Turkey is geographically close to major shipping routes and is placed strategically between Europe and the Middle East nations, which is helpful as a distribution strategy to bring it quicker to the consumer. This distribution channel is exclusive to the area and will provide quality service. Valero has opened many retail gasoline stations and this type of distribution will help build their brand name by delivering right to the consumer.
Due to a high volatile state of the economy and the war on terror make marketing issues a sensitive subject. It is Valero’s duty to be successful in their new expansion and create and environment that is sensitive to the people of Turkey. Cultural barriers will be a common occurrence when entering a new country, these barriers will be broken as long as they are made aware of and enough research prior to entry is conducted.
Human Resources
Valero has three key areas of focus while considering human resource management in Turkey. These include talent acquisition, talent development and talent retention.
Talent Acquisition
Valero Energy has won several awards for being an employer of choice because –
- Valero's commitment to its workforce as "Care more about your employees than you care about yourself" (Leonard, 2006).
- The company has never had a layoff and has some of the best salaries, benefits and stock options in the industry (Leonard, 2006).
- About half of the refineries listed as the safest place to work by OSHA were Valero units (CNNMoney.com, 2007). This signifies a serious commitment to employee safety.
- The company also promotes and encourages participation in volunteer activities through the Valero Energy Foundation and partnerships with United Way (Leonard, 2006).
Talent Development
As Valero Energy plans to expand by buying out wholly owned subsidiaries in Turkey, initially it should follow a polycentric staffing policy to meet its talent needs (Hill, 2008). This will help Valero meet any cultural and political challenges in Turkey and then once it is established it can follow a more geocentric policy to take advantage of international talent and use the expertise for its growth in other countries.
Valero Energy will need to provide training to its managers and staff in Turkey & the US to help them navigate around cultural differences, language barriers and technical training related to oil and energy resources. The other challenges in international expansion include fair performance management processes, fair compensation policies and strategy towards labor relations (Hill, 2008).
Talent Retention
According to Ozcelik & Aydinli (2006), when the importance of human resource management was compared between companies in Turkey and Germany & Spain in terms of the importance businesses attach strategically to human resource management, it was found that the importance of HR was similar in all three countries amongst global companies. In addition, in order to retain talent, Valero Energy must ensure equal treatment and opportunities in the workplace.
Risk and Opportunities
Today, 88% of Valero’s revenues come from inside of the United States. This leaves Valero extremely vulnerable to ebbs and flows of the US economy (Datamonitor, 2007, p. 6). Turkey has enjoyed a recent boom of over 2,000% of increased Foreign Direct Investment (FDI) in the last several years, so it is clear that corporations in other countries have recognized this investment opportunity as well. Hill (2008), states that First Mover Advantages provide benefits to the initial entrant into a market (p. 78). While Valero will not be the first mover into Turkey, they can still be an early entrant. Turkey has implemented several economic, legal, currency and legal regulations that ensure that Turkey will remain an optimal market for foreign investment. It is our belief that Turkey is a country that provides an excellent opportunity for foreign investment. However, it is worth noting that even with Turkey’s recent removal of trade restrictions and implementation of policies designed to attract FDI, they are still not receiving as much FDI as countries with similar GDP per capita such as Poland and Mexico (Datamonitor, 2007, p. 6).
While there are many advantages to expand into Turkey, Valero must be aware of the risks associated with any expansion. The petroleum industry always faces the possibility of competition in the form of alternative energy. Valero has logistical advantages by operating in North America, which consumes a third of the world’s oil, but a move into Turkey would require them to set up completely new distribution channels (Datamonitor, 2007, p. 6). Furthermore, Valero must take the risk of increased labor and resource costs. An increase in the GDP per capita in Turkey will force Valero to offer higher wages to stay competitive.
Business Issues
Sustainable Development and the Challenges Associated
During the last decade companies around the world have become increasingly aware of social, financial and environmental demands that their business faces (Hall & Vredenburg, 2003, p. 61). Many scholars argue that these demands offer a wonderful opportunity for innovative companies, while companies that ignore these demands do so at their own peril. The reality is probably not quite that simple. In actuality managers have had great difficulty in developing a model of sustainable development. This is due in part to the uncertainty and complexity of the new demands that will be put on the company by the public (Hall & Vredenburg, 2003, p. 61).
