Finance Acme Is Setting Up

They have relatively high unemployment, giving us access to some of those highly-skilled workers. There are several distinct cultural features of the Finns that conflict with American culture, but none so significant that they cannot be overcome with some training.

The Japanese have much higher cultural barriers. Japanese culture is insular and difficult to penetrate for outsiders. Many Japanese do not speak English. Japanese corporate culture is also vastly different from our own, and American firms have difficulty establishing American corporate values in Japanese subsidiaries. However, Japanese corporate culture is moving more towards our own, with cornerstones such as the keiretsu and lifetime employment replaced by western concepts. Moreover, the Japanese are hard-working, loyal, highly-educated and have high technological literacy.

It is recommended that we set up greenfield in Finland. The cultural similarities will allow us to translate many of our operational competencies easily to the new facility.

Setting up in Japan would be more appropriate for a joint venture where the local partner could help us navigate the cultural waters. The Finnish subsidiary will have full access to the Euro zone and regions with strong trade ties to the EU. Japan also has strong market access, but not as strong as the EU. The only drawback is the currency. If we contain our sales focus to the Euro zone, the currency exchange risk will be largely on paper. Moreover, adding Euro revenues will help improve the wealth of overall wealth of Acme in the face of declines in the dollar. Additionally, the Japanese subsidiary would rely on sales outside of Japan, resulting in a less ideal operating hedge than Finland would provide.

Works Cited

Eiteman, K.D., Stonehill, I.A., & Moffett, H.M. (2007). Multinational Business Finance (7th ed.). Boston, MA: Pearson Education, Inc..

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