Multinationals: Business Problems

Multinationals Name Institution Question 1 Globalization has brought many opportunities, which surpass the local environment to international opportunities. It is now common to come around cross-cultural and multinational terms as businesses are benefiting from the increased knowledge which is new and based and has insightful approaches to related business problems. However, there are disadvantages and stumbling blocks to this growth, and one of them is that these multinational face shock regarding culture and international business. Culture is observed as the set and accepted common norms, which are shared by society. However, in the international business environment, what is potentially acceptable and common professionally in one country could differ in another. Culture can influence organization in various ways. One is language, culture collisions, and pricing difficulties. As mistakes sometimes are difficult to correct, the organization ought to thoroughly research about the foreign culture. This will help managers in keeping delivery times as well as in planning. To prevent failure in management because of foreign culture, there is need to have an effective communication for example what is common in one country like a handshake or direct eye contact may be unusual in another country and hence mode of interaction needs to change for the management (Briscoe, Tarique & Schuler, 2012). Organization hierarchy and the set attitudes towards management may determine success in management. In the organization, the subordinate staff will feel free to question the decision, speak up in a meeting, and express themselves if the management adheres to the cultural norms. Organization hierarchy helps in this part. Question 2 Regional trade agreements have been observed to be the key answer to fix the international trade relation by reducing trade barriers and in turn, increases the rate of global economic growth. Today, RTAs have increased in numbers, and their strategies have grown to be more complex and vary in depth (Porter, 1986). The Secretariat and the WTO members are enhancing transparency and increasing understanding of the nature of their activities as well as the impact to the multilateral trading system through fostering discussions. RTAs reduce and eliminate tariffs which are the main barriers to trade. Members of an RTA can agree on tariffs to exports or imports thus increase the flow of goods improve the economy. RTAs do encourage the creation of jobs and investments which are based on trade opportunities. RTAs do foster strong ties and secure borders. This is because efficient trade does can only occur in an environment that is peaceful and promises prosperity. Multinationals are in a position to further the objectives of the RTAs in a couple of ways. One of them is simply by participating, as many organizations aim at maximizing profit most forget the society around them. Multinationals engaging in cross border trade needs to be managed properly in a manner that they protect themselves against risks and credit. Question 3 Multinationals are complex to manage and run because they face many challenges such as legal, political, religion, environment, and culture. The cultural environment is one the complex factors that hamper managers efforts in a multinational. The three levels of culture include a national culture that is dominant within political boundaries of a country, a business culture that includes the values, norms, and beliefs relating to aspects of the business activities in culture and the organizational and occupational culture. To conquer the challenges brought about by culture managers are represented with their diagnostic models based on multinational settings. These include the Hofstede model of national culture, global leadership, & organizational behavior effectiveness and 7d culture model (Black, 2003). Hofstede model is proposed to help recognize the regional and national factors that contribute to the culture of a firm and the behavior of the workers. According to the model, power distance, masculinity v feminity, individualism, uncertainty avoidance index, and long-term orientation understanding help multinationals manager overcome the cultural environment challenges. Globe national culture, which extends Hofstede works, is a managerial tool that using data and research investigated organizations globally based on cultures. The research comes up with nine dimensions, which include; uncertainty avoidance, human orientation, power distance, assertiveness, institutional collectiveness, performance orientation, gender difference, in group collectivism and future orientation. The final model is the 7d culture model helps managers understand the differences between cultures and enhance a conducive working environment eliminating misunderstandings. The developers Trompenaars and Hampden gives the following dimensions to help managers distinguish individuals from one culture compared to others; universalism v particularism, specific v diffuse, individualism v communitarianism, achievement v ascription, neutral v ascription, internal direction v outer direction and sequential time v synchronous time. This model is used by managers to relate to people from different cultural backgrounds increasing working relationships and reducing misunderstanding with them. These models help managers to cope with a diverse group of people. Question 4 Technology has a big impact on globalization, advancement in technology helped in turning the world into a global village, which we now enjoy. Major aspects such as trade, business, and the economy have been globalized (Graham, 1998). This is as a result of technological changes which continue to take place, these changes relate to communication, distribution, and production. Technology has made it possible for nations and regions that could not interact and become innovate before together. Due to this, sectors such as trade have been revolutionalized, and interaction is now at an international level in most areas. Technology factors such as the internet have developed easier means of conducting business globally, for example, the rise of E-commerce, that is business solely conducted through the electronic communication networks. New craze of virtual business has emerged, and an individual can set up business with very few barriers. For example Amazon, Netflix and eBay. However, use of the internet for global business is not without disadvantages as the model poses the following cons: privacy and security concerns, as the pro...