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Report On Strategic Options, FDI, Change Management and Leadership In China and India 1 THOMAS COOK COMPANY, MANAGEMENT

REPORT REPORT ON STRATEGIC OPTIONS, FDI, CHANGE MANAGEMENT AND LEADERSHIP FOR THOMAS COOK COMPANY IN CHINA AND INDIA SUMMARY This management report entails on the perspective of foreign direct investment in china and India countries. The report begins with the definition of the term, strategic developments and its significance to both china and India countries. It continues to stipulate the rationale why china and India are the best-suited countries for management and investment sector. In the main body of the report, strategic development directions through FDI in china and India have been articulated clearly; this is through application of Ansoff Matrix, which features the consolidation, integration, diversification, market penetration and product development options (a table has been selected to analyze the general Ansoff matrix). The management report continues to discuss the organizational structure for both counties and stipulates the advantages and disadvantages for investment opportunities. NB, in this area, the report analyzes on infrastructure, risk and economic simulations, economic relations, FDI incentives and technological aspects. In the last part of this management report, we deal with the leadership and management aspects for application of Thomas cook strategic development directions. The main theme of leadership and management for sufficient application of FDI directions for prosperous china and India FDI relations has been well articulated. We then conclude the management report with remarks on FDI, and advice to the MD on proceeding with the new strategic direction.

Report On Strategic Options, FDI, Change Management and Leadership In China and India 2 INTRODUCTION Strategic development strategies are mindset that evaluates changes in environment both externally and internally, one is able to apply strategically both management and development tools. This analytical approach has been part of my option for better and quality assessment of directions that India should set up to increase its Direct Foreign Investment, one has to have a unique outlook to assist him deal with the diverse exchange royalties. I have decided to have a dynamic approach to the management prospects of the company Thomas Cook. Essential planning is required as one deal with these aspects of development strategies. My strategic development consists of future orientation, where the environment is deemed to change. One outlooks one the perceptions of the organization and how I want my company to be in future. My choice of development strategies concerns: technological, political, economical, the environmental conditions and on dimensions of the social background. Both China and India have policies that assist one in the overall implementation of strategies and management of the FDI in the end, I am able to determine the level or china and India resources through development strategies and to the optimum level of resources of each country. Choice of development strategies also relies on the structure and resources of each country. Reassessments of company elements and modification of the economic investments in the countries should be in continuous strategic move. Choice of development strategies is also due to the strong economic and environmental ties between the two countries, one is encouraged to foster foreign direct investments in china due to openness in development and it instills continuous changing goals for investments. China sets

Report On Strategic Options, FDI, Change Management and Leadership In China and India 3 good investments mechanisms all over the world to ensure strategically developments patterns are in position for strategically management and to monitor the overall economic growth. The choice for selecting china and India is due to the essence of acquisition of products and services are easily carried on within these two countries. The efficient capital transfers, and the wide range presence reformed management skill assist one to establish the Foreign Direct Investment move. China and India have also a diverse economical outlook, which assist in transfers and in the development of better information systems that enable them to raise their performance level in the economic market as they strive to meet their customer needs. STRATEGIC DEVELOPMENT DIRECTIONS Direct foreign investment involves the transfer of large sums of money from between countries usually from developed countries to less developed countries. Funds could be invested in Greenfield investment, which involves building a new business concern like factory in a foreign country. Funds could also be used in mergers and acquisitions in exchange of royalties in product production. Mergers and acquisitions involve the amalgamation of two or more firms or the purchase that is directed to current firm within the foreign country. There was establishment by Whiting (1976) that Firms acquisitions were made for increase in efficiency of the companies acquired though capital transfer , use of marketing skills, presence of skill for management and the diverse technology. Besides, the development of better information systems in the global trade can enable a company increase level of performance of firms acquired to enable it, meet its customer needs better.

