The management issues faced by multinationals in host nations are Essay

The management issues faced by multinationals in host nations are merely a magnified version of issues faced by these enterprises in their home countries - Essay Example Globalization and low barriers to trade propose MNEs unlimited opportunities to expend their businesses overseas. Thus, in host countries they face numerous challenges and threats which have a great impact on their profitability and market position. In many cases, the management issues faced by multinationals in host nations are merely a magnified version of issues faced by these enterprises in their home countries. MNEs are vitally concerned with the environment affecting their interests which encompass employment opportunities (i.e., the availability of jobs); conditions of employment, such as employment stability and the potential for advancement, income and the determinants of income, fringe benefits; and the employer/employee representative structures responsible for negotiation and administration of employment contracts. In many cases, environmental factors which influence the corporation are similar to those of the home country (Mckern 2003). Following Mckern (2003): the traditional view of the international environments in which MNCs operate is based on the opposing forces of national responsiveness and global integration. In the multinational the forces for responsiveness are strong and the integration forces weak, as in packaged goods, household appliances, and beverages" (p. 2). Traditional management practices do not change greatly when... This is explained by the fact that MNEs a magnified version of issues and problems faced by these enterprises in their home countries. Organization structure is one of the examples which prove this statement. Organization structure relates to management decision-making authority and the broader issues of autonomy and control. Of special relevance is the organization of the industrial relations function at the subsidiary level and the question of control in industrial relations management (Budhwar & Debrah 2001). The structures are fairly flat at the smaller subsidiaries, such as New England Drawn Steel, Mt. Pleasant Chemical Co., and Fujitsu America. They become more complex at the larger firms, such as Mitsubishi Aircraft, Murata, and Sanyo Manufacturing. At home country, as company size grows, senior management titles tend to change from manager and director to vice-president and executive director. Also, as the complexity and size of the organizations advance, basic line managemen t structures tend to move from the purely functional. Product line development and the nature of the production process are also seen as important influences on organizational development (Rugman et al 2006). MNEs with a narrow product line and a basically single production process, such as Auburn Steel, are typically organized around distinctive functional units. These structures are the same in their local subsidies around the world. Following Mckern (2003) The complexity of the environment of multi-business corporations implies that organization structures and processes need to respond to the special circumstances of each business and region. This imperative suggests an organizational response that is highly differentiated across the corporation's