Lesson #10 Assignment:

FINAL PROJECT
This project requires research, imagination, and logic in applying the content of this course
and book.

Create an imaginary company that you have been operating in the domestic arena for some
time. You have decided its time to go international.

1. Describe your company and its operations, relative size, and so forth. Give reasons for
your decision to go international.

2. Decide on an appropriate country in which to operate, and give your rationale for this
choice.

3. State your planned entry strategy, and give your reasons for this strategy.

4. Describe the environment in which you will operate and the critical operational factors
that you must consider and how they will affect your company.

5. Give a cultural profile of the local area in which you will be operating. What are the
workers going to be like? What kind of reception do you anticipate from local
governments, suppliers, distributors, and so on?

6. Draw up an organization chart showing the company and its overseas operations, and
describe why you have chosen this structure.

7. Decide on the staffing policy you will use for top-managers, and give your rationale for
this policy.

8. Describe the kinds of leadership and motivational systems you think would be most
effective in this environment, focusing on factors affecting behavior in the workplace.
Integrate any findings regarding motivation or work attitudes and behaviors. Decide on the
type of approach to motivation you would take and the kinds of incentive and reward
systems you would set up as manager of a subsidiary in that country. Then decide what
type of leadership style and process you would use.

9. Discuss the kinds of communication problems your managers face in the host-country
working environment. How should they prepare for and deal with them?

10. Explain any special control issues that concern you for this overseas operation. How do
you plan to deal with them?
11. Identify the concerns of the host country and the local community regarding your
operations there. What plans do you have to deal with their concerns and to ensure a long-
term cooperative relationship?

Be sure to research your host country and provide references for your resources.

As a further resource for citation of bibliographic references, please refer to the Publication
Manual of the American Psychological Association (5th Edition) Published by American
Psychological Association, 2001. ISBN: 1-55798-7912

Examples using the 5th edition of the American Psychological Association or APA citation style
are listed below. If you do not see the example you need listed here or if you want a more in-
depth discussion of APA, you should consult the text recommended above.

American Psychological Association's online 'FAQ for APA Style':

http://apastyle.apa.org/

The Purdue University Online Writing Lab's guide to APA:

http://owl.english.purdue.edu/handouts/research/r_apa.html

Westfield State College Ely Library's guide to APA:

http://www.lib.wsc.ma.edu/citation.htm#APA

Grading Criteria Points

Meets length requirement (3500-4000 words) 50

All parts of the assignment are complete 50

Content clearly and convincingly presented 80

Research is adequate and applicable; sources are 80

appropriate for graduate-level work and are correctly
cited

Grammar/Spelling 20

Use of APA 20

Total 300
Dynamic Global Event Services, Inc. (DGES) is a full service meeting, event, conference, and
convention-planning company headquartered in Athens, Georgia, which is just a short 45 minute
drive from Hotlanta! We represent customers in the government, sporting, corporate, direct
selling, religious and non-profit industries.

The DGES staff is highly qualified and dedicated professionals with nationwide and overseas
meeting planning experience. Our vast and varied experience with convention venues, hotels,
CVBs, DMCs and service providers will guarantee the successful, high quality event you are
expecting.

We specialize in site-selection, contract negotiations, event planning, housing & registration, on-
site event execution and catering. We have access to over 3,000 premium speakers and
entertainers. DGES has working relationships with over 20 award winning Production companies
located all over the United States.

We have organized and executed events ranging from 50 to 40,000 people in size. We are
Certified Meeting Professionals and our Leadership staff has over 85 years of combined
experience in the event industry.

Our mission is to provide you with the highest level of service while demonstrating excellent
business ethics and morals. We believe in having a servant’s attitude and exemplify it by our
service and anticipating our clients' needs. Dynamic Global Event Service’s goal is to provide
specialized, excellent service with cost-effective solutions for your meeting, convention or event.

Currently, DGES has 16 employees, including myself, Managing Director, in our US office.

