Expanding business internationally can be trouble some, if the person does not have understood, culture of his new business place thoroughly. Apart from financial and labor issues, cultural issues play their part in great ways and once that is solved many of the problems can be solved.
John, who was already facing labor shortage in the small manufacturing firm in US, has been approached by a Major automobile giant from Japan for a joint venture where he has to begin a operation in Japan and majority ownership will be with John only. It was a lucrative opportunity; hence John signed the contract with the mindset of expanding his company to a new country unaware of labor laws and cost of living in Japan.
John required 500 labors to maintain the desired output and make a healthy profit. In order to manage things properly, he transferred some of his trustworthy staff to Japan. But very soon realized that the cost of living is Tokyo is way too high. He decided to hire local talent to manage things in his unit, but soon realized that young talent is unavailable in Japan, as employees don’t prefer switching companies; instead work for single firm till retirement as it is a working culture in Japan. To add to his woes, Union issues started creeping in his American Unit. As the Union Steward demanded, their share of promotional opportunity arising out of this expansion and they also demanded similar union contract to be extended to the Japanese employee also.
With all the unfavorable circumstances, John’s enthusiasm of working with one of the biggest automobile manufacturer, collapses and he wonders whether he will be able to take this project out of ground or not. He has signed the contract and now he is on the brink of host of problems.
Que 1. What Steps can you suggest that might help solve his labor problems for the new plant in Tokyo?
John is facing problems related to aging workers of Japan, high cost of living in Tokyo and he is also forced to extend American Union contract to the Japanese workers. The best strategy for John will be to hire fresher workforce, train them as per his requirements and also he can mold them in his American working culture or style. If John hires local, college passouts, he can of course save a lot on salary as; John will have to pay lesser to young graduates in comparison to experienced campaigners. At the same time young engineers or workers can be trained easily to work for the company and they will also save John’s expenses regarding providing them a suitable home as being local, they already will have it.
Que 2. How could he persuade either union or his joint venture partner to help him with this problem?
Once John has signed the Joint-Venture contract, accepting all their terms and conditions, it will be difficult for him to change his stance on that. He can of course persuade Union members to support him by luring them with bonuses once his new unit in Japan kicks off. He can negotiate with the Union members that if they support him with the new Unit, he can provide them bonus or raise their payscale from the profit he makes from his Japanese Unit. All they have to do is to make him run this new venture by his own ways without their interference.
Que 3. What types of cultural training, both in the US and in Japan, that might be necessary for John's new venture to be successful?
In order to make employees for both the unit feel equal, John can make a unified cultural norms or centre for his entire business group. The HR department will ensure that celebrations of success are enjoyed equally at both the units so that all are aware of each other’s growth. Similarly they can train Americans with Japanese language and culture and vis-à-vis he can train Japanese with American language and culture. This way both the units will operate in friendly culture.
Que 4. What could John have done differently to eliminate some his current labor problems?
John could have understood the working scenario of Japan and should have foresighted the cultural issues that can creep up once he decided to start a new unit under same company name.
In order to subside his labor issues, John must create a unified company culture where labors and employees of both the unit see each other’s success as their own and they hope for entire group to be successful, which will make them grow automatically.
1. Labour Laws of Japan (2012). Retrieved from http://www.jil.go.jp/english/laborinfo/library/Laws.htm
2. Cultural differences between the U.S. and Japan (2011). Retrieved from http://www.equinekingdom.com/miscellaneous/stuff%20I've%20written/culture%20differences.htm