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March
2, 2004
MEXICO
PRESENTATION DUTIES:
Tentative presentation outline
Part 1- Introduction:
introduce group and outline events of the training session
Part 2- Speaking
responsibilities:
Each member will speak for 3-5 minutes on each of our areas of
research, to share info on Mexico.
You only need to be an expert in your area.
Part 3- Show
class the Website (Rob)
Part 4- Presentation
(Shawn- technical/bus. plan, overall view of our competition
strategy)
Part 5- Presentation
(Oona- overcoming cultural differences; cultural artifacts,
money, accuracy(hands on)
Part 6- Presentation
(Mike-
learning activity/manufacturing process training, possibly? (FUN!))
Part 7- Conclusion,
questions, etc.
Group
members are responsible for these components by March 15th:
All
Members- Emailing Rob your research & cites by end
of Spring break- March 15th at latest (ALL MEMBERS)
Eva needs all this info in ASAP to write the paper.
Shawn-
Creation of business plan for chosen business; Creation of written
training session
Oona-
Organize
Research/Paper writing/ Cultural Issues; Materials for training
packet
Michael-
Breakdown
of the soccer ball/sporting good manufacturing process; Technical
Issues & Viability, Manufacturing, overall product creativity
& direction; Activity section of training presentation- hands
on, fun.
Rob-
Proj. Organization/ Management; Website for both project &
training
Eva-
Paper Writing with Oona; Responsible for final written paper
-------------------------------------------------------------------------------
MEXICO
GROUP Chose soccer ball manufacturing as field for project.
1)
Manufacture this product(s) in Mexico using our trained American
team and trained local labor
2) Market, distribute, sell this product(s) in Mexico
3) Export this product(s) to America and other countries, for
marketing, distribution and sale
Spalding
Soccer Balls
(an example)
Anyone know anyting about the soccer ball manufacturing process
and raw materials required?
Thanks!
Rob Ziruolo
ciscorob5@aol.com
(239) 410-6031
http://www.ciscorob.com/global/
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Mexico
- Project Outline Links
|
|
| Rob-
Proj. Organization/ Management; Website for both project & training |
| Michael-
Technical
Issues & Viability, Manufacturing, overall product creativity
& direction; Activity section of training presentation |
| Oona-
Research/Paper
writing/ Cultural Issues; Materials for training packet |
| Eva-
Paper Writing with Oona; Responsible for final written paper |
| Shawn-
Creation of business plan for chosen business; Creation of written
training session |
| ALL
MEMBERS: Send info w/ cites to ROb for your research sections |
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MEXICO
GROUP PROJECT TIMELINE
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Jan
20
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Group
creation, agreement formed & submitted- DONE! |
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Jan
27
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Agreement
on business; Soccer: DONE! |
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Feb
3
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Research
& Development of your section - 25% done- DONE |
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Feb
10
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Research
& Development of your section 50% done - DONE |
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Feb
17
|
Research
& Development of your section - Assembly of components should
be 75% done |
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Feb
24
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Website,
Training kit, training activity, paper to final completion stages |
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Mar
2
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Project
due to group for peer review. We all look at everything to find weaknesses
(content and grammar), and make adjustments |
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Mar
9
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Spring
Break. Drink and be merry. |
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Mar
16
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Final
assembly of project with corrections made |
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Mar
23
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Project
due to instructor |
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Mar
30
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Assemble
20 employee training kits. Practice the fun/activity part of the presentation |
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April
6
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We
present training session to the entire class |
| |
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I
can be reached anytime at 239-410-6031 or ciscorob5@aol.com
if any problems arise. Good luck!
-Rob Ziruolo |

I. Country Information & Background- Rob
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Start
section 1,
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Country
Information and Background
Geographic
location/ Neighboring countries and bodies of water- Middle
America, bordering the Caribbean Sea and the Gulf of Mexico, between
Belize and the US and bordering the North Pacific Ocean, between
Guatemala and the US
Population
Stats:
Population
and population density- 104,907,991 (July 2003 est.)
Population: 100,294,036 (July 1999 est.)
