In the 21st century, due to the undeniable globalization processes, it seems normal when companies become international and open their filial not just in other countries but also in distant regions. The economic stimulus for this internationalization is endless: they vary from diversification of markets to incentives for the local employment rates. Meanwhile, Rolls-Royce Motor Cars appears to be such an example: established in 1904 in the United Kingdom, it now produces its cars in different countries. Hence, the case under discussion deals with the Singaporean filial that started its work more than 100 years after the birth of the company.
To begin with, it is vital to assess the role of Seletar in the Rolls-Royce manufacturing network. The primary mission of Seletar was an increase in production capacity at the market where the number of consumers has grown sustainably (Singapore Management University, 2020). The idea is that Singapore is situated “at the crossroads of the company’s largest and fastest-growing markets: the Middle East and Asia” (Singapore Management University, 2020, p. 2). Nevertheless, one of the main reasons also lies in the company’s commitment to grow a local workforce and contribute to the development of leaders globally (Singapore Management University, 2020). Simultaneously, that was the way Rolls-Royce managed to create more employment. Thus, Seletar served as a means to expand the firm’s markets and contributed to the increase in the local workforce.
Speaking of the most critical issues that Rolls-Royce had to deal with in order to ensure Seletar’s success. Firstly, expatriates from the head office helped to overcome the technical challenges, which, according to Ketson, was the key to Seletar’s efficiency (Singapore Management University, 2020, p. 4). Secondly, some problems dealt with transferring the group of expatriates (Singapore Management University, 2020, p. 4). Thirdly, it is the transfer of information problem discussed below. Therefore, in the diversification of markets, any company faces various objective challenges.
As for the transfer of knowledge, it is essential to realize there are two dimensions of the process: explicit and implicit. It is relevant to point out the fact that transmitting the data on processes and production overall appeared to be significantly more comfortable than, for instance, informal knowledge. This kind of information deals with various spheres of any enterprise’s life, primarily with the corporate culture that guarantees the efficiency and maintenance of a company’s values. Finally, it is fair to pose the question of how Rolls-Royce could guarantee expatriates return to the United Kingdom and a healthy network of plants. As it is explained in the article, the leadership team at all the facilities realized the necessity to develop consistent and robust network relationships, and “through a combination of both formal and informal strategies, efforts had been made to promote networking and the sharing of experiences” (Singapore Management University, 2020, p. 4).
To conclude, an average modern enterprise seeks internationalization of its business activity. Asian market appears to be the perfect economic destination considering the population growth and the financial potential of the region. That is the reason why Rolls-Royce chose Singapore to open its filial Seletar. The aim was not only to grow the income but also to create employment in the region and boost the leadership ambitions of the locals. However, there were several issues, the solution of which was vital for Seletar’s effective work: transfer of explicit and implicit knowledge, technical issues, and transfer of the expatriates.
Reference
Singapore Management University. (2020). Rolls-Royce in Singapore: Becoming a real partner in the group’s global network.