Using the uploaded file, Please provide a PowerPoint presentation
In this assignment, you will condense information from Outsourcing an MNC Part 2 assignment to create a PowerPoint presentation.
Create an 11 slides PowerPoint Presentation in which you:
1. Provide a title slide
2. Create a slide to introduce your presentation
3. Summarize your response to each of the criteria in Outsourcing an MNC Part 2—one slide per criterion, for a total of seven slides.
4. Provide a summary slide which addresses key points of your paper.
5. Provide a slide capturing the strategies you feel will lead to a successful outsourcing venture.
6. Please provide what you would say for narration in the notes section of your PowerPoint presentation. Each slide should have a notes section that would equate to two minutes of recorded narration.
Assignment 2 – Outsourcing an MNC – Part 2
IBT300 – Fundamental of Global Management
Professor Peter Freeman
August 31, 2021
Outsourcing An MNC – Part 2
In my previous assignment, the hypothetical company that was referenced was Cachet Call Center. Our company operates as an inbound and outbound call center specializing in debt collections, political and charitable donations, and other services mentioned in the last assignment. The Cachet Call Center management team accepted my recommendation to outsource and offshore the IT Department in Canada. Taking into account the high standards of international trade, Canada was the ideal country to consider. Another reason is the close location, which makes maintaining business relationships with the United States more accessible than other countries. The next step is to formulate an entry and implementation strategy to ensure the effective execution of the outsourcing strategy.
Culture of Canada
The first step of outsourcing a multinational company is establishing a good relationship with potential partners and other parties to be engaged in the target country. To do this effectively, one must ensure that they are well versed with the country's common cultural concepts. The company's team that will be involved in the outsourcing has to understand the country's culture. This plan offers some critical pointers of some of the cultural behaviors of Canadians.
Culture is vitally important part of human life and influences all aspects, including a country's economic characteristics. It is a crucial indicator of the macro-environment. Canada has developed a vibrant cultural sector and has numerous cultural institutions. It also has a talented music industry, a dynamic cultural media industry. The Canadian government is a crucial promoter of the preservation of Canadian culture. The business culture is quite different from the United States. The country's population have a high sense of their opinions; therefore, it is essential to respect their individual opinions. The business hours in the country are from 9.00 am to 5.00 pm from Monday to Friday. Many people prefer having appointments on Monday. Pleasantries are exchanged quickly in the country, and strong eye contact is highly preferred. Unlike the USA, the country has both English and French as its official languages. It is also essential that identification items that the company officials use have both English and French translations. Some provinces like Quebec have French in all the commercial languages. It is therefore imperative that the company engage staff who are conversant with both English and French. It will also be essential to ascertain that all people in the business meeting speak English since it is considered rude to speak in a language that all do not understand (Farha et al., 2019). Many Canadians also loathe strong scents since the country has a large number of asthmatic people. Business lunches are usually short with lighter types of food.
As earlier highlighted, it is essential to consider the cultural difference when engaging with potential partners and managing the country's team. There are several factors that the company needs to consider to gauge its level of multiculturalism. Some of the options available include: using a standardized marketing mix, using a single marketing strategy similar to the country of origin, adjusting the company's organizational culture, and contextualizing the market mix to the foreign country.
The company will have to be more open and accommodative to its heterogeneous working environment. At the moment, the country will have to expand the diversity of its workforce. This will help inform some of the strategies and organizational values that need to be considered when outsourcing.
Basic Strategies – Global Integration; International strategy, Multi-Domestic Strategy, Global strategy, and Transnational strategy
The different basic strategies for global integration also have a specific organizational culture. The multi-domestic strategy involves centralization into the home country. The international strategy involves decentralization to local foreign units. The domestic strategy involves a heavy centralization of corporate activities in the home country. In this case, the human resource, production, finance/accounting. It optimizes all resources in the home country.
On the other hand, a multinational strategy has financial management in the home country, and the sales and marketing operations are decentralized. In this case, products and services in sale in different countries suit local market conditions. The transnational strategy involves total globalization and has no single national headquarters. They have regional headquarters and a world headquarters. From a global perspective, all value-added activities are managed with complete optimization of demand and supply. There is usually central solid management in decision making, but global divisions have considerable financial power too.
The appropriate strategy would be the international strategy where the financial management is in the home country while the I.T. department is offshored to Canada. This will allow access to lower costs of computing services and cloud storage systems. The company will also leverage the highly skilled and educated Canadian workforce. However, since it is the only offshored department, all the other significant departments will remain in the home office.