In order to be successful, the strategy must integrate both the goals of sustainability and innovation while not going against the social, environmental and financial demands set upon the company by outside forces. Sustainable development innovation (SDI) is more complex than market driven innovation because of the fact that there are usually a larger group of stakeholders and the demands of these stakeholders will often be quite different and often contradictory (Hall & Vredenburg, 2003, p. 61). Further complicating the problem is the issue of SDI is the fact that SDI often involves technology that is cutting edge and has yet so be accepted by the scientific, political, religious and business communities (Hall & Vredenburg, 2003, p. 61). In the case of Valero, they must be particularly careful about the environmental and financial impact that they will have in the areas where they operate. Due to all of the uncertainty surrounding SDI it is often difficult and risky to attempt to implement.
Take the experience of Monsanto Co., during the 1970’s and 1980’s they were a chemical company that sold pesticides to farmers. Later they decided to change from a chemical company to a bioscience company. As a result they were able to introduce to the market a group of genetically modified crops that would not have as much a need for pesticides due to their genetically increased resistance to insects. By 1997, the company’s logo had become “sustainable development for the world’s future” (Hall & Vredenburg, 2003, p. 62).
So what went wrong? While Monsanto had successfully innovated technology necessary to increase crop production, they only took into account the concerns of their customers and did not take the concerns of other stakeholders. While Monsanto’s partner (farmers and food producers) had similar inters such as increased production, safety and profit margin growth, they failed to ask what others might think of the ethics behind genetic modification and the environmental impact that might occur (Hall & Vredenburg, 2003, p. 62). In the future, Valero, whether in Turkey or some place else in the world, must be extremely considerate as to how their operations will impact the environment around them. While their shareholder and customers may be happy with Valero’s product, other people’s demands may be quite different.
There are other examples of where companies were forced to acquiesce to outside demands in order to continue to goal of SDI. One occurred in the mid 1990’s when Suncor had to make a financial change to stay in the good graces of the area that they were operating out of. Suncor, one of the pillars of the Canadian energy sector was operating in rural Canada, when many of the local residents became quite upset over the industry intrusion and increased pollution. To placate the local population, Suncor made the financial decision to make 12% of workforce indigenous of any area which the company is conducting business (Hall & Vredenburg, 2003, p. 65). Valero would be wise to follow Suncor’s example and placate the local population by employing a percentage of them. TransAlta is a publicly traded Canadian electric company which had relied on the Alberta regions abundance of low-cost coal. TransAlta correctly predicted that changing views regarding the environment and carbon dioxide emissions would cause a strong regulatory and public back lash (Hall & Vredenburg, 2003, p. 66). They worked to reduce greenhouse gas emissions by developing new grasses to be used on Ugandan cattle ranches. They also purchased a wind electricity generator firm as part of a ten year 1-2 billion dollar plan to increase its generation capacity from renewable energy sources to 10% by 2012 (Hall & Vredenburg, 2003, p. 66). Valero, will, doubtlessly face pressure from many groups to be more eco-friendly and will have to take steps to show the public that they are taking steps to protect the environment.
Dow Jones Sustainability Index
The Dow Jones Sustainability Indexes were launched in 1999 and designed to track the financial sustainability-drive of companies throughout the globe (Corporate Sustainability, 2008).
This is based on the cooperation of several indexes such as the Dow Jones Indexes, STOXX Limited and Sam Group. With these, assets managers are provided with reliable and objective benchmarks to establish sustainability portfolios (Corporate Sustainability, 2008).
The Dow Jones Sustainability World Index covers 10% of the 2,500 world’s largest companies that are traded on the Dow Jones. It judges them in terms of economic, social and environmental criteria. This index came into existence in September of 1999 (Corporate Sustainability, 2008). There are now 70 DJSI licenses that are held by asset managers in over 15 countries which serve to manage many different financial products including active and passive funds and segregated accounts.
