To say that there is a definite skills set necessary to manage a multinational corporation is absolutely correct. To say that it is more challenging and more complex than managing a domestic corporation would also be undeniably accurate. But to say that it is completely different, would be highly inaccurate. A majority of the skills needed to manage a multinational corporation are essentially the same skills as the managers of a domestic corporation use, only intensified. When studying the above table, it was difficult trying to decide if a certain skill would be needed for both multinational and domestic managers, because every skill listed would equate to a great manager in either form. It came down to if the skill/technique/trait was absolutely imperative to the job or not. As the multinational list grew, it became obvious that the major differences between managing a multinational corporation vs managing a domestic one, were primarily personality traits. It was rarely skills or techniques, which one side needed more than the other, to really set them apart. It was personality traits. Fortunately, I wasn’t the only one to see it that way. A study done in 1998, performed by scientists Stahl and Kühlmann, decided that the 7 competencies needed for leaders in a global market were:
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This could be due to the cultural challenges faced by leaders entering new countries. In fact, a study by Right Management found that 80% of HR professionals rated Cultural Assimilation as the greatest challenge facing successful leaders outside of their home country (Right Management, 2011). This means that cultural issues are dominating the required competencies for global leaders. So in order to perform well in a multinational corporation, your personality can make more of a difference than your skill level (in
A multinational corporation is an entity that its headquarters is based in one country and incorporates a group of organizations that are geographically distant and have various goals. "Such an entity can be conceptualized as an inter-organizational network that is embedded in an external network consisting of all other organizations such as managers, customers, suppliers and regulators"(Ghoshal & Barlett, 1990). As the organizations develop and find their way into significant growth they are inclined to identify the goals, perspectives, assimilation, and rules of their framework. The role of the managers in such entities is to coordinate organizations that work in various cultures and environments, in which the levels of involvement, diversity,
A Multinational Corporation (MNC) can be defined as “a single entity that controls and manages group of goal-disparate and geographically dispersed productive subsidiaries” (Triandis and Wasti, 2008, p. 2). Multinational corporations are entities that make Foreign Direct Investment (FDI) and produce added value in countries other than the country in which they are headquartered. One of the key objectives of the MNC is to obtain capital where is it cheapest and to invest FDI and undertake production in areas that yield the highest rates of return (De Beule and Van Den Bulcke, 2009). However, many theories have been advanced to account for the decision-making process that MNCs undertake in relation to FDI. The purpose of this paper is to explain the two main theories – internalization theory and OLI eclectic paradigm theory – and to critique these in relation to some of the other conceptual models that have been advocated.
4. Peterson, TO & Fleet, DDV 2004, ‘The Ongoing Legacy of R.L.Katz: An updated Typology of Management Skills’, Management Decision, vol.42, no.10, pp.1297-1308.
Advancing the mission and effectiveness of a multicultural organization relies on the ability for a leader to understand the personality traits and individual differences of his/her workforce or team. House, Hanges, Javidan, and Gupta (2004), noted that managers of global organizations are being forced to make critical decisions at alarming rates due to the advancement of globalized competition. Makela, Andersson and Seppala (2012) postulated that a multicultural or global organization expands its capabilities to grow by its ability to distribute and assimilate knowledge across different geographical, cultural and social contexts as expressed through the lens of their global team members. Maria and Lozano (2010) posited
Globalisation allows individuals, groups, corporations, and countries to reach around the world farther, faster, more deeply, and more cheaply than ever before. Most large local companies regard globalisation as opportunity, thereby exploring overseas markets for maximum market share and optimum business strategies. However, managers would face a series of challenges caused by leadership models, cultural backgrounds, political and economic risks, HR management, etc. To study multinational management skills is very useful for my future career. In this essay, I will set goals for this subject, identify the skills I have honed and need to improve, and explain my strategies for achieving goals.
International businesses are also finding new ways of increasing diversity abroad. Instead of using expatriate employees as management, they are starting to hire locals. Companies that operate abroad are realizing that using expatriate employees is not a permanent solution. They are often expensive, and are not capable of translating their skills into the new environment. In a company that operates globally, it is important that the company knows how to relate to the local markets, and a great way to do this is by hiring local talent. Hiring locally is cheaper, there is not a language barrier, and they are accustomed to the business environment in the area(5). They can also help the business by providing a new perspective into international markets, and offer ways that the company can improve their diversity abroa...
Multinational enterprise (MNE) is “a company that is headquartered in one country but has operations in one or more other countries” (Rugman and Collinson 2012, p.38) that has at least one office in different countries but centralised home office. These offices coordinate global management in the context of international business. MNEs have increasingly essential influence on the development of the global economy and coordinate with other companies in different business environments. However, there are many issues involved with how MNEs operate well overseas, especially in emerging markets (EMs) (Cavusgil et al., 2013, p.5).
“Exchange rates are the amount of one country’s currency needed to purchase one unit of another currency (Brealey 1999, p. 625)”. People wanting to exchange some money for their vacation trip will not be too much bothered with shifts if the exchange rates. However, for multinational companies, dealing with very large amounts of money in their transactions, the rise or fall of a currency can mean getting a surplus or a deficit on their balance sheets. What types of exchange rate risks do multinational companies face?
In its evolution the multinational corporation faced serious contradictions. Evolving from its national context, the multinational corporation employs large numbers of employees of diverse nationalities and ethnicities. Westney (1993) notes that managers are, thus, caught between the institutional pressures to conform to the company norms and values, as well as to the cultural and social influences of its local national environment.
Svensson, G., 2001. 'Globalization' of Business Activities: A 'Global Strategy' Approach, Management Decision, 39(1), pp.6-18.
8. What is diversification and why do organisations diversify? Recommend two (2) possible ways that this organisation can diversify, if they choose to
In the past few decades, the world has experienced heightened globalisation. During this period, organisations have prioritised setting up leaders capable of dealing with the ever-increasing involvedness of running their global operations. Overseeing global talent along with career paths is consequently a decisive challenge in lots of multinational organisations. Individuals as well as organisations perceive International assignments as a constructive way of developing global occupational competencies (Brewster & Suutari, 2005).
There are lots of scholars tried to recognize the physiological, demographic, personality, intellective, task-related, and social characteristics with the emergence and effectiveness leaders based on trait approach (Management Study Guide, 2013). Basically, successful leaders will possess certain interests, abilities, and personality traits which are diverse than the less effective leaders (Management Study Guide, 2013). However, it doesn’t ...
Chandler, A.D. (1986), "Technological and organizational underpinnings of modern industrial multinational enterprise: the dynamics of competitive advantage", chapter 2 in A. Teichova, M. Lévy-Leboyer and H. Nussbaum (eds.), Multinational Enterprise in Historical Perspective, New York: Cambridge University Press.
Nowadays, business is set in a global environment. Companies not only regard their locations or primary market bases, but also consider the rest of the world. In this context, more and more companies start to run multinational business in various parts of the world. In this essay, companies which run multinational business are to be characterized as multinational companies'. By following the globalization campaign, multinational companies' supply chains can be enriched, high costs work force can be transformed and potential markets can be expanded. Consequentially, competitive advantages of companies can be strengthened in a global market. Otherwise, some problems are met in the changed environments in foreign countries at the same time. The changed environments can be divided into four main aspects, namely, cultural environment, legal environment, economic environment and political system problems. All the changed environments make problems to multinational companies. In particular, problems which are caused by changed culture environment are the most serious aspect of running a multinational business. This essay will discuss these problems and give some suggestions to solve them.