Impact Of Localisation On Products Of Automobile Company DAK Corporation

Standardisation versus Localisation

Discuss about the Case Study on DAK Organization for Standardization and Localization.

The aim of this report is to discuss the impact of localisation of the products of a highly reputed automobile company DAK Corporation. It mainly operates in the US and European countries which mandates for standardisation of their products hence the company faces various risks related to their business. Due to tis fact the comment cannot expand itself to the oversea market mainly in the Asian countries where the demand of cars is high as well as have high concentration in the market. Therefore, the company needs to bring some changes in their policies so that it can cope up with the changing nature of the organisation through localisation of the products in one hand and gain popularity of their products in the overseas markets. This report discusses importance of localisation in the first half then develops a plan to prepare the company’s managers for China and considers the importance of reward and performance management system. 

Globalisation has made the economy of the world more transferable as the companies that used to operate in one domestic market can easily access the other markets and reach variety of customer and gain profit and fame. This is the reason why concentration has been increasing in one particular industry. The competition level of this particular industry is fairly high which is affecting this company to face new and existing markets (Renwick, Redman and Maguire 2013). As mentioned in the case study, DAK has become one of the largest automobile company that has branches in various continents in the word including the Americas and Europe. The company has been expanding consistently since 1890s and became torch bearer of globalisation. Initially the company had followed the method of acquisition to enter the global market but this path was not smooth or free from any setbacks.

From the very beginning, this particular automobile company followed the method of standardisation instead of localisation. To the globalists, this method is mainly followed by the companies operating globally and need to position their brands for gaining more recognition in the global market. It is the process of setting some uniform features for the brand’s goods and services. As the automobile industry is completely dependent on the advancement of technology, product standardisation among goods became mandatory. This is due to the fact that this method allows competition among various suppliers. However, the critics feel standardisation not to be apt for perfect approach to satiate the demands and needs of the customers. The company DAK as followed standardisation process through following built in quality method, actually marginalised and homogenised the human diversity in the countries where it is operating or entering the market.

Importance of Localisation

The company actually does business in all the important European nations where the culture of the organisation does not have much difference among themselves. Moreover, the demands of the customers are also similar as they demand similar features in a car.  This is the reason why the company does not feel the importance to localise their product rather followed standardisation of their final product. The company has only focussed on the quality of their products as well as services from the perspectives of the customers. Homogenisation added fuel to standardisation of the system as all the products have exactly same features while being sold in different countries of Europe (Wright, Christensen and Isett 2013). Not only the products but the post purchase services also do not have variation as the demand s of the customers are similar. Unlike other companies, the chief aim of this organisation is to incur the customer satisfaction therefore, it has focussed on high standardisation of the cars with high quality services and more advanced technology. In human resource management also, this company has recoded evidences of standardisation which is perfectly in tune with the philosophy of this company. Despite the fact that it has incorporated some changes in order to build green plant, most of them are cultural shift but only focussed on the Japanese principles of management. The car industry of the global market has become volatile as the demands have decreased and competitors have increased in any country. These increase the risk for DAK Polska and it already had experienced fall during the recession and failed the takeover bids in the year 2009 when the European subsidiaries had been struggling to regain their places in the competition. This only focus on standardisation, resulted in closing down of DAK UK plant in 2001 and many other. This is the reason why the company needed to follow localisation of its products as well as their process which could shift the emphasis from the dominance of the major political as well as economic interests such as that of the USA and Europe.

Localisation has become mandatory for the companies operating in the global context as without this, they cannot survive in the markets of the foreign region. For example, while operating in the Asian country like China, the company cannot impose rules and regulations of those branches situated in the European countries. This is because the organisational culture in China is completely different from that of European nations. Moreover, the features that the customers of China expect from the Automobile companies to provide in their products have no similarity with those of the European customers. Moreover, 20% things associated with this particular company is non-negotiable. The parts of the cars have high quality specifications which could not be altered. Hence to cope up with the market’s demands and increase market share localisation in mandatory (Shields et al. 2015). The specific wants that the overseas market have, must be understood and adapt itself accordingly. This is the main motto of localisation which is the chief source of competitive advantage. Localising the products gives sizable leg up on the competition and improve the ranking among the competitors. This will also mitigate the issues related to the employees and their cultural background. In order to localise the product and management of the firm the company needs to bring changes in the rules relating to negotiation methods, quality requirement and other aspects as these can be different in different countries. Through localisation, the company will have more popularity and more product differentiation. 

Preparing Managers for China

In the country of China, the human resource management (HRM) is still in the stage of development. The managers in the China a less trained and deliver poor quality of practice of the HRM. Though the training department is developing presently, the problem as yet to be solved. Training and developing is the most effective method that should be undertaken by the organization in order to develop and make proper utilization of the skills of HR (Cooke 2013).

Training and development helps in the improvement in the function of an organization by providing efficiency in the employees, improving the quality of the work, enhancing and improving the quality of the product and strengthening the competitive nature of the organization.

