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The Biggest Issues Facing Mncs Commerce Essay

There are several issues confronted by MNCs while competing in the global dynamic business environment today. One of the primary challenges today has been global while operating locally by understanding the culture of location in which they operate (Firoz, Maghrabi & Kim, 2002). It really is vital for organizations to understand the local culture to discuss with local suppliers, government and other stakeholders. Furthermore understanding the moral and honest ideals of targeted consumers is also essential so that companies can market the right product to the right market in the right manners. Another problem for MNCs is economic and politics condition of the country where they operate since politics instability can lead to economical instability with changing inflation rates, taxes, restrictions, exchange rates etc. Another problem is integrating marketing strategies according to the cultural values of the region where the MNC runs so that no blunders might be determined such as the case of Nestle in Africa. Rivalling with local merchant is also a grave concern since MNCs need to distinguish their products in quality and price to contend with local competition which have greater knowledge of the country and people. Since MNCs utilize folks from a diverse social background therefore the managers need to generate synergy through their labor force.

Q2) Why could it be useful to have an 8-step negotiation model? What exactly are the consequences in case a step is skipped?

Companies need to understand the negotiation model given that they have to work out with several stakeholders outside and inside the organization such as suppliers, labor unions, government etc. Making use of the 8-step model can enforce a competent negotiation process through which companies can avoid turning a discord into turmoil. The 8-step model provides the company with step by step answer to every kind of negotiation the business may need to consider. The characteristics of various steps in this model understand the circumstance, hearing all parties, create substitute alternatives, offer BATNA, reaching a final arrangement, arriving to a realization and making sure that the decision is put in place (The Negotiation Experts, 2012). A firm must proceed through each and every step when on the negotiation table for a number of reasons. First reason is the fact if companies miss any one step such as offering BATNA incase an agreement is set upon a minor conflict may turn into an emergency. Further if organizations miss an important step like looking for substitute solutions then the companies might not know very well what possible solutions can be found which can help the company negotiate with any get together while keeping the company's interest intact. As companies employs the steps for negotiation professionals can find alternatives in an reliable manner.

Q3) Which of the cross-cultural theme do you are feeling is most vital to the success of an MNC and just why?

Cross-cultural management is vital for MNCs since multi-national businesses suffer from people from a diverse social track record. One cross-cultural theme which companies need to include in their business strategy and with prove essential for the success of the company is creation of synergy within the workforce. MNCs have a tendency to work across geographical boundaries and worker folks from various locations and cultures. All these people will vary in demographical characteristics like caste, love-making, religious beliefs, color and other beliefs. Now as human-resource is the biggest asset of a firm it is therefore essential that the personnel work in a harmonious manner. There are several ways of creating synergy such as writing a common perspective and goals aligned with the company's strategic goals along with creation of trust, compassion and companionship in the company (Kusumowidagdo, 2011). Such methods can help companies to build up a well-integrated corporate culture so that all the departments work in unity towards obtaining the strategic goals of an organization. It is vital for an MNC to create such a corporate and business culture so that corporations can succeed in different countries. It is therefore essential for companies to check out this cross-cultural theme to get the maximum gain from a diverse workforce.

Q4) How should an HR division evolve to match a company's enlargement overseas? Which management roles are most significant in this scenario?

HR department must evolve in accordance with the company's expansion abroad and form strategies which help out with staffing and motivating the organization's human resource. It is important that while staffing HR section consider the importance of aligning visitors to the corporate ideals of the business. The business should make sure that HR team should perform value-based interviewing techniques so that only those individuals who's frame of mind match with the worth of the business. HR department should also incorporate talent pools which integrate strategies of selection and succession through a continuous development process. Command roles are also important for MNCs since a good command in one country might not be considered good in other country as well. Every culture has its own cultural and social standard when management is known as. Therefore a leader must have knowledge about the beliefs, ethics, traditions and beliefs so that they may be able to efficiently lead business internationally. There are many skills which a leader must have and which might make leaders globally successful. These skills include integrity, courage, benchmarks, awareness, business knowledge, determination and sensitivity towards ethnic differences. A leader must be aware of good work ethics, professional and personal integrity and dedication to lead.

Q5) Characterize the continuing future of US-based companies desiring to broaden overseas next 5 years. What politics, economic, and technical difficulties might those companies face and just why? How can they be beat?

US-based firms thinking about expanding globally may have to face several cultural, political and monetary routines in the returning years credited to an alteration in notion of United States in the growing and developed countries. Furthermore exchange rates of producing countries are being unstable across the globe anticipated to a dynamic change in the socio-political and monetary factor. The planet is certainly going through a global recession and another 5 years might see a global change towards business practices with an enormous move towards e-business strategies. The war against terror has distorted US economy and made it politically unstable with a distorted image in the Muslim world where US products have a great potential marketplace. However this situation might change in the next 5 years with appearing marketplaces like Brazil, India, Russia, China and Pakistan on the world. These countries will have a suitable working environment for US-based business with high demand for US-based high quality products as local vendors will never be able to provide such products anticipated to insufficient technology and money. US-based corporation can use this opportunity and gain maximum revenue through growing business in expanding countries along with thinking of ways to lessen processing cost.

Q6) Describe the relevant factors when contemplating localization of HR activities.

HR department needs to consider several factors when working internationally so that their activities are developed relative to the local cultures. HR section must set up their activities in line with the cultural values, patterns and requirement of business functions in the united states they operate. First factor to be considered is the ethnical sizes of Hofstedes such as factors like masculinity, long-term orientation and individualism are essential when considering HR strategies. For example individualism approach is highly recommended when developing individuals source of information development strategies since employees from American background and Asian culture will vary in their strategy towards career. Asian employees are more of collectivism aspect and have a tendency to prefer employed in organizations whereas American employees have to be of individualistic nature and like working by themselves or not writing their success with anyone. Further motivational factors are also different among different cultures since different cultures have different motivational drives which should be considered when motivational strategies are developed.

Q7) Discuss the impact and implications of Hofstede's Cultural Measurements on MNC's today.

Hofstede's Cultural Proportions have a grave effect on strategies of MNCs today given that they suffer from diverse cultures. Whenever a company works outside its local geographical boundary it results in a different set of cultural principles. Hofstede has viewed these cultural beliefs into five social dimensions called ability distance, individualism, uncertainty, masculinity and long-term orientation. A MNC must take each one of these cultural dimensions under consideration when making ways of target consumers in various countries. For instance when making the organizational hierarchy when establishing a international subsidiary the company must acknowledge the energy distance cultural values in that country so that the managers can integrate an organizational culture with accordance to the neighborhood values. Further there are specific scenarios in which a firm develops relationship with the suppliers or form a joint-venture contract in which principles like long-term approach and uncertainty must be taken into consideration. For example when forming cooperation with a local company the foreign firm must really know what ethnical norms such as risk taking or long-term procedure embodies the neighborhood culture. Each one of these dimensions identified by Hofstede also play a significant role in the strategies for global branding and advertising strategy so that strategies are developed matching to local patterns and choices (Mooij & Hofstede, 2010).

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