Report On Strategic Options, FDI, Change Management and Leadership In China and India 4 In strategically developments options we can derive an Ansoff model to show how directions are carried out through the china India development strategy. According to Charles (2008), he explains that foreign direct investment flows can be based on the strategic rivalries that take place between firms in global market place; these rivalries have been identified between firms in oligopolistic industries and in relationships between FDI flows. Every action that any of the firm takes to reduce its price leads to very significant increase in its sale and a large reduction in sales of competing firms, this forces competitors to react to price reduction by one firm, by reducing their own prices by the same account or more for market share maintenance. According to Ansoff matrix by Ansoff (1988), he generalizes and evaluates the strategic development directions through four-quarter analysis method for Thomas cook Corporation to have a rapid and smooth company management strategy it should do the following: Market development strategy, target new markets that are in the prevalent open market, international business should be encouraged. The main objective is ensuring rivals gaining power for a position in commanding is minimized in addition, the generation of profits for subsidization of attacks that are competitive are fully utilized in various segment of markets within the same region of competition. They should target different location; location specific implies that FDI could be based on the location specific concentration of technology advantage. Advantages rise from the prevalence concentration of resources and in increase from the informal network allowing different firms to be beneficial to every form of market segmentation. Knowledge is widely shared among the different forms of competitors allowing the free flow of information without bias or impediments whatsoever. Thomas cook should opt to use online and direct sales through the trade in accordance to Ansoff matrix, Ansoff (1988)

Report On Strategic Options, FDI, Change Management and Leadership In China and India 5 ANSOFF MATRIX- THE ESSENCE OF FUTURE OPTIONS Existing product The risk is low Existing market Low risk This where core businesses are encouraged to act continuously Thomas cook company penetrates the market Thomas cook can withdraw or consolidate its activities. The risk is medium New market There is market Medium development risk Thomas cook can either make expansion to available new segments or customers encouraged in new field High risk Diversification takes place in here This may include either vertical or horizontal diversification that is related We have unrelated diversification Medium risk New product The risk is medium We have product development where the prevailing products are replaced by new products and better services. Improvement of products Extensions for the product are carried on The risk is high

The source table: is by Johnson and scholes, (2006), adapted from H. Ansoff (1988) On diversification, Thomas Cook should use the strategy to ensure they secure their business in case of loss, FDI is considered risky in this section, as one does business in other cultures compared to that are original to the local culture. Probability is greater for a multinational firm

Report On Strategic Options, FDI, Change Management and Leadership In China and India 6 that is in full effect to have losses that may collapse the firms due to the inadequate program set up by the prevailing government. According to Ansoff Matrix Smith (1994) advantages of diversification is that one may be able to secure himself from losses derived due to adverse circumstances. The other category is on market penetration, to ensure that one is able to survive in the market Thomas Cook Company should fully advertise by; encouraging people to choose their product, introduction of scheme loyalties, launching prices, ensuring promotions for special purposes, maintaining activities for sale and by increasing their quota by buying a company for competitors. They secure their foundation by product development strategy; this is where by they produce different construction amenities, develop related materials that are cheap, also their marketing time should be shortened to ensure customers are able to know them and improve the quality of its products and services this is in accordance to Ansoff (1988). The exiting capabilities are well analyzed and proper documentation is applied; Thomas cook should follow the customer needs and ensure satisfaction is ensured, Market consolidation assists to avoid the market imperfections between china and India. In international business literature Charles (2008), the explanation of FDI assists in removing the factors affecting construction market from working perfectly. The marketing imperfection approach the internalization theory ensures that FDI are encouraged as tit increases the profitability in the host country. Thomas cook can follow development direction though exploiting competence in the china and India market. CSFs (change in critical success factors) are greatly encouraged to ensure that emphasis is put in the success of the company; Thomas

Report On Strategic Options, FDI, Change Management and Leadership In China and India 7 cook can ensure short life cycles of the product they have so to establish the condition of the India and china market (Ansoff ,1988). Market should develop with similar CSFs in product development for Thomas Cook Company, they should also target geographical markets that are new or chose option from other countries. India should have capability development strategy to enable it survive foreign direct investment. Expectations for this company should be credible enough to ensure that their expectations evaluation in future is foreseeable. ADVANTAGES AND DISADVANTAGES OF INVESTMENTS In my management report research for the general assessments criteria, I used three of the most conversant organization for the economic outlook for both the Chinese and Indian economies. The Organisation for Economic Co-Operation and Development (OECD) a: Annual Report Gives strategic analysis on organization decisions making UN Conference on Trade and Development (UNCTAD) 1999 Gives the general view of investment in china and India It has analysis on globalization and investment integrations for china and India In these aspects of organization culture, we entail on the diversified organizational strategies for china and the India. CHINA ORGANIZATIONAL CULTURE

