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Internalization of Vechtel Company Case Study

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Updated: Jun 4th, 2019

Introduction

Internationalization is vital in business management and operations especially when a company intends to localize production tools such as labor, distribution, language, ethics, and culture. Often, in the contemporary business environment, managers face challenges in line of duty especially when servival of a company is directly affected by unfavorable market swings.

In response, several strategies are put in place such as internalization, merger, and other analytical skills to understand the situation and work on modalities that aim at reversing the same.

Thus, this reflective treatise attempts to explicitly analyse the aspects of internalization, stereotyping, cultural classification, acculturation of a company, and how culture affects behaviour and responsiveness in the market for products.

Besides, the paper is specific on management modalities adopted by two protagonists; Jean-Pierre Courbet and Jaap Harlem, in application of managements skills in different environments in the company.

Internalization phases

Apprenticeship

Foresight is very crucial since it gives a company rough perspective and overview of the future concerning the expected and unexpected changes and challenges (Sinclair, 2010). Therefore, Vechtel had to carefully examine and evaluate their past and endeavor to adopt relevant skills that will be relevant for future challenges and responsibilities.

In the quest for internalization, Vechtel Company opted for use of local labor as a strategy to include in the management team members of the French company through training of young and talented managers who are skillful. Besides, the company embraced the need for creation of an integrated structure to absorb company goals and those that favor business in France.

In turn, this gave them various meanings with relation to their prospective or viewpoints as French citizens have unique culture (Morden, 1995, p. 33). Besides, this foresight gave the company ability to look forward into the future in an effort to predict and anticipate various developments before they actually take place since some members of the decision making organ were French.

Implementation

The Company opted to embrace the unique culture of the French who were their consumers. In doing this, the company incorporated distribution agency control by the French and customized the drinks to suit consumers. In effect, the prevailing trends determine an organization’s functions and the context within which it operates (Carbaugh, 2010).

Therefore this strategy was very crucial, especially in forecast of future direction as the French market is used to customization and introduction of special aspects in the drink industry. As a strategy aimed at keeping customers, the process embraced cooperate social responsibility (Dijk & Punch, 1993, p. 175).

Internationalization

Through identification of critical trends defining workplace functions, the company was in a position to break them down into significant elements. In addition, the company embraced trend identification especially in the technological, social, political, national, local, and environmental factors.

From the analysis, the aspect of embracing culture by directly involving the French in the company was the most successful since this market is known to operate on ability to customize a product and add special touch that resembles the French culture.

Concept of Stereotyping

Trends entail those patterns that revolutionize and changes over time. In relation to personal foresight, an individual can use change patterns to visualize future changes that are likely to occur. Work in every aspect is necessary for individuals who have a vision of the future (Sinclair, 2010). For this reason, employment is a central concern when it comes to competing perspectives.

Future work has made its existence using different trends related to work. Trends may consist of counter trends and current trends in thoughts and views of a particular market or management approach (Morden, 1995, p. 33). In the process, stereotyping may arise due to perception and cultural variance.

Imagination apply when management form mental images, concepts and sensations when faced with a phenomena. Nonetheless, it has its identifiable characteristics such as its effective and quick way of working and maintaining one in the current time not forgetting that one will not be sure of what the future holds (Trompennars, 1996, p.59).

The two protagonists share very little in cultural approach towards management. Before handing over Jean-Pierre Courbet, Jaap Harlem examined and evaluated the actual trajectories of life changes in terms of prospective, present and retrospective satisfaction to conclude that operation risks in France may turn out to be the same as in Spain since the company was treading in risky grounds.

He perceives this to shared distribution network with a rival, the unique French culture, and minimal involvement of French in the production processes.

On the other hand, Pierre is an optimistic manager who believes in cultural inclusion and maximum use of local expertise in order to tailor products that are best understood by the market. In this case, his foresight spans between longevity as a factor that goes hand in hand with age of decisions and planned results. This involves considering different ages working together, that is, both the young and the older generation.

His perception accompanies the challenges of simultaneous living of generations, funding fresh approach, sustained market challenges and the difference existing between views made by the old and the young generation managers (Trompennars, 1996, p.56). All these factors translated to his perception of low quality responses in case his plans don’t work out.

Classification of Culture

Ethical management thus, is the practice(s) set by a business organization in an attempt to incorporate a sense of honesty, integrity, and truthfulness in duty performance and embracing culture.

