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International Retailing Organizations
International integration of business organizations is a growing trend evidenced in the business arena currently. Big-Box retailing organizations are among the large business retailing organizations dealing with buying huge volumes of merchandise, and selling it at low prices, and across national borders. However, these big-box retailing business organizations are often faced with several problems. Some of these problems evidenced in these organizations include the following. Poor relations with employers and lack of coordination between different branches of these organizations are other problems evidenced in these organizations. Given a chance to acquire a big box organization characterized by the above problems, one can undertake several strategies and measures to provide remedy to such cases.
Enhancing coordination through knowledge sharing
In the field of overseas retailing, lack of coordination between a retailing organization and its suppliers can be a major concern to address if smooth relations are to be realized. Coordination problems and challenges may arise as a result of organizations’ inabilities and reluctance, to share knowledge with partnering organizations. For instance sharing information with their suppliers will help both parties in mutual understanding, which in turn creates good coordination in their trading activities.
When acquiring a big-box retailing organization characterized with coordination challenges, one can employ several measures to alleviate these challenges. For instance the firm can ensure that there is mutual inter-organizational leaning between organizations. Through establishment of knowledge-sharing networks between the supplier and the Toyota company, knowledge was easily accessed at substantially reduced costs, as well as helping in building mutual trust between all parties involved in the trading relationship (Dyer & Nobeoka, 2000). Knowledge sharing helps organizations in a relationship also helps organizations learn from their past experiences. This is an effective measure in avoiding current and future coordination challenges (Emden, Yaprak & Cavusgil, 2005). This will help in facilitating the inter-organizational understanding between the concerned and the operations will be smoother, as coordination will be highly enhanced. The partners in the alliance should strive to learn and get well acquainted with their partners. The overall benefit in information sharing will be great and productive to all parties as is evidenced in the Toyota case (Dyer & Nobeoka, 2000).
Improving Work Conditions
The issue regarding working conditions has a great influence on relation between organizations and their work either within the premise or in other international organizations linked in their business operations. Issues such as Underpayment and bad working conditions can have great effect on the sustenance of productive and smooth relations between an organization and its workers. The issue of underpayment to laborers is a big challenge to organizations conducting business activities across regions. This is an issue that can be highly detrimental to an organization’s overall productivity and profitability. Big box organizations with business units across regions are not spared either by this practice of underpayment to their workers in other regions.
Kristof & Wuddun (2000), noted that underpayment of workers was rampant in overseas companies based in Asia. In a specific case observed in a factory in Bangkok, where a lady worker claimed that she was paid two dollars per day after toiling for nine hours, in a company concerned with exporting clothing to America. In addition to the pay the working conditions were not favorable at all. Cases of American companies overseas, with dismal working conditions have also been criticized by western press for oppressing their workers. When acquiring a big box retailing organization with such dismal practices to their workers, one needs to evaluate the amount of payment to the workers and the working conditions to be in compliance with World Trade Organization stipulations.
Taming cultural differences among employees working in different cultural backgrounds can be an effective strategy in enhancing working conditions. These cultural differences are likely to arouse conflicts. Even though cultural differences may not be the real causes of retailers’ problems, they may be overrated (Pressey & Selassie, 2003).
Ensuring legitimacy in all procedures
The business activities of organizations operating across the borders should be in conformity with the regions or country’s legal structures and frameworks, otherwise the resulting effects can be interruptions on the smooth operations as well as the productivity of the organizations in the alliance. A case study involving legitimacy problems was evidenced in the sportswear industry, involving companies like Nike and Reebok, where they were outsourcing their production services to low-wage Asian countries (Nijhof, Forterre and Jeurissen, 2008). These companies oppressed workers in terms of wages, building bad and negative relations with customers and consumers. For instance, Nijhof et al (2008) noted that Nike sportswear products were associated with negative social images such as ‘slave wages’. The main legitimacy problems were related to the violation of labor standards, undermining human rights of the workers in the industries and the environmental damage during their course of operations. When acquiring a business organization operating across borders with various legal complications, some strategic remedy measures can be adopted (Nijhof, et al, 2008).
