Abstract
Companies often come up with different strategies that aim at helping them gain access and successfully manage their operations in overseas markets. Diverse entry modes are often chosen by firms.
The choice of entry strategies is often dependent on the local business culture of the company, as well as the nature of the operational environment that prevails in the international market.
This paper has explored the global strategy of managing business internationally as has been implemented by the Gulfstream Aerospace Corporation in its practice of expanding its operations overseas.
The findings from the research that has been conducted in the paper indicate that expanding business through partnerships and mergers is mostly utilized by Gulfstream.
The rate of adaptability to the foreign business environment ranges with the proactive strategies that help a company to quickly learn how to discharge managerial practices in a foreign business culture.
Overview of the Gulfstream Aerospace Corporation
According to GAC (n.d.), the Gulfstream Aerospace Corporation is one of the most renowned companies in the global aviation industry. The company has been in operation since the late 1950s. However, the real operations of the company were launched in 1978.
The company operates as a subsidiary firm of the General Dynamics Company. The company deals in the design, manufacture, distribution, and servicing of aircraft. The company is known for its specialization in the production and marketing of business-jet aircraft.
The company is said to have produced over 2,000 aircraft Since it began its operations. It should be noted that the company designs and manufactures different aircraft models, making it one of the most competitive companies in the business segment globally (Gufstream Website 2013).
The company has managed to manufacture and distribute different aircraft models. The aircraft models that make the company to come out as a world standard in the global aviation industry include G650, G150, G280, and the G550.
The ability of the company to sustain its operations in the global aviation industry is associated with investment in research and development. Research and development helps the company to come up with safe and reliable aircrafts that meet demand across different countries (Gulfstream, 2013).
Leadership and management philosophies in Gulfstream
The nature of leadership in a company is critical to the structuring and efficiency of operations in the company. Being a technological company, Gulfstream highly embraces quality. The management of quality in the company is termed as one of the key pillars of competition for the company.
Therefore, the management of the company focuses on outsourcing and development of a highly skilled labor team to manage technical operations in the company. In the management of its projects, the company’s management ensures that the codes of performance are highly fulfilled.
This is done in all projects of the company. Some of the codes that are critical to the attainment of quality in the company’s operations include the ‘Safety Management Diagnostic and the Safety Culture Organizational Review Evaluation’.
These codes of management ensure a high level of the minimization of flaws in the projects of the company, which in turn gives the company a competitive edge in the aircraft industry (GAC, n.d.).
Organizational design and marketing strategies
The Gulfstresm Corporation embraces flexibility in its management structures.
The company runs operations in different parts of the world. In order to attain market penetration in new operational regions across the globe, the company has sets operational centers in those regions in order to help it acquaint with the new markets.
The regional operational centers work in liaison with the main operational center of the company that is situated in the United States. The company’s marketing strategies are highly organized along international strategies of marketing.
The move to capture the international opportunities in the industry necessitates the time to time restructuring of the practices of the company (Brendan, 2005).
International business presents business opportunities for a company. However, a company must be in a position to meet the expectations of the customers in the international business environment in order to realize the benefits that accrue from the international business opportunities.
Expansion of the business landscape in China denotes a lot of travel by people into and out of the country. The Chinese private jet market is projected to attain a growth rate of 15.6 percent for 9 years.
The projection was made in the year 2009, following the signing of a business partnership agreement between the Gulfstream Aerospace Corporation and the Deer Jet Company Limited.
The partnership agreement between the two companies was signed in order to enhance the ability of the Deer Jet Company to manage the growing number of aircrafts procured from the Gulfstream Aerospace Corporation.
Under this agreement, Gulfstream is required to expand its support network in China through the deployment of its technicians in the country in order to aid in enhancing the required supportive infrastructure for the operation of the aircraft.
This provides grounds for the company to understand the Chinese business environment (Mayle 2010). This implies potential business operations for the company in China.
With a lot of indicators pointing to the fact that Gulfstream is expanding its market to China, it is critical to note the model through which the company is utilizing to penetrate the seemingly competitive Chinese market (Brendan, 2005).
As part of the marketing initiative to easily penetrate the Chinese market, Gulfstream utilized third party aircraft companies that are familiar with the Chinese business environment.
While the ability of the company to deliver aircraft cannot be doubted, the entry model into the Chinese market remains to be a critical issue. The company is reported to have sold the G200 aircraft to Sky Jet in the year 2005.
The planes were further purchased by Business Aviation Asia, which is a Hong Kong based company that has extensive business operations in the Asian region, including China (Brendan, 2005).
Human resource management policies
Human resource management practices are critical to the operations of a company since they determine the level of efficiency in the delivery of services to customers. According to GAC (n.d.), Gulfstream has approximately ten thousand employees who work across its operational centers.
The human resource management system of the company is efficient and captures the needs of the employees, who are located in the different operational locations in the USA, United Kingdom, Mexico, and recently the new operational regions in other countries like China.
The company employs people with a high level of skills. Moreover it embraces training, which helps the recruited employees to familiarize with the operational functions of the company.
The other notable HR practice in the company is the deployment of foreign staffs who help the company to comprehend the international management environment.