Mode of Entry
The following several sections will address issues that play an important part in determining the most advantageous method of market entry. These issues include: Valero’s business model; Turkey’s demographic & socioeconomic status and receptiveness to such a venture; Porter’s 5 Forces; Porter’s Diamond and applicability to this scenario; FDI, advantages, disadvantages, applicability; Regional Economic Integration (REI) and relevance to Turkey; global market, friction, relativity; and the most advantageous expansion mode given all these characteristics.
Valero’s Business Model
Valero’s business model is the core of the company’s competitiveness; Expand during market pullbacks and other areas of opportunity, practice fiscal conservatism, and extend conversion capabilities to increase profit margin. Get quality people, keep quality people and convert low grade inputs into high quality outputs. These are Valero’s operations. At no time in the company’s history have there been more economic turmoil and decline than at the present, leaving Valero with significant opportunity should they intend to pursue it.
Numerous forces consistently influence energy prices, driving inconsistencies in supply and demand. These forces are not on just a local level, but an international one as well. Energy prices affect the level of economic activity in every industry and play a key part in importing and exporting. Valero must pay attention to other forces as well, such as legislation, regulations and environmental concerns and pressures. Chief economist John Felmy of API, a national trade association representing the petroleum industry states that “hurricanes, the war in Iraq, OPEC and a growing global market for energy have made the oil market more complicated,” significantly less predictable and more susceptible toward speculative trends (Byron, 2008).
Turkey’s Demographic & Socioeconomic Status & Receptiveness
Turkey currently has a democratic form of government, but has had a rough past with military coups in 1960, 1971and 1980, leaving Turkey with lingering collectivist sentiment. Turkey shares borders with Iran, Iraq, Syria, Georgia and Greece. It currently has maritime disputes with Greece over Aegean Sea, conflicts over the status of North Cyprus as a country, treatment of Kurds in Iraq and tense relations with Syria and Iraq over hydrological projects in the Euphrates River. Historically, the US has vested interests in Turkey because of their strategic geographical location between Eastern Europe and Asia and proximity to Iran and Iraq.
Ethics: Turkey’s religion heavily influences its code of conduct, interpersonal relations, and business ethics. The Koran favors ethical business practices, exercising Corporate Social Responsibility, and stresses charitable activity (Hill, 2008, p. 104). Therefore, the Muslim religion that Turkey practices weighs heavily on their code of ethics. This also means that the Turkish people are receptive to international business as long as they operate within the same code of ethics.
Legal System: Turkey operates under a civil law system influenced by the legal system in other European countries. Under civil law systems, there is less room for interpretation and precedence and judges’ work on applying the laws. This seems consistent with Geert Hofstede’s evaluation of Turkey with a higher Uncertainty Avoidance Index (UAI); they require set rules, controls and policies and are not comfortable with uncertainty (Hill, 2001). Additionally, there is a widespread belief that Turkish courts are biased against foreign organizations; a significant hurdle for outsiders, considering that legal decisions require local court enforcement (Turkey Business Forecast Report, 2007, p. 37).
Socio-Economic: Turkey has a strong and rapidly growing private sector, yet the state still plays a major role in basic industry, banking, transport and communication. In 2000, with US backing the country was International Monetary Fund’s (IMF) biggest clients with $30 billion in subsidized loans and another $7 billion from the World Bank (Rossett, 2003). By 2005, IMF pressure, Turkey has privatized most of its unhealthy industries and was back at a growth rate of 6%. According to the CIA World Factbook, traditional agriculture still accounts for 35% of employment in Turkey. Turkey’s real GNP growth has exceeded 6% in the past years, but this growth has also been interrupted by sharp declines in output in 1994, 1999 and 2001. Turkey's high current account deficit leaves the economy vulnerable to destabilizing shifts in investor confidence.
Porter’s 5 Forces, Porter’s Diamond and Applicability to Scenario
Porter’s Five Forces that shape strategy represent more than just the traditional direct competition, and have significant impacts on not only company, but industry profitability (Porter, 2008). These 5 forces are: threat of new entrants, power of suppliers, bargaining power of buyers, threat of substitutes, and existing rivalry/competition.
