Analyzing and Management recommendations of a Company

Analyzing and Management recommendations of a Company

Blue- Line Company management situation

Blue- Line Company is one of the best Australian consulting companies in matters pertaining to indoor environmental health and safety. The Company focuses on providing its customers with pieces of advice and solutions regarding the quality of air, water, and mold together with lead exposure issues. The Company was established in 2010 and has employed close to 200 employees with its headquarters in Australia. The main aim of the Company is to assist its clients to establish healthy homes and workplaces. Their services range from testing to problem resolution, assessing the problem, analyzing the root cause, and issuing independent recommendations to their clients. In the last 9 years, Blue- Line Company has grown rapidly to be the leading Company for providing solutions towards achieving a healthy indoor environment and has the desire of reaching out to more countries in the broader region of Asia market including India, which has got a similar climate and shares the same air quality problems with Australia. Blue- Line Company believes that by entering the India market, it would be in a position to increase their annual sales. The Company has offered solutions and services to more than 35% of Fortune 100 companies and has completed over 7000 projects as well.

The immediate strategy for Blue- Line Company has been to improve the already existing business and also strive to maintain leadership within the numerous numbers of industries that they are in. They are looking forward to unlocking all the efficiencies across all the businesses involved by increasing the effectiveness of their operation as well as reducing cost and at the same time, delivering projects that have high-quality growth (Schuler & Jackson, 2002). The Company plans to use mergers and acquisitions as a strategy for entering into the Indian market.

The use of mergers and acquisition (M&A) often cause acceleration of growth of a well-established business strategy as it offers the organization the potential to enter new markets, access top talent as well as reduced costs. Moving Blue-Line Company overseas through either merger or acquisition is expected to face some uncertainties as the Company finds itself in a new and unfamiliar market (Schuler and Jackson, 2002). Although there are significant opportunities that come with the merger, there are also new levels of risks that are likely to face the emerging international Company. Therefore, it is important to conduct some modification to the Company as it goes abroad in order to remain competitive, grow bigger, create synergies and economies of scale (Schuler & Jackson, 2002).  This is the management and organizational situation that is currently being faced by the Blue-line Company.

When Blue- Line Company, for instance, merges with or acquires another company in India, some changes and modifications are likely to occur, such as eliminating redundant positions or combining teams and departments. Nevertheless, some of these modifications ought to be done carefully as they involve complete alteration of the normal Company’s operation as well as employees. The Company will be expected to retain its key employees, especially the senior executives such as the CEO, as he or she serves as a beacon of the Company who carries the values of the Company at heart.

Schuler & Jackson (2002) argue that choosing the right mode of entry is very critical for any company that is interested in expanding its market to the international level because the choice has a significant influence on the success of the business. Depending on the selected strategy, there could be effects on company performance. Bhagwat, Brogaard, & Julio (2017) explain that entry strategies can significantly affect performance through the determination of the control level, levels of risk, and the Company share in foreign markets and eventually result in either a company becoming successful or failing. The definition of entry mode performance is given based on profitability or efficiency. Interventions that are believed to be non-profit are assumed to be reflected in long term profits; they include knowledge and resource development or strategic moves against competitors.

As a result of its foreign investment to India through a merger, Blue- Line Company is likely to face numerous changes regarding communication, management, recruitment, new production methods, restructuring the organizations, and other operational aspects. Making such changes without lying a carefully though plan and process would lead to chaos (Bhagwat, Brogaard, & Julio, 2017). Strategic change management, therefore, allows Blue- Line Company to organize, plan, and execute changes. Strategic change management refers to the process of managing organizational changes in an organized way, such to ensure that organizations achieve their short and long-term goals. The method may include communicating the proposed merger and foreign investment, costs, timeline, and how an employee would be trained before or during the change.

