Foreign Market Entry Mode

Market entry mode is defined as measures and plans that are needed to be considered before a company grows its business into a foreign market. Entry mode actually is the most important decision to be taken by a company (Borneck, 2015). Entry modes are classified into types, considering the level of commitment for resources, the risk factor involved, and check and balance a company takes for its foreign market behaviors.

Market entry modes are divided into three main types, investment, export, and contractual mode. These categories are further divided into several other entry modes. The investment mode allows a market entry either through establishing a new facility or through investing in an existing organization. The second group of entry modes is the export mode. In this foreign market entry mode, goods are sent from one country to another for sale service and distribution. Direct and indirect export modes are the sub-classifications of the export entry mode. If the company exports its product directly into the foreign market it is called direct entry mode while if it takes help of a third party or distributor to sell tit product then the entry mode is known as indirect entry mode.

The third group is the contractual entry mode. It can be further classified as joint ventures, licensing and franchising. The right to the third party in order to bought design, brand, property and business of the parent company into other country is called licensing. A joint venture, on other hand, is a business alliance by tow companies in a foreign market. The last one is the franchising, that is a licensed agreement in between the two companies in which the selling company or the franchisor provides assistance to the partner company (the franchisee) with its system, business format and trademark. An initial licensing fee and future royalties are paid to franchisor by the franchisee.

In contrast to larger organizations, small-to-medium firms like Oporto are limited by personnel and financial resource constraints. Such companies are bound to portray a higher sensitivity level to outer influences, thus having a crucial effect on the entry mode choice (Laufs & Schwens, 2014). Hence, small-to-medium firms are least expected to opt for an entry mode with higher-commitments like acquisitions. Considering these accusations the best foreign market entry mode for Oporto is franchising. Since the company also have its franchises throughout the Middle-East and South-Asian countries like Srilanka, therefore Oporto will face very little or no issues at all while starting its business in Pakistan.

Human Resource Recommendations

Human resource management is an idea where the department entails set of activities targeted to attract, fashion, and retain the most effective and skilled workforce to carry out routine tasks, goals and targets set by the organization (Griffin & Pustay, 2013). Application of these ideas at an international level might prove to be a difficult and challenging task for managers as the cultural, economic development issues come into play here. Such differences normally call the firm for taking measures like the revision of hire-train-fire programs in each of the countries they operate.

On seeing the cultural background of Pakistan and as it is described earlier the differences between the cultures of the two countries, Oporto has to take multiple consideration before entering into the Pakistani fast food market. From figure 1, it is visible that norms and traits of the Pakistani society vary in the greater extent to the Australian one. Pakistan is a collectivist society that values long-term obligation and royalty, similarly, the uncertainty avoidance defines the firm code of behavior. But since the foreign market entry mode suggested for Oporto to dive into the Pakistani market is franchising, therefore there are no basic requirements for its human resource management approach. The only time when Oporto has to consider or look into its human resource management approach is the proposal stage or when a company representative has to visit the market and when there will be stakeholders meeting.

Methods and Strategies for Motivation and Leadership of Cross-Cultural Teams

To achieve a high-level performance through its team every organization is concerned with what strategies should be adopted (Armstrong, 2005). The best way to design the most effective strategies for achieving the motivation and leadership in a cross-cultural team is to have an intuitive investigation of values, customs, attitudes and rituals of the culture.

Methods and Strategies for Motivation

Motivation is defined as the set of overall aspects that cause an individual to select positive actions when presented with (Griffin and Pustay, 2010), or simply to act more efficiently. Motivation promotes people to use their abilities to achieve the organizational objectives and values while satisfying their needs. On the other hand, cultural differences have the ability to manipulate the motivational environment affecting one’s perception of the achievement motivation. The methods and strategies developed for the motivation must have cultural consideration especially in the case of companies like Oporto that are willing to work cross-cultural.

Despite the dissimilarities in between the core cultures, ethics and values of the two countries, the high score of Pakistan on “Uncertainty Avoidance”, in Geert Hofstede’s six cultural dimensions, defines that the people of Pakistan have greater urge to keep themselves busy and work hard. Since motivation needs just not recognition and rewards for its initiation, but also ongoing-learning, justice empowerment and most importantly the trust, therefore the firm has to offer both extrinsic as well as intrinsic rewards. Extrinsic rewards include bonuses and promotion while the intrinsic ones have the pleasure and likelihood resulting from the work (Nujjoo and Meyer, 2012).

In particular, Oporto has to offer both extrinsic and intrinsic rewards in shape of incentives, training, appreciation certificates and accreditation to its stakeholders and employees in Pakistan, in order to establish its foot in the new country and to easily and efficiently achieve its targets. Values are attitudes and traditions that persons believe essential and crucial to them (Griffin and Pustay, 2010) and Pakistani loves their customs and traditions more than anything, for that reason another best strategy, that Oporto has to pick for its successful launch is to motivate the stakeholders by blending itself within the cultures and norms of the country.

Methods and Strategies to Enhance Leadership

Leadership is defined as a role in an organization or group that is influential or capable of shaping the destiny and can make a difference in the performance of that group or organization (Sadler, 2003). In an international organizational environment, leadership faces multiple complications due to the varied nature of cultural background. Therefore it is important to have a sound knowledge of cultures and good and effective communication style in order to succeed in a cross-cultural organization.

There are two main types of leaders, task-oriented and relationship oriented. Task-oriented leaders are good for product development and research life due to their strengths and time management skills but are not a good choice for the cross-cultural project. On the other hand, relationship oriented leaders value relationships and have time for personal communication. Their positive aurora helps in escalating the motivational spirit in team members (Mäkilouko, 2003).

In the case of Oporto, the participatory leadership method, widely used by the relationship-oriented leaders, is the most effective and appropriate approach (Hudea, 2014). This leadership style, for the companies operating cross-culturally, ensures the bi-directional communication where the leader and the team achieve the goals by involving and intercommunicating. The bi-directional communication in between the Oporto and the company’s stakeholders in Pakistan will certainly allow the company to remain updated on the performance and sales of the brand in Pakistan. Besides this, any issues hindering in the proper operation of the company in the foreign market will also be tackled easily and in a timely manner.

Conclusion

This report evaluates the issues related to the corporate social responsibility (CSR) and ethics that may probably be faced by Oporto in Pakistani fast food market. Considering the cultural and religious differences in between Australia and Pakistan, and using Geet-Hofstede cultural dimension theory, a few major issues are identified. The ethical issues that may arrive in operation will be due to the different religious background. Pakistanis, being a resident of an Islamic country, may have some concerns especially when a company from the non-Muslim state has to operate in their food industry. But due to the rise in Pakistan’s fast food market, Oporto can have a potential share in the market.

After highlighting the possible issues, the report then proposes Oporto with the most appropriate international strategies and methods ranging from ethics to CSR to tackle the business expansion venture in Pakistan. Since the variations and diversity in between the cultures of Australia and Pakistan, the report suggests offering of both intrinsic and extrinsic rewards along with a participatory leadership approach. To best achieve the opportunity and to expand its business in Pakistani fast food market, Oporto has to stick to the cultural values and customs of the new marketplace. With it authentic Portuguese recipes, well-established strategies like enhancing the motivation in its employees and providing them with relationship-oriented leaders, and an appealing and creative marketing campaign; it is guaranteed that Oporto will soon be a favorite of the people of Pakistan as it has wooed the Australians.

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