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Strategic Decisions for a Business

Essay by   •  February 16, 2013  •  Research Paper  •  1,888 Words (8 Pages)  •  1,036 Views

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Introduction

The culture surroundings of a company's management have a huge impact on strategic decisions for a business. These ideas eventually affect the community along with the surroundings areas that invest their lives in specific products and services. Tom Chong, the country manager of Jextra Stores, is trying to build a new store in Klang, Malaysia. As he makes the transaction to start a new contract, he runs into several issues that require him to make important decisions that will possibly affect the future of Jextra. Throughout this case analysis, I will discuss the major issues, possible resolutions, and recommendations that could affect Chong's decision to build a new store.

Major Issues

Jextra Stores ran into political and legal issues trying to operate in Malaysia. First, Jextra and the mayor of Klang, had a discussion about a potential store in Klang. However, the mayor was looking at other ideas along with building a store to expand for his community. He wants to build a primary school because young families were moving to Malaysia. The mayor also wanted Jextra to aid in paying for the flyover. Jextra could possible run into some systemic political risks because the government is creating problems for a foreign company in their home market (Daniels, Radebaugh, & Sullivan, 2013, p. 107). The mayor of Klang has control over his community making it difficult to negotiate with foreign companies trying to do business when he has his political views in mind. Instead of just building a store in Klang, the mayor wants Jextra to contribute funds to under concerns of shortfall that was explained to Chong. The strategies for both the mayor and Jextra were going in two directions, as far as, the location where the store would be on the site. Also, there are some inconsistencies involving the final cost to complete this project, which Chong will have to investigate to confirm if he will build a store in Klang or not. The second issue is Jextra's top achieving buyer, Arif Alam. Chong is concern with Alam's purchasing methods, which could lead to legal issues for Jextra. As a category manager, Alam was responsible for negotiating with other suppliers. Because Alam was a category manger for fruits and vegetables, its possible that he was receiving rewards and obtaining bribes. His actions may lead to punishment to those who breach the standards or criminal law (Daniels al el., 2013, p. 111). Alam, along with his father-in-law, may have an illegal system of listing a new product where the agency has no record of it. The transactions that Alam bargains with could also be a direct violation of the civil and commercial laws. This is to ensure fairness and efficiency in business transactions regulating relations and conduct between individuals and/or organizations (Daniels al el., 2013, p. 111). Most countries follow this modern legal systems which Chong must determine the correct path of decision-making.

Chong's Resolution

For Chong to come to a solution with the requests from the mayor of Klang, he will need to renegotiate the terms to open a Jextra Neighbourhood Market there. Chong needs to determine what the true incentive is for the mayor to agree with the terms to complete this business transaction. He needs to contact the director of schools to confirm the cost for the new primary school. A meeting with director of school may be necessary to verify that a new primary school in Klang is even required in the community. Chong should meet with his management team and discuss the requests of the mayor with his team. The management team could converse on the elements of Klang to estimate its development path and performance potential (Daniels et al., 2013, p. 143). Chong should reach out to various financial institutes to internationally build the store on the potential site. This could be achieved through a possible joint venture between international or private investors. There are various ways Chong can build the store, such as, Commercial Property refinancing, utilizing his other assets as possible collateral. Also, there are various types of construction loans for many situations existing to handle the funding for Jextra stores. Since Chong is negotiating with mayor of Klang, he must consider adjusting his decision making to account for the intricacies of mayor's political activities (Daniels at el., 2013, p. 98). Chong needs to evaluate what are the mayor goals and objectives for the future of the community. Discussions of the economic growth for Klang will be a key factor for how the store will bring customers and revenue to the community.

Bribery and Kickbacks

After hearing the rumors about Arif Alam possibly receiving bribes from his suppliers, there are several ways Chong can approach the situation. Chong should gather his management team to discuss the policies and regulations of his organization, making certain that these policies are strictly followed. He must comprehend what are the potential corruption schemes that dishonest employee will take advantage of. Some of efficient ways to prevent bribery problems include "determine whether inexpensive, impersonal items may be acceptable gifts in one's business and tell employees why accepting gifts from people who have a special interest in the company is generally unacceptable" (Greene, C., 2013). Keeping the company on alert about the issues they face may help avoid corporate problems that may lead to legal issues. At the meeting, management should also discuss the work procedures

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