Do Strategies Stay the Same or Do They Need to Be Altered in Some Way?
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- Date Submitted: 02/24/2010 11:12 AM
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MULTINATIONAL ENTERPRISES: DO STRATEGIES STAY THE SAME OR ARE THEY ALTERED IN SOME WAY?
Keywords
Culture, Strategy, 5 Dimensions, Cross Cultural Management
Abstract
This paper attempts to address the question: How important is it, if at all for corporate strategies to be altered in some way, so as to fit in with their chosen host country? The paper will consider issues concerned with crossing of national borders and Hofstede’s 5 dimensions: measurement of national cultural traits, in relation to multinationals.
Introduction
National economies are becoming involved in a single global economy, to which big organisations are operating across national boundaries, providing world-wide markets and positioning production wherever it looks/is most cost-effective to do so. “The world economy is steadily internationalising. Between 1980 and 1991, annual world exports doubled to a total value of $3,500 billion (International Monetary Fund).”1 This increase in internationalisation has lead to an increase in the number of competing multinational enterprises (MNE’s).
“A Multinational Enterprise (MNE) is a company which undertakes productive activities outside the country in which they are incorporated.”2 Therefore, they are organisations considering the market and production localities anywhere in the world.
Thus, there is a need to develop an understanding into the reasons behind the increases in international economic activity.
A question must be asked: Have the successful MNE’s today used original organisational strategies in aiding them to cross national borders? Or have they adapted this in some way, in order to fit in with their chosen host country?
Crossing National Borders.
It can be seen that when companies are competing on home ground, and in the home
market, a stable environment, the primary focus of management is towards the competitive and technological factors in order to maintain a competitive advantage over
rival firms i.e....
Keywords
Culture, Strategy, 5 Dimensions, Cross Cultural Management
Abstract
This paper attempts to address the question: How important is it, if at all for corporate strategies to be altered in some way, so as to fit in with their chosen host country? The paper will consider issues concerned with crossing of national borders and Hofstede’s 5 dimensions: measurement of national cultural traits, in relation to multinationals.
Introduction
National economies are becoming involved in a single global economy, to which big organisations are operating across national boundaries, providing world-wide markets and positioning production wherever it looks/is most cost-effective to do so. “The world economy is steadily internationalising. Between 1980 and 1991, annual world exports doubled to a total value of $3,500 billion (International Monetary Fund).”1 This increase in internationalisation has lead to an increase in the number of competing multinational enterprises (MNE’s).
“A Multinational Enterprise (MNE) is a company which undertakes productive activities outside the country in which they are incorporated.”2 Therefore, they are organisations considering the market and production localities anywhere in the world.
Thus, there is a need to develop an understanding into the reasons behind the increases in international economic activity.
A question must be asked: Have the successful MNE’s today used original organisational strategies in aiding them to cross national borders? Or have they adapted this in some way, in order to fit in with their chosen host country?
Crossing National Borders.
It can be seen that when companies are competing on home ground, and in the home
market, a stable environment, the primary focus of management is towards the competitive and technological factors in order to maintain a competitive advantage over
rival firms i.e....