Age
structure:
0-14 years: 35% (male 17,987,500; female 17,289,875)
15-64 years: 61% (male 29,610,813; female 31,216,342)
65 years and over: 4% (male 1,873,986; female 2,315,520) (1999 est.)
Population
growth rate: 1.73% (1999 est.)
Birth
rate: 24.99 births/1,000 population (1999 est.)
Death
rate: 4.83 deaths/1,000 population (1999 est.)
Net
migration rate: -2.84 migrant(s)/1,000 population (1999 est.)
Sex
ratio:
at birth: 1.05 male(s)/female
under 15 years: 1.04 male(s)/female
15-64 years: 0.95 male(s)/female
65 years and over: 0.81 male(s)/female
total population: 0.97 male(s)/female (1999 est.)
Infant
mortality rate: 24.62 deaths/1,000 live births (1999 est.)
Life
expectancy at birth:
total population: 72 years
male: 68.98 years
female: 75.17 years (1999 est.)
Total
fertility rate: 2.85 children born/woman (1999 est.)
Literacy:
definition: age 15 and over can read and write
total population: 89.6%
male: 91.8%
female: 87.4% (1995 est.)
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Nationality:
noun: Mexican(s)
adjective: Mexican
Religions:
nominally Roman Catholic 89%, Protestant 6%
Languages: Spanish, various Mayan, Nahuatl, and other regional indigenous
languages
Literacy:
definition: age 15 and over can read and write
total population: 89.6%
male: 91.8%
female: 87.4% (1995 est.)
Ethnic
groups: mestizo (Amerindian-Spanish) 60%, Amerindian or predominantly
Amerindian 30%, white 9%, other 1%
Currency-
Guide
to mexican currency
Transportation-
Automobiles are the main mode of transportation in Mexico City.
To address the problems of air pollution and traffic congestion,
the authorities have launched car-free day campaigns. In addition,
efforts have been made to establish auto-emission inspection and
control systems. The main public transportation systems in the city
are buses and subway trains. The subway system was constructed with
French technology in 1968 when the Mexico Olympic Games were held.
Some subway stations exhibit remains of an ancient city, which were
discovered during construction work. http://www.nsca.gr.jp/english/mexico/
complete
list of gov't bodies
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Form
of government- conventional long form: United Mexican States
conventional short form: Mexico
local short form: Mexico
local long form: Estados Unidos Mexicanos
Government type: federal republic operating under a centralized
government Administrative divisions: 31 states (estados, singularestado)
and 1 federal district* (distrito federal); Aguascalientes, Baja
California, Baja California Sur, Campeche, Chiapas, Chihuahua, Coahuila
de Zaragoza, Colima, Distrito Federal*, Durango, Guanajuato, Guerrero,
Hidalgo, Jalisco, Mexico, Michoacan de Ocampo, Morelos, Nayarit,
Nuevo Leon, Oaxaca, Puebla, Queretaro de Arteaga, Quintana Roo,
San Luis Potosi, Sinaloa, Sonora, Tabasco, Tamaulipas, Tlaxcala,
Veracruz-Llave, Yucatan, Zacatecas
Independence:
16 September 1810 (from Spain)
National
holiday: Independence Day, 16 September (1810)
Constitution:
5 February 1917
Legal
system: mixture of US constitutional theory and civil law system;
judicial review of legislative acts; accepts compulsory ICJ jurisdiction,
with reservations
Suffrage:
18 years of age; universal and compulsory (but not enforced)
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Main
industries and locations within country- The
main industries of Mexico City are manufacturing and commerce. The
metal products, textiles, foodstuffs and publishing/printing industries
are flourishing. The Mexico metropolitan area is home to 75% of
all domestic companies in the textile industry, and more than 47%
in the rubber/plastic and publishing/printing industries.
