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The main purpose of establishing an organization is to fulfill the laid down objectives. A company may lose its meaning and purpose when those objectives are not met accordingly. At this juncture, an organization has to consider either quitting its operations or changing its objectives to comply with the prevailing situation. However, it may not be easy for such an organization to make an exit decision due to many factors. There are several strategies that a company can use so as to effectively quit its operations without causing external alarm.
One of the most reasonable strategies that can be used by an organization to exit its international operations is by selling the organization. It may have been difficult for the organization to operate in this country because of the fact that; it did not understand the needs of the people. An entrepreneur of the same country could transform the organization into an institution that will run in accordance with the people’s requirements (Pettinger, 2002). This will also allow the former owner of the organization to observe such operations under new management and understand what exactly made him not progress. He may not buy the same organization back but it will assist him to make future decisions.
Some of the issues that may make an organization consider implementing an exit strategy are; if the objectives of its establishment are not being fulfilled, in case of insecurity in the area of location that may jeopardize its activities incase it continues when the organization lacks support from the community of location when it has accomplished its intended mission and the technological and environmental changes that render the organizations operation invalid.
When an organization establishes its operations in a foreign country, it is likely to experience some internal and external issues upon its decision to exit. This is due to the fact that, during its operations, it had some impacts on both the local residents and its dependants (Newman, 2007). When an organization is established, the surrounding people benefit a lot from its operations. Apart from the services, they also provide employment which helps in boosting the living standards of the concerned employees.
It may not be easy for these individuals to come to terms with such a decision. The organizations on the other hand will have some questions to answer on what led to such a decision. In most cases, when a company decides to withdraw its operations, it is usually assumed that it was unable to manage its resources. This may cause it to be ridiculed by other similar organizations and also affect the other similar branches established elsewhere. Some of its major partners and investors may withdraw their support from other branches of the organization. The exit of a similar branch in one country will mean to them that, the organization can not be trusted with any other management and that sooner or later; the other branches may be closed. The employees of similar branches may also withdraw their services from the organization as a precautionary measure and look for employment opportunities somewhere else. It may therefore be difficult for this organization to normally operate its activities due to such kinds of reactions.
The major reason that may make a global organization fail is poor management. The success of a business is determined by the ability of the management to effectively deal with the internal and external challenges that it faces. When the management is not equipped with the necessary skills, then the organization is likely to fail. Lack of proper planning is another factor that may make a business fail. Before any organization is established, environmental and other factors have to be considered to ensure that, it does not fail in its future operations (Amann, 2007). With proper planning, necessary predictions can be made concerning its success or failures. Knowledge of such will make the company fully be prepared to avoid failure.
Another cause of failure is a lack of finances. Without funds, an organization can not be run. Finances are needed to meet the day-to-day business activities like transport, communication, and remuneration of the workers. Marketing is another fundamental aspect needed for an organization to succeed. When there is inadequate marketing, the potential target group may not be informed of the services of this organization which may make it fail due to lack of support.
Some of the measures that an organization can take to protect it from global failure are to critically study the country of the location before it launches its operations. Different countries have different business laws that have to be complied with by any foreign organization. Failure to do so may lead the organization into untold circumstances when it is discovered. The organization has also to ensure that, it establishes a solid relationship with the local government. This will guarantee its protection in case of an intended invasion. The local government will give it the assurance to carry out its operations and provide the security personnel when required.
References
Amann W. (2007): Managing complexity in global organizations: John Wiley and Sons pp 28-33.
Newman E. (2007): A crisis of global institutions: Routledge pp 30-36.
Pettinger R. (2002): Global Organizations: John Wiley & Sons pp 36-41.
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