Module: BH 1107
Course: Business and Management
Candidate Number: 515663
Word Count: 2390 (with Bibliography)
At present, Multinational corporations (MNC) commonly referred as ‘big business’ are a powerful economic force (Chandler and Mazlish 2005,2, Penrose 1995). A multinational company usually has its head quarters in one country, but its operations extend beyond boundaries. They have been known to enhance rapid economic liberalization in developing countries like India, Sri-Lanka etc. Generally outsourcing from developed countries like U.S.A and Japan these multinational companies look for cheap labour in the developing countries. Outsourcing shifts core activities that used to be within MNC’s to arms-length transactions (Castells 2000, Porter 1990). The detailed study of these multinational companies would provide key information about their working and management. For example, ‘The BG Group’ a British multinational oil and gas company has its operations in 25 other countries. The Head quarters being in Reading, United Kingdom, The BG group is the biggest supplier of (LNG) to the United States. With a market capitalization of £44.9 billion it is also listed in the London Stock Exchange. The BG group has a thin layer of management between shop floor and the board, starting with the Chairman, the Chief executive followed by the executive officers and the non-executive officers. This thin layer plays a key role in shortening the time taken in decision making, which in turn results in more production. The success of the BG group could also be claimed to be substantial because of its Board of Directors and their execution. BricotexLtd founded by JL Gradworthy can be claimed to be a much smaller version of the BG group. Although the company seems to be doing pretty good in the raincoat market purely due to its quality, there is still a wide scope for improvement in the management sector. Taking inspiration from The BG Group, BricotexLtd could make great reforms in its working. A detailed study of the Multinational Company would give BricotexLtd enough knowledge of its mistakes and correct the same accordingly. Currently, BricotexLtd has 6 management layers between shop floor and the board, starting with chairman: Sir. Owen Gradworthy, 4 Board of Directors: 2 of which are Sir. Owen’s sons who take the responsibilities of the Managing director followed by a Finance Director and a Marketing director. After that come the Divisional managers each with an Assistant manager. This long staircase of management reduces the speed of any decision made and in turn reduces the speed of production. Reduced production reduced sales and reduced sales lead to limited profits. The managerial sector of the company could be indirectly blamed for a low turn over each year. Mr. Julius Gradworthy, who just completed his MBA from Aston University, Suggested that these layers of management be cut down to only 3 tiers ie. The Board, the management team and the work team. According to Mr. Julius, this would speed up the decision making process and also reduce the number of staff needed. The issue arising due to this is that the distinctive amount of lay-offs would demoralize the labour. The unsatisfied work force thus, would not put in as much effort as is required resulting into less production. Solutions to all the possible outcomes, which would arise with the acceptance to Mr. Julius’s concept of management, would be needed. In accordance with Ms. Faye Oliver’s plan for the implementation of this concept, following is the literature that is collected on the 2 key theories namely Team Working and Motivation: Team Working:
Studies of team working suggest that for it to be successful, fundamental changes must take place in many aspects of an organization’s structure and operations (Issues in Team Working- Mueller, Frank Proctor, Stephen). To start with, Team Work in any business can be...