US
Managing Director
Creative Director
Executive Assistant
Director, Design & Development
Senior Event Manager (2)
Event Manager (2)
Logistics Manager
Travel Coordinators (2)
Senior Sales & Account Manager
Sales & Marketing Assistant
Director, Operations & Account Services
Financial Analyst
Purchasing Analyst

My background incorporates financial, strategic management and planning as well as project

management. I have spent the last 12 years producing and running events in over 25 countries
around the world. I started my career in finance with SC Johnson, working with a broad range of
clients. In 2000, I moved into events, and began organizing parties and corporate functions. I
opened DGES in 2005 and began producing stunning events for Chateau Haut-Brion, Jefferies
Inventment Bank, Revlon, Bacardi, DHL and Mazda. I am spearheading DGES’s expansion into
the exciting Spanish markets.

Why take DGES global?

The main benefit for DGES to expand abroad is access to additional markets and expand our
customer base. Along those lines is the ability to balance risks (e.g. if one country is going slow,
you can sell to another country which has a stronger economy). The world is a mix of
opportunities and variety.

 Middle-class consumption is shifting massively from the United States, Europe and Japan
to China, India and Spain. In the coming decades, not only will almost all middle-class
growth come from India, China & Spain, but their absolute numbers will dwarf the
former leaders. Obviously, this sweeping demographic change has huge consequences for
anyone trying to build a business abroad (Delaney, 2001).
 Telecommunications: Improved information processing and communication allows us to
have better information about distant markets and coordinate activities worldwide. The
explosive growth of the World Wide Web and the Internet provide a means to rapid
communication of information.
 DGES is developing a partnership approach whereby it will enter the Spanish market
through a joint partnership with a local Madrilenos. This gives DGES access to
knowledge of local political and institutional conditions, as well as a ‘local face’.
 Potential diversification through worldwide connections. We feel that the more people we
talk to about our business and our industry, the more ideas we are exposed to. Getting
different points of view from around the globe could trigger all sorts of opportunities and
possibilities. (Chapman, 1998)
 Market Size: Saturation of the home market is a major motive for our expansion into the
global market. (Perlmutter, 1969)

Why has DGES decided on global expansion into Madrid, Spain?

DGES has have partnered with a stylish Madrilenos, Belen Parades, who will bring a unique
combination of experience and expertise to Dynamic Global Event Solutions, Inc. She is a
results-oriented events manager and consultant with extensive global experience, producing
shows from Hong Kong to Nova Scotia to Madrid. Belen has key account management
experience for Fortune 500 clients, working with Ambassadors and Consul Generals from China,
Japan, the United Kingdom, Russia, Germany, Canada, the Caribbean, Mexico and Central
America.

She has a proven track record in special event production, project management, and the
implementation of event marketing programs and holds numerous awards.

Belen holds an MBA in Contemporary Culture and MA Media Communication from

Universidad Compultnese de Madrid and a BA in Communications and International Studies
from St. Louis University, Madrid.
With a dynamic European economy characterized by strong economic growth, Spain is the
world’s ninth largest economy and is responsible for half the new jobs created in the European
Union recently (www.spain.info.com). Doing business in Spain provides ample opportunities to
target Spain’s 44.7 million resident consumers, to take advantage of Spain’s modern
infrastructure and to create a strategic base for pursuing Latin American and other European
markets. With its Old World charm and a modern approach to encouraging entrepreneurship,
Madrid is winning over businesses seeking a European presence. Madrid makes a fabulous
jumping-off point for all of Europe, the Middle East, and North Africa, not to mention the
Spanish-speaking world of Latin America.

The Spanish capital has a long history of nurturing small business: 99% of companies in the
Madrid region have fewer than 50 employees (in the U.S. as a whole it's about 94% of
companies). Amid a small-business boom in the area, two government-funded groups, Promo-
Madrid and Madrid-Emprende, are hunting for foreign investment and winning high marks from
U.S. companies (Haiken, 2008). The Madrid city and region created Promo-Madrid in 2004 and
Madrid-Emprende in 2005. Funded with an ample budget of 25 million euros, they assist foreign
entrepreneurs with everything from work permits to corporate taxes to commercial real estate.

In the last ten years, Madrid’s immigrant population has increased tenfold. Today, over half a
million people, 17% of the city’s population are foreigners who hail from 183 different countries.
Madrid also has a low cost of living and a high quality of life. This makes Spain very desirable
for foreign investors.

