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 …show more content…
Uncertainty avoidance also differs from country to country. Employees from countries like Brazil and Switzerland find it easier to follow rules, policies, procedures and social norms to deal with uncertainty. The employees find contentment with order, consistency and structure, but in countries such as Hong Kong and Malaysia where there is low uncertainty avoidance, the employees tolerate a variety of opinions and are open to change and are more prone to taking risk.
Other factors include Assertiveness which entail a corporation in one country encouraging competitiveness among colleagues, but not so in less assertive countries because harmony in relationships, loyalty and solidarity are encouraged. Power distance, Gender egalitarianism, institutional collectivism, humane orientation, and future orientation are also factors which contribute to managerial culture shock …show more content…
fair trade standards apply. Here are five fair trade key issues: fair labour conditions, democratic and transparent organizations, environmental sustainability and economic sustainability and access to credit.
·Ethical issues faced by managers in dealing with international business
According to investopedia, ethics is the study of proper business policies and practices regarding potentially controversial issues, such as corporate governance, insider trading, bribery, discrimination, corporate social responsibility and fiduciary responsibilities. Business ethics are often guided by law, while other times provide a basic framework that businesses may choose to follow in order to gain public acceptance. From this definition it is important for corporations to follow the law concerning the following:
1.Advertising
To avoid legal battles, all laws laid by the Federal Trade Commission concerning advertising must be adhered to. Consumers must not be mislead, therefore there must be truth in advertising. Also for advertising to Children, advertising of harmful products and for all issues regarding advertising tactics, the law must be adhered