Challenges Managers Face When Companies Go International

Topics: Multinational corporation, Globalization, Corporation Pages: 8 (2594 words) Published: March 17, 2012
Executive Summary
These days, most businesses are set in a global environment, and the various corporations do not just regard their primary market locations or bases, they also have to take the rest of the world into consideration. Thus, many more corporations are going into multi-national business, scattered all over numerous parts of the globe. Usually the major source of concern for multinational companies and their managers is how to maintain high quality, in an ever-changing global economy It is quite clear that multicultural organizations and their mangers still find solutions to their multi-cultural problems despite severe bureaucracy and staff frustration in some cases. Although multi-national corporations are aware of the management areas that require attention, they still have to decide whether to deal with the problems on a decentralized or centralized basis. Multinational companies seek the benefits of doing business on a global basis, but there are still a lot of cultural and market differences to handle. “Various delivery systems are significantly different. One size can’t fit all. Culturally, what drives employees and what tools engage employees in the employment deal changes from one place to another.” (Towers Perrin research, 2007) It has also been pointed out that “multi-nationals companies customize compensation and benefit packages in order to meet needs, according to the nature of the markets.” (Towers Perrin research, 2007) After researching and analyzing benefits and compensation in about 26 locations all over the world, it was discovered that the benefits approach, when regionally edited, enables corporations to improve cost-efficiency become more consistent about the compensation practices all around the world, while also maintaining competitiveness through the variation of remuneration and performance pay, based on cultural and regulatory differences

This report aims at understanding the challenges that managers and organisations face in going international, and will offer some recommendations and possible solutions that can be considered by the organisations. The number of corporations that are going international is on a steady increase, as the world is opening up for foreign firms and there is more opportunity to expand to new destinations across the globe. Most times, multinational companies operating abroad face much more difficult tasks than before, due to high competition. A lot of companies form partnerships with foreign distributors in order to expand internationally, but they might not have the necessary resources and international experience it takes to sustain an international presence as the whole process can be a very demanding task, especially on the part of the managers

Countries of the world are now interacting more rapidly in the globalized business environment of today. Thus the problems involved in managing across diverse cultures affects not only the multinational corporations, but also domestic companies, as a large number of domestic corporations also face multi-cultural environments because they seem to be constantly selling their good or making purchases in the international markets. Some domestic corporations also employ a lot of staff and management who are from different cultures. Thus when managers fail to fully appreciate and deal with the resulting differences in behavior, attitudes and values of those with whom they work or interact, especially in international business transactions, then that would be a major source of difficulties. According to Charles Perrow “Interactive complexity is the measure of the degree to which we cannot foresee all the ways things can go wrong. This may be because there are just too many interactions to keep track of. More likely, it is because our various theories are simply not up to the task of modeling socio-technical interactions. Second, coupling is a measure of the degree to which...
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