Running Head: GOING GLOBAL 1

Going Global and Inclusion Analysis

LIST Management

OGL355: Leading Organizational Innovation and Change

Dr. B

September 25, 2019

Arizona State University

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Going Global and Inclusion Analysis

Over the past few weeks LIST Management has analyzed the many aspects of

Apple Inc. as a business entity. Apple Inc. has rapidly grown across the world and its

products have become integral parts of everyday life for many Americans. Although

Apple Inc. has expanded quickly, they did not enter the global market until November 30,

2003 when they opened their first retail chain outside the United States in Tokyo, Japan

(Dormehl, 2018, para. 1). After looking at the success of the company, LIST

Management came to the conclusion that increasing the number of international locations

Apple Inc. supports would benefit the future growth and profitability of the company as a

whole.

India

LIST Management researched many different countries for Apple to expand into

and ultimately decided that India would be the best country to pursue entry of. “The

transformations in business models, production processes and global value chains that are

enabled by technological adoption and digitization have the potential to reshape work in

India for the better” (Kedia and Chapman, 2018, para. 1). The population in India is

growing and it has been expressed that the young people of India are looking for non-

traditional work opportunities to pursue. Currently, approximately 64% of the Indian

population ages 15-30 are either unemployed or not in school (Kedia and Chapman,

2018, para. 13). Under-utilizing human resources available puts constraints on the

potential for productivity and economic growth in India. “Emerging technologies can

provide India with a unique opportunity to level the playing field. As work shifts from

offices to digital spaces, it will be possible to rearticulate social norms around work”
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(Kedia and Chapman, 2018, para. 14). Not only would Apple Inc. be able to utilize the

interested youth of India in terms of employment; but employing these individuals would

put more money into the communities leading to greater potential for investment in

Apple’s products.

Mode of Entry

Apple Inc.’s chosen method of entry into the Indian marketplace is through

franchising. A franchise is a “business opportunity that allows the franchisee to start a

business by legally using someone else’s expertise, ideas, and processes” (Business

Opportunities, 2014, para. 1). India would be given “the right or license” (Merriam-

Webster, 2019) to manufacture and sell Apple Inc.’s “goods or services in a particular

territory” (Merriam-Webster, 2019). With franchising, Apple Inc. will maintain control

over its brand while creating higher economic returns. In addition to economic returns,

the cost and risk will remain low (Schmitz, 2012).

With this global expansion opportunity, Apple Inc. will maintain primary control

over its franchises in India. Apple Inc. will supply support materials like “branding,

concepts, expertise, and in fact, most facets that are needed to operate" (Friesner, T.

2014, para. 3). India will also be required to follow Apple Inc.’s business plan

requirements. In return, India will establish manufacturing facilities with flexible

production granted by Apple Inc. It will be responsible for catering to the target market

and advertising to consumers (Friesner, 2014). This way, India will be economically

responsible for all costs associated with manufacturing, operating, production, and

advertising.
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Choosing to expand via franchises, Apple Inc. will not be required to support its

business ventures with extensive financing. It will not pay India’s twenty percent import

tariff, manufacturing, or shipping costs (Schmitz. 2012). India will be responsible for

paying a licensing fee each year to use Apple Inc.’s name and trademark to manufacture

its products (Friesner, 2014). This way there is “minimal cost and risk” on Apple Inc.’s

behalf (Donohoe, 2019, para. 9) Compared to other modes of entry like joint ventures or

strategic alliances, franchising provides low cost and risk (International-Expansion Entry

Modes, 2019).

Political and Economic Issues

There are several political and economic issues that Apple Inc. faces. These must

be taken into consideration when entering the Indian marketplace. Although the Trump

administration created “Prosperity through Partnership” with Indian Prime Minister Modi

in 2017 (Helping U.S. Companies Export, 2019, para. 1), several challenges remain. High

tariffs on imported goods, iPhone price points, brand awareness and market share will

have some of the biggest impacts on Apple Inc.