In acquiring a big box retailing organization, one can have a clear statement encompassing the codes and conducts of operations, and its expectations from the other partners overseas such as suppliers and branch manufacturers. One can also acquire programs to deal with problems regarding labor exploitation especially when outsourcing through overseas contractors, as in the case of Nike 2002, when it implemented a program to oversee labor standards for its overseas contractors (Nijhof, et al, 2008). A big box retailing organization will effectively tackle legitimacy cases if it goes on to put in place departments to be in charge of reporting issues taking place across the borders, especially issues surrounding the production and supply processes.
When one acquires a retailing firm, it becomes a necessary move to ensure that its operations comply with all legal norms as stipulated in business laws, and that all the stakeholders are aware of their duties and rights. This will enable the owner to create a good working environment, hence the promotion of coordination and good relations (Nijhof, et al, 2008). After acquiring the organization, the new owner can decide to embark on training program for all employees of the organization, with the aim of making them have a self-awareness of their rights.
Establishment of a global sourcing system
It is an effective strategy to establish of a global sourcing system, which ensures that legal processes are adhered to, and to make sure that its activities are socially acceptable within the areas of operations. A proper system will help in enhancing their relations especially with global suppliers. Coordinating business processes and practices as well as planning activities between organizations will greatly improve their relations hence global sourcing system is an effective strategy to be utilized after acquiring an organization with problems in relating with other stakeholders in the industry (Trent & Monczka, 2002). GE medical systems’ (2002), noted that a global sourcing system should involve a long-term process of finding suitable global suppliers as well as proper integration of the suppliers into their system.
Regular evaluation and good communication systems
Another strategy that can be highly effective when adopted in big box retail organizations experiencing problems in relationships is incorporating regular evaluation procedures. This strategy will help the owner to ascertain the effectiveness of new strategies acquired in relation to establishing better relationships between all the stakeholders and parties involved in the operations of the organization (Nijhof, et al, 2008). These evaluation studies should involve activities such as monitoring supplier’s conformity to the set guidelines of operation, and assessing whether causes of bad relations, such as poor working conditions are well tackled. Specifically in the retailing industry, working conditions will be improved when suppliers improve their working schedules. Good communication channels should be in place to address new ideas, such as in the implementation of new technology (Plenert, 1990)
Conclusion
In the process of acquiring a big box retailing organization, good relations between all the stakeholders should be present for the organization’s activities to be successful. However in circumstances where coordination problems and unproductive are present between partnering organizations, the acquiring owner can put in place several measures to alleviate the problems. Some of the major strategies include mutual inter-organizational commitment in learning and understanding and adherence to international labor norms. The acquiring firm on adopting all the necessary strategies to restore good relations especially with suppliers and all other parties involved, will greatly enhance the working conditions and in turn enhance its productivity.
References
Dyer, J.H. & Nobeoka, K. (2000). “Creating and managing a high performance knowledge-sharing network: The Toyota case”, Strategic Management Journal, 21, 345-367.
Emden, Z., Yaprak, A. & Cavusgil, S.T. (2005). “Learning from experience in international alliances: antecedents and firm performance implications”, Journal of Business Research, 58. 883-892.
General Electric Medical Systems. (2002). In Developing Strategic Capabilities: Building Layers of Competitive Advantage. 266-287.
Kristof, N. D. and WuDunn, S. (2000). Two cheers for sweatshops. New York Times Magazine. pg70.
.Nijhof, A., Forterre, D. and Jeurissen, R. (2008). Managing legitimacy issues in global Supply chains: the case of the athletic footwear industry. Corporate Governance. 8(4), 506-517.
Plenert, G. (1990). “Developing a production system in Mexico”. Interfaces, 20(3), 14-23.
Trent, J. R and Monczka, R. M. (2002). Pursuing Competitive advantage through Integrated global sourcing. Academy of Management Executive.16 (2), 2-4.
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