Management recommendations for Blue- Line Company

Strategic planning and management

Hayes (2018) outlines that organization strategic planning usually legitimizes the program of change. The triumph of strategic change management depends explicitly not only on the ability of the organization to come up with the new process and relevant structure but also on the capability of the organization to plan for its new mission and vision in the new business environment. Changes within an organization usually have two distinct dimensions, people and business dimensions. Proper planning by management helps the organization to achieve her long-term goal of going international. The strategic planning by Blue- Line Company should address a number of issues that include change process, strategy, structure, systems, implementation as well as post-implementation of the proposed change (He, 2011). Organization planning, more also in relation to moving into the international market, starts with a proper analysis of the already existing condition in the home market to understand the actual call for the transformation and the general ability to move overseas.

The specific goals, relevant data, and the whole change procedure have to be planned for. Blue- Line Company has to plan for her international operational competence, financial outcomes, and relevant leadership obligation. Hayes (2018) states further that while change is a kind of steady experience, awareness and acquaintance regarding the important issues that are related to the administration of the change cannot be established within those who are held accountable for the whole progress. Therefore, if the Company is going to realize a higher level of success in its changed development strategy, leaders, managers, as well as executives have to have some proper plan on how to recruit employees overseas, their compensations, training, and marketing strategies to be employed.

Organizational structure and design

As a result of international growth, structural reforms occur, and this also changes the design functions of the organization. There are three structural, organizational forms that Blue- Line Company may choose from as their move abroad. They include; centralized, decentralized, and transition structure.  The centralized structure is mainly characterized by a situation where power rests on the organization’s top management. Under this structure, the key role of the Company’s executives will be to maintain control over the global level management position such as divisional and subsidiary managers so that operation of the oversea branch is under central control in the home country (He, 2011).

Additionally there is also decentralized organizational structural where companies devolve responsibilities to small groups of managers at various company branches who confine their roles to senior management at corporate headquarters (Dowling et al., 2017).  In this type of structural design,  the branch managers are allowed to make a business decision on behalf of the Company as long as they communicate such decisions back to the headquarter. Conversely, transitional organizational structural form applies in companies characterized by medium-size corporate staffed by a relatively small group at corporate headquarters. Companies that apply this structural form are operated in a decentralized and product-based structure (Kraus et al., 2017). The Blue- Line Company should consider adopting decentralized structural design as it moves overseas. This is mainly because the merger or acquisition relies on a team environment at different levels in the Company. Moreover, it should utilize individuals with a variety of expertise and knowledge at each level for running the business.

Other than the organizational structure, there are four approaches to international staffing that Blue Line Company is likely to develop. These four approaches include ethnocentric staffing, polycentric staffing, geocentric staffing, and regiocentric staffing. Ethnocentric Staffing involves staffing the most valued positions into foreign subsidiaries with expatriates from the local country (Dowling et al., 2017). This is because expatriates are strongly believed to better represent the interest of the home office in a foreign country. The expatriates, in this case, are chosen from the current employees based in the home country and only get relocated to the foreign subsidiary. The apparent advantage of ethnocentric staffing is the alignment of interests and the general perspective of the home office (Dowling et al., 2017).  It is possible to relocate employees who have a clear record of excellent performance. This would be the ideal staffing structure for Blue- Line Company.

The other option available for Blue Line Company is to adopt a kind of polycentric staffing, a situation in which a company employs host-country nationals for a position within the Company, from the junior staff to the organization’s top leadership. This type of staffing can be advantageous as the nationals of the host country will be in a position to properly guide the Company on conditions of the local market, laws, politics as well as culture in every foreign location (Dowling et al., 2017).  Local employees are equally cheaper, and there is no form of relocation expenses that the Company will undergo. However, relying on the local staff may means that the Company disconnects with the interests and perspectives of the home country in Australia.

The third option is the regiocentric approach. Scholars argue that the regiocentric approach to the recruitment process means that the Company hires or rather transfer people found in the same region to fill up all the vacant positions (Dowling et al., 2017).  For instance, employees are only transferred from one region to manage the international branch.  This might not be the best alternative in the case of Blue- Line Company.

Geocentric staffing is another approach of staffing in which the Company hires people to fill the relevant positions without considering where they originate from or where they are living (Dowling et al., 2017). This comprises of hiring remote employees, and relocating employees.  For Blue- Line Company to apply the geocentric type of approach, it has to develop a kind of global outlook, which is presently not the case.

