Introduction
The wave of globalization has led to the establishment of many corporations that operate in different countries or regions. Such companies are known as multinational enterprises (MNEs). They are characterized by adequate financial, technological, and human resources that make them competitive. This paper gives a detailed analysis of the unique characteristics, challenges, and benefits of MNEs. It goes further to examine how human resources roles tend to change whenever managers are working for such MNEs.
MNEs: Aspects and Characteristics
Chen (2016) acknowledges that MNEs succeed since they operate on a global scale. There are also unique characteristics or aspects that make them competitive. For instance, such organizations are present in different parts across the globe. This is the case since they have numerous branches, subsidiaries, or outlets that make it possible for them to serve many customers. Such organizations are owned by entrepreneurs in host or parent countries. They also have parent companies that control, monitor, and manage operations in every country. Another attribute is that MNEs are associated with huge assets and advanced systems. Consequently, they promote the way technologies are transferred from country A to B.
Haller (2016) indicates that MNEs are characterized by competitive or superior marketing initiatives. This happens to be the case since such corporations usually have efficient distribution systems and networks in different countries. They also pursue their goals and missions with high efficiency. This objective is achieved through the use of effective initiatives. For example, competent leaders are identified to mentor others in order to provide desirable services or goods (Haller, 2016). Another aspect is that they have something known as a “productive organization” (Chen, 2016). According to this concept, they produce goods that are marketed in different parts of the world.
Benefits and Challenges
There are various aspects of benefits that encourage established enterprises or companies to go multinational. The first one is that such businesses can make huge profits because they operate in different countries. Secondly, MNEs create employment opportunities for locals who work as expatriates (Haller, 2016). Thirdly, most of the targeted workers can acquire or develop superior competencies in leadership, management, and production. This means that such employees will become proficient and successful in their respective positions.
The fourth benefit is that many MNEs record various economic advantages. For instance, they find it easier to monitor such factors as transportation costs, logistical operations, warehousing and hoarding, and production. These attributes are analyzed in an attempt to deliver positive results or profits. Fifthly, the model makes it easier for managers to operate in regions with attractive policies and political stabilities (Geppert, Becker-Ritterspach, & Mudambi, 2016). For example, many American multinational corporations such as Coca-Cola have been doing business in the United Arab Emirates and China. These nations are politically stable. The approach is also beneficial since it generates foreign direct investments (FDIs). The MNE business model has been observed to result in the generation or acquisition of superior ideas that can promote organizational performance. It also reduces operational costs and possible business risks.
On the other hand, many MNEs encounter numerous challenges that can have an impact on their effectiveness. The first one arises from social and cultural factors. Since MNEs operate in different environments and regions, it can be impossible to manage individuals efficiently. They should also employ competent leaders to deal with emerging cultural issues (Geppert et al., 2016). The second concern arises from the legal aspects experienced in different regions. Such corporations must always focus on emerging political conditions and international policies if they are to realize their potential.
Since MNEs operate globally, they tend to encounter various problems such as inflation and high interest rates. These changes can affect performance and make it impossible for different companies to achieve their potential. Companies must use their financial resources to address these problems and emerge successful (Chen, 2016). The political environment in a given foreign nation will influence the success of an MNE. This amounts to an external threat that has the potential to disorient performance.
The level of competition remains extremely high in companies operating globally or in many foreign regions. This is the case because the model can be replicated by other companies in the targeted markets. The approach will result in the production and marketing of similar products to the identified customers. The strategy is also affected by the fact that there are many organizations operating in different segments. MNEs should, therefore, focus on the best strategies and approaches in an attempt to remain competitive and achieve their potential (Haller, 2016). Emerging technologies also pose a major threat to many MNEs. This happens to be the case since new innovations and ideas are becoming common. These corporations also face numerous challenges from global concerns such as cybercrime. It would, therefore, be appropriate for MNEs to focus on these issues and establish superior models in order to emerge successfully.
Role of Human Resources
Normally, human resources (HR) managers use their competencies to lead their followers and deliver positive results. However, the nature of control changes whenever HR supervisors are focusing on the performance of employees in multinational companies. To begin with, HR managers in such firms should use a hybrid approach depending on the cultural and behavioral attributes of the targeted employees. For instance, many people in Asian countries expect their leaders to show direction, unlike in western nations. This means that the major cultural dimensions impact leadership in different regions (Chen, 2016). An HR manager will, therefore, be required to adjust his or her leadership philosophy in accordance with the cultural attributes of the targeted followers.
HR leaders in MNEs will be required to transform their strategies depending on the changing demands of their employees. They should also focus on aspects such as power distance, uncertainty avoidance, and masculinity in an attempt to deliver positive results. The emerging needs or expectations of different customers must also be analyzed carefully (Geppert et al., 2016). This means that every subsidiary or outlet in a specific geographical region will require unique HR practices. The ultimate goal is to empower different employees efficiently and address their challenges (Haller, 2016). This approach will ensure that workers in various countries are guided effectively. Expatriate HR managers should be aware of such cultural issues in an attempt to drive performance.
Conclusion
The concept of MNE is embraced by many corporations in order to achieve their potential. Managers in such organizations should consider the above benefits and disadvantages to deal with potential issues that can disorient performance. HR leaders should consider every cultural dimension since employees in different regions require diverse incentives and resources. The ultimate objective is to develop a powerful model that can deliver positive results.
References
Chen, C. (2016). Evaluating the investment benefit of multinational enterprises’ international projects based on risk adjustment: Evidence from China. Eurasia Journal of Mathematics, Science and Technology Education, 12(9), 2451-2464. Web.
Geppert, M., Becker-Ritterspach, F., & Mudambi, R. (2016). Politics and power in multinational companies: Integrating the international business and organization studies perspectives. Organization Studies, 37(9), 1209-1225. Web.
Haller, A. (2016). Globalization, multinational companies and emerging markets. Ecoforum, 5(1), 9-15.