The new “Madrileños” have enriched the life of the city, which is always willing to welcome
anyone who desires to become part of it. However, Madrid understands that coexistence between
native Madrilenos and foreign immigrants can be a complicated task and that the integration of
different cultures, with their specific customs, is a slow process that cannot be completed
overnight. Facing this reality, the Madrid City Hall implemented the first Coexistence Plan in
2005, which established a specific action plan in matters of immigration and a series of services
aimed to promote integration of the immigrant population and harmonious coexistence among all
Madrid residents (Government Department of Family and Social Services).

This new plan is governed by three basic principles: the first is universality; the government of
Madrid will properly tend to all of the inhabitants of Madrid, regardless of their origin or legal
status. Then there are the principles of active integration and intercultural coexistence, which
highlight the need for the municipal services to absorb the phenomenon of immigration in its
entire complexity (Government Department of Family and Social Services). To this end, the plan
specially focuses on the mechanisms and actions that, beyond shelter, allow the full and free
incorporation of immigrants into Madrid society, with equality of rights, obligations and
opportunities.

Madrid’s recent history has led to a character that is hospitable to external influences and
receptive for newcomers. In short, Madrid is a city that is open to coexistence.
Madrid has a very modernized and elaborate transportation network of buses and Metro. The city
contrasts with some large European cities in that it is extremely clean, and city employees in
bright yellow vests can almost always be seen cleaning the streets and sidewalks .

Madrid proudly sports one of the best public transportation networks in the world and the second
largest metro network in Europe, second only to London's. Buses and subways form an
integrated network and work with the same tickets.

Madrid is a very safe city. The police are visible, and the city is equipped with cameras. There
are always a lot of people in the streets, even at night time, so you can walk across the city
without fear.

It is essential, before entering a foreign market to clearly identify the motivations behind your
decision to explore entering the international marketplace; to examine what your domestic
marketing strategy has been and how the domestic plan employed by your company on a local
level needs to be tailored to be positively received in the proposed international territory.

DGES’s strategy to enter the international market:

 We have secured elegant, but affordable, office space located in downtown Madrid which
will put us within arms-reach of our targeted business district.
 Initially, we will strategically focus on companies who have not been represented by
meeting/planning firms or utilized meeting planning search firms in the past but have a
need for planning services.
o This should bring in new clients to help build our client-base.
 Market Segmentation:
o Corporate
These potential customers are planning corporate group (10 or more rooms)
meetings which range from small board to national sales meetings and can range
from one to several hundred meetings per year.
o Incentive
Incentive planners are a subgroup of the the corporate segment specializing in
reward-based high-end group travel. Again, the decision makers can vary from
office to office. They plan group incentive trips to, generally, resort destinations
which can range from the top ten company executives to several hundred sales
personnel.
o Association
Associations, according to their by-laws, must typically have a specific number of
meetings per year. Usually, an association will have a few board meetings and
one or more large conventions/trade shows per year.
o Social/Military/Educational/Religious/Fraternal (SMERF)
This market segment, sometimes referred to by its acronym SMERF, represents
events which are planned by designated individuals who may be somewhat
unfamiliar with meeting planning, such as social committee members, military
personnel, teachers, pastors, or fraternal organization officers. This market
segment's meetings are typically mid-range to low budgeted events (usually due
 to the diverse economic status of the members and the need to avoid excluding
any attendees due to costs).
 Service Business Analysis: DGES, Inc. will be instantly recognizable to meeting
professionals as part of the hospitality industry's largest and finest event, meeting and
conference resource firm. We will have the challenge of establishing ourselves with
customers as a "client advocate," not a hotel/resort representative, and separate ourselves
from the mega-firms by the quality of personal service we offer.
 Main Competitors: There are currently 120 event planners located in the Madrid area.
However, after much research and analysis we have determined that our main
competitors are:
o Ultrmar Event Management
o Mys Eventos
o DirecTo Spain
o A & E (Arte & Events)
o Capital Events
o Unitours Maroc
o Iventions
 Target Market Segment Strategy: Prospecting is the key to success. We must consistently
bring in new customers to use our site selection service and who we can potentially upsell
our other alliance services. To increase the success of prospecting, we must create
targeted lists which fit the criteria of a future client. These lists will be compiled utilizing
resources available to DGES including, but not limited to, the Official Meeting Planners
Guide, Meeting Planners International Directory, Executive Women International
Resources, etc.
o After ascertaining a potential customer by prospecting, we must follow through
with efficient site recommendations based on the exact client needs, and always
remember to upsell the additional client services to add value to our services for
the client and increase possible revenues.

