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Write 8 pages thesis on the topic the issues and challenges facing by multinational companies in the global business environment.
Write 8 pages thesis on the topic the issues and challenges facing by multinational companies in the global business environment. Multi-national organisations on the modern-day environment often face several issues that impose unfavorable impacts upon their operational performance. With the advent of globalisation, the companies have to deal with stern competition, forcing them to adopt unconventional strategies for the purpose of overcoming the identified issues and attaining sustainability. Apart from this, companies also need to move parallel with the changing demands of the customers. Additionally, constant advancements in technology present another major challenge for companies in this present day context (Slideshare Inc., 2013).
Multi-national companies are observed to remain continuously under immense pressure in order to perform effectively in an evenly poised competitive global market. According to the study conducted by McDonald & Burton (2013), there are certain major challenges that companies face when they perform their respective operations in several regions of the world, which can be explained with the assistance of the globalization and international theories. Emphasizing the same context, Hennart (2000), affirmed that the foremost among them is the changing economic conditions that have been explained as ‘market imperfections’ in Hymer’s international theories. In this regard, the global financial conditions fluctuate quite frequently due to gaining momentum of globalisation and other crucial factors mainly owing to two driving forces, viz. ‘boundedly rational’ and ‘opportunistic’ forces, influencing companies to change their strategies on a constant basis in correspondence to their transaction costs (Hennart, 2000). Moreover, McDonald & Burton (2013) also affirmed that volatility in the political conditions of various nations also forced multi-national companies to change their operational approaches, which can be further considered as a major challenge for them (McDonald & Burton, 2013). The study conducted with a similar concern by Rondinelli (2004) also revealed that multi-nationals operating in various nations of the world had to deal with different lawful regulations along with obligations, which further gives rise to business ethics-related challenges. According to Pesalj (2011) and Hennart (2000), MNCs tend to gain competitive advantages through continuous internationalization. At often instances, MNCs internationalize through mergers or acquisitions, which in turn rewards them with monopolistic power in the market context. Considering the current unconventional practices by MNCs from a managerial point of view, it was further affirmed by Pesalj (2011) that MNCs currently is showing a trend to expand in transitional countries, which are supposed to offer better growth opportunities to these organizations. To be precise, focusing on the knowledge-based as well as network-based concepts of modern global management, these MNCs tend to supply or channelize those resources which are either found to abundance in the transitional economy (mostly knowledge that remain majorly unused in the national economic plethora) or outsource resources to contribute to the economic progress of the host nation (mostly in the form of technological advancements and employment generation) (Pesalj, 2011).
