Various challenges affect the operations of most companies that try to expand their business operations in new markets around the world. One of the significant challenges that most contemporary business organizations face when they grow into other countries is the process that focuses on adaptation to their existing diverse cultures. Presently, in the era of globalization, various organizations are gaining the status of multinationals by focusing on developing and expanding business operations to several regions of the globe (George and Nazeh 2019). The process that focuses on adaptation of a company to the local cultures of subsidiaries is one of the necessary primary challenges that businesses are unable to accomplish is the development of a dynamic environment for business (Sharma 2017).. Therefore, the primary objective of this research paper is to identify and evaluate a selection of challenges that multinational organizations face within human resource management. The paper concludes by addressing some of recommendations on how multinationals organizations can work to address or deal with identified challenges during their operations in the global business communities.
The function of managing an organization with multinational operations presents different challenges. These challenges relate to regulations of policies by different government in foreign nations, standardization of products, product adaptation, barriers to entry into the market, the culture of a region, and human resource management among other factors (Peterson 2011). Some of the major challenges that multinational organizations faced can be grouped into diverse major categories. These categories comprise of social, financial, and environmental factors. Some of the known major challenges that affect operations of multinational companies include cases of terrorist attacks, the conflict between people in different nations, and natural disasters that rarely happen in the society. Besides, other challenges that affect operations of the organization in global society include the presence of business competition that comes from other businesses around the world (Barbero and Puig 2015). Other challenges consist of strategies of marketing products, poor communication as well as transport systems, political instability in some regions, along with occurrences of natural disasters. Al these challenges have a negative influence on the growth and operations of multinational organizations
The multinational organization in most cases faces the challenge of dealing with diverse sets of authority laws together with regulations that might cause the organizations to incur extra charges of operations. Phukan and Basu (2014) stated that foreign governments are increasing taxes of value-added duty in various goods alongside services in addition to tightening compliance laws and regulations. The shift in compliance regulation in most cases means that multinational organizations have to adopt effective to their operational policies as well as on how they deliver their products to different countries that they export their merchandise targeted consumers (Bonga 2017). Such operations may need enhanced charges to appoint local experts who are capable of keeping abreast of variations together with agree openly with administrators of global authority.
In the process of introducing the product to different global markets, the organization needs to survey the market. The research aims to determine whether adaptation required to be made during the operation. The use of brand titles, logos, Together with product attributes might all require to be modified to ensuring success in different markets (Zaroff 2011). Such operations remain to be the challenge for multinational organizations that are entering strange customs alongside markets. Besides, translations of the language of names as well as advertising slogans might also prove to be the challenge as wording together with the structure of sentence might skew the intended meaning. For instance, the company that deals with different products such as food might need to market their products under different brand title than in its home nation. Such changes occur due to the potentially unfavorable interpretation (Krug and Kavanagh 2014). Additionally, manufacturers might also require producing a different line of flavors to appeal to various tastes and preferences among the people in local markets.
Various multinational corporations face the dispute of choosing how to harmonize as well as update actions amid their habitat nation together with their foreign functions. Different marketing decisions within these organizations have to be created concerning when as well as the manner of creating the regional physical charisma and how to achieve the foundation of regional organizations like unions of labor alongside dealers of different parts. Their lack of operation makes it tough for the company to expand its operations due to a lack of effective network and communication system to be used in foreign markets around the world (Caligiuri and Bonache 2016). Therefore, this challenge requires business operators within multinational organizations need to stay consistent as much as probable amongst nations that could guide to enhanced duplication of services.
The management that deals with profit together with wages often attests to be the test for the operations of global organizations. Diverse conditions of labor markets might cause the firm to offer the collection of advantages that in some instance it is unable to offer (Dismas, and Aketch 2016). Therefore, for multinational organizations to attract as well as retain the talent, it finds it challenging to maintain the balance amid its costs of administration along with recruiting the necessary human capital to perform in the foreign nations efficiently. Another essential challenge in operations of the multinational organization is in determining policies of human resources that are influenced by different cultures. The same management of human resource can potentially produce diverse outcomes for multinational organizations and thus be challenging and ineffective when implemented in different regions around the world (Subramanian, Allcock, and Lathlean 2011). Problems that are caused by culture change are the most severe aspect of organizing operations of multinational organizations.
Culture of people is just the broad collection of ancient beliefs that impact behaviour, often without conscious awareness. While managers of human resources are tasked with the challenge of following the regulations in operations as well as the implementation of appropriate policies no matter the business is situated, local culture and business culture can create particular changes for the department of HRM. Some aspects of culture are pertinent in developing the structure and policies of HR. The volume of the stand of workers, company’s framework, the conditions of the workplace, and even the environment and industry all consist of managerial culture, and eventually affect HR plans. Some of the cultural aspects that affect policies of HRM consist of a base of workers that shows that the number of workers that a given company employs (Koziko?lu and Senemo?lu 2018). The number of personnel employed by a workplace determines its culture. Therefore, big organizations that recruit thousands of employeees must possess a more practical culture than small business. Culture impacts policy of recruitment in most organizations. Every organization and every nation has to follow various recruitment policies that depend upon cultural attitudes such as polycentrism, ethnocentrism, and geo-centrism. Culture affects the policy of selection that varies from one nation to another (Zaroff 2011). During the process of selection, workers tend to find it tough to adapt to diverse language, dressing codes, and lifestyle that make them to be depressed or happy.
Approaches in which internationals organization can operate to focus on or deal with operational contests
When the multinational organization decides to expand its operations around global markets, they need to focus on the market variables. These variables always comprise of the natural resources of a nation, type of targeted market, potential differences in standard procedures of doing businesses. Therefore, each firm has the mandate of considering its entry policy and whether outlining the joint scheme with the regional organizations might appropriately