India’s Export Import Policy and the GOI Foreign Trade Act enforces some of the

highest tariffs on imported goods in India. Tariff prices for imported goods are

calculated differently based on the Good and Service Tax standard. Each imported item is

calculated based on the GST formula and then the tax is applied. For technological

imports, the rate is twenty percent (Privacy Shield Framework, 2019). This is a

considerable added expense that Apple Inc. would pay to import its merchandise. It

makes more sense to franchise in India rather than import because Apple Inc. would

avoid paying high fees.

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Besides high tariffs, iPhone prices are too high. India’s average Gross Domestic

Product per capita is calculated at $2104.20 USD (Trading Economics, 2019). Although

Apple Inc. products are known for their sleek, innovative designs, Indian consumers will

not be able to afford them and won’t pay the high prices (Cohan, 2018). It will need to

reconsider lower prices in order to be successful in India. Competitors like Samsung and

Xiaomi have taken this into consideration and have set price points for smartphones

under $200 (Ghosh, 2019).

Among these challenges is brand awareness. Because Apple Inc. does not cater to

lower income consumers, its brand awareness is less than fifty percent in India. This is

because of the large gap between the poor and the wealthy. The gap also affects Apple

Inc.’s advertising for Apple Inc. products. Advertisements are only seen in affluent

communities like Mumbai or Delhi. This is why market share remains less than three

percent in India’s economy. There are also currently no Apple Inc. stores located in India

so it is much more costly to get devices repaired or replaced. For these reasons, its

products are scarcely seen (Ghosh, 2019).

Key Cultural Differences Between the U.S. and India

LIST Management remains confident that Apple Inc. would prosper if they

choose to expand to India through franchise efforts. However, when expanding a

company to another country, there are cultural differences that need to be considered. For

example, Apple Inc. was founded in the United States where there is no establishment of

a status hierarchy or caste system. In India, “The concept of hierarchy, though, is strong

in business. For example, Indians do not like to do jobs that they consider beneath them,

or more suited to a lower caste” (Bryant, S. 2019, para. 2). If you compare this concept to
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the USA, it is highly likely you will find a PhD student working as a waiter or the night

shift as a bartender to pay their way through school. Similarly, executive level employees

are also commonly seen walking around the factory floor, greeting hourly team members,

or participating in company wide events to support socializing or bonding (Bryant, S.

2019, para. 2).

Another cultural difference between America and India is the concept of goal

setting and decision making. “Americans tend to be highly goal-orientated, working to

achieve profit as fast as possible. Usually, this is achieved by efficient teamwork and by

delegating responsibility, with each individual responsible for their own decisions and

actions” (Bryant, S. 2019, para. 5). In India however, the system of hierarchy has great

influence over who is empowered to set goals or make decisions. It is common for those

considered ‘higher up’ in the system to make decisions with only their own regard in

mind; whereas, those ‘lower’ in status cannot make decisions regarding their own goals

(Bryant, S. 2019, para. 5).

In addition to the presence of social castes and its influence on goals and decision

making, time is another point of contention between India and the United States.

“Americans tend to be impatient. Life is lived in the fast lane, full of conveniences.

Deadlines in business are tight and are expected to be met. People will work long hours

to achieve this and there is little tolerance for delay” (Bryant, S. 2019, para. 8). This

varies greatly from India, as time moves at a slower pace and the flow through life is a

gradual pace, despite the chaos of the big cities. In India, “Time is viewed more as

circular than linear and relationships are more important than deadlines” (Bryant, S.

2019, para. 8). The cultural differences between the U.S. and India could create a
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potential issue for expansion. However, awareness of these differences allows Apple Inc.

to consider expansion and analyze any potential issues that may arise from these

differences ahead of time.

