Managing Multinational Corporation
Multinational corporations belong to the final stage of globalization meaning that such businesses are provided with strategic corporate units in other countries “that interacts with both headquarters and each other”. Therefore, the objective of a management is to create global structure aimed at tying people and to provide help in coordinating scattered offices. It goes without saying that management of international company differs from management of national one, firstly because global business is more affected by political and economic factors such as customs duties, taxes on corporate income, offset trade and local content.
Natural and climatic conditions, ecology, political and economic conditions in the country, social and psychological conditions, labour force and unions, customers and suppliers, technologies and competition – all these factors directly impact performance of multinational corporations. The next moment to mention is international competition – the same multinational companies may compete for the same customers and suppliers. Inability to compete may lead to slow market growth (fighting for market share), high fixed costs, high storage costs, low switching costs, low levels of product differentiation, high exit barriers, industry shakeout, and diversity of rivals.
Managing international company requires not only management skills, but also cultural knowledge and cross-cultural communication skills. Understanding how to communicate cross-culturally will assist business developing in promoting creating smoothly working project teams; responding to customers, clients, and markets; living and working in a culturally diverse world. In a modern swiftly changing world people and cultures are circulating and interacting as at a really dizzying speed. Those people who know how to use language and how to communicate cross-culturally have a crucial advantage over other businesses. Managing international company ensures the highest levels of leadership skills. Managers of global companies provide leadership and continuity in the various divisions.
Cherrington, D. & Middleton, L. (1995, June). An Introduction to Global Business Issues. HR Magazine, retrieved February 3, 2007, from http://www.findarticles.com/p/articles/mi_m3495/is_n6_v40/ai_17191274/pg_3