The first step in the training and development of the employees in an organization involves the identification of the requirements of the activities of the managers that require training and development. Prior to the conduct of training, it is the duty of the organization to analyse the need and requirement of the training which is termed as the “need assessment” (Jackson et al. 2014). The method of training and development can broadly be divided into three main sections, which include TBC, OJT and OFFJT (Graves, Mohamed and Hinton 2013). The TBC involves the graining and developing the new employees within an organization. It mainly refers to the orientation or the training where the introductions about the along with some of the guidelines regarding the working and the culture organization are provided to the new employees. This helps in the reduction of anxiety among the new employees in the new atmosphere of the organization. The OJT involves working and training of the new employees in an organization in a simultaneous manner (Clark 2014). The rotation of the jobs in this process of training refers to the transfer of the employees from one kind of job to another in a very short period of time. In the process of action learning, the participants or the employees are required to take part in several types of the practical jobs or to deal with various realistic issues that are arising within the organization. The OFFJT is a process of training the employees in an n organization by means of lectures, discussions, providing case studies and through the stimulation training process (Ford 2014). 

The training and developing of the employees of the organization DAK Corporation at first requires introduction of the managers to the culture of their new location, China (Liu et al. 2015). This has to be done so that the employees or the managers of the organization do not have to face any kind of humiliation while performing their jobs in some other countries. As different countries and places have different culture and culture varies from one another in terms of their language, food and their daily practices.

Importance of Reward and Performance Management System

The organization or the car manufacturing company, DAK Corporation, needs to practice the ethnocentric approach of employment. The polycentric approach of employment places the natives of the home country in the key positions of the organizations host country is placed in the position of the managers for the factories and the plants that are located in the host country and the parent company is operated by the natives of the home country. In this case, the organization, DAK Corporation would place the people of the country of China as the operations managers for the plants and the factories of the company that is located in China and the operations of the parent company would be looked after by the people belonging to the United Sates. The organization also needs to understand the ways in which they can train the people of China as well as the people of the parent country so that the management of the company is not hampered.

Types of Activities	Current Performance Status	Areas need to be Improved	Time required for Implementation	Estimated Outcomes
Efficiency of communication	Difficulty in communicating	The managers need to understand the culture and the language of the people of China	1 week	Better verbal as well as non-verbal communication
Decision making	Unsatisfactory	Lack of training and development.	2 weeks	Better decision-making skills.
Project Handling	Poor	The managers are not being able to handle the projects efficiently. Requires technical training.	1 week	Efficient in handling the project
Innovation	Not being able to innovate new products I features	Lack of communication Lack of cooperation among the supervisors	15 days	Innovation of new and modern features Better cooperation among the members
Management of Available Resources	Unsatisfactory	Requirement of more resources than required. Unskilled managers	10 days	The managers will be able to use the resources available to them rather than requiring more of it.

The term “reward management” refers to the system of management that is mainly concerned with the strategies that are being formulated and implemented in an organization (Shields et al. 2015). This strategy is formulated in such an effective way so that the people are rewarded fairly and equally according to their performance and skills performed in the organization. This system of management involves analyzation and control of the remuneration, compensation and all the benefits of the employees that are company provides them. Rewards can be provided to the employees in the form of bonuses, raise in the salary, gifts and promotion (Renz and Herman 2016).

The term “performance management” include all the activities that are capable of ensuing that the goals of the organization are efficiently being met by the employees (Van Dooren, Bouckaert and Halligan 2015). The performance management focuses on the performance of the organization as a whole or a department of the organization or that of an employee of the organization. This system of management is primarily used in the workplaces and can be applied where people most often interact with each other like the schools, churches, communities, sports team and health settings (Wang and Sarkis 2013).

Besides providing financial rewards, the organization, DAK Corporation provides the following reward systems to its employees.

Career Advancement

Recognition of the employees

Flexible working conditions

The managers of an organization provide opportunities of promotion to the employees. The employees improve their skill and efficiency and hopes to get promoted to the higher level. The employees who are promoted know the rules of the organization and hence the cost of training the new employees reduces. The offering of the promotional opportunities increases the morale of the employees. The promotion of the employees also has some disadvantages as well. Promotion of the employees from within the organization does not help in the flow of new ideas. This might create a sense of resentment among the other employees as they might feel that they were more capable for the opportunity. 

Recognition is the giving of special respect that satisfies the demands of the employees. It allows the employees to feel a sense of appreciation for their hard work and dedication. The more the employees of the organization are happy the more will be the productivity and better performance and reputation of the organization (Alfes et al. 2013). The employee recognized in a wrong method, might destroy the motivation of the hard work and dedication of the employees. It might create an environment where the employees are being favourited over the others.

Most of the employees in an organization require to travel for long hours in order to reach their place of work. Flexible working hours can help these employees to work as well as to take care of their employees. They can be allowed to work from their home as and when required by them. The employees can work as they might feel beneficial after taking care of their families and completing their personal chores (Brewster 2017). These are disadvantageous for the organizations that mostly depends on their team for their work. The productivity of the workers working from their home cannot be assessed physically.

Conclusion:

Therefore, it can be concluded that the company mainly operating in the western European countries and the US need to feel the importance of understanding the different demands and needs of the customers present in the overseas markets. The company aims to open branches in China where the culture of the organisations and demands of the customers are completely different. This is the reason why standardisation of the products and process are to be replaced by localisation. This will follow the changes in the product designing, and development in one hand and relate the employee motivation through training and knowledge about difference in culture. Thus, DAK Corporation will reach the desired place in the global market. 

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