Threat of new entrants: There are significant barriers to market entry in the oil industry, to include regional legislation, specialized labor requirements, and significantly inhibitive cost requirements (Investopedia, 2008). Because of these entry barriers, the threat of new entrants into the oil industry is very small.
Power of suppliers: There are numerous companies involved in the oil industry, but the majority of the industry is controlled by a very few dominant organizations. Because oil is a necessity and the industry is oligopolistic, there is certainly enough business to render each company profitable. Therefore, competition is not necessarily intense between major companies, but these companies do possess the ability to significantly influence the industry, impacting smaller companies, economies, and consumers (Investopedia, 2008).
Bargaining power of buyers: Buyers are limited in their ability to bargain in this industry, but can moderately impact transactions because all oil company’s products are essentially the same (Investopedia, 2008). This gives consumers the ability to compare products and seek value.
Threat of substitute products or services: The threat of substitutes is currently minimal in the refining industry. As the environmental movement continues to gain support and as alternative energy methods are discovered and implemented, the threat will grow, but it is currently so small it is almost non-existent relative to the size of the oil industry.
Rivalry among existing competitors: The oil industry has experienced slight growth for the past several years. The fixed costs associated with refining are high and increasing with the rising costs of materials such as steel. The industry is often burdened with inadequate capacity, creating pull tendencies in the market, and limiting the impact of competition. Perhaps the most significant factor associated with rivalry is the completely insignificant value-added by an inoperable refinery, and the resulting potentially enormous exit costs (Investopedia, 2008).
Porter’s Diamond Model depicts aspects associated with competitive advantage in industry (Askalany, 2008, p. 16).
Firm strategy, structure and rivalry: Valero’s current strategy is a refocus on core business competencies and value based expansion. The company takes a conservative approach to business, and as a result, positions itself to weather present but limited competition.
Factor condition: Porter (2008) states, that key factors of production (“skilled labor, capital, and infrastructure”) “are created not inherited” (Porter2, 2008). Non-key factors don’t translate into competitive advantage. Valero has a stellar track record of investment in its own employees, thus creating a long term dedicated labor force. Additionally, Valero is fiscally responsible in its value based operational approach, and allocates significant resources to infrastructure investments.
Demand condition: Turkey has an independent business and profit and innovation inclination similar to that of the United States.
Related and supporting industries: Turkey has supported industry and infrastructure, though neither is quite cutting edge. The knowledge and experience does, however exist, presenting the potential for upstream and downstream collaboration for innovation and advancement.
Government: The role of government in each country presents a major difference. Governments can push for increased innovation and productivity and offer incentives for advancement, among other options to facilitate increased competitiveness (Porter2, 2008). Turkey’s government is pro-business, supporting innovation and involved in promoting economic advancement.
FDI: Advantages, Disadvantages & Applicability
The choice of entry mode into a country is a significant strategic decision for a company. Valero must consider its internal strengths, long term goals and ability to deal with emerging economies while deciding its mode of foreign investment. When undertaking horizontal FDI, a few considerations are quite important: transportation costs – is the shipping price inhibitive, or enough to render a venture cost ineffective, advantages associated with location, mimicking effect and tariffs, regulations, restrictions, quotas on imports and their impact (Hill, 2008, p. 229-237).
Firms constantly seek opportunities to invest overseas where they can gain advantages that their competitors do not enjoy. They gain these advantages due to the market factors for product demand and factors influencing production i.e. due to the absence of a perfect competition market. The flaw in this theory is however that it does not explain the need for foreign production to be undertaken by a firm (Katsikeas & Morgan, 1997).
This theory suggests that a firm will try to invest in producing goods in a foreign country depending on the advantages it has in its home country vs. advantages it can gain in a foreign country. The main emphasis in this theory is that apart from the firm's own resources and territorial advantages in a foreign country, the foreign policies and Govt. trade policies also attract or deny entry to new businesses (Katsikeas & Morgan, 1997).
