Yola: Managing Multiple Challenges
1. How should Lingham manage the dual structure with Cape Town and Silicon Valley? In this case, we have a company which headquarter is based to Silicon Valley and has subsidiary into other countries. Cape Town is one of them, and the office was not structured as others, for the only reason that there was no developed market in South Africa for company to invest. Yola was in his internationalization process beginning. The Problems of organization and human resource management were the major source of frustration in the South African’s subsidiary.
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The Lacks of communication between headquarter and his subsidiary is the worst thing to do when planning to develop a market. To manage this issue, Lingham should have thought first how to organize the cap town’s office. Even if it was playing a less role value, without organization, the internalization was condemned to failure. A local person with experience to the market, product, leadership and cross culture competences should have been chosen to lead the office. His competences could be helpful for the company to understand how to work with capetonians without giving them a sense of underestimates.
It may be also a solution to reduce frustration caused by jet lag, instead of having meeting with entire team, choosing a representative for the team who will know how to give feed back to the rest of the group, and make modification if needed. That organisation would be a solution of headquarters’ orientation strategy to maintain the ethnocentric system because no decision was made in South Africa and the market was not developed yet. It would be easier with that strategy to deal with an organized subsidiary by maintaining a good communication, a centralized decision making and high control over operations.
To strengthen relationships amongst his employees, and to strengthen the sense of belonging to the company for the capetonians, an exchange policy with their colleague in Silicon Valley may be benefit to them end to the company. First of all, it may be a way of performing their knowledge, and deal with another culture. Clear policies, communication (formal, informal), Decentralize, Decision process, Promote understanding Relocation, Team building: virtual meeting 2. How viable is the proposed expansion into the developing world as a future source of competitive advantage for Yola?
Now days, most companies have an office, subsidiary or are operating abroad through different way. Often developing country such as china, South Africa, Arabic countries, etc are the target of those companies because there are considered such as good investment. With globalisation, companies are competing around the word, and the market which still free for those companies is emerging countries. For a long term strategy, expansion into developing world is profitable.
Although the purchasing power of developing countries don’t make enough profit for multinational companies, but their average growth rate still increasing than developed countries because the market is not saturated. And the advantage for Yola to be the first operating company in that territory, is the choice it has, whether for the market, the sector, costumers, … As markets don’t react the same way to the different economic problems, it is advisable to diversify its portfolio and to invest in developing country; they have often better resistance than developed countries.
Many companies tend to ignore Africa because of the persistent political problems, corruption, so they turned to emerging countries like the BRICs countries. While much remains to be done in terms of international rules in these countries, at least they have insurance for companies that want to invest, by adhering to international standards. 3. What is the core challenge facing Yola? There are several issues raised in this case, starting from product diversification to generate more profit, opportunity to stay in the country knowing that it takes time for a company to make profits in developing countries … ut the major problem for the company is how to adopt appropriate strategy with its subsidiaries, for a growing company. Human resources is the main challenge because, he is involved in all issues strategy If we analyze the company, Yola is a company that began looking to foreign markets. The market in South Africa is not as developed for the company to establish offices with all the departments necessary for operation. The subsidiaries are very dependent to headquarter in USA, country where the market represents more than 40% of sales.
As the company begins to think internationally, and the opportunities increase, it is time for Yola establish a strategy to integrate its human resources in its internationalization strategy. If we follow the evolution of stages of a company that wants to go abroad, the next step will be operations through wholly owned Subsidiaries. if yola wants to prepare for this evolution of market, it should have a solid strategy for human resources. The strategy proposed in this case is to keep control at the head office. The reason is simple. The area in which the company operates, is an area with lots of competition.
It is a rapidly evolving field, and having the head office in Silicon Valley will allow the company to always be at the forefront of technology, and will also allow its subsidiaries to remain competitive in the respective countries. Such an international scale, even if it is the control center of its subsidiaries, it should gradually integrate its subsidiaries in strategic decision-making. Even if its subsidiaries are dependent of the head office regarding the means, procedures, they can keep this does freedom to adjust to the local conditions.