Businesses face various challenges when conducting business with foreign countries. Businesses must be aware of the different rules and regulations in the international environment. Today more firms than ever are earning some of their revenue from international operations. Riordan Manufacturing is a global plastics producer employing 550 people with projected annual earnings of $46 million. The company is wholly owned by Riordan Industries, a Fortune 1000 enterprise with revenues in excess of $1 billion (Apollo Group).
Riordan has a production facility in Hangzhou, China that has prospered in the past year and CEOMichael Riordan is looking for opportunities to expand the facility (Scenario). In the process of expanding the facility in China, Riordan is faced with many challenges and issues. This paper will focus on the issues Riordan faces and the possible opportunities to overcome the issues. The stakeholders of Riordan will be identified and discussed along with the vision of the company.
Situation AnalysisIssue and Opportunity IdentificationOne of the largest issues facing Riordan is the lack of Chinese skilled workers because of the competition in the province. Since there are no Chinese workers available, the company must look at other cultures in the province. Pakistanis, Indians, and Koreans are the foreign labor available for the facility. The new cultures raises the concern of cross-cultural issues coming to bear that could affect the production and delivery schedules for the new facility (Scenario). With the different cultures in place, this could affect the power distance of each country. "Countries in which people blindly obey the orders of their superiors have high power" (Hodgetts, Luthans & Doh, 2005).
Another issue facing Riordan is the fact that the culture diversity is not strong. The executives of Riordan did not formulate and evaluate cross-cultural decisions that will enable the organization to achieve the...