FDI in Turkey: According to Week 4’s provided United Nations conference on Trade & Development Report (2008), Turkey ranks 29th globally and eighth among developing economies (p.53). Despite this moderately high ranking, UNCTAD2 (2008) lists Turkey as an underperformer in its FDI Indices. Turkey ranks 85 out of 141 countries in FDI inflows from 2004-2007 (United Nations3, 2008) and 77 in outward FDI (United Nations4, 2008). According to UNCTAD’s World Investment Prospects Survey 2008–2010, Turkey is one of the top two countries in West Asia for FDI (United Nations, 2008, p. 58). In 2007, West Asia realized a 12% increase in inward FDI, among which Turkey saw the second highest investment (United Nations, 2008, p. 27).
Turkey’s Inward Stock has experienced significant increases from 2002 - 2007. Turkey’s inward stock (22.2%) is slightly lower than the world average of 27.9% in terms of GDP. It is also apparent that Turkey’s Outward Stock is frail and insignificant, as 1.9% of GDP. This pales in comparison the world average of 28.9%. Turkey’s outward stock represents the value of Turkish based companies’ assets in foreign economies (United Nations5, 2008).
Inward and outward FDI flows represent the capital coming into and exiting the country for FDI purposes, respectively. Turkey’s 2007 Inward Flows (15.56%) are slightly higher than the world average of 14.8% when expressed as a percentage of GDP (United Nations5, 2008). Turkey’s Outward Flows (1.5%) are significantly lower than the world average of 16.2% (United Nations5, 2008).
Recently, new FDI law changes have decreased administrative requirements and awarded foreign businesses the same rights as domestic businesses (Turkey Business Forecast Report, 2007, p. 40). This policy change is a significant driver of the continued FDI increase, projected to exceed twenty billion dollars in 2008 (Emerging Europe Monitor, 2008, p. 11).
Despite its large increases in FDI, Turkey still has not fared as well as other countries (Erdilek, 2003). FDI inflows have lagged behind much of the globalized world. Perhaps this is because of the still developing nature of Turkey’s business environment. Given the AK party’s pro-business record, history of deregulation, and focus in economic issues, we can hope the future holds the additional reforms needed to make Turkey a frontrunner with respect to FDI, and the prospective admittance to the European Union just may.
REI and Relevance to Turkey
Hill (2008) defines Regional Economic Integration as “agreements among countries in a geographic region to reduce and ultimately remove tariff and nontariff barriers to the free flow of goods, services, and factors of production between each other” (p. 262). Trade agreements facilitating REI have significantly increased in the past twenty years; almost every WTO member state is included in a current trade agreement (Hill, 2008, p. 262).
The existence of the EU is a prime example of a successful REI. The numerous changes experienced by EU member countries decreased barriers and restrictions on trade, created a single currency, and essentially created a unified market large enough to rival that of the United States (Hill, 2008, p. 263). Regional Economic Integration provides benefits not only to developed nations, but also to disadvantaged areas, allowing them to compete in a broader capacity. It allows less developed or less competitive nations to combine resources and compete globally. If Turkey is successful in its bid for UN admission, it would significantly increase turkey’s economic viability.
Thus far, Turkey and the EU have enjoyed somewhat of a reduction in trade barriers and both have received benefits. However, Turkey began to experience economic trouble, and began to create additional trade barriers (CIA, 2008). In 1980, Turkey was taken over by a coup, eliminating dialogues with the EU until 1983, when a civilian government was once again realized and applied for EU entry.
Turkey and the EU reduced trade barriers and both received benefits to conform to EU expectations, and move toward European societal expectations. These benefits would render Turkey a more economically viable, politically stable, and westernized nation, and certain economic benefit would follow.
Global Market & Friction
We are already experiencing the initial “reinvention” by new entrants in the form of a rising Chinese economy. “During these recent centuries, Europe and the West evolved and perfected the current capitalist economic system, a system based on markets, strong property rights, relatively open trade, innovative technology, general education, efficient capital allocation mechanisms, and clear legal frameworks” (Kelley, 2006, p. 132). In the current system, the states that are economically dominant are the states that developed the system. This system is inherently cyclical in its reinforcement, continuing to underline the advantage of the initial entrants.
