Multinational Organizations : Multinational Companies Essay

Multinational Organizations : Multinational Companies Essay

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MNC also called as Multinational Corporation, is an enterprise operating in several countries but managed from home country, for example, Nike, Coca-Cola and BMW. Such companies have offices and factories in different countries also have head office where they co-ordinate global management. Multinational firms arise because capital is much more mobile than labour, since cheap labour and raw material are located in other countries, multinational firms establish there.

The advantages of multinational companies including, create jobs, wealth and improved technology in countries that are in need of such development, benefit from economies of scale, and lower output by purchasing automated equipment (fixed cost) and buying in bulk of supplies and materials for a much cheaper price. On the other hand, multinationals can undue political influence over governments, exploiting the workforce and the environment and create job losses in their home country. Also, the jobs they create may be deskilled and workers can work below minimum wage for longer hours as repetitive assembly line work.

There are some reasons why organisations wish to become multinationals, to increase market share, government grants and to secure cheaper premises and labour, which cost of land and labour will be cheaper in developing countries.

“There are over 40,000 multinational corporations currently operating in the global economy, in addition to approximately 250,000 overseas affiliates running cross-continental businesses. In 1995, the top 200 multinational corporations had combined sales of $7.1 trillion, which is equivalent to 28.3 percent of the world 's gross domestic product. The top multinational corporations are headq...

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..., arise from the culture and issues related to organisation structure.

American management style can be described as individualistic but all people in the organisation have an important role to play and valued for their input. The management in America have a high tolerance for risk and approach to change, which usually bring improvements and enhancements. For the U.S. missing a deadline is a sign of poor management and inefficiency that will shake people’s confidence. Decision making in American management style, employees are freely cross management levels and speak directly to senior managers.

In the united states, groups collaborate well together as teams, members are chosen based on skills or knowledge and welcome to contribute any discussion, or generate new ideas. All members are valued for their contribution and all treated with respect.

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