Premium Essay

Multi National Environment: Meaning The Multinational Environment

Submitted By
Words 1462
Pages 6
2.1.9 EVALUATING AND CREATING THE MULTINATIONAL ENVIRONMENT
MEANING OF MULTI NATIONAL CORPORATION
Multinational Corporation - MNC' A corporation that has its own facilities and other assets in at least one or two countries. Such companies have offices and/or factories in almost different countries and usually they have a centralized head office where they co-ordinate the global management. In other words an enterprise operating in several countries but managed from one (home) country is known as a multinational corporation. Generally, any company or group that derives a quarter of its revenue from operations i.e., outside of its home country is considered a multinational corporation.
Multinational corporations (MNCs) are huge industrial organizations. …show more content…
In the last 1950s, over 80 percent of the world’s major innovations were first introduced in the United States. By 1965 this figure had declined to 55 percent, and the decline continues today. On the other hand, France has made impressive advantage in electrical traction, nuclear power, and aviation. West Germany is a proclaimed leader in chemicals and pharmaceuticals, precision and heavy machinery, heavy electrical goods, metallurgy, and surface transport equipment. Japan leads in optics, solid state physics, engineering, chemistry, and process metallurgy. Eastern Europe and the Soviet Union, the so called come-on [council for mutual economic assistance] countries, generate 30 percent of annual worldwide patient’s applications. However, the United States can regain some of its lost competitive advantages. Through internationalization US firms can often reap benefits from emerging industries and evolutionary technologies developed …show more content…
This theoretical approach is often referred to as the "network approach". Internationalization is defined as developing networks of business relationships in other countries through extension, penetration and integration. Extension refers to investments in networks that are new to the firm, whereas penetration means developing positions and increasing resource commitments in networks which the firm already is involved with.
Integration can be understood as the co-ordination of different national networks. Thus, if the relationships between firms are seen as a network, it can be argued that firms internationalize because other firms in their (inter) national network are doing so. Within the industrial system, firms engaged in the production, distribution and use of goods and services depend on each other due to specialization. However, certain industries or types of markets are more likely to be internationalized, given the configuration of the world economy. Under the prospect of this approach, Johansson & Mattson distinguish four types of international firms: The early starter, the late starter, the lonely international and the international among others. To which of these categories a firm is referred to depend on both the level of internationalization of the network and the level of internationalization

Similar Documents

Premium Essay

Globalization

...List of Contents 1. Background 3 2. Globalization Problems 4 3. Types of Globalization 5 3.1 Economical globalization 5 3.2 Political globalization 5 3.3 Social globalization 5 3.4 Cultural globalization 5 4. Pro or against globalization? 6 4.1 Advantages of globalization 6 4.2 Disadvantages of globalization 6 4.3 Institutes 6 5. Conclusion 7 6. Sources 7 1. Background Globalization is simply becoming world-wide or making it world-wide. It exists at a lot of places in different sizes. Globalization is to create a good world economy. This could be done by big multinational companies. The reason why I mention the multinationals is because of the influence that they (can) have on the economy worldwide. After all, the world trade plays the biggest part in it. However globalization and the free world trade don’t automatically mean that the well-being is divided all over the world. But where did it start? Who started it and why is it so important for the well being of the world? Well, the globalization existed during different levels/steps. People/companies with power from the past created our current globalize civilization. The first level was when the South conquered the North and applying economical structures. Consequences were the slavery. The second level was the colonization. The North plundered the South, recreated maps and set up one religion and forced their language to be the official language. The third level...

Words: 1905 - Pages: 8

Premium Essay

Culture and Ethics in Business Learning Journal

...CULTURE AND ETHICS IN BUSINESS LEARNING JOURNAL CHALLENGES OF MANAGER’S CULTURAL DIFFERENCES FOR THE INTERNATIONAL BUSINESS ENVIRONMENT Introduction Business today has seen a high surge in globalization. This increase of international business all over has led to a number of ties and relations among people from different culture and nationalities. Managers who still haven’t adapted to the new age managerial skills and are still following the conventional route have found themselves extremely ineffective in the global platform. A need of global managers who understand multi-cultural competencies has arrived and most scholars debate that the working style, values and behaviour of a manager are directly a persona of their national culture. Thus in order to be competitive in this global market, the traditional approach by the managers must transcend to a global one. A global manager is one who has the ability to manage the complexities in a business which is conducted or laid upon multi-cultural diversities. A global manager has many challenges when managing people from different cultures; this includes the people from both High context society as well as low context society. Challenges Lack of communication: When a manager is working with his team members who have different native tongue, it’s most possible at time that the information flow is not constant. Adding to the woes are the multitasking employees and talking to employees over...