 Market Growth: The growth potential in the event planning and meetings industry is
strong. Currently, over $100 billion is spent annually on meetings, according to
MeetingNews (MeetingNews, 2011).
 All indicators seem to predict growth within the meeting planning industry. In the
Convene Magazine 8th Annual Market Survey, 89% of meeting professionals reported
flat or increased meeting attendance expected for 2011 versus 2010 (Russell, 2011).
 Growth within the corporate, association, incentive and SMERF market segments are
conservatively estimated to grow at a rate of three percent, two percent, and three
percent, and remain flat, respectively over the next few years. (Russell, 2011).
 Market Trends: The market for site selection firms is growing as companies are utilizing
outside providers for event planning services instead of paying permanent in-house
employees. According to the 1999 American Society of Association Executives and
Professional Convention Management Association's Housing Trends Study, there is a
rising trend toward utilizing third party services--from 47% in 1997, to an estimated 61%
by 2001. They are looking for external cost-effective ways to plan company meetings,
and incentives and customer events. (Clarke, 2010).
  Education of Business Etiquette in the International Market: As we enter the
international market, we must ensure that we know, and understand, Spain’s history, the
proper way to greet someone, the ordinary times for lunch, etc. We must ensure that we
communicate in the way that will be expected and accepted as societal “norm”.
 Utilize the government provided groups, Promo-Madrid and Madrid-Emprende, to help
us navigate Spain’s laws governing business.
 Act local – local customers, local cultures, local supply chains and local staff.
 Be flexible. We understand that emerging into a new market requires diligence and
patience.

Over the last decade, the Region of Madrid’s economic development has enjoyed sustained
growth, driven by Regional Government policies that favor entrepreneurs’ and investors’
initiatives and maximize their profits. Today, Madrid is a dynamic, prosperous free market
economy.

The Regional Government fosters the entrepreneurial spirit through its business-friendly legal
framework and tax regime, the simplification of establishment processes as well as institutional
support.

According to the OECD, income tax is lower in Spain than it is in many other European
countries such as France, Germany, the Netherlands, Italy, the Czech Republic and Poland. Also,
Madrid has one of the most favorable tax mechanisms in Spain and is the region that offers the
most favorable income tax deduction to its citizens (Dayton-Johnson, 2011).

Finally, labor costs are significantly lower than those of other European countries and those of
the U.S. According to Eurostat data, Madrid is the city with the fifth lowest labor costs in the
European Union (Labour Market (including the Labour Force Survey), 2011).

Spain is the sixth inward investment destination in the world and from 2000 to 2008 the Region
of Madrid received 63% of the foreign direct investment into Spain (Dayton-Johnson, 2011).

Over 4,500 foreign companies operate in the Region of Madrid and account for the direct
employment of 360,000 people (Madrid Chamber of Commerce). These numbers position
Madrid as the premier region in terms of employment generated by foreign companies (28% of
the national total) and as the preferred destination for new investment projects.

Madrid has a fairly laid back attitude to life, which, at first glance, seems to be reflected in the
work ethic. An expat from a different country might confuse this mellow mindset of working in
Madrid with inefficiency. On the contrary, Spanish business people require this relaxed
atmosphere to work productively. Their long lunch hours are not simply dedicated to eating, but
create an environment for discussing business, settling deals and establishing contacts.
Our US office must adapt to local office hours in Madrid: Almost no business is open before 9
am and closes before 8pm. Generally speaking, most businesses close for a couple of hours in the
afternoon.

In working with Belen, we have compiled a list of Do’s and Don’ts for operating in Madrid:

 Do not plan on scheduling a meeting before 10 a.m.