Capital
City - Mexico City (Mexico City's climate is temperate year
round, though it can get a little nippy at night from November to
February. During this period, because of thermal inversion, air
pollution is often at its heaviest. You can generally count on April
for ubiquitous lilac-colored jacaranda blossoms coupled with nice
temperatures. Though the city will sweep you up at any time of the
year, the holiday periods of Semana Santa and Christmas to New Year's
are particularly jovial, busy times to visit. Many Mexicans do their
holidaying in July or August.) http://www.lonelyplanet.com/destinations/north_america/mexico_city/facts.htm
Mexico City, the capital of the United Mexican States, is the center
of the country's politics, economy and culture. Situated in the
middle of the nation at an altitude of 2,200 meters above sea level,
the city possesses a mild climate throughout the year. In the rainy
season from May through October, there are sudden showers in the
evening.
Mexico City, which was built by the Spaniards on the ruins of Tenochtitlan,
the capital of the Aztec empire nation, boasts of a long history
and multi-layered culture.
http://www.nsca.gr.jp/english/mexico/
Relevant
history- In 1325, the nomadic Aztec tribe established the capital
of Tenochtitlan, where Mexico City is currently situated. Over a
relatively short period of two hundred years, they conquered surrounding
tribes and built an empire.
In 1519, Spanish conquerors led by Hernan Cortes came to the Aztec
empire nation and took full control of Tenochtitlan on August 13,
1521. After reducing houses and palaces to ruins, Cortes built a
new city on the site. However, having flourished as the political
center during the Aztec era, Mexico's unique culture was handed
down to the colonial days. It is often said that you can hardly
discuss Mexico's important historical matters without taking Mexico
City into account. Since its independence from Spain in 1821, Mexico
City has seen many changes of political power.
http://www.nsca.gr.jp/english/mexico/
On
December 21, 1970, the Basic Law on Federal Districts was promulgated.
Under the law, Mexico City was divided into 16 administrative districts
and designated as the federal capital where the three powers of
legislation, administration and judicature are concentrated.
Design
of flag and what symbols represent- Flag description: three
equal vertical bands of green (hoist side), white, and red; the
coat of arms (an eagle perched on a cactus with a snake in its beak)
is centered in the white band
Mexican
Holiday Calendar- http://www.mexonline.com/holiday.htm
End
section 1,
Country Information and Background
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II.
Cultural Patterns & Variables- Oona
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Cultural
Patterns & Variables
Hofstede
Power distance is the level of acceptance by a society of the unequal
distribution of power in institutions. Mexico ranks high on power
distance. Mexican business culture value expectations are respect
status roles and top-down hierarchical structure.
Uncertainty avoidance refers to the extent to which people in a
society feel threatened by ambiguous situations. Mexico ranks high
on uncertainty avoidance. Mexican business cultures resist change.
Collectivism is where a culture has tight social frameworks, emotional
dependence on belonging and a strong belief in a group. Mexican
workers prefer collectivism because it values the good of the group,
family or country over individual achievement. Value expectations
are shared responsibility, moral obligation, paternalistic management,
and harmony.
Masculinity refers to the degree of traditionally "masculine"
values like assertiveness, materialism and lack of concern for others.
Machismo is the sharp role differentiation based on gender. Machismo
and prestige are important characteristics of the Mexican culture.
Trompenaars
Particularism approach puts the first obligation on relationships
and is more subjective.
Affective is the focus on the emotional orientation of relationships.
Mexicans would openly express emotions even in a business situation.
Diffuse oriented cultures have a spillover from work into personal
relationships and vice versa.
Styles of negotiating, decision making, & leadership
Styles of negotiation are as follows:
Emotional sensitivity valued, emotionally passionate, great power
plays; use of weakness, loyalty to employer, face-saving crucial
in decision making to preserve honor; dignity, execution of special
interests of decision expected, condoned, argumentative when right
or wrong, passionate impatient with documentation as obstacle to
understanding general principles, impulsive, spontaneous decision
making, what is good for the group is good for the individual, personalism
necessary for good decision making.
Most managers find that the management style that works best there
is authoritative and paternal. Paternalism is expected; the manager
is regarded as el patron, or father figure, whose role is to take
care of the workers as an extended family.
Levels of general trust in people - 35%
Values and Attitudes
Emphasis placed on materialism vs. relationships - Mexican workers
place family or country over individual achievement. Family is of
central importance; loyalty and commitment to the family frequently
determines employment, promotion, or special treatment for contracts.
