1. Multinational Enterprise.
1.1.1 Definition of Multinational Enterprise.
The multinational enterprise (MNE) can be measured as the most powerful organisation in the world today. Globalization is the development that has a significant impact on how the world operates today and is mostly driven by the expansion of MNE’s. Internationalisation has lined the technique for the eradication of boundaries between countries and now multinational enterprises (MNE’s) can be distributed across the world in exploration of new markets, opportunities and wherewithal.
“A multinational enterprise (MNE) takes a worldwide view of markets and production.” (Daniels 2009, 63) In simple terms, a Multinational enterprise (MNE) will produce and market their products anywhere in the world. Operations can also take place in multiple countries, for example, in the wholesale trade Nestle is an excellent example of an MNE. Nestle has marketing and production facilities in almost every country, in the world; Nestle Switzerland operational plants must be managed to use the same set of management styles as their international counterpart Nestle SA.
A multinational enterprise (MNE) is an organisation that holds a hefty equity share; usually fifty percent or more of another organisation, functioning in an overseas country. The multinational enterprise (MNE) can be formed when an organisation in one country makes an impartiality investment in an organisation, in another country. Foreign direct investment (FDI) is an investment in an overseas organisation where the overseas financier holds at least ten percent of the average shares, accepted with the objective of proven a ‘lasting interest’ overseas, a durable bond and momentous influence on the management o...
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As the salespeople’s immediate supervisor, it is the primary responsibility of the manager to provide proper training to enhance the salespersons’ effectiveness and improve their skills. Given the importance of having a productive and enthusiastic sales team, the manager needs to develop and manage effective reward and compensation packages to ensure a highly motivated and satisfied sales force. Sales managers also ensure that the company 's standards of professionalism, image, and branding are consistent with the sales team’s interaction with company customers. The manager 's presence also makes customers feel valued as well as provide credibility on behalf of the company (Pilling, Donthu, & Henson,
Off-shoring is the establishment of business operations outside national boundaries. The process of moving business outside these boundaries is to garner an advantage either through tax breaks, lower wages, lower transportation cost and/or relaxed regulations ("Offshore definition," 2014). Many firms either branch out as a horizontal multinational or vertical multinational. Horizontal multinational’s produce the same good or services as abroad. This foreign direct investment (FDI) is done to strategically place production closer to the target market. Doing this provides advantages surrounding transportation cost while enhancing learning associated with local needs. A vertical multinational is one that fragments a portion of its good to take advantage of lower cost (i.e. cheap labor). Markusen and Maskus found horizontal multinational replaces trade whereas, a vertical multinational positively correlates with trade (Markusen & Maskus, 2001).
Gerry Johnson & Kevan Scholes (2002) Exploring Corporate Strategy Sixth Edition. London: Prentice Hall. 2. Henry Mintzberg, James Brian Quinn, & Sumantra Ghoshal (1995)
Today, many companies enter the global market, and some companies have become extremely successful in the global marketplace and others still struggling. In Theodore Levitt’s article “The Globalization of Markets”, he states that a well managed corporation focuses on selling standardized products with high quality and low priced instead of focuses on selling on customized products with high cost. Levitt defines the differences between multinational corporation and global corporation, and adopts many specific examples to proves his view. He defines the multinational corporation who operates in many countries and adjust its product based on the taste of specific region. This will result in a high cost to produce the product because company have to input more resource into each individual product. However, global corporation sells similar product worldwide at relative low cost. According to Levitt, the cultural differences are becoming more and more “homogenized”; therefore, becoming a global corporation will lead to the successful of the company in the global market.
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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).
Robbins, S, DeCenzo, D, Coulter, M & Woods, M 2011, Management: The Essentials, Pearson Australia, NSW, Australia, 1st Edition
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.
Mira Wilkins defines a multinational enterprise (MNE) as a “firm that extends itself over borders to do business outside its headquarters country.” By 1870, a period denoted as industrial capitalism, MNCs started to evolve and the nature...
Stonehouse, G., Campbell, D., Hamill, J. & Purdie, T. (2004). Global and Transnational Business (2nd ed.). Chichester: John Wiley & Sons.