In business management, culture encompasses the aspects of national culture, professional culture, personal culture, and corporate culture (Dijk & Punch, 1993, p. 180). Thus, the need for an ethical connection between such cultures and management is important.

National culture

France has a unique market with unique consumers who love personalized touch in products they consume. Beer consumption is a cultural event and characterized by interaction. The two protagonists share this perception on this as they perceive the importance of identifying cultural features of a market before doing business.

Jaap Harlem reflects on the localised production which embrace french language and embracing local distribution network. In order to maximise gain, Jean-Pierre Courbet steps in to cut a sustainable niche in this maekret by pushing for mergers that saw the company spring back to life.

Professional culture

Professional culture involves use of local talent, language, and labor in production and distribution channels. Jaap Harlem is aware of this and he speaks fluent French language and has embraced the need to employ a good number of managers from the locals.

Upon take over, Jean-Pierre Courbet establishes ethics and practices and offers an alternative prescription advice through streamlining operations that fit with appropriate set standards (Morden, 1995, p. 32).

There is a closely monitored channel via which employees address their concerns on corporate compliance to value ethics which is very special to the French. Reflectively, the two protagonists embraced the culture of informed decision making and extensive research in order to take responsibility for actions taken. Fortunately, this works to their advantage in both scenarios.

Personal culture

Personal culture encompasses shared beliefs, values and ethics in management. Reflectively, these protagonists share internalized set of beliefs in appropriate conduct alongside enforcement structures which are vocatively institutionalized to include the social issues.They pay attention to the concerns of the market and employees and offer suitable solutions to address these concerns formulated and presented for further debate.

They share success of turning around a misfortune into a fortune and reversing dismal performance through application of insight leadership rather than following prescriptions from books that might not be very appropriate.

As believers in inclusive management, they share the aspect of embracing diversity, affirming position, and re-energizing operations through efficient and satisfying use of labor and other factors of production (Dijk & Punch, 1993, p. 171).

Corporate culture

Ethics and practice are entrusted by the company to offer the latest researched mechanisms of maintaining acceptable performance through inclusion of the company’s culture of market leadership. The company has had a long history in the culture of brewing beer that is tailored for each market segment.

To further penetrate the market, the two protagonists are empowered to closely follow up all the work related procedures within their departments and suggest alternative review by the flexible management culture of the company.

In summary, the aspect of culture as described above enabled the company to successful acquire the French firm and establish a strong leadership position as it perfected the culture of beer brewing, introduction of special touch, personal attention to target market, and use professional ethics in management (Morden, 1995, p. 34).

Strategies Applied in Vechtel (Rotterdam HQ) and Brasseries Vechtel (Lyons)

When decisions are made on universal appropriate management culture, the outcome will be pleasing and convenient for operation in short and long term. If these principles are internalized in the management and the workforce, they will appreciate the need to uphold the social interactions standards based on what is universally ‘right’.

The bottom line of each action would be as though it were a universally accepted law governing nature (Trevino, 2010). A sense of pride will be inculcated in this group who will strive to live as per the internalized identity code of conduct.

It is necessary to consider community aspect in ethical decision making. In precision, for these decisions to hold and be positively assimilated into the work environment, a series of tests should be carried out by gathering facts and incorporating them in defined issues surrounding ethics (Dijk & Punch, 1993, p. 178).

The Vechtel Rotterdam Head quarter company uses localized raw materials, labor, management team, and trade policies. Specifically, the management team consists of the local Dutch professionals who are well conversant with the local language, culture, and market behavior and government policies.

In this respect, the head quarter company has assimilated the above aspects in production of their beer to suite needs of the locals. To maintain a lead in the market, the headquarter branch has an established and properly networked distribution channel running across Netherlands. Besides, the company’s labor pull consist mainly of the locals who are knowledgeable on culture and basically use same language (Trevino, 2010).

Although entwined with the ‘hard stuff’, the distinct concern of the managerial component at the headquarter branch company is the organization ethics in all levels. The top management plays a vital role not only in financial management, but also moral, political, and social leadership as an act of cultural ethics in its organization, functioning, and implementation of strategies (Dijk & Punch, 1993, p. 178).

On the other hand, the Brasseries Vechtel (Lyons) shares these strategies though their distribution channel is not very well established. Besides, they operate in a totally different culture and face stiffer competition. In response, this branch has embraced the strategy of merger in order to acquire the market leadership tag.

Besides, it has invested in an array of beers in order to tap the highly integrated market with ease and as a survival strategy through diversification (Morden, 1995, p. 33). However, the labor force is not fully localized as in the headquarter branch. Besides, the French branch has not fully embraced the concept utilitarianism in decision making.