Hard work vs. leisure - Mexican workers allow time for socializing
and appreciating their cultural artifacts, buildings and so forth.
Cultural taboos (alcohol, literature, etc.) For the most part, Mexican
workers expect that authority will not be abused but rather that
it will follow the family model where everyone works together in
a dignified manner according to their designated roles.
Attitudes toward time (Importance of schedules & Importance
of efficiency) Mexican people are very warm and have a leisurely
attitude toward time. Mexicans have a polychronic time system because
they will many times put an important conversation ahead of being
on time for a business meeting.
Attitudes toward work - Mexican males value work only in its ability
to fulfill their culturally imposed responsibilities as head of
household and breadwinner rather than to seek individual achievement.
Strong vs. weak work ethic - Mexicans will strive to work, but the
managers are expected to be the authority and all power rest with
them. For the most part, if not told to do it, the workers won't
do it. Nor will they question the boss or make any decisions for
the boss.
Opportunity for success and reward - Given that getting ahead is
often associated with outside forces than with one's own actions,
the motivation a reward system becomes difficult to structure in
the usual ways.
Impact of technology- for those who can afford it, cellular phones
aide in the communication between farmers and workers. Local malls
offer the use of Internet at a low price.
Attitudes toward cultural change - Mexican border facilities have
boomed, and many of those jobs are now high tech, bringing training
and a higher standard of living for many Mexicans.
Acceptance of traits from other cultures
Attitudes toward foreign companies Latin Americans have a high-context
culture because they expect others to understand unarticulated moods,
subtle gestures, and environmental clues resulting in misunderstanding.
Impact of international companies on local culture
Manners and customs
Appropriate behavior, speech, and dress
Suitable circumstances for conducting business Mexican workers need
more communication, more relationship building and more reassurance
than US employees. Mexican workers are now motivated with higher
wages because they highly value the enjoyment of life. Many companies
in Mexico provide recreational facilities like a picnic area, a
soccer field and so forth.
Important customs (folk and popular) Mexicans are very proud and
patriotic; respeto is important to them and slights against personal
dignity are regarded as a grave provocation. They like to take time
to celebrate birthdays and anniversaries. This will increase loyalty
and effort.
Gift-giving customs - Bonuses are expected regardless of productivity.
In fact, it is the law to give Christmas bonuses of 15 days pay
to each worker. Fringe benefits are also important because most
Mexicans are poor. Benefits are also important because they help
to manage family related issues. They are positive motivators for
employees to at lease show up to work.
Business cards
Social structure
Prevalence of nuclear vs. extended family
Importance of gender roles& business opportunities for men vs.
women (be specific about the role of women in society and business)
Classes of the society - Companies must understand the local infrastructure
problems and can provide a bus to minimize absenteeism and tardiness.
The also can provide onsite health care facilities for workers and
their families, nurseries, free meals and even small loans in crisis
situation.
There is a burgeoning middle class in some areas, and there are
other areas where extreme poverty and environmental pollution prevail.
Rigidity of social strata & the potential for mobility (upward
and downward) Mexican business culture value expectations are respect
status roles and top-down hierarchical structure.
Religion
Dominant faiths and belief systems
Main religion - Christianity
Others-Roman Catholic - 89%, Protestant 6%, other 5%
Influence on cultural values - generally speaking, many Mexican
workers doubt their ability to personally influence the outcome
of their lives. They are apt to attribute events to the will of
God, or to luck, timing or relationships with higher authority figures.
Influence on business practices/product offerings - For many, decisions
are made on the basis of ideals, emotions, and intuition rather
than objective information.
Personal Communication
Main spoken languages/Official language - Spanish, Mayan, Nahuati
Languages of large ethnic groups - Spanish
Key traits of body language (personal space, gestures, etc.) Face
to face interaction is best for any kind of business. Mexicans often
speak loudly and rapidly. They speak with their hands and have no
problems with close spaces. This makes them a high-contact culture.
Mexican employees and managers also use object language. Managers
are advised to take time out to show appreciation for surrounding
architecture, which is prized by Mexicans.