Managing organizational change

Strategic management utilizes systematic means and processes to manage the strategic changes proposed by an organization.  The process is carefully thought and executed to ensure a smooth transition into the next stage.  The process runs for a specific period and is expected to yield the outcomes predicted during the onset.  The success of a strategic change management program for Blue- Line Company relies on the ability of the firm to device new procedures that match organizational goals of going overseas.  It also depends on management’s ability to come up with new goals, objectives that blend with the strategic goals, and projected change outcomes (Fernandez  et al., 2017). Change management may take two dimensions; the business dimension or the people’s dimension.  Managing business dimensions requires Blue- Line Company to look at several key things.

Most importantly, they need to have a strategy, lay down the change process, procedures, and implementation structures.  Effective management of business dimensions requires managers at Blue- Line Company to synchronize all the internal and external factors that may limit their desire to go overseas (Hayes, 2018). On the other hand, Peoples’ dimension requires managers at the Company to address skills, abilities, and additional reinforcements.  Management at the Blue- Line Company may also need to access employees’ attitudes, desires, and personal goals towards the transition into a foreign market.

Financial accounting

Licensing of accountants or accounting activities becomes less independent as the Company will be moving overseas because the accountants from one country are also employed in other countries. Different countries harmonize their criteria for licensing accountants or adjust their trade rules to facilitate trade. For example, in India, the operational rules and terms for employment for accountants have changed significantly. Globalization with information technology has prompted India to change accountancy rules from the generally accepted accounting principles (GAAP) to the international financial reporting standards (IFRS) because transactions have become international, making it necessary to have a standardized reporting system or criteria (Pomerance, 2014). Blue- Line Company should equally develop such international reporting policy as it seeks to globalize its operations. The change of rules and reinforcing professional standards has enabled profit-oriented entities to use IFRS with equal authority as a system for ensuring rate-regulated operations among partners in the open economy.

Usually, the accounting equation states that Assets = Liabilities + Shareholder Equity (Phillips & Heiser, 2011).  Taking the case of Blue- Line Company, assets are all the resources that Blue- Line Company is having, and they include cash received from clients, the buildings, inventory, and account receivable. As per the accounting equation, the amount of the company’s assets has to equal the sum of liabilities and shareholder’s equity even as they plan to move overseas (Phillips & Heiser, 2011).   The liabilities of the company are what Blue- Line Company owes others, and these can comprise of wages and salaries paid to staff, income taxes payable, the maintenance cost, and the company loans (Phillips & Heiser, 2011).  The daily expense for the organization, such as the money used to buy equipment, among others, also amounts to company liabilities.  Shareholder equity is usually obtained by subtracting the liabilities from the asset. Asset¾Liabilities =Shareholder Equity. It will be important for Blue- Line Company to maintain clear accounting records for its financial performance and subsequent growth.

The accounting managers at Blue- Line Company have the greatest responsibility of not only keeping safe the assets of the Company overseas but also maximizing them while at the same time minimizing the liabilities. In doing that, the manager will be increasing the overall shareholder equity and hence promoting the growth and productivity of the whole organization.

Creating a business plan

In the setting up of a venture, some critical factors must be taken into consideration in order to make sure that the business runs efficiently and more safely, the greatest of all factors in the development of a business plan. Although, the projections and forecasts are essential for the setting up and management of a business, the numbers in the business plan is not the most important, as Sahlman w, elucidates on “How to write a business plan” the business plan  outline the broader scope of the real business, highlighting product offered, marketing strategy, organizational structure, and financial management. As Blue- Line Company seeks to venture into the Indian market through a merger with another local company in India, they must come up with a new business plan that fits the market. The plan should be focused on the models and how the company and the team responsible for the operations, strategies, and setting up of the company abroad will respond in case of failure or low performance.