As the trickle down effect continues to provide technology and economic resources to developing nations, the recipient developing nations will continue to become empowered, self sufficient, and economically viable. Perhaps they will enjoy additional advantages in that their underdeveloped economies and governmental structures have the flexibility to adapt to current times and facilitate increased competitiveness.
Additionally, the catch-up effect will allow these areas to realize more advancement that industrialized nations. When we look at the statistical standard distribution model, we see that the deviations more distant from the mean require less resources to incite a greater change. The same idea applies to developing nations, in that fewer resources are required to obtain similar advancement.
This economic trend will continue as the global market continues its approach toward some level of equilibrium. Future market dominance depends upon (1) science, development and innovation and (2) institutions and policies. Turkey is somewhat in the middle of the spectrum, and will benefit significantly because it possesses westernized and pro-business attributes, along with low cost operations and other characteristics of developing nations.
Conclusion: Most Advantageous Expansion Mode/Entry Vehicle
Valero Energy is successful for a number of reasons. These include its relative size, location, physical dispersion, recruitment, and core quality focus, and likely the most important, its conversion ability. Valero’s conversion ability lies in the process of converting low grade stock into high grade fuels (Datamonitor, 2007, p. 6). Valero is an industry leader in this regard, and has improved numerous facilities to develop this capability. This investment in facilities is indicative of Valero’s focus on investment. Low grade stock and conversion comprises a significant portion of Valero’s operations; approximately sixty percent (Moroney, 2008). Purchasing low grade (sour crude) inputs and converting facilitates higher profit margins given the beta between input resource price and industry matching retail prices.
Valero’s competitive advantages in technology, processes, structure, culture, and recruiting would be best maintained in expanding via wholly owned subsidiaries. This is a very important issue when exploring potential expansion into Turkey, which possesses insufficient Intellectual Property legislation, and lacks the judicial system to enforce what little legislation is present.
In choosing this method, Valero would guarantee strict control over its operations, and procedural and manufacturing quality control could be adequately over watched. Company strategy would be embodied by the new foreign site, direction and culture adopted, allowing Valero to maintain its advantages in these areas.
Hill (2008), states that the largest disadvantage of pursuing a foreign wholly owned subsidiary is the cost (p. 411). The initial costs would be significant, but not inhibitive, as explained above. For Valero, the price tag on such a venture would be similar to current ventures, even with an additional 15% added representing the average cost overrun of international projects.
Turkey possesses the potential for relatively inexpensive operation with a relatively solid and strengthening pro-business environment. It is strategically located in a position that provides significant logistical advantages along major trade routes, and is geographically close to (1) the largest oil surplus in the world, and (2) a very solid and lucrative market that is the EU. This venture represents a very solid and opportunistic longer term venture, one that falls in line with Valero’s business strategy. The payback time for this venture is relatively short, the risks are low, the profit potential is high, political and other risks are low. Turkish entry pursued through a vehicle of acquisition and wholly owned subsidiaries presents a lucrative and viable opportunity.
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Appendix
Team Wrap-up
This semester, we worked as a team consulting for Valero Energy on their international expansion opportunities in Russia and Turkey. This assignment gave us insights into two countries, Russia and Turkey that we had not had a chance to explore in our personal lives. We also had the opportunity to research the energy and fuel industry, which is a booming industry that ironically also faces the threat of competition from alternative energy sources.
In Weeks 1 & 2, we became familiar with some of the concepts of a global business, how to acquire and promote a global mindset and understanding some of the global issues corporate executives face (Kedia & Mukherji, 1999). In Weeks 3, 4 & 5, we were able to learn about the different theories related to foreign direct investment, especially Porter’s Diamond and how some nations gain a trade advantage over others and arguments in favor of free trade (Hill, 2008).
In Weeks 5 & 6, we also studied the different regional agreements and treaties that countries enter into, what advantages this offers and how it changes the way other engage in trade (Hill, 2008). The economic prosperity of developed nations, their decline and the rise of developing countries like India and China in the coming decades will change the way we consider human resources management in businesses (Kelly, 2006).