Education
Literacy of general population
Literacy - age 15 and over can read & write
Reading literacy - 422
Average level of educational attainment
Average level if schooling - 7.2
Influence of brain drain (pro or con)
Selecting an entry mode
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III.
Political and Legal Analysis- Michael
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Political
and legal analysis
1.
Political risk - any government action or political related event that
would affect the profitability of the company negatively in the long-run.
(Text Book)
2. The political risk level for Mexico is a 3 out of a 1 to 5 scale with
5 being the lowest relative risk (Text Book)
3. allegations of embezzlement, financial statement fraud, kickback schemes,
sexual harassment, stalking, computer hacking, theft of intellectual property,
anonymous threats, ethics violations, corruption, civil rights violations,
workplace violations, workplace violence, wrongful death and other internal
misconduct (www. Ipsaintl.com/includes/newsroom/pr_07_08_02_pr.cfm)
4.
5. -adaptation
a. equity sharing
b. participative management
c. localization of the operation- suit local tastes
d. development assistance- firm has control of infrastrucuture
-dependency and hedging
a. input control - control over the materials
b. market control - control distributors
c. position control - subsidiary management positions
d. staged contribution strategies - increase contributions to host nation
as company grows (Text Book)
6. Legal system - regulations to help company comply in host country (Text
Book)
7. mixture of US constitutional law and civil law system (http://www.odci.gov/cia/publications/factbook/geos/mx.html#Govt)
8. Similarity of home and host nations legal systems are basically the
same with the supreme court justices and them using a mixture of the US
constitution and civil law. (http://www.odci.gov/cia/publications/factbook/geos/mx.html#Govt)
9. Mexico has the highest level incidence of intellectual property violations
(www.netamericas.net/Researchpapers/Documents/ Ortiz%20Mena/Ortiz-Mena1.PDF)
10. Tri-National Intellectual Property Committee, comprised of representatives
from government, private industry, industry associations, non-governmental
organizations, the legal community, and universities. (http://www.natlaw.com/intelpro.htm)
11. -Federal Taxes:
1. Taxes on income, including a minimum tax based on assets held;
2. Value-added tax;
3. Import and export taxes; and
4. Payroll taxes, social security premiums, mandatory retirement savings
system, and contributions to the National Workers' Housing Fund.
-Local taxes:
1. On real property;
2. On salaries; and
3. On acquisitions of real property. (http://www.solutionsabroad.com/d_taxesmexico.asp)
12. International relations and general relations
NAFTA (Text Book)
IV.
Economic Analysis - Eva
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http://www.odci.gov/cia/publications/factbook/geos/mx.html
Economic
system
Link between
culture and economic system
Type of system
(centrally planned, mixed, or market)
Level of
economic freedom
Economic
development
GDP and GDP
per capita
Country classification
(developed, newly industrialized, or developing)
Economic
transition (if in transition from central planning)
Quality of
managerial expertise
Capital availability
Cultural
issues
Environmental
degradation
Financial
markets
Performance
of the nations stock market(s)
Exchange
rates with key currencies and recent trends
Presence
of currency controls/restrictions
Influence
of exchange rate on business activity
Affect of
inflation
Impact of
exchange rate on exports and imports
Level of
external debt
V.
Trade and Investment Analysis - Shawn
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Role
of trade in economy:
Importance of trade to the nation (trade as % of GDP)
-GDP was only a mere .9% in 2002 and trade as % of GDP is 27.3%
Main exports and volumes/Main imports and volumes
-Crude Oil, Manufactured goods, and Machinery
Main trading partners
-US, Canada, and Japan
Trade dependency
-$160 billion in exports and $168 billion in imports (Pretty even considering)
National competitive advantage:
Factor conditions (basic and advanced)
-Variety and cost of labor/ Tax savings and Overhead savings with land
use
Sophistication of demand
-Skilled Workforce
Government support or lack thereof
-Government is a big proponent of industrialization
Government's intervention in trade:
Cultural motives
-Create a better economy for the people
Political motives
-Be a respected player in the export business and have a respected economy
Protect jobs
-Top 12 labor force at 39.8 million people employed
Response to "unfair" trade by other nations
-90% if trade is free trade
Economic motives:
Strategic trade policy
-Utilize NAFTA and WTO trade agreements to ensure economic success
Trade Restriction:
Tariffs
-Phasing out current tariffs with other trading countries
NAFTA provides for the elimination of Mexican tariffs on 5,900 categories
of imports from the United States and Canada (mostly machinery and intermediate
goods), representing more than 40 percent of Mexico's overall trade.
