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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 in unfamiliar environments and ensuring that the strategic vision aligns with local operational practices.
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Communication Skills: Strong communication is essential to bridge cultural differences and foster collaboration among diverse teams, including those based in Australia and the developing country.
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 the company's management and local employees. Management may prioritize cost savings through lower wages in the developing country, which could lead to dissatisfaction among local staff who might feel undervalued when compared to their Australian counterparts.
Additionally, customers in the home country might view the decision negatively if they perceive it as exploiting cheaper labor, leading to possible harm to the company's brand reputation. Balancing these interests is critical to achieving sustainable growth while maintaining stakeholder trust.