Weeks 7 & 8, further helped us consider the different modes of entry into a country and understand what works best for Valero Energy and how we could strategize on the best mode of entry for a more sustainable growth model (Hill, 2008). Week 9 suggested export and import as well as countertrade as a strategy for exploring potential country markets as well.
In addition, we had the opportunity to learn about other country markets, other organizations and share information with peers through the conference discussions. We also were able to manage and lead our own conference discussions as sub-groups and individual conferences. Our own personal applications helped us assess our own competencies and identify our learning through the process.
Competencies
Below are the competencies we worked on strengthening through the AMBA 606 course, both individually and as a team -
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Communication skills - As a team we developed our communication skills by using the Study Group conference area, e-mails as well as conference calls with Prof Askalany. We used the conference areas and chat feature within Web Tycho to touch base on team and individual assignments, update each other on any conversations with the Prof or Jomarie and to keep each other informed of our progress and any delays. As a result, we were able to produce all our team assignments on or before the deadlines and adhering to the rubrics. We were able to communicate our opinions in conferences by providing supporting references and citations, while being in or not in agreement with the class readings. With Prof’s guidance, we were also able to critique our classmates’ findings and conclusions professionally based on our own research.
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Critical thinking - This class also gave us the opportunity to develop our own ideas based on the recommended class readings and textbooks. For example, we were able to analyze foreign trade data for Turkey and Russia, financial information for Valero Energy and its competitors and suggest the best mode of entry for Valero into these two countries. We were also able to analyze political issues for Turkey, ethical and corruption problems in Russia based on our readings and asses the potential of both these countries for business expansion.
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Decision Making - We have been using our decision making skills throughout the course with regarding to group and sub-group outputs as well as in Week 10 with our final paper. We especially used our decision making skills in Week 6 where we made recommendations on how to manage the changing world in terms of economic prosperity declining in developed countries and rising exponentially in developing countries. Again, in Week 8, in our sub-group conference we analyzed the information from past weeks and discussed the best mode of entry for Valero Energy into our respective countries. Here we discussed the advantages and disadvantages of the different modes, opening it up for discussion with other class mates.
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Diversity/Cross-cultural perspectives – This class especially gave us added insight into different cultures across countries that we chose as well as countries that were being discussed by other groups. Week 2 and Chapter 2 from the Hill textbook gave us the chance to delve into business practices, religious differences and Hofstede’s evaluation of the countries. Week 7 further gave us the opportunity to discuss our own personal and work experiences in different countries and share it with team members.
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Ethical leadership - As a team, we have motivated each other to produce better quality work and stretch ourselves to meet grading goals and the tight schedules for this class. We were also able to maintain a fair level of transparency with our project contributions.
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Executing Decisions – As a team leader Daniel has effectively communicated the plan for our team upfront and with detail. In turn, the team has followed up on our own commitments to make our team projects successful. In Week 7, we were able to manage and market our own conference and figured out the key to a successful conference was early initiation coupled with well-researched discussions.
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Information literacy/research skills – Our information and research skills have been stretched throughout this class, since the countries as well as the company of our research are not part of our own prior work or personal experience, we have had to rely on course textbooks and UMUC library resources heavily in formulating our opinions and gaining the right quantitative data.
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Systems thinking – Weeks 5, 7 and 8 helped us strengthen our approach to this assignment to be more strategic and keeping a global vision in mind for Valero Energy. Even as we worked on our own sub-group countries, we remained actively involved in the other sub-group’s conferences as well, since we knew that our final project would be a culmination of work from both sub-groups.
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Teambuilding skills - We were able to form our team prior to the start of this class. We have not worked closely with some of the team members in any of the past AMBA classes, so this was a new experience. We collectively and actively bonded to stay focused on our assignment and grading goals throughout the course, however this doesn’t mean we always agreed but were able to view each other’s opinions objectively.
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Technology fluency - In this class, we mainly used our web research skills, UMUC library research skills and Microsoft Word to accomplish our assignments. I believe the group was pretty comfortable with these programs because of our past experience using them in class and at work.