Quotas
-Phasing out current quotas with other trading countries
International organization involvement:
WTO membership
-Member of this organization since 01/01/1995 to facilitate trade
Foreign direct investment (FDI):
FDI inflows and sources
-USA, Japan, Canada
FDI outflows and destinations
-USA, Japan, Canada, EU, South America
Government policy instruments and FDI
Host countries: restriction (NAFTA limits restrictions)
Ownership restrictions
Performance demands
Host countries: promotion
Financial incentives (Tax Treatment Advantages)
Infrastructure improvements
Home countries: restriction
Differential tax rates
Sanctions
Home countries: promotion
Insurance
Loans
Tax breaks
Political pressure
VI.
Market Potential - Eva
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http://www.odci.gov/cia/publications/factbook/geos/mx.html
Identify
basic appeal
Suitability
of climate
Absolute
product bans
Access to
materials
Access to
labor
Access to
financing
Measure market
or site potential
Measure current
sales
Quality of
workforce
Quality of
inputs
Quality of
infrastructure
VII.
Select An Entry Mode - Oona
This
must be decided prior to completion
Exporting
Direct exporting
Indirect exporting
Contractual entry modes
Licensing
Franchising
Management contracts
Turnkey projects
Investment entry modes
Wholly owned subsidiary
Joint venture
Strategic alliance
Factors to consider in cooperation
Goals of each party
Each party's commitment to common goals
Trustworthiness of potential partner
What potential partner brings to the cooperative arrangement
Strategic factors in entry mode selection
Cultural environment
Political and legal environments
Market size
Production and shipping costs
Level of international experience
Information taken from International Management and data taken
from
http://www.nsca.gr.jp/english/mexico/.
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Exporting
Direct exporting
Indirect
exporting
Contractual
entry modes
Licensing
Franchising
Management
contracts
Turnkey projects
Investment
entry modes
Wholly owned
subsidiary
Joint venture
Strategic
alliance
Factors to
consider in cooperation
Goals of
each party
Each partys
commitment to common goals
Trustworthiness
of potential partner
What potential
partner brings to the cooperative arrangement
Strategic
factors in entry mode selection
Cultural
environment
Political
and legal environments
Market size
Production
and shipping costs
Level of
international experience
VIII.
Business Resources - Shawn
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Human
resources:
International staffing policy:
Polycentric staffing- local managers are hired to fill key positions in
their country
Recruit and select human resources:
Consider culture shock and reverse culture shock
-There will be a culture shock for the Mexicans having an American company
to work for and a culture shock for American employees working on foreign
soil
Training and development needs:
Need for cultural training
-Significant need for cultural training and a plan has been developed
that will subject the American employees to Mexican culture well before
the departure.
Compensation of employees
American employees will get there current pay plus benefits for accepting
the foreign assignment. Host nationals will receive fair market price
for factory work. This wage will not have any relation to American wages.
Legally required benefits:
Managerial employees
Bonus and tax incentives (Will receive bonus based on a successful start
of the factory in Mexico. They will be measured by a variety of performance
objectives and paid accordingly)
Parental leave
Number of vacation days (No vacation will be allowed during the assignment)
Hardship or "combat" pay (Every 6 months the employees can fly
home for a week of rest and relaxation)
Non-managerial workers
Labor-management relations
Presence of labor unions
More than 90 percent of production workers in industrial enterprises employing
more than twenty-five workers belong to labor unions. Relatively few craft
or professional workers are organized.
IX.
Web Design - Rob
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X.
Overall Assembly/Organization- Michael/Rob
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Training
packet for emplolyees should include the following materials:

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