MALAYSIAN MNCs
description
Transcript of MALAYSIAN MNCs
ISSUES AND CHALLENGES
An MNC is a corporation headquartered in one country and having operations in more than one country
EMC = Emerging markets MNC = MNCs headquartered in an emerging market and having operations in more than one country, i.e. Malaysian MNCs
Three types of headquarters attitude/orientation towards subsidiaries in an MNC:• Ethnocentric• Polycentric• Geocentric
Organization design
Ethnocentric Polycentric Geocentric
Complexity of organization
Complex in home country, simple in subsidiaries
Varied and independent
Increasingly complex and interdependent
Authority; decision making
High in headquarters
Relatively low in headquarters
Aim for collaborative approach between headquarters and subsidiaries
Evaluation and control
Home standards applied for persons and performance
Determined locally
Find standards which are universal and local
Organization design
Ethnocentric Polycentric Geocentric
Rewards and punishments
High in headquarters, low in subsidiaries
Wide variation, can be high or low rewards for subsidiary performance
International and local executives rewarded for reaching local and worldwide objectives
Communication; information flow
High volumes to subsidiaries, orders, command, advice
Little to and from headquarters; little between subsidiaries
Both ways and between subsidiaries; head of subsidiaries part of management team
Recruiting; staffing development
Recruit and develop people of home country for key positions everywhere in the world
Develop people of local nationality for key positions in their own country
Develop best men everywhere in the world for key positions everywhere in the world
Environmental Intra-organizationalEconomic nationalism in host and home countries
Management inexperience in overseas markets
Political nationalism in host and home countries
Nation-centered reward and punishment structure
Military secrecy associated with research in home country
Mutual distrust between home-country people and foreign executives
Distrust of big MNC by host-country political leaders
Resistance to letting foreigners into the power structure
Lack of international monetary system
Anticipated costs and risks of geocentrism
Growing differences between the rich and poor countries
Increasing immobility of staff
Home-country political leaders’ attempts to control firm’s policy
Linguistic problems and different cultural background
Dwindling global supply of resources Rising inflation Stag-deflation (combination of
stagnation/recession/depression) Great depression? Rising unemployment rate People-government expectations Political tension
End. Discussion Thank you.