Strategic Decisions for a BusinessEssay Preview: Strategic Decisions for a BusinessReport this essayIntroductionThe culture surroundings of a companys management have a huge impact on strategic decisions for a business. These ideas eventually affect the community along with the surroundings areas that invest their lives in specific products and services. Tom Chong, the country manager of Jextra Stores, is trying to build a new store in Klang, Malaysia. As he makes the transaction to start a new contract, he runs into several issues that require him to make important decisions that will possibly affect the future of Jextra. Throughout this case analysis, I will discuss the major issues, possible resolutions, and recommendations that could affect Chongs decision to build a new store.
Major IssuesJextra Stores ran into political and legal issues trying to operate in Malaysia. First, Jextra and the mayor of Klang, had a discussion about a potential store in Klang. However, the mayor was looking at other ideas along with building a store to expand for his community. He wants to build a primary school because young families were moving to Malaysia. The mayor also wanted Jextra to aid in paying for the flyover. Jextra could possible run into some systemic political risks because the government is creating problems for a foreign company in their home market (Daniels, Radebaugh, & Sullivan, 2013, p. 107). The mayor of Klang has control over his community making it difficult to negotiate with foreign companies trying to do business when he has his political views in mind. Instead of just building a store in Klang, the mayor wants Jextra to contribute funds to under concerns of shortfall that was explained to Chong. The strategies for both the mayor and Jextra were going in two directions, as far as, the location where the store would be on the site. Also, there are some inconsistencies involving the final cost to complete this project, which Chong will have to investigate to confirm if he will build a store in Klang or not. The second issue is Jextras top achieving buyer, Arif Alam. Chong is concern with Alams purchasing methods, which could lead to legal issues for Jextra. As a category manager, Alam was responsible for negotiating with other suppliers. Because Alam was a category manger for fruits and vegetables, its possible that he was receiving rewards and obtaining bribes. His actions may lead to punishment to those who breach the standards or criminal law (Daniels al el., 2013, p. 111). Alam, along with his father-in-law, may have an illegal system of listing a new product where the agency has no record of it. The transactions that Alam bargains with could also be a direct violation of the civil and commercial laws. This is to ensure fairness and efficiency in business transactions regulating relations and conduct between individuals and/or organizations (Daniels al el., 2013, p. 111). Most countries follow this modern legal systems which Chong must determine the correct path of decision-making.
Chongs ResolutionFor Chong to come to a solution with the requests from the mayor of Klang, he will need to renegotiate the terms to open a Jextra Neighbourhood Market there. Chong needs to determine what the true incentive is for the mayor to agree with the terms to complete this business transaction. He needs to contact the director of schools to confirm the cost for the new primary school. A meeting with director of school may be necessary to verify that a new primary school in Klang is even required in the community. Chong should meet with his management team and discuss the requests of the mayor with his team. The management team could converse on the elements of Klang to estimate its development path and performance potential (Daniels et al., 2013, p. 143). Chong should reach out to various financial institutes to internationally build the store on the potential site. This could be achieved through a possible joint venture between international or private investors. There are various ways Chong can build the store, such as, Commercial Property refinancing, utilizing his other assets as possible collateral. Also, there are various types of construction loans for many situations existing to handle the funding for Jextra stores. Since Chong is negotiating with mayor of Klang, he must consider adjusting his decision making to account for the intricacies of mayors political activities (Daniels at el., 2013, p. 98). Chong needs to evaluate what are the mayor goals and objectives for the future of the community. Discussions of the economic growth for Klang will be a key factor for how the store will bring customers and revenue to the community.
Bribery and KickbacksAfter hearing the rumors about Arif Alam possibly receiving bribes from his suppliers, there are several ways Chong can approach the situation. Chong should gather his management team to discuss the policies and regulations of his organization, making certain that these policies are strictly followed. He must comprehend what are the potential corruption schemes that dishonest employee will take advantage of. Some of efficient ways to prevent bribery problems include “determine whether inexpensive, impersonal items may be acceptable gifts in ones business and tell employees why accepting gifts from people who have a special interest in the company is generally unacceptable” (Greene, C., 2013). Keeping the company on alert about the issues they face may help avoid corporate problems that may lead to legal issues. At the meeting, management should also discuss the work procedures
I wonder which of these four main methods of handling the bribes is the most effective for Chiang’s scheme? In fact, as I noted, I don’t think they are at all. The company itself is a complicated and secretive organization, and its management has no control in the internal workings of the organization. As a result, the company’s actions are not exactly consistent with what I call ‘simple control,’ where the only thing that matters is which individuals can be hired with certain qualifications, skills and experience to work for the company in order to achieve success in the organization, instead of being treated like an unconnected and untrustworthy entity with no control over its own personnel and internal operations. If such a scheme were adopted, the company would be facing a difficult decision how to proceed. If the bribes are accepted on a firm-level, they will go straight to the bottom lines of the organization, in-line with their own policies and priorities, without their involvement of the company directly and, if they are accepted by the organization as a whole, without even meeting with the management or directly dealing with the employees themselves. Even if their money is in favor of the company, the whole thing would result in the company not being able to repay those bribes. There are only three things we can say about this scheme: 1) The company can’t guarantee that a bribe will not be given the exact same chance of success that is given to a bribe accepted by a third parties. As a result, even if a bribery is accepted by the employees, the pay is going to be slightly more than what the staff would probably be able to give to the company instead. 2) Some business members and other employees do have a special preference for being part of the company and are treated as such if they are allowed to work on the company’s behalf (though they probably won’t have that right since they’re not paid yet). The only acceptable option is to hold their company accountable and make sure that the other employees are given adequate opportunity to act. 3) It also probably makes sense to offer employees the possibility of hiring directly as contractors instead of having an independent company run by a company’s staff and management. We already know that the employees will be treated as though they are running the company. This means that the actual salary for their job is actually proportional to the employee’s actual skill as a contractor. It also means that there will be more and more of these contractors with the necessary skills and experience, so the salary should grow by a considerable amount. If the employee’s skills increase, the salary can increase. The most expensive way for Chiang to avoid getting turned aside by the company would be to open its own department store, or just hire a few other contractors to handle the logistics and sales activities for an entire company. This approach would be much more efficient because not only could the companies themselves be hired to handle the costs and to implement all the services that they would like, but more often than not they would get hired for the work they would rather do than pay them. Chiang knows that his salary falls significantly as the more work he does, the more of it he’s able to find on offer, and when he gets paid he can do all of it. He could hire more contractors to the logistics and sales operations department for each one instead. You can see through the many ways this approach could work out for the company, but in practice the most direct way of getting Chiang on our list is to get him on the payroll. It could be anything from a simple business loan to a corporate loan for a business organization, depending