Actions for Inclusion

Making sure employees feel welcomed and supported especially during the

formative stage of a team is absolutely critical and necessary. Because Apple Inc. is

already a well-known brand throughout the world, they are able to shift their focus on

employees and their training compared to worrying about prospective customers. LIST

Management advice that Apple Inc. focuses on making sure their brand-new employees

are well-trained, well-supported, and most of all, that their new store is focused on

building an inclusive and diverse team. Below LIST Management has created an

Employee Do’s and Don’ts that is specially made to foster inclusion and diversity in the

workplace.

Employee Do’s Employee Don’ts

1.Do communicate Don’t assume that everyone is up to date with any

new goals, process, etc.

2. Do ask lots of questions Don’t be shy, if you have any work appropriate

questions, ask away! No question is too stupid to ask.

If you need help, let us know!

3. Do celebrate employee Don’t assume anything about anyone’s culture or

differences upbringing

4. Do educate yourself about Don’t keep work related issues in

differences

5. Do listen without being Don’t treat people the way you wish you are treated,
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offensive rather treat them the way they wish to be treated.

6. Do welcome ideas Don’t shame or shut people’s ideas down just

because you don’t like them or think the idea is

stupid.

7. Do respect each other Don’t invade people’s personal space or say anything

rude or disrespectful to one another

Communicating goals, values, and progress in the workplace is not a new

concept, although overtime, it is something that does get looked over. Constantly

communicating and updating the team with new goals, process and progress is necessary

to make team members feel included, which obviously foster inclusion. Alike clarifying

values, sharing goals and values with the team will help build a strong foundation for

productivity and genuine work relationship (Kouzes and Posner, 2017, p.61). Although

creating a diverse and inclusive workplace takes great time and patience, just like in any

relationship, proper communication plays a large role in ensuring positivity in the

workplace. These updates and conversations “renew commitment and reinforces feelings

that everyone is on the same team, which is especially critical in geographically

distributed workplaces” (Kouzes and Posner, 2017, p.65).

When working with a diverse team, celebrating employee differences is a must to

positively promote inclusion and diversity in the workplace. By inviting employees to

celebrate and share their tradition and background in the workplace, it shows respect for

the employees and enhances everyone’s cultural competency (Gurchiek, 2019).

Celebrating employee differences does not have to be a grand gesture, but by allowing

everyone to share, people become more “familiar with diversity-related terms,” customs
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and “practices associated with their culture,” thus lessening the chances of offending

anyone (Pedrelli, 2014). For example, the HR team at Bak USA, holds potluck parties to

celebrate the different nationalities represented among their employees, during these

potlucks, employees are given the opportunity to showcase the foods of their home

countries and as a result, Bak USA has concluded that “inclusion is what connects people

to the business, and we believe it’s one of the core reasons they stay” (Gurchiek, 2019).

In terms of respecting one another, shaming or shutting down other people’s ideas

is a large don’t. Not only is it rude and will make employees feel unwelcomed and

unheard, but it is a terrible way to promote creativity in the workplace. By welcoming

ideas that are different from your own, it shows support to fellow teammates and allow

other perspective and insights to be heard (Pedrelli, 2014). “Diversity in teams leads to

better decision-making, greater innovation and ultimately higher returns,” therefore, it is

imperative to allow teammate’s ideas to be heard, respected and even considered

(Gurchiek, 2018). Another don’t in terms of fostering inclusiveness and diversity in the

workplace is don’t treat people the way you wish you are treated, rather treat them the

way they wish to be treated (Pedrelli, 2014). Although it is more common for people to

hear the saying “treat people the way you wish to be treated,” in a culturally diverse

workplace this may not suffice. Just because some common social activities and practices

may be comfortable for others, it does not mean all employees can agree. For example,

culturally, Indian women are not allowed to go out in public while wearing shorts or

skirts above the knee, while on the other hand, American women are usually free to wear

whatever they please, by joking around or showing offensive pictures of American

women to Indian people, it is not only seen as extremely disrespectful but it is also very
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uncomfortable and inappropriate in any work setting. All in all, do not assume how

people want to be treated and most of all, always be respectful.

