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Analyse the industrial conflict issues that may arise as a result of a business's chosen methods of international expansion. - HSC - SSCE Business Studies - Question 28 - 2010 - Paper 1
Question 28
Analyse the industrial conflict issues that may arise as a result of a business's chosen methods of international expansion.
Worked Solution & Example Answer:Analyse the industrial conflict issues that may arise as a result of a business's chosen methods of international expansion. - HSC - SSCE Business Studies - Question 28 - 2010 - Paper 1
Step 1
Chosen Methods of International Expansion
Answer
International expansion can be achieved through various methods, such as exporting, franchising, joint ventures, and direct investment. Each method has its implications and associated risks, especially concerning industrial relations. For instance, a company that opts for direct investment may establish a manufacturing plant in a foreign country, which could lead to issues related to local labor laws, wage discrepancies, and employee relations.
Step 2
Potential Industrial Conflict Issues
Answer
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Labor Relations: Expansion may require hiring local employees, which could lead to tensions between existing management and new hires, particularly if there are differing expectations regarding work practices and rights.
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Cultural Differences: Businesses often face cultural challenges when expanding internationally. Misunderstandings stemming from different work cultures can create friction, leading to potential strikes or protests.
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Wage Disparities: Issues stemming from wage differences between domestic and international workers may arise. If local workers demand wages comparable to their counterparts in the company's home country, this can lead to dissatisfaction and union actions.
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Trade Union Conflicts: Local labor unions may resist foreign firms, especially if they believe the business threatens local jobs or employs practices not aligned with local labor standards. This can lead to significant industrial disputes.
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Regulatory Compliance: Navigating different regulatory environments can pose problems. If a business fails to comply with local labor laws, it may face legal actions and conflicts with labor organizations, leading to workplace unrest.
Step 3
Long-term Implications
Answer
The repercussions of industrial conflicts can jeopardize a business's reputation and operational efficiency. Long-term effects include:
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Damage to Reputation: Conflicts can tarnish the public image of an organization, affecting customer perception and brand loyalty.
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Operational Disruption: Ongoing industrial conflict may lead to strikes, which disrupt production and logistics, impacting profitability.
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Increased Costs: Resolving conflicts can lead to increased legal and operational costs, detracting from financial resources that could be invested in growth.
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Employee Turnover: Unresolved disputes may lead to high turnover rates, which incur recruitment and training costs, further impacting business continuity.