Words: 2183 - Pages: 9

Premium Essay

New Organizational

...What type of structure will be best suited to a multinational Internet retailer? Why? Structures of a team base is consisted with organizational leaders that are one-end and junior employees on the other end. (Nahavandi 2012). Internet retailers are very close to approximate necessary conditions that has prefect increasing of information and product information and price transparency, internet retailing also provides low cost of collecting information that improves opportunities for price discrimination which is used to save the cost of operating. Multi-national internet retailers locates the importance and responsibility that relates between Organizational Structure. Multinational companies like smaller ones face more organizational challenges than companies that are operating in only one national market, smaller companies have to maintain functional operational units that also have to be fulfilled these functions in different ways. To make an organizational structure successful in the domestic market that can be used in the in the global world use much use the appropriate functions for all of the businesses that are suitable for the production structure for multi-national internet retailer because communication is the key information about the products and technology in a single chain of each level that consist the difference in behavior and other attributes. (Henry C. Lucas 2001). How would you recommend building a culture that was inclusive of diverse cultures...

Words: 970 - Pages: 4

Premium Essay

Cultural Issues and Ethics in International Business

...foreign trade and international, which includes transactions such as exports, imports, investments, or financing that are performed worldwide. Among the success factors that can be mentioned in the international business operations are competitiveness, financial support between the parties and logistics. This aspect is very important because when the actors involved are from different countries or regions, the business success is more complicated. In analyzing the economy, we must review the dimension that transcends the borders of a country, i.e. which addresses the problems international economic purposes (Maddox, 1993). The importance of international relations in trading, politics or culture has reached a global level, a deeper meaning that one cannot speak only about goods but also exchange programs of integration. The international economy requires to study the problems of international economic transactions. Therefore, when we talk about international economy is talking about the international trade factors. International business is the exchange of economic goods that takes place between the two or more nations in a way that rises the outflows...

Words: 1481 - Pages: 6

Premium Essay

Corporate Social Responsibility

...Corporate social responsibility statements are effective ways of ensuring multi-national companies act ethically.   Discuss For the past few years there has been lots of discussion about Corporate Social Responsibility. Most of the multinational companies issue every year a report on their practices. They try to get involved into communities, fight the poverty in the third world countries and donate millions of ponds every year to charities to as they say “build the better future”. But are their corporate social responsibility statements effective ways of ensuring that multinational entities act ethically? From my point of viewview, CSR statements do not ensure that practices of companies obey the rules of business ethics and I am going to present a few arguments for. Corporate Social Responsibility is fairly recent termterm and maybe that is why there is no consistent definition for it. Most multinational companies use different terms in their reports, for example Shell defines it as ‘sustainable development’, Ford uses the phrase ‘connecting with society’, Diageo prefers the termterm ‘corporate citizenship’. All these expressions, although they have different meanings, are related to Corporate Social Responsibility but because of the proliferation of approaches, every company can put emphasis on something different, creating therefore complexity and confusion. What is more, the socially responsible company not only complies with minimum requirements of the law, but goes...

Words: 1078 - Pages: 5

Premium Essay

Marketing

...International marketing  - is simply the application of marketing principles to more than one country. However, there is a crossover between what is commonly expressed as international marketing and global marketing, which is a similar term. For the purposes of this lesson on international marketing and those that follow it, international marketing and global marketing are interchangeable. - marketing involves the firm in making one or more marketing mix decisions across national boundaries. At its most complex level, it involves the firm in establishing manufacturing facilities overseas and coordinating marketing strategies across the globe. Controllable element - it clearly defines the meaning of a business environment, which is the foundation to begin with before answering the question. it defines a business environment as " encompasses all those factors that affect a company's operations, and includes customers, competitors, stakeholders, suppliers, industry trends, regulations, other government activities, social and economic factors, and technological developments" However, the definition given is very general, it does not distinguish or point out which elements are controllable and which are not. To my own understanding, controllable elements, also known as internal elements, are those which are within the organization which are eligible to controlling the operation of an organization, which includes the management, the hierarchy of the business, the personnel, the...

