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Global Business Challenges Faced by Any Multinational Company

Essay by   •  May 12, 2011  •  Research Paper  •  625 Words (3 Pages)  •  2,797 Views

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Question: Analyse the impact of global business challenges faced by any multinational company?

What is a Multinational Company?

A Multinational company is a business establishment which has many branches in different countries. Multinational companies provide something that is advantageous to developing countries as they benefit for competitive advantage. They offer jobs and increase the wealth of the local people. The country gains wealth by means of taxes. (Scalloway, 2011)

Handling multinational company is a big challenge for every business minded person. There are many issues and factors that needs to consider such as, the strengths, weaknesses, opportunities, and threats (SWOT Analysis), and External Environmental factors which is (PESTEL Analysis).

Global business challenges faced by any multinational company

Multinational companies are rapidly getting more complicated as an immediate outcome with daily challenges faced by any multinational companies. "Remains to be done to assist them in the midst of the changes, competition, many companies rely on analysts whose job is to analyse the structure of an organization, efficiency or profits." (Meilan, 2011).

What are the challenges faced by multinational company?

Absence of a framework of global rules

First important thing to consider are the global rules where in different countries have different set of rules to follow. As it is a lack of support to global rules. Fair trading must practice to prevent conflicts on export and import of products.

Having an example from World Trade Organisation, trade issues are in part under the control of agreement or rules even though not all countries are yet part of the WTO process.

Challenge refers on how multinational companies are organised and managed

Command and control which has been the organisational model, not only for companies but also in military organisation model in the past which it did not work effectively.

Companies' top management must need to hand over the power to the people in different branches and apply real delegation of authority, to establish exactly who is responsible to monitor the status in the company.

Challenges about cultural diversity

This is related to race and values. Most of business environment is monoculture. "Even in our industry which has been working internationally for decades the nationality of the company has been reflected in the makeup of the workforce in general and senior management in particular." (Manzoni, 2005).

It is impossible to do business in any well developed country or indeed anywhere without recruiting and employing local staff in senior



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