories. One involves breaking the policy for social media office use, the second involves posting content that breaks the rules for acceptable content, and the third involves sending company information or other language that would be grounds for an immediate dismissal. Each enforcement structure may differ depending on the types of rules you put into your policy. Work with HR and upper management to determine the course of action your company should take each time the policy is broken. Recommended Reading: How to Improve Your Social Media Management in Just 30 Days Where Should Staff Direct Questions About the Social Media Policy? Your employees are going to have questions, whether it’s a simple â€Å"can I post this meme?† or more serious questions like â€Å"I posted a tweet and now people are upset, what do I do?† Having someone to turn to whether it’s a simple matter or a time of crisis can help make sure that your social media program is flowing smoothly. In your social media policy template, you’ll see a whole section dedicated to laying out what your chain of contact looks like. For this example we would have information all the way up to our CMO listed however, your’s may be different based on company and personal preferences. What Happens In A Crisis Situation? Everyone is human and therefore mistakes happen. What do you do when those mistakes arise? More importantly, what do you do when those mistakes create a social media crisis situation for an employee? In your social media policy template, you’re going to layout the exact instructions that your employee will need to follow. The following is what I would have an employee do at Change Theatre Company. 1. Delete the tweet and issue a sincere apology.  If something gets posted by one of your employees and it starts to cause a backlash, have your employee delete that message right away. It’s important to note that while the message may be gone, it very well could have been saved by someone else. Be prepared for it to resurface. The second thing your employee needs to do is issue a sincere apology. Not a regurgitated, robotic one either. You need to sincerely apologize for the offending message. People can tell in an instant if you’re just apologizing to save your skin. 2. Contact your social team.  The next thing you need your employee to do is to contact your social media team and let them know what has happened. Once they have all the information they can prepare the company for any backlash they might face, and they’ll be able to advise said employee on what steps to take next in order to remedy the situation. Speaking of next steps†¦ 3. Don't ignore angry messages.  The worst thing you can do in terms of a social media crisis is to ignore angry messages. This adds gasoline to an already growing flame. Be sincere in your responses and remember the more genuine you can be with your responses the better. This is where I would end my instructions for my employees. However, based on your company and procedures your list may be longer.   Work with your social media team to figure out the best process for you and There is a second section of your crisis management involves contacts of people who need to be informed immediately if a crisis situation arises. These are the people who can put your crisis plan into action and try to control any damage that the company may suffer before it gets out of control. Managing Your Online Presence Having resources at the end of your social media policy to help your employees manage their social presence will not only give them peace of mind about what to post but if they’re done right if will actually encourage them to post more. In your social media policy template is the last section for you to fill out. Here is an example of what I would want my management section to look like. Creating A Checklist Or Step List To Great Online Etiquette Forbes has an amazing 12 step checklist to having great social media etiquette. Things have changed since the days of 12-course dinners and formal introductions. So I would put a short online etiquette list for your employees. For this example, I stuck to five major ideas. Your list could be longer like the Forbes list or shorter than my example. This list is mainly here to serve as a reminder to double-check that you’re sending the right things out into the mindset. How To Deal With Online Complaints Or Questions Never ever let your employees take complaints or questions into their own hands unless it’s part of their job to do so. For this example, I include a simple three-step process for my employees to follow if they see a question or complaint about the company. Be Up Front About Who You Work For You never want to be deceptive in your social media use so it’s important that your employees are upfront about who they work for. Intel has a great social media policy that highlights how employees can identify that they work for Intel.  Usually, they have a disclaimer in their bio that they work for Intel and if they post about something work related they should use the hashtag #IAmIntel I used this same theory in creating our example social media policy. There is a section explaining what they should have in their social media bios and the hashtag they should use. Four Real-World Social Media Policy and Business Guidelines for Inspiration Now you’ve got your initial social media policy built. There may be more things you want to cover in your policy and that’s ok. But in case you need even more inspiration to create your policy check out some of these examples.