Words: 2006 - Pages: 9

Premium Essay

International Human Resource Management (Importance Ad Significance)

...three dimensions 4 International assignments create expatriates 5 Increasing Importance of International Human Resource Management 6 Significance of International Human Resource Management 9 Conclusion 11 Reference……. 12 Introduction As we enter the new millennium, more and more companies are recognizing the importance of managing their human resources as effectively as possible. They are also recognizing that doing so, however, cannot be done without recognition and incorporation of the global context. It is virtually impossible to read a business periodical or newspaper anywhere in the world without seeing stories detailing the success of a company due to how effectively it manages its people. As the environment becomes more global, managing people also becomes more challenging, more unpredictable and uncertain and more subject to rapid change and surprise. Thus what we are witnessing within human resource management (HRM) is the rapid appreciation for and development of all aspects of global and international activities and issues associated with and affected by HRM. And because the importance of managing people effectively in the global context is so great, many companies are devoting a great deal more time, attention, skill, and effort into doing it well. To be successful, many firms have to compete on the global playing field because the costs associated with the development and marketing of new products are too great to be amortized only...

Words: 3338 - Pages: 14

Premium Essay

Culture Management

...communications. According to Stephen Roberts: “Culture is the framework in which we communicate” This suggests that various factors give rise to the problem of cross-cultural communication. These factors include: language, environment, technology, social organization, the perception of authority and non-verbal communications. Having the ability to assess these variables is vital in ensuring for managers to convey messages and conduct business across a wide range of cultures. This paper addresses communication within multicultural project teams and the significance of leadership style in managing cross-cultural communications. The aim of this paper is to reveal different ways or skills that managers need to adopt to make the process of communication effective. Furthermore, this paper sheds lights on variegated barriers that may exist in effective communication process in a cross-culture environment. Literature review Zapf (1991, p.105) describes culture as “more than simply a set of customs”. Culture is a shared set of meanings among community of people who develop a common model from shared experiences. Zapf (1991, p.106) continues by stating that when individuals interact with others sharing the same viewpoint, they assume meanings unconsciously. However, it is only through interacting with someone who views...

Words: 2491 - Pages: 10

Premium Essay

Managing Across Cultures

...- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -7th REFRENCES- - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - 8th Executive Summary The Purpose of this report is to make a study on “Managing across Cultures”, and problems faced by the managers working with different cultural employees. This report will also discuss about some methods that could be use by the managers to accomplish cultural diversified staff. Cross Cultural simply implies the staff that comes from unlike cultural background. In the competitive or universal economy the managers are involved in some form or another with global management. Working internationally makes a manager, a global manager; he works across national borders to achieve the worldwide commercial objectives. In such case all the managers are working with different cultural background...

Words: 1866 - Pages: 8

Premium Essay

Multi-National Corporation’s Strategies for Special Interest Groups Within a Host Country

...Abstract Developing countries seeking to build their economy commonly look to attracting multi-national corporations (MNCs) through low cost labor and lucrative tax incentives plans in the hopes of creating a mutually benefiting relationship between both parties. However bringing in these outside businesses poses a legitimate threat to elite special interest groups already existing and thriving in the current economic state. MNCs must due their due diligence when selecting a potential host country and then determine the best strategy to deal with these groups in order to mitigate as much risk as possible. Contents Abstract ……………2. Contents……………………………………………………………………………………………………………………………………. 3 Intorduction 4 Literature Review 6 MNCs must determine the political environment 6 Why elite special interest groups exist 8 Strategies for dealing with elite special interest groups 9 Corupption………………………………………………………………………… 9 Assisting host government in creating a functioning economy………………… 11 Methodology 12 Conclusion 12 References 16 Multi-National Corporation’s Strategies for Special Interest Groups within a Host Country Research of developing countries has shown that economic growth is closely correlated to its cash flows and the quickest way for developing countries to increase those cash flows is through attracting new businesses. Technology has played a major role in the globalization of business and has made it much easier for corporations...

Words: 4358 - Pages: 18

Free Essay

Human Resource

...preventions in the context of Singapore. The focus will be employees on Singapore work environment. Cullen & Praveen (2014) explains culture as the characteristics of a particular group of people, defined by everything from language, religion, cuisine, social habits, music and arts etc. Nick (2012) points out that in Southeast Asia, Singapore has become a newly industrialized nation, which was hailed as a great economic success during the last 2 decades and the countries traditions of its culture still play a major role in business activities. While Stanton & Nankervis (2011) argues that the national culture of Singapore is high in power distance and this has lead the superiors and subordinates treat each other as unequals in the country. Singapore has also been called is also called a “nanny state’ by Nick (2012), because it is a work culture in which people are supposed to do exactly what they are told and there is no decentralisation or any opportunity for lower level employees to make suggestions. The research used both primary and secondary data collection method to collect information about the question at hand. Research found that Clearly the problem of conflicts due to culture is prevailing both in work conditions and everyday life in Singapore. These have huge implications for the businesses, especially in a fast passed globalized business. Conflict at work is common in multinational companies around the world, but as Joana, John, Luthans & Bovaird (2014) states, conflicts...

