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Red Flash is an Australian manufacturer of a range of sportswear - HSC - SSCE Business Studies - Question 24 - 2002 - Paper 1
Question 24
Red Flash is an Australian manufacturer of a range of sportswear. It is intending to expand overseas by establishing a subsidiary in a developing country. Managemen... show full transcript
Worked Solution & Example Answer:Red Flash is an Australian manufacturer of a range of sportswear - HSC - SSCE Business Studies - Question 24 - 2002 - Paper 1
Step 1
Identify TWO skills of management needed to implement this business proposal.
Answer
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Leadership Skills: Effective leadership is crucial for guiding teams through the complexities of establishing operations in a new country. This includes inspiring employees, making strategic decisions, and managing change effectively.
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Cross-Cultural Communication Skills: Understanding and effectively communicating across different cultural contexts is essential when working in a developing country. This skill helps in minimizing misunderstandings and fostering better working relationships.
Step 2
Discuss a possible conflict of interest between stakeholders in relation to the decision to locate in a developing country.
Answer
A potential conflict of interest may arise between management and local employees.
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Management Perspective: From the management's viewpoint, establishing a subsidiary in a developing country may be driven by cost-saving motives. They might prioritize lower labor costs, which could result in decisions that favor company profits over local employee welfare.
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Local Employee Perspective: Conversely, local employees may feel that their rights are compromised due to the less stringent labor laws in their country compared to Australia. They might perceive management's decisions as exploitation, leading to discontent and decreased morale.
This conflict underlines the need for management to balance profitability with ethical considerations towards local stakeholders.