Strategic planning is one of the crucial activities in an organization. The core objective of businesses is to make profits, expand its operations as well as enhance the welfare of its employees. A firm’s expansion translates to an increase in its profitability. On the other hand, improving workers’ welfare increases labor productivity hence the firm’s output. In order to achieve this, corporate organizations need to strategically plan for their operations.
In precision, strategic planning is a tailored effort by firms to establish critical decisions and actions that shape what firms are, what they do, as well as why they do so with a key emphasis on their future. It is rather a process that prepares the best ways to respond to firms’ circumstances and intentionally setting objectives thereby developing an approach to accomplish the goals (NAMAC). This paper aims at answering three questions as provided so as to assist such organizations achieve their ultimate objectives as will be outlined in the lower portion of the paper.
Ethical Issues in DHL
The initial strategic plan for DHL has been fruitful over the years and aims to expand its operations so as to further increase the profit levels. Besides, increasing profits, the organization has to satisfy its consumers’ needs including the National Safety Council that has requested the company to develop first aid kits for farms. In fact, this is a business opportunity that the company needs to venture in. Consequently, the company has an opportunity to outsource some of its manufacturing to South East. The company has to achieve these and at the same time maintain some of the ethical issues. Firstly, the company has the responsibility to provide incentives to its employees including desirable wage rates, medical allowances, regular training among others. This will possibly increase the productivity of the workers hence output. On the other hand, the firm has the responsibility to the workers who will be hired by the outsourcing firm. In line with this, the organization is responsible for their actions. This forces the organization to legally comply with certain issues since the workers are no longer directly employed by the DHL.
Before Mr.Hammond outsources workers, it is paramount to calculate the extra costs that would be incurred. As outlined above, it is a bit risky to outsource workers since the organization is liable for the actions of the outsourced workers. In case, the costs associated with outsourcing are high, then the firm needs to utilize the services of the workers already employed in the organization. In addition, the costs of expansion should not be directed to the workers as this would lower their productivity.
The Entry mode and Cultural Issues the Firm may face
The writer of the essay strongly believes that Mr. Hammond should invest in Korea instead of exporting the first aid kits to Korea. Foreign direct investment would mean setting up plants in Korea. This would assist him to closely supervise the operations in Korea as well as get more customers and also be able to improve the quality of the first aid kits so as to be highly competitive in the Korean market.
In case, Mr. Hammond opts to directly invest in Korea, he will possibly be faced with a number of cultural issues including difficulty in understanding the culture and traditions in the country besides language barriers which may affect his operations. In order, to avoid this, he needs to employ professionals who understand the culture of such a country. In case, he needs to utilize the services of his current workforce, then, he has to incur an extra cost of training them on culture issues in Korea.
A Comprehensive Competitive Analysis
In virtually all businesses, there subsists stiff competition which is healthy in availing quality services to the consumers. Today, most businesses are less competitive due to inadequate information. Businesses possessing the latest market information are highly competitive compared to those businesses with inadequate information. Consequently, businesses using obsolete technology are as well less competitive. In order to increase efficiency in production, firms need to use edge cutting technology (Erlich).
In the last decades, most businesses had little emphasis on technology and innovation. In fact, the businesses concentrated on ways they would produce more goods at lower costs. As a result of low costs of production, they would sell the goods at lower prices thereby driving other businesses out of the market. With increased globalization, this is no more and in fact businesses concentrate on use of up to date techniques of production and innovations. Use of the latest technology fosters efficiency in production while innovations avails new products that do not exist in the market. The writer of the paper strongly feels that technology and innovations are important aspects that sustain a firm’s competitiveness.
Erlich, Leandro. “The New Path to the C-suite.” Havard Business Journal (2012): 1-3. Print.
NAMAC. Strategic Planning. 23 5 2009. web. 27 05 2012.