Words: 7009 - Pages: 29

Premium Essay

Globalization Effects on Environment

...Introduction Globalization is a popular term used to describe the process of global expansion of economies and markets across borders, exchange of goods and services, mass movements of communities for better working conditions, multi-cultural exposures, exchange of technological know-how etc. The process of globalization is considered to be erasing transnational boundaries with people sharing common goods and services or adopting the cultures of another culture. Thus, the statement given above by Knox and Marston that globalization seems to lead to loss of originality or territorial identity can be considered as true in a way. According to definitions of globalization, the primary characteristics that it possess include movement of people and goods, improvement in technology and telecommunications, diffusion of knowledge and a spurt in multinational corporations. There have been debates about the positive and negative aspects of globalization. Those who are in favour of globalization point out that economically weaker countries can have the opportunity to join the global market and export their goods and services and thereby improve their economies. Also, different governments can co-operate together for global welfare and citizens can experience other cultures and become global citizens. The positive aspects of globalization are again overshadowed by its negative aspects which include loss of territorial identity and original culture. International bodies like the World Bank...

Words: 2416 - Pages: 10

Premium Essay

What Does It Mean to Be an Operations Manager in the International Environment

...Semester Project: What does it mean to be an Operations Manager in The International Environment Fedorenko Danil 21.02.2013 Introduction Many of the techniques used in Operations Management are essential for the international business consultant. These tools allow consultants to advise companies on selecting the best locations for their facilities, determining the most efficient balance of employees to comprise their global workforce, customizing products to satisfy specific local needs, maximizing the efficiency of the global supply chain, and determining the necessary capacity of local operations. In order to use these tools in a multinational context the operations manager must have a solid grasp on global issues. He or she must be familiar with the firm's overall international strategy and the reasoning that went into developing it. He or she must be must familiar with the critical success factors involved in selecting site locations, the process by which an international corporate strategy is formed, and the changes in the organization that will need to take place in order to implement it. Without a grasp of these concepts the operations manager will not be able to use the tools of operations management to help his or her firm establish a presence in new markets. How OM Techniques can help International Consultants to become better Managers The operations aspect of international consulting should start with a SWOT analysis, an examination of Strengths, Weaknesses...

Words: 3887 - Pages: 16

Premium Essay

A Giant Among Women Case Analysis

...Study Analysis Through this case study analysis, I will provide you with background information about Giant Manufacturing Co. Ltd., the key issues brought up by this dilemma, and an analysis of my recommendations on how to handle these issues. “The environment is intimidating, the service is bad, and they don’t understand my needs. Sometimes, there’s no dressing room, or it’s surrounded by men. It’s just not comfortable.” Giant Manufacturing Co. Ltd., one of the largest bicycle manufactures in the world, has set out to improve the bicycler experience for their female consumers and eliminate customer reviews like the one quoted before. The Taiwanese based company has run many retail outlets before, but none catering only to women. Tony Lo, CEO of Giant, saw how the women’s sections were secluded to small corners of the bicycle shops, and how the mostly male staff was unable to cater to their needs. Along with a limited line of bicycles and accessories for women, something had to be done to resolve the company’s female consumer’s needs. So he decided that he did not have the perspective to solve this issue and thus gave autonomous authority to his EVP and CFO, Bonnie Tu, to design a bicycle store with a comfortable environment that was specifically for women. Enter “Liv/giant” the end result of Bonnie Tu and her team that she had put together in order to open Giant’s first women’s bike store in Taipei, Taiwan. The Liv/giant store turned successfully profitable after only four...

Words: 948 - Pages: 4

Premium Essay

Management Strategies and Building a More Successful Global Business

...Final Paper – International Management (2012-08-MAN-372-OL011) Management Strategies and Building a more Successful Global Business Introduction Globalization is a powerful real aspect of the new world system, and it represents one of the most influential forces in determining the future course of the planet. It has manifold dimensions: economic, political, security, environmental, health, social, cultural, and others. The focus here is on the concept of "globalization" as applied to the world economy. International expansion is simply about smart preparation and well-thought-out execution; it can be enticing and highly profitable, but only if you do it right. If you don’t plan for tax exposures, business model alterations, and international corporate structure in advance, then you’re setting yourself up for an uphill battle at best — and failure at worst. With the increasing trend of globalization, industries are rapidly expanding into the international market. With no exception, many U.S.-based companies are expanding beyond the home country despite the risks. Why is international expansion important? A company can grow by exploiting overseas market opportunities and imperfections through internationalization, and growth has a positive impact on the firm performance. In short, international expansion can be profitable to companies. Moreover, why is the relationship between international expansion and firm performance important? Ultimately, a company’s performance...

Words: 3379 - Pages: 14