Report On Strategic Options, FDI, Change Management and Leadership In China and India 8 China is a rising power in the economic developments, there is gain in political and military manifestation though-out china. The cultural dynamics of Chinese entail on the language perspective and on how well do china relate with its neighbors and trading partners. China organization culture is more of traditional and is categorized of giving individuals assigned to their firm a high job safety measure. Thomas Cook Company operates as a close d network culture to ensure that employees remain in their firms. Chinese deal on inter firm relations referred to as Confucian capitalism. These increases the level of trust and the commitment levels in the companies. Thomas cook should opt for the closed culture systems as it assist Chinese organization culture in networking and dependability. Chinese relies on traditional methods of transactions in its operations. Localization of Chinese firms assists in risk management and in the contracting or relations and personal loyalties. Network capitalism has developed and evolved most of Chinese economic cultures. In analyzing organizational culture according to Boisot and Child (1988) he analyzed Chinese organizations, [by] characterizing it into fieflike system , he stipulated that the system relied on traditional methods in transactions to ensure that risk were minimized and personal loyalties localized (fieflike) with the relational contracting. Chinese organization culture was also shaped by the prevailing reforms for political arena.

INDIA ORGANIZATIONAL CULTURE The organization culture for India rests on quest for dominance globally; it has long traditions that prevail in its organization. India companies are now strong driven with strategically aspect of business as compared to the traditional aspects of Chinese firms. The westernized values are

Report On Strategic Options, FDI, Change Management and Leadership In China and India 9 immensely gaining recognition in the India countries. Investments have been encourages through western corporate strategies. In the organizational resolution of India companies emphasis has been put on personal and economical satisfactions, and experienced is being highly regarded in the human capital and performance activities. Organizational goals and strategic evaluations tend to focus on organizational performance. Thomas cook will grow and develop well in this system as the FDI rule applied for developing countries. India is categorized with strong language, English being its communication for corporate, international and political cultures. India is quickly gaining over china due to its strong economical operations and better investments reforms. Sustainable competency in leadership has categorized most of Indian firms. Employments opportunities have increased in India and better policies have been deployed to allow FDI and other related investments activities. There have been adequate changes in political arena and improved government controls compared to china. Exports and imports have generally increased in the overall long run of investments activities. The organization reforms compared to china are more able to develop investment and FDI levels.

ADVANTAGEs National Economy Simulations According to Earth summit, (2002) FDI can contribute to Gross Domestic Product (GDP), Gross Fixed Capital Formation (total investment in a host economy) and balance of payments.

Report On Strategic Options, FDI, Change Management and Leadership In China and India 10 According to Earth summit (2002) Subsidiaries of Trans-National Corporations (TNCs), which bring the vast portion of FDI, are estimated to produce around a third of total global exports. There is a total growth in India GDP due to the investment development. The high GDP growth helps china in its overall economic management due to its high economic reruns. There are stipulations according to Earth summit (2002) UNCTAD (1999) that levels of FDI do not necessarily give any indication of the domestic gain corporate strategies [examples] protective tariffs and transfer pricing can reduce the level of corporate tax received by host governments. Future strategies are implemented through investments to ensure that better and efficient growth is in place. Conditions of investment according to Earth summit (2002) UNCTAD (1999) are that impact of FDI will largely depend on the conditions of the host economy, [example] the level of domestic investment, the mode of entry (merger & acquisitions or Greenfield (new) investments) and the sector involved, as well as a countrys ability to regulate foreign investment . FDI are more stable Investments have an advantage that they are unlikely to be affected. The researcher in Earth summit (2002) gives reasons that this is partly [due] because currency devaluation means a drop in the relative cost of production and assets (capital, goods and services) for foreign companies and thereby increases the relative attraction of a host country [India]. Diversification is also promoted through investments, as India is able to venture into new businesses that assist it in economic development. According to Earth Summit (2002), UNCTAD (1999) FDI can stimulate product diversification through investments into new businesses, so reducing market reliance on a limited number of sectors/products. Development of the nation socially