 Do not expect anyone to show up on time to the scheduled meeting: A 15-minute wait is
standard.
 Do care about how you present yourself. Conservative and carefully selected clothing is
imperative for business people working in Madrid.
 Do not launch into a topic of business immediately. Small talk is an important way of
warming up in Spain.
 Do expect your Spanish contacts to take their time when negotiating a business deal.
Discussions are part of the charm of bargains.
 Do pick out a relatively expensive and good quality restaurant when organizing a lunch
or dinner meeting with colleagues and/or business partners while working in Madrid.
 Do expect to pick up the bill and argue about who is to pay when ending a business meal
in a restaurant.
 Do print business cards, double-sided, in both English and Spanish. Remember to present
them to clients, employees, partners and colleagues with the Spanish side facing up.
 When greeting clients/associates, or at the beginning or end of a business meeting, a
friendly handshake is customary. Generally, conducting business if fairly formal and
similar to that of other European areas.
 Socially, the Spanish are some of the most gregarious people in the works and are always
very hospitable. They love to entertain, and while our local staff may understand the
normality of the evening meal not beginning until 10:00 pm, this will be an adjustment
for any Expats that will work out of this office. It is also normal to take a small gift such
as a bottle of wine or flowers to the dinner.
 The dress code in Madrid is quite formal when conducting business. Both men and
women wear suits.
 Use of personal and public space in Spain: Spaniards generally need considerably less
personal space than certain other nationalities, Americans in particular. Our expats must
learn to be flexible and try not to inch away from the speaker; this is considered rude.
 Business negotiations:
o Madrileños place great importance on the character of the person with whom they
do business.
o Hierarchy and rank are very important and decision-making is held at the top of
the company.
o You may be interrupted while you are speaking. This is not an insult; it merely
means the person is interested in what you are saying.
o In general, Spaniards do not like to lose face, so they will not necessarily say that
they do not understand something, particularly if you are not speaking Spanish.
You must be adept at discerning body language.
o Madrileños are very thorough. They will review every minute detail to make
certain it is understood.
While we will be employing local Madrileños, we do have a few expatriates that have been
learning about the Spanish culture, not just in the business sense, but learning the everyday
culture. We are trying to ensure easy assimilation into their new environment.

As part of our globalization efforts, our expatriates have had much cross-cultural training
including one-on-one instruction to assist them in their international move. All staff relocating
to Madrid must have an understanding of not just the cultural differences but the legal and social
differences as well. The education and instruction of our expatriates has revolved around
“respect for differences in people”. We believe that the appreciation of cultural diversity will
need to include both the "big things" and "small things" that make up Madrid’s unique culture. It
is clear that religion is one of the most important variables that impact behavior in the
region. Smaller issues, such as the meaning of gifts or the importance of timeliness will also
need to be understood.

We also understand that there are many HR differences between the United States and Spain so
consequently we have carefully analyzed the HR practices of Spain, including hiring, termination
and salary expectations. We found that in Spain, salaries typically are quoted with two addi-
tional months’ salaries that are paid in July and December.

Madrid has a fairly laid back attitude to life, which, at first glance, seems to be reflected in the
work ethic. An expat from a different country might confuse this mellow mindset of working in
Madrid with inefficiency. On the contrary, Spanish business people require this relaxed
atmosphere to work productively. Their long lunch hours are not simply dedicated to eating, but
create an environment for discussing business, settling deals and establishing contacts.

Social life in Spain is very important. Family and friends are vitally important to most Spaniards.
Spaniards normally act and speak in an informal and spontaneous manner during social
interactions and physical contact is frequent with greeting, kisses and embraces that may take
those who are visiting Spain for the first time by surprise. Similarly, the Spanish habit of
interrupting one another is not considered bad manners in Spain, but part of spontaneous
communication.

First of all there’s the work ethic. Spaniards firmly believe that life is for living and not for
working so the work ethic isn’t as strong as it is in the UK or US where people’s lives revolve
around making money. This doesn’t mean that the Spanish do not work hard; it just means they
don’t think you should waste your life working when you could be enjoying time with your
family and friends.

We understand that while in Spain, do as the Spaniards do. While in the US, we typically go in
“guns a blazing” for meetings and deals, in Spain, it is important to build rapport with potential
clients. We must develop and nurture relationships and friendships in order to build trust
(Perlmutter, 1969). We must also determine, and then relay, how this relationship will benefit
from our services.

In a high-context culture, there are many contextual elements that help people to understand the
rules. As a result, much is taken for granted. Spain is a fairly high context society, so there is
less emphasis on written documentation, manuals, etc. Contracts are heavy documents and are
always usually read out aloud in front of the signing parties in the presence of the Notary. We
understand that this can be very confusing for expats who do not understand the 'unwritten rules'
of the culture. It is our intent to utilize Belen’s “local” knowledge to help us maneuver the
unwritten business culture. We must not think about Spain as a whole, but take into
consideration regional laws, infrastructures and other political implications. Be aware not to
damage a person’s pride, this is a very important Spanish characteristic, especially between men

Vendors do not appreciate being too informal in the early stages of relationship building. They
do not like new associates to make assumptions. It is also important to not step on toes and to not
disrespect or damage a person’s pride. This can have serious consequences.

