The Globalization Of A Multinational Corporation

Typically, a multinational corporation develops new products in its native country and manufactures them abroad, often in Third World nations, thus gaining trade advantages and economies of labor and materials. Almost all the largest multinational firms are American, Japanese, or West European. Such corporations have had worldwide influence—over other business entities and even over governments, many of which have imposed controls on them. During the last

Global company : An organization that attempts to standardize and integrate operations worldwide in all functional areas.

A multinational corporation houses other offices and factories in different countries and regions (Investopedia.,2014). In addition, these corporations tend to have a centralized office where global management is carried out. Becoming a multinational corporation has the advantages of vertical and horizontal economies of scale as well increased market share due to the increased outputs (Investopedia.,2014). To contrast these corporations can be portrayed as entities that seek political and economic control. While this perception is not always the case it does occasionally occur because big businesses can impact the countries they are in.

Businesses today operate an environment that differs greatly from anytime millennia, centuries or even decades ago. The pace of businesses has increased exponentially with the continuous improvement of information technology, telecommunications and geolocation supported by satellites and progressively more efficient modes of transportation and mechanization. The ability to move products globally overnight, increasing levels of automation, and collaboration instantaneously via virtual means has forever changed and reduced traditional barriers businesses face while creating a myriad of new challenges, risks and opportunities.

Globalization of business has had a large impact on the field of management. Those seeking management roles in large, multinational corporations must have a different set of skills than in previous generations. In his article “Globalization on the Homefront”, Harold Torrence (n.d.) wrote, “As a direct result [of globalization], management teams are racing to develop the skills and competencies needed to comprehend and appreciate an onslaught of values, assumptions, beliefs and traditions that are fundamentally different from their own.”

Business cultures between USA and Japan vary immensely the American’s are quick to make decisions and allow many juniors to make decisions of their own accord, although many errors can be caused because of the leeway given. In comparison to Japan where business decisions are a lot slower and given a lot of thought. Japan will avoid all risks possible and all business decisions are made following a corporate hierarchy. This entails many meetings and numerous records to minimise any errors so they can deliver consistency at all levels.

Baines, H.V., & Ursah, J. (2009). Globalization: Understanding, Management, and Effects. Retrieved from The University of Phoenix eBook Collection Data Base.

The companies have become a key parameter, especially in the global economy. The size of global companies closely correlated with the decrease of vulnerabilities, with higher resistance to economic shocks occurred along the time and with their bigger chances of success in certain markets. Companies aim not only to optimize their size, but also to strengthen the global production networks, affording them a better competitive position, in a mighty competitive environment and under the pressure of quick development of the technological environment. The size of an organization has become a barrier that stops its entry into the sector, higher than profitability, which explains why some corporations have focused, in recent times, more on strengthening their position abroad, although their economic performance does not justify this endeavor. The process of economic globalization is both a resultant of the increasing activity of multinational organizations and a cause of their increasingly stronger internationally affirmation. However, global organizations activity is much more intense in the developed countries; their impact on the developing countries must not be neglected. Global organizations have a few main features that individualize them from all other forms of companies known so far:

New York Times columnist Thomas Friedman defines globalization as “the inexorable integration of markets, transportation systems, and communication systems to a degree never witnessed before – in a way that is enabling corporations, countries, and individuals to reach around the world farther, faster, deeper, and cheaper than ever before.” (Friedman, 2002). Corporations can no longer operate exclusively in one or two countries. Today’s markets are far too complicated and interdependent for that. As globalization expands managers spend more and more time navigating the world to conduct business.

The process of globalization began over three thousand years ago, although the use of the term gained popularity in the 1980s, when Marshall McLuhan introduced his term, the “global village.” Globalization is simply the ”process of interaction and integration among the people, companies, and governments of different nations” (SUNY Levin). The world is an interconnected place now because of this. Businesses have expanded outside of their home countries and introduced their products globally due to this phenomenon. McDonald’s, originally an American burger joint, is one of the largest examples of a business that has successfully globalized with service in 119 countries and 35,000 stores.

Multinational corporations are companies that have branches and operations in two or more countries. These companies are the main results of globalization, since they operate all over the world as if it was one country. Multinational corporations have a home country which contain their headquarters and offices for management and have host countries in which their operations take place. The home countries of multinational corporations are usually developed countries that have great capitals and the host countries are developing countries due to the low costs of labor, raw materials, and taxes paid to the governments.

Multinational corporations are business entities that operate in more than one country. The typical multinational corporation or MNC normally functions with a headquarters that is based in one country, while other facilities are based in locations in other countries. In some circles, a multinational corporation is referred to as a multinational enterprise or a transnational corporation .

Globalization is when a company extends their business to other countries outside of their current location (businessdictionary). Companies are looking to aggressively grow and a way from them to achieve the growth goal is through globalization. In addition, for companies to stay competitive they need to make a global presence (diplomacy.edu). In 2011, American companies saw an average of 15% of their revenues from overseas. Likewise, major companies saw substantial revenues from overseas include Walmart at 26%, General Electric at 54%, Boeing at 41%, and Amazon at 41% (Newman, 2011). In addition, the major companies employee an average of 750,00 people across the global, Walmart alone employees 2.3

The rapid pace of Globalization has led to a change in the global economy during the past several decades; it is believe that factors such as trade liberalisation, access to cheaper labour and resources, similarity of consumer demand around the world, and advances in technology and communication has widened the market of consumption, investment as well as production on a global scale. These globalization driven factors created new challenges and global competition for businesses around the world thus as a response many companies decided to expand their operation across national borders in order to be competitive. A company that operates their business in at least one country other than its country is called Multinational

In recent times the differences are lower as the American management system as incorporated the Japanese system, such as: Just in time inventory, Kaizen, quality management and giving employees rights to give suggestion and make decisions. But there are still differences such as: The Japanese workers being more loyal to the firm, more focus on teamwork and higher respect for authority, while American employees focus on individuality and not loyal to firm, would usually go to the highest