Canada – Environmental Scanning Analysis
As of 2020, the ease of doing business in Canada was ranked as the 23rd worldwide with a score of 79.6%. The World Bank conducted this rating. However, the country had poor rankings in getting electricity, registering properties, and construction permits. The country is also favorable in terms of paying rent and encouraging trade across borders. It is also relatively easier to obtain credit in Canada. The cost of operations in the country is cheaper than many other places worldwide, making it suitable for outsourcing. The country also has a highly educated workforce that was ranked second-best in the world (Ducas & Wilner, 2017). The tax provisions of the company are also suitable and stand at 88%. However, the country performs poorly in provisions of electricity and enforcement of contracts.
Political Risk Analysis
The political risk in Canada is shallow. Canada has been able to maintain good relations with the United States. The relationships have strengthened after the transition of power for President Trump to President Biden. However, this is just temporary. The poor relationships and trade restriction during President Trump's era makes this a macro risk that the company should consider when deepening its engagements in the country. The company can leverage the current political relations to transfer some of the staff in the USA to Canada to help strengthen the outsourcing operations (Farha et al., 2019). Another of the few macro-risks is the country's stringent labor regulation laws, which vary among the different provinces. The rising cyber security issues after the onset of COVID-19 could tighten the regulation of foreign technology companies in the country, which would be a micro risk for the company.
It is a democratic country and has a high level of political stability. The company can also leverage the bilateral relationship between the two countries. The two governments renewed their engagement in the renewed U.S. – Canada Partnership on February 23, 2021. The Partnership reinforces the free trade between the two countries. The United States-Mexico-Canada Agreement will replace NAFTA on July 1, 2021. Canada does not have a significant emphasis on indigenous laws. Most of these laws after local operations and do not extend to international operations. An example is the Aboriginal laws.
The first step in establishing an I.T. Department in the country will be identifying potential partners. One of the potential partners in the country is CGI Inc. The company is based in Montreal, Quebec. One of its primary operations is outsourcing and consulting for international technological investors. Another potential company is OpenText Corporation. The company engages in enterprise information management (EIM). Another potential partner that the company should consider is Descartes Systems Group Inc. The company offers cloud-based services and logistics software.
One of the main opportunities in the country is the ease of establishing a business in Canada and forming trade partnerships between United States companies and Canadian companies. This is enabled by the existing trade agreements between Canada and the United States. Minority investors are also well protected by the government. One of the main challenges of establishing partnerships is the low ranking in the enforcement of contracts within the country. Another challenge is the reliability of electricity in the country. This is a significant challenge of establishing an I.T. department. The company will also have to incur extra costs investing in alternative energy sources for the I.T. Department. Another challenge is that different provinces have different rules.
Canada’s Contrasting Strategies versus the U.S. MNC Strategies
One of the first market entry strategies that the company could consider is participating in some Canadian exhibition forums and joining the U.S. trade mission to Canada. The company's management can also source influential people within the potential partners and form a good relationship with them (Rajack, C. 2019). The market dynamics for Canada and the USA are quite different. One of the factors that influence market entry strategies are the cultural differences between the two countries. Most Canadians have a high inclination to value proposition for any service of product provided. There has less brand loyalty compared to United States citizens. Canada also has a higher internet penetration but many citizens are not aggressive in utilizing technologies services. One of the adjustments to the initial strategy will be reducing the number of potential organizational partners to engage. This is due to the fact that many of this organizations are in different provinces and cities. It makes coordination a bit difficult. A more viable market entry will be engaging a single partner.
1. Ducas, E., & Wilner, A. (2017). The security and financial implications of blockchain technologies: Regulating emerging technologies in Canada. International Journal, 72(4), 538-562. https://www.researchgate.net/publication/321727643_The_security_and_financial_implications_of_blockchain_technologies_Regulating_emerging_technologies_in_Canada
2. Farha, A. K. A., Koku, P. S., Al-Kwifi, S. O., & Ahmed, Z. U. (2019). Services marketing practices in diverse cultures: Canada compared to Qatar. Journal of Services Marketing. https://qspace.qu.edu.qa/handle/10576/13571
3. Rajack, C. (2019). Information Technology Outsourcing Strategies to Ensure Customer Satisfaction (Doctoral dissertation, Walden University). https://scholarworks.waldenu.edu/dissertations/7721/
4. Strange, R., & Magnani, G. (2018). Outsourcing, offshoring and the global factory. In The Routledge companion to the geography of international business (pp. 60-77). Routledge. https://www.routledge.com/The-Routledge-Companion-to-the-Geography-of-International-Business/Cook-Johns-McDonald-Beaverstock-Pandit/p/book/9781138953345
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