Spain, being firmly rooted in today’s digital age, was one of the first countries to have broadband
wireless technology. Today the IT industry in southern Spain has been called the “California of
Europe”. Fast broadband Internet access is widely available to both commercial and residential
subscribers.

Organizing, the process of structuring human and physical resources in order to accomplish
organizational objectives, involves dividing tasks into jobs, specifying the appropriate
department for each job, determining the optimum number of jobs in each department, and
delegating authority within and among departments. One of the most critical challenges facing
service managers today is the development of a responsive organizational structure that is
committed to quality (Shippes, 1992). The framework of jobs and departments that make up any
organization must be directed toward achieving the organization’s objectives. In other words, the
structure of our business must be consistent with our strategy. The manager will provide that
structure through job specialization, organization, and establishment of patterns of authority
and span of control (Lasserre, 2003).

While a more flat organizational structure is what we utilize in the States, Spain is all about
hierarchy and job titles are very important. So, our organizational structure will reflect this
“cultural” idiosyncrasy.

Our organizational structure in Spain will be as follows:

Belen Parades, Managing Director

Beth Hudson, Creative Director / Event Manager
Tatiana Escudero, Executive Assistant
Amaranto Carrion, Director Design & Development / Event Manager
Lynn Gherig, Event Manager
Paloma Cortes, Logistics Manager
Cristian Martines, Sales, Marketing & Account Manager
Ysabel Iglecias, Travel & Sales Coordinator
Yasmeen Hishmeh, Financial & Purchasing Manager
Abella Botella, Purchasing & Financial Analyst
Staffing for a multinational company is complicated by the more diverse environment (business,
economic, political, legal), cultural implications & the Parent company's need for control. This
impacts acceptability, effectiveness & management of human resources (Fadel, 2007).

Our organization needed to ensure the fit between HR practices and strategies. We believe very
strongly that to be a better citizen of Madrid, we needed to utilize local management talent. By
utilizing local management and providing appropriate training and development, as well as a
good performance appraisal system, that our organizational mission, vision and goals will be
engrained into the new division’s corporate culture.

The staffing approach that DGES will utilize for our international office will be a polycentric
approach. To us, it makes sense to pursue local management, as it creates greater cultural
understanding than an ethnocentric approach, is less costly to establish than other staffing
strategies and gives hope for profit maximization through flexibility because local managers can
react quickly to market needs in the areas of pricing, production, product life cycle, and political
activity.

DGES is also utilizing decentralized recruitment which provides a higher degree of flexibility,
freedom and control for our local managing director. It is our intent that the decentralized
business structure will lead to better decision making as the director is closer to her staff and the
information she will need to make good decisions.

Public holidays are a big issue in Spain, especially since the permeating culture is one where
family and friends come first, work comes second. There are 14 holidays annually and there is
also statutory leave for personal issues such as bereavement, married and purchasing a new
home.

Because DGES, Inc. is a relatively small firm, we believe it has several features that distinguish
it from large firms. These features determine the strength of the relationship between leadership
style and effectiveness. Through research and analysis, we have determined that a supportive
and participatory leadership style will prove effective in our Madrid office.

Therefore, we propose that our international staff are motivated by participation and by the
acceptance of their opinions, suggestions and ideas in the decision-making process. Therefore,
our managing director will collaborate with team members, thereby producing a positive work
environment (Amason, 1997).

As part of our HRM efforts, a Myers-Briggs test will be administered during the interview
process. This will provide our managing director workplace knowledge of her employee’s
personality type which will enable her to better identify and use the strengths of her staff.

It is our hope that this will lead to reduced conflict, reduced absenteeism in the workplace as well
as a basis to help develop individual motivational systems.

Language is socially constructed and therefore embedded in the culture. Understanding the
embedded meanings requires mastering the language, a process that can be extremely time
consuming and difficult. Misinterpreting the words or the cultural meaning associated with them
may negatively affect the entire interchange. In the case of a business deal, it may be a deal-
breaker. This is why we have selected a managing director who is fluent in both Spanish and
English.