Attitudes

While being uneducated on a specific culture’s norms, you can find yourself

unintentionally upsetting or offending someone quite easily. In this table, we are

presenting a list of the Do's and Don’ts for our employees that will help us foster trust

and respect in the Indian culture as we expand. We chose these specific Do’s and Don’ts

because they are likely the ones we would do the opposite of subconsciously, as they are

not present in our western culture.

Employee Do’s Employee Don’ts

Wear shoes you can slip off easily and Men and women cannot wear distressed or

take off your shoes when entering certain revealing clothing

places

Be mindful of position of feet when sitting Do not present sole of foot to anyone

Keep your feet/toenails clean and kept Women cannot go into public while 1)

wearing pants unless wearing a shirt long

enough to cover their butts, 2) not wearing

a bra, 3) wearing shorts or skirts above the

knee, 4) wearing sheer or sleeveless tops

Do say Namaste as a greeting and Don’t rush Indian’s into decision making

goodbye

Do keep family at the heart of everything Don’t use your left hand to eat, pass

objects, or touch anyone

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It’s necessary for employees to wear shoes they can slip off easily because in the

Indian culture, you are expected to remove your shoes when entering a home, place of

worship, or even some businesses (Bragg, n.d.). By following this norm, you will

demonstrate respect for the Indian culture fostering trust with them. You also should be

mindful of the position of your feet when you are sitting because it is a cultural norm for

Indian people not to point your feet at another person, altar, or any religious images on a

wall. It is also important not to let the soles of your feet show to anyone (Bragg, n.d.).

Although those behaviors may not mean anything in our culture, it’s important to be

mindful of them so we are not seen as disrespectful in their culture.

Another way to foster trust and respect in the Indian culture is by saying namaste.

While putting your palms together in front of your heart, say namaste as you slightly nod

your head forward when greeting or saying goodbye to someone. The gesture alone

means “the God in my heart greets the God in yours” which will help develop trust and

show respect to their culture (Bragg, n.d.). It is also important to keep family at the heart

of everything, because the indian culture is very family oriented and they take a lot of

pride in their lineage.

In order to foster trust and respect, our employees must follow some cultural

norms of the Indian culture that are unheard of in our American culture. In America,

women and men have quite a bit of freedom in how they would like to dress. In India,

they have far less freedom in how they dress, women specifically. Our female employees

will have to adjust quite a bit to dress respectfully in India. According to Viharini, “Basic

standards of modesty all over India require that you cover your knees, upper arms,

shoulders, cleavage and midriff. It’s acceptable for your midriff to be exposed when
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wearing a sari, but not otherwise. Shorts and short skirts are not acceptable. Underwear

should always be worn discreetly under your clothes where it belongs, and it should not

show at all; moreover, a bra is essential unless you are as flat-chested as an eight-year

old. Tops should not show your cleavage or be too tight or revealing (Viharini, n.d.).”

Showing that you are willing to change your normal ways of dressing while in their

country will show a high level of respect for them.

Another key thing to remember when doing business in India is that they aren’t as

time oriented as Americans are so it’s important not to rush them into business decisions.

In America, the business culture believes that ‘time is money.’ Indians prefer to take

their time making sure all details are in order because they believe that details are the

heart and soul of the business (India Business Culture Is Different Than U.S. Business

Culture, n.d.). Another thing to keep in mind is not to use your left hand to pass objects,

eat, or touch someone. The left hand is associated with going to the bathroom, therefore

viewed as unclean and not meant to come in contact with others (Cook, 2019).

Conclusion

Overall, LIST Management advises Apple Inc. to enter into the Indian

marketplace. It provides a good business opportunity to expand and enter into a new

geographic location and target a new demographic audience. We have provided

suggestions in order for Apple Inc. to be successful when developing this new franchise

opportunity. We have also advised Apple Inc. in terms of political and economic issues,

cultural differences, inclusion, and attitudes. We are confident that Apple Inc. will be

successful in this global expansion per our research and analysis.

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