The Management Of A Multinational Corporation Essay

1052 Words Feb 8th, 2015 null Page
The multinational corporation

The management of a multinational corporation requires the understanding of the fundamental economic, strategic, organizational and socio-political issues that have impact on the processes of expansion of a particular corporation.

Also the linkages between foreign subsidiaries and corporate headquarters in the country of origin, and the relationship between the multinational corporation and interest groups in foreign countries, and also relationships including government, labour unions and suppliers.

Multinational corporations exist because of certain economic conditions which make it possible for a firm to profitably undertake the production of goods or services in a foreign location. Through vertical expansion a corporation locates assets or employees in a foreign country with the aim of securing the production of a raw material or input or the distribution and sale of goods and services. The main condition for vertical expansion is comparative advantage in the foreign location.

·Culture shock experienced by managers who work abroad

Managers who do not possess the sufficient capacity for global leadership struggle especially in the area of communication with their subordinates. Another factor is that of different cultural approaches.

The western culture or norm of communication is more direct than in other countries. For example if a U.S manager were to answer a question, the answer would be direct as opposed to the European norm,…

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