Leslie and Luis (1999) observed that the international business culture entails a set of business attributes such as business policies, practices and the business setting in the foreign market. This can be understood better by exploring their model of management in the appendices.
The complexity of managing business across international borders is compounded by the fact that firms are forced to learn to manage the culture in a foreign business environment.
According to Teagarden (2010), a firm can hardly access a foreign market without comprehension of the differences in business culture. Ethical issues vary in diverse markets, and so is the embrace of foreign operational cultures in Gulfstream’s foreign operations.
The main goal of the company, which also serves as its competitive edge, is the embrace of quality in technology. Therefore, the organization of human resource practices is also founded on quality. Apart from the normal routine operations, the operations of the company are deeply founded in organizational projects.
Where the staffs of the company cannot deliver on a given project, the company outsources project development teams from benchmark organizations, who help in accomplishing the company’s projects (GAC, n.d.).
Harrison and Bach (2005) ascertained that the company has not experienced any main labor dispute since the beginning of its operations. What is often experienced in the company are the small-scale labor disputes.
During the year 2002, the company’s management adopted a Dispute Resolution Process as a tool for resolving employee-drawn disputes. The Dispute Resolution Process is structured in such a way that it captures and resolves disputes of different dimensions. The process is organized in four levels, which include:
- Human resource review
- Management panel review
- Mediation and
- Arbitration
The employees are allowed to launch complaints of any labor misdeeds in the company, which are then determined through the dispute resolution process.
Basing on the labor code in each country, there are specific restrictions on the nature of complaints that can be raised and resolved through the dispute resolution process of the company.
Gulfstream ensures that the dispute resolution process does not tamper with the Federal Labor Act, which is the chief legal foundation on which all labor dispute resolution requirements are based.
The main labor dispute in the company was launched in the year 2003, where a total of 200 employees of the company claimed that they had not been remunerated, in spite of having worked overtime (Harrison & Bach 2005).
Strategies on global operation
The growth of the Gulfstream Corporation and its subsequent spread of its business operations in other regions of the world like Europe and Asia are likened to the business expansion strategies that were utilized by the company in the course of its growth.
Notable among the strategies is mergers and acquisitions as a way of strengthening operations and adapting to diverse business cultures across different regions. There have been a lot of developments in the Gulfstream Corporation since its acquisition of the General Dynamics.
The developments often revolve around the adoption of technology and expansion-oriented strategies. As of today, the aircrafts of the company are used in over forty countries across the globe.
The company is projected to gain a solid operational ground in different regions of the world through its continued investment in business expansion programs (Gufstream Website, 2013).
One area that has been the center of the expansion strategies for the company has been to monitor competition in the foreign environment. There are a wide number of aviation companies that are coming up in the Asian region.
While these companies do not pose a direct threat to Gulfstream because of its entry model into the region, this poses a lot of indirect threats to the company. It should be noted that entry through third parties prevents the company from gaining direct exposure into the Chinese market.
This means that the company can easily be eliminated from the market in case the Asian companies advance their operations and abilities to produce and operate aircraft. The prohibition of private companies to register and operate their aircrafts in China has helped to sustain Gulfstream operations in China.
However, the partnership of its third parties like Business Aviation Asia with other companies in the region poses a major threat to future operations of the company in China and the entire Asian region (Brendan, 2005).
In its bid to gain a stronger footing in global operations in other regions of the globe, especially Europe and Asia, the company faces a lot of constraints in establishing the operational centers in these regions. The problem ranges from cost to the culture and adaptability of the new operational environment in these regions.
The centers are critical to the regional operations of the company, including attending to the concerns that are raised by private customers in these foreign markets.
While the local companies find it easy to address the needs of their customers, it is quite daunting for Gulfstream to understand and respond to the demand of the customers.
However, it is quite easy to effectively attend to the needs of the customers with the setting up of the local operational centers in the new operational regions, for instance the Gulfstream Lutton factory service center in Europe.
The local companies that partner with Gulfstream also help the company to understand and deal with the demands of the customers in the foreign markets (Mayle, 2010).
While entry into markets by partnerships helps the company to easily adapt to the foreign business culture, it can be disadvantageous to the company in cases where such partnerships are terminated by the foreign firms.
The entry through establishment of subsidiaries is not highly embraced by Gulfstream, yet it can be critical in the advancement of international HR strategies of the company (Adams Media Inc., 2009).
Conclusion
This paper has explored the management strategies in the Gulfstream Aerospace Corporation. The Gulfstream Aerospace Corporation is an international company that deals in the manufacture, distribution, marketing and repair of aircraft, specifically jets.
In the paper, it has come out that the company is proactive in terms of devise and implementation of managerial strategies that helps it thrive in the international market. It has also come out that the company has been investing in the development of strategies to help it access foreign markets.
With a management philosophy that embraces quality in design and operation, combined with the ability of the company to integrate local and international human resource strategies, the company is likely to remain competitive in the industry.
Appendices
Appendix 1
Figure 1: Impact of cultural influences on the efficiency of firms in the international business environment.
Source: Leslie & Luis (1999).
References
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