For instance in an ethical quandary, utilitarian demands that before indulging any information on an impending lay off, one should first analyze the consequences of such demoralizing reality. When such information is presented after good timing to the unknowing workforce, then the company may easily be in a position to manage the response (Dijk & Punch, 1993, p. 178).

Behavior of Cultural Concerns in a multicultural situation

Reconciling internationalization strategies

When operating leverage, fixed and variable costs of labor should be separated from each other as outsourcing tend to change balancing of this ratio through moving from fixed cost to variable coast thus making variable costs predictable in the company. In addition, in contracting an outside source as a factor of production there is needed to improve quality of duty for which such a job is required (Williams, 2007).

This is possible when constituted within acceptable levels of service agreement duly aligned. In Netherlands, the operating leverage is skewed towards integrating localized labor (Trompennars, 1996, p.53). On the hand, the same has been applied in France to integrate the two companies into single unit.

Common ground

Before engaging in contractual agreements with a professional in a field of specialization, it is important to have clear understanding of knowledge and their application in hiring up of experience and healthy work culture (Morden, 1995, p. 33).

Reflectively, the company has a strong policy that work at macro level to integrate the above aspect into their operation. Through merger and acquisition of the distribution channels, the branches were in a position to affirm the overall goal of leadership via market segmentation in line with consumer behavior and culture (Trompennars, 1996, p.54).

Conclusion

In conclusion, the internalization strategy could have been improved in the following way. Before implementation, parties affected, who in this case are the company personnel, are to be informed and their opinions consulted.

Once identified, it become easy to understand views from different perspective as a gauge for various reactions thus making available an opportunity regulate and fine tune an ethical decision that fully embrace culture (Shaw, 2010).

In order to be more international, constant tests then should follow in quality of service definition levels in order for Vechtel Company to determine the lowest negotiated prices for accomplishing production goal. Besides, these should be aligned with cost restructuring as the organization endeavors to access labor arbitrage.

In addition, focus should be directed towards primary core business undertaking rather than temporary secondary shortages expected to end in short term (Williams, 2007). Decisions made should be dependent on available resources such as investment portfolio, infrastructure, personnel size, experience and efficiency for a specialized high skill assignment requiring specific qualifications.

The first face could have been shortened through explicit market research carried out to learn and understand various models of best practices which may be too complex for an in-house team to comprehend. Besides, it is a necessity to know current relevant operational experiences before engaging in apprenticeship (Murphy, 2010).

If the company had a better capacity management team, the aspects of risks and uncertainty considerations could have fallen within the company’s expectations. Through consistency and performance test mechanisms, a more desirable take over could have been within reach.

Where necessary, the management should apply an independent catalyst for testing and speeding up an impending change often referred to as a change agent (MacKay & McKiernan, 2004, p.170). If properly tested, it is possible to predetermine the expected results thus giving room for pre planning any adjustments that may arise.

From the above analysis, the aspect of localizing labor and factors of production plays the most important role in the internalization strategy. This is because of the aspect of cultural relevance in terms of language, preference, consumption pattern, and unique policies that might be in the target market.

Reference List

Dijk, V & Punch, M 1993, “Open borders, closed circles: management and organization in the Netherlands”, in Hickson, D (ed), Management in Western Europe, Walter de Gruyter, Berlin, pp. 167-190.

MacKay, B & McKiernan, P 2004, “The role of hindsight in foresight: refining strategic reasoning”, Futures, vol. 36, pp. 161-179.

Morden, T 1995, “Management in France”, Cross Cultural Management: An International Journal, vol. 3, no 3, pp. 31-38.

Murphy J, 2010 Organization theory and design, Cengage Learning EMEA, Hampshire.

Shaw, H 2010, Business Ethics: A Textbook with Cases, Cengage Learning, Alabama. Carbaugh, R 2010, Contemporary Economics: An Applications Approach, M.E. Sharpe, New York.

Sinclair, M 2010, Fear and Self-Loathing in the City: A Guide to Keeping Sane in the Square Mile, Karnac Books, London.

Trevino, K 2010 Managing Business Ethics, John Wiley and Sons, New York.

Trompennars, F 1996, “Resolving international conflict: culture and business strategy”, Business Strategy review, vol. 7 no 3, pp. 51-68.

Williams, C 2007, Re-thinking the future of work: directions and visions, Palgrave, New York.

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