Among the critical factors for the success of a business is to optimize the utilization of the resources used in the implementation and operation, and it has to meet customer needs; and at the same time, be economically viable (Schatz, 2017). Some keys factors for the success of a business plan are People, place, product, and promotion. The plan has to be focused on these four points. Moreover, the opportunity aspect for investing in India has to be analyzed for furtherer understanding of what the market is about, all of the prospectus, and possible barriers to the success of the business.

Corporate social responsibility and ethics

Corporate social responsibility (CSR) has always been an essential topic within recent years, with the majority of the companies making serious announcements on their aggressive goals to their clean energy usage. To a majority of these companies, transitioning their usage of energy into renewable energy sources plays an essential role in meeting sustainable goals (Mezher, Tabbara & Al-Hosany, 2010).  This should be a no different scenario from Blue- Line Company. As the name suggests, the company should make it clear that they stand for Blue energy and a sustainable environment.

For Blue- Line Company to remain competitive in the foreign market in India, for them to attract new customers and to increase the level of trust that consumers have, they must remain socially responsible for all the stakeholders, more also the consumers. For instance, a study carried out by Munilla & Miles (2005) mentioned that company projects that give support to environmental and social issues always maintain the vast number of consumers and donors who take such said companies as positive light, self-identity and sustainable.  Therefore, the company needs to make it clear that they focus on indoor environmental health and safety.

Operational and performance management

Rapid changes in the business environment, increased competition, and globalization will be the standard backdrop for Blue- Line Company as it seeks to move abroad. In order to compete effectively, Blue- Line Company must continuously improve its performance by minimizing costs, differentiating its products, and enhancing quality.  Recently, scholars have examined human resource management as a way of enhancing competitive advantage.  The underlying assumption by the scholars and practitioners is that strategic, operational management is essential for business growth, especially for the case of Blue- Line Company, who plans to open more branches overseas.

Performance management should be based on individual employee’s compensation package, the specific duties and tasks being undertaken by the respective expatriate, the amount of support that such employees perceive to be receiving from the company leadership, and how the cultural practice of the host country impact on the expatriate together with their family members (Briscoe, Schuler & Tarique, 2012). The performance criteria should also involve matters of compensation as it is key in the performance management of the expatriate employees since pay and allowances usually profoundly impact on the motivation and commitment of the employees to work extra hard.

References

Bhagwat, V., Brogaard, J. and Julio, B., 2017. A BIT goes a long way: bilateral investment treaties and cross-border mergers. Available at SSRN 2872989.

Dowling, P. J., Festing, M., & Engle, A. D., Sr., 2017. International human resource  management (7th ed.). Hampshire, United Kingdom: Cengage Learning.

Fernandez, S. and Rainey, H.G., 2017. Managing successful organizational change in the public sector. In Debating Public Administration (pp. 7-26). Routledge.

Hayes, J., 2018. The theory and practice of change management. Palgrave.

He, S., 2011. The Influential Factors on Internationalization of the SMEs in China: on  Wenzhou¡¯ s Shoe Industry and Policy Implications. Research in World Economy, 2(1), 48-57.

Kraus, S., Mitter, C., Eggers, F., & Stieg, P., 2017. Drivers of internationalization success: a conjoint choice experiment on German SME managers. Review of Managerial Science, 11(3), 691-716.,

Munilla, L. S., & Miles, M. P. (2005). The corporate social responsibility continuum as a component of stakeholder theory. Business and society review, 110(4), 371-387.

Phillips, F., & Heiser, L. (2011). A field experiment examining the effects of accounting equation emphasis and transaction scope on students learning to journalize. Issues in Accounting Education, 26(4), 681-699.

Pomerance, M. (2014). The economist. Ottawa: Oberon Press.

Schatz, R. D., 2017. Issue: Social Entrepreneurship Social Entrepreneurship.

Mezher, T., Tabbara, S., & Al-Hosany, N. (2010). An overview of CSR in the renewable energy sector: Examples from the Masdar Initiative in Abu Dhabi. Management of Environmental Quality: An International Journal, 21(6), 744-760.

Briscoe, D., Schuler, R., & Tarique, I. (2012). International human resources management: Policies and practices for multinational enterprises (4th ed.). New York, NY: Rutledge.