Discuss the contemporary challenges facing the management of a Multi-National Corporation.
“Discuss the contemporary challenges facing the management of a Multi-National Corporation.”
Multi-National Corporation (MNC) can be defined as a corporation that provides products and services in various countries or continents (Maheshwari, 1997). Due to the fact that operating internationally can introduce new markets throughout the world, market growth is then stimulated (Eagle, 2010). This becomes the essential key to globalisation for the entrepreneur. To achieve this panorama, there are number of issues that cannot be neglected. In this study, articles and journals were reviewed in order to identify the risks of managing multi-national corporations nowadays. Examples are also provided to demonstrate how some well–known companies are being able to overcome these contemporary challenges.
To maintain the profitability and efficiency, there are six key themes that are crucial to a multi-national corporation – Political, Environmental, Social, Technological, Economic and Legal contexts (Boddy, 2011, p.107,111). In Figure 1, it shows a general idea on the themes in managing internationally:
1. Political context - Government’s management style and stability
2. Environmental context - Resources consumption and sustainability
3. Social context - Cultural differences and levels of education
4. Technological context - New inventions and rate of development
5. Economic context - Business cycles and unemployment
6. Legal context - Employment law and consumer protection
As for the political aspect, the involvement of government can dramatically affect its country’s market behaviour. Political risk of losing assets and power control on management due to the government’s activities and the political atmosphere may be raised. For instance, east European countries successfully motivated Western companies to develop industrial facilities like power plants, but the motivation was out to be illegal after twenty years. Hence, those companies that had invested to the
Multi-National Corporation (MNC) can be defined as a corporation that provides products and services in various countries or continents (Maheshwari, 1997). Due to the fact that operating internationally can introduce new markets throughout the world, market growth is then stimulated (Eagle, 2010). This becomes the essential key to globalisation for the entrepreneur. To achieve this panorama, there are number of issues that cannot be neglected. In this study, articles and journals were reviewed in order to identify the risks of managing multi-national corporations nowadays. Examples are also provided to demonstrate how some well–known companies are being able to overcome these contemporary challenges.
To maintain the profitability and efficiency, there are six key themes that are crucial to a multi-national corporation – Political, Environmental, Social, Technological, Economic and Legal contexts (Boddy, 2011, p.107,111). In Figure 1, it shows a general idea on the themes in managing internationally:
1. Political context - Government’s management style and stability
2. Environmental context - Resources consumption and sustainability
3. Social context - Cultural differences and levels of education
4. Technological context - New inventions and rate of development
5. Economic context - Business cycles and unemployment
6. Legal context - Employment law and consumer protection
As for the political aspect, the involvement of government can dramatically affect its country’s market behaviour. Political risk of losing assets and power control on management due to the government’s activities and the political atmosphere may be raised. For instance, east European countries successfully motivated Western companies to develop industrial facilities like power plants, but the motivation was out to be illegal after twenty years. Hence, those companies that had invested to the