Report On Strategic Options, FDI, Change Management and Leadership In China and India 11 China and India are able to increase their social movements treads through increased wages and better increases in the employment sectors. according to Earth summit (2002) ,OECD (a) However, the benefits may only be felt by small portion of the population,[example] where employment and training is given to more educated, typically wealthy elites or there is an urban emphasis, wage differentials (or dual economies) between income groups will be exacerbated. India and china have been able to culturally advance and they can as well foster good economic relations. Investments has promoted the social impacts in both countries through the opportunities for social communication and sharing of ideas. A culture consumerism is encouraged through these various impacts of social opportunities. Better products are produced and sufficient quality services are offered as one socially engages with the other. Technological and infrastructure developments China and India have seen a total growth of infrastructure and the excess resources due to the sustainable investments opportunities. Greenfield investments have dully assisted the development of buildings and railways throughout the two countries.

DISADVANTAGEs Unstable economies In situations where the fall of trade and investments takes place their might result an unstable FDI movement. International effects may regulate both the economical outlook of the companies and the investments opportunities. This makes it more hard has its hard for investment country to

Report On Strategic Options, FDI, Change Management and Leadership In China and India 12 de-invest when there is economic crisis. Thomas Company therefore should make sure that it has accrued its benefits to avoid international economic turmoil. Investments opportunities for local economies This is seen where India will have less capacity when dealing with decisions making between the two countries. Thomas Cook company in India is has less power for mitigation of damages that occur environmentally or in imposition of remediation costs. Environmental and employment impacts As both countries produce efficient goods and services in FDI environment they may produce sophisticated products that may injure environment. Employment has also seen to diminish in situations where FDI movement lock down the local economies and benefit the high economic strongholds.

LEADERSHIP AND MANAGEMENT I my management report I have found out that, Leadership and management are in different categories and one has to be able to differentiate between the two. For the Thomas cook co to carry out its direction for development strategically it should have effective leaders and an effective management positions.

Report On Strategic Options, FDI, Change Management and Leadership In China and India 13 The economic succession should be well articulated and formed to ensure that the strategies FDI goals and objectives are in hand to hand with its policies. The leader should be task oriented and in high regard of the companys objective. Thomas Cook in its future resolutions it can empower the government to carry out sufficient task for environmental degradation and ensure that sufficient resources are put in place to foster out Foreign Direct Investments. Let me first define both term (leadership and management) in the outlook of Thomas cook, leadership in this report, means that the most of individuals in the company are able to influence the overall running of the company goals. Leadership means that individuals are able to articulate the FDI elements for Thomas cook co objectives and influence economical externalizes in its ways. Leadership involves process of attainment of specific objective, in our case the development direction in FDI. Management refers to ability of Thomas Cook Company to establish clear outlined goals that may assist in the overall developing strategy completion. The company should have an executive direction for the FDI opportunistic development. The administration of these strategies requires good supervisory and management techniques. Management of Thomas Cook Company should influence the overall nature of economic growth and should foster a clear objective in the end. In summary of this management report according to Fayol (1949), he stipulates that, in Unity of command, as each member of organization should receive orders from one superior and be responsible to one superior in order to reduce confusion, conflicts and the emergence of chaos Unity of direction, for effective organization members of should work towards the same objective. Individuals goods should not interfere with organization objectives. According to Fayol (1949), through remuneration of personnel, the pay should be fair there should be no

Report On Strategic Options, FDI, Change Management and Leadership In China and India 14 exploitation. A variety of modes of payment such as time or wage rates price rates, bonuses, profit sharing and non-financial rewards were suggested. This gives a clear role on what management and leadership should deal with. In the management change, we can apply various techniques to ensure that the aspects of management and leadership by Thomas Cook Company can be diversified and stabilized. In both china and India, economic development and growth towards sustainable foreign direct investment may require the following skills. I will categorize them into conceptual, human and technical skills. These assist in the task-oriented culture of Thomas cook in the sustainability of investments. As china and India participates in FDI strategic resolutions, they should have a clear knowledge on the perspectives of economic investments. The technical skill that Thomas cook should have is the information and clear understanding on concepts of Foreign Direct Investments (FDI). Proficiency should be encouraged where specialization with particular fields should be addressed. The company should know both the horizontal and vertical direct investments and how markets imperfections can be eliminated in the overall long run. Foreign exchange inflows should also be analyzed and the company should have the proponents of foreign Direct Investments theory. There should also be technological advancement in the economic and finance sectors. China has a high technological mode that it can instill to Indians. The foreign exchange bureaus should be in place and the relevant licensing done. Thomas cook should have the ability to analyze concepts of FDI, Stability of tenure personnel, time is required to get used to new work the new investment environment. All the processes of conceptual skill should be utilized by both Thomas cook management firm and the countries involved in governance. Tenure personnel of both the countries (basis for probation period that new employee undergo before they are confirmed and employee on permanent basis) should take

Report On Strategic Options, FDI, Change Management and Leadership In China and India 15 place as people delegate FDI activities. Ideas of FDI organization should be well put in place to ensure a stable and educative system that would work efficiently. What Thomas cook should do in its foreign direct investment is ensuring that both individuals are aware of advantages of investments and of its implications in the current international economies. At the long last human skill should be utilized in the management and leadership as the company strives to achieve development objectives. Each country perspectives should be well analyzed and motivation process carried on by Thomas Cook Company. In India, there should be incentives and proper worker rumination to ensure cooperation and understandings. In management and leadership, change aspect of globalization should be taken into effect to ensure that all the master of economic regression is in place. Thomas cook should regulate global investments ideas and ensure efficient sustainable relationships in the international market. Ethical management should be carried on in the trading operations between china and the Indians; they should all encourage bilateral trade.

In conclusion, of this management report, we have Cleary outline the different methodologies used in leadership and management change for the India economy through FDI. The organizational developments and strategically approach for both china and the Indiana community; gives a general view on political, economical and d social aspects of culture prevailing in both markets. The company where FDI is able to meet the essential requirement is more acceptable. Thomas cook will operate generally in the India organizational culture due to its diverse westernized intrusion to their counterparts, compared to the china that mainly rely on traditional ways of satisfaction and personal loyalties. We are able to figure out incompetences hindering the growth of Thomas cook in its FDI managements. The MD should choose India as a

Report On Strategic Options, FDI, Change Management and Leadership In China and India 16 prevalent country and follow up its organizational strategic directions. One should be able to Cleary articulate the strategic analysis of the overall development and strategic options. I have also Cleary outlined the foreign direct investment advantages and disadvantages through china and India Foreign Direct Investments justification. There is increased foreign direct investment; one should be able to encourage good communication networks throughout the system. As we see between china and India relations, one is able to feel the overall effects for direct foreign investments. In this management report, I conclude with remarks, that one should promote FDI movements in the nation and better foreign country relationships should be maintained according to India cultural movements and the current political and economical growth.

REFERENCES Charles W. L. 2008, International Business, 7th edition, McGraw Hill Higher Education; University of Manchester's Institute of Science and Technology, Chap 6-7. Ansoff, H. 1988, corporate strategy, penguin, chapter 6. Smith, I 1994, Meeting Customer Needs, IoM Butterworth Heinemann, pp 63. UNCTAD, 2007, World Investment Report 2007, New York and Geneva: Oxford University Press

Report On Strategic Options, FDI, Change Management and Leadership In China and India 17 Towards Earth Summit, 2002, Foreign Direct Investment: A Lead Driver for Sustainable Development, Foreign Direct Investment Briefing Paper, Economic Briefing Series No. 1 UNCTAD, 1999, Foreign Direct Investment and the Challenge of Development, World Investment Report, Oxford University Press Milan Pagon, Banutai, E 2008, Leadership Competencies for Successful Change Management, A Preliminary Study Report, University of Maribor, Slovenia Mie, Markus Knudsen, 2010, The Strategic Challenge of Chinese Organisations: Understanding Decision Making in Chinese Organisations, Research & Assessment Branch, England Child, John and Max Boisot, 1988, The Iron Law of Fiefs: Bureaucratic Failure and the Problem of Governance in the Chinese Economic Reforms, Administrative Science Quarterly, 33: 507-27 Sharma R, 2008, Building Sustainable Leadership Competency, Educational Programs, SHRM India, SHRM Research, Society for Human Resource Management Khandekar, A., & Sharma, A, 2005, Managing human resource capabilities for sustainable competitive advantage: An empirical analysis from Indian global organizations. Education & Training, 47(47/48), 628-639. Uchisaiwaicho, 2008, OECD Annual Report, OCED Tokyo center, Nippon Press center building, Tokyo

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