This report mentions multinational companies and their environments. It also discusses a key issue faced by MNC, which is the cultural impact and how to overcome this problem. This report also illustrates some implementation strategies related to MNC.
In this modern world, a lot of multinational companies are registered. Increased globalization boosts the growth of multinational companies in the world. It helps to enhance the cooperation between countries and leads to the concept that the whole world is under one umbrella. With the growth of multinational companies, anyone from any part of this world can get products that are manufactured in any other part of the world.
Till the last century, it was difficult to imagine that one bought a product which was manufactured abroad, but in this century it is common. The growth of the multinational company is the reason for this kind of change in the world. Software and hardware companies like Microsoft, Intel, IBM, electronic companies like Sony, Casio, automobile companies like Ford, Hyundai, Toyota, etc. are some of the popular multinational companies.
This report mentions the multinational company Wal-Mart, with its base, is in the United States of America. Wal-Mart is the world’s fourth level company in online selling and it is one of the topmost job provider companies in America. Wal-Mart has around 6400 stores around the world.
Like many other multinational companies, Wal-Mart provides a good environment for its employees as well as customers. They offer competitive salaries; a person who works in Wal-Mart gets good benefits and many opportunities related to the profession. Through the expanding stores in different countries, they are in a position to provide many job opportunities in future also.
In the past, their health care service to the employees was not good. In recent times they have devoted much attention to this area and now they provide enough health care services by contributing towards premium and changing working hours. They conduct the campaign for this collecting opinions from their employees working in different stores within America and abroad. (Wal-Mart Workers Need a Union).
Almost all multinational companies face some problems relating to their working environment. Wal-Mart also has these kinds of problems. One major complaint raised against this company was they discriminate against women in matters like a job promotion. The reason for this is that in this company around 90% of employees are women, but in the top-level management this rate decreases to 15%. Another complaint against Wal-Mart is in the matter of hiring employees through illegal immigration. These are not unsolvable problems. Wal-Mart has started to work on this kind of complaint.
Wal-Mark takes security measures to overcome market changes. “Despite the general weakness in the world economy and the uncertain environment that prevailed, Wal-Mart had reported sale growth of 11%, amounting to $6.4 billion.” (Ramaswamy, 83).
Wal-Mart tries to supply renewable energy and reduce the wasting particles amount to zero. It also tries to sustain the mineral deposits and environment.
Wal-Mart has two types of stakeholders: Market stakeholders who have an economic stake and non-market stakeholders who have a non-economic and political stake. Market stakeholders include the stockholders, the Wal-Mart executives, the employees, the local communities, consumers, non-profit organizations, other retailers, online retailers, and gasoline retailers. Non-market stakeholders include labor unions, international retail stores, and politicians. Based on the 2001 annual report of Wal-Mart, this MNC Company paid $.24 per share for its dividend. (Hayden, et al)
Different factors are affecting the smooth working of an MNC. There is a possibility of occurrence of conflict in multinational companies due to cultural differences. MNC are spread in different countries. People’s culture in one country is different from another country. Due to the communication gap and cultural differences, misunderstanding maybe happen. Customs and conventions differ from country to country. It may also have an impact on business. For example, Wal-Mart faces this kind of problem in their stores in China, South Korea, and Germany. In China, the reason for this kind of difficulty is mainly the cultural outlook of China and factors like diverse population, too many players, local protectionism, backward infrastructure, rules and regulations of government and employees. (China Business Strategy: Walmart and Chinese Culture).
To solve these kinds of cultural impacts, MNC can take some steps. If MNC companies post employees from the local area, where the company works, it will help to minimize the communication problem. MNCs can take a suitable decision for reserving some percentage of vacancies for natives. When they negotiate with someone or launch products into the market they must consider the culture and lifestyle of the locality.
When deputing foreigners, the company should give them a brief idea about the culture and social status of the locality. At the time of decision making, MNC must consider the social situation in the locality and must ensure that their decisions do not lead to a conflict with the local government.
While implementing a strategy a multinational company must consider some key points. This will help avoid conflicts in such companies. Some such points are mentioned here. They are: at the time of staffing give appropriate priority for the natives because they have a clear understanding of their culture and lifestyle. While fixing wages/salaries, consider the value of money in that particular area and fix salary taking this into account.
This factor needs to be kept in mind at the time of deciding the price of a product also. While designing publicity materials and releasing advertisements, the culture of the country should be a guiding factor. MNC must fully comply with the trading rules and other rules existing in the country while they decide to do business with or in a country. Any type of business deal or agreement made by an MNC should be matching with the rules and regulations of the country where it is made.
Conclusion
From this study, it is clear that multinational companies are a part of the process of development of the present-day world. For the successful working of a multinational company, it must have the ability to absorb the culture from different countries and accept the necessary things based on the needs. They must have the ability to identify the needs of customers in different localities. Moreover, management power is an important factor for the success of a multinational company.
Works Cited
China Business Strategy: Walmart and Chinese Culture. Fili’s World. 2009. Web.
Hayden, Patrick., etal. Wal – Mart: Staying on Top of the Fortune 500: A Case Study on Wal – Mart Stores Inc. 2002. Web.
Ramaswamy, Kannan. Walt Mart Stores Inc.: Dominating Global Retailing. Thunderbird: the Garvin School of Inter National Management. 2004. Web.
Wal-Mart Workers Need a Union. Coalition of Labor Union Women. 2006. Web.