It is our hope that Belen, being both bi-lingual and a native Madrilenos, will construct bridges
and open doors that would not be opened to an outsider.

In a low-context culture, very little is taken for granted. Whilst this means that more explanation
is needed, it also means there is less chance of misunderstanding particularly when visitors are
present.

Spain is a high context culture which means that most of the information is either in the physical
context or initialized in the person, while very little is in the coded, explicit, transmitted part of
the message (Hall, 1976, p 79). The major difference between high and low context cultures is
the amount of information that a person can comfortably manage. In a high context culture,
background information tends to be implicit. In a low context culture, much of the background
information needs to be made explicit in the communication.

All cultures have unique concepts of time and ways of managing it. Americans tend to worship
time and manage it as though it were a tangible and scarce resource: "Time is money." Few
cultures can compete with the American obsession with time. In most countries, time is more
flexible. Being late to an appointment, or taking a long time to get down to business, is the
accepted norm in Spain. Cultural time differences can be categorized according to whether they
are monochronic (sequential) or polychronic (synchronic) and according to the culture's
orientation to past, present, and future (O'Hara-Devereaux, 1994). Polychronic time is multi-
track circular; it allows many things to happen simultaneously, with no particular end in sight
(O'Hara-Devereaux, 1994). Monochronic time is tightly compartmentalized and schedules are
almost sacred. Polychronic time is open-ended: completing the task or communication is more
important than adhering to a schedule.

Understanding this cultural difference we hope to utilize this to our benefit. There has been
documented research that polychronic workers function with far greater comfort and assurance in
that sea of information which threatens to swamp monochronic cultures. So in times of distress,
economic turbulence and chaos, our polychromic workers will have the potential to flourish.

The future success of any organizations relies on the ability to manage a diverse body of talent
that can bring innovative ideas, perspectives and views to their work. The challenge and
problems faced of workplace diversity can be turned into a strategic organizational asset if an
organization is able to capitalize on this melting pot of diverse talents (Cox, 1994). With the
mixture of talents of diverse cultural backgrounds, genders, ages and lifestyles, an organization
can respond to business opportunities more rapidly and creatively, especially in the global arena
(Cox, 1993), which must be one of the important organizational goals to be attained.

Cultural differences, economic differences, political differences, legal differences and HR

differences; all of this issues are a concern to DGES. However, we feel that we have been
thorough in our due diligence in analyzing and researching the political, economic, legal and
HRM environment of Spain. We have provided in-depth diversity and cultural training to both
the US and Spanish staff. Like with all facets of business, we have learned to expect the
unexpected. Managing a global business, we recognize that we must be prepared to deal with
situations that aren't covered in traditional business plans. Whether the event creates opportunity
or peril, how we prepare and plan to react to the unexpected, we believe, becomes an essential
part of our global strategy. Whether the issue is a natural disaster that disrupts communication
channels, an outbreak of influenza that can shut down commerce, worker strikes that close down
ports or a currency crises that turn a region's economy on its head, the longer you are involved in
international business the more likely it is that some issue will arise that was unanticipated and
unplanned. The smart global entrepreneur always expects the unexpected and has a flexible
enough infrastructure to change course when circumstances dictate.

By being a good steward of local resources and demonstrating Corporate Social Responsibility.
Since businesses play a pivotal role in job and wealth creating in local society, our CSR is a
central management concern.

Above all, our CSR is about performance: moving beyond words on a page to effective and
observable actions and societal impacts. Performance reporting is all part of transparent,
accountable and credible corporate behavior.

There is growing consensus about the connection between corporate social responsibility and
business success. The World Business Council for Sustainable Development has noted that a
coherent CSR strategy based on integrity, sound values and a long-term approach offers clear
business benefits to companies and contributes to the well-being of society (The World Business
Council for Sustainable Development, 2011).

As these points suggest, businesses are beginning to recognize that their corporate reputation is
closely connected to how well they consider the effects of their activities on those with whom
they interact. As a result, reputation is an invaluable asset that must be managed as carefully as
any other (Orlitzky, 2003).

For us, our CSR approach for more than just economic reasons. Our CSR ties in directly to our
mission, vision and values as well as our moral principles.
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