RJR
Illustrate the difficulties of establishing and managing a subsidiary in terms of strategic ethical considerations -- not only because of differences in corporate (organizational) cultures, but also in national cultures and laws.
The United States has some of the most restrictive laws regarding cigarette taxation, use of tobacco, and advertising. The government actively campaigns against tobacco use as part of its public health education efforts. Thus it behooves RJR to sell its product abroad in less restrictive contexts, effectively encouraging other people to risk their health smoking tobacco. Often such nations are located in the developing world and target people who have less education about the damage that tobacco can do to their health.
Q2. Explain in your own words why RJR prefers to work with a local partner to establish a joint venture rather than simply acquiring a company in another country.
Given that RJR has frequently embarked upon ventures in developing world countries, using joint ventures as a point of entry is advisable given that this enables the company to better understand the national culture, government, and business regulatory system. Especially with a very personal product such as tobacco, patterns of use and customer preferences can be extremely varied all over the globe. Developing world nations are particularly prone to corruption and navigating the red tape and bureaucracy in the environment needed to set up a new business can be daunting. Given that an increasingly larger percentage of the company's revenue is derived from international sales, having acquisitions in every nation where the brand has a presence might also be logistically difficult and costly to maintain.
Reference
David, F.R. (2005). Strategic management: Concepts and cases (10th ed.). Upper Saddle River,
NJ: Pearson/Prentice Hall.
Case study: Japanese company
Q1. Assume that you are a member of the strategic planning committee that intends to design the ethical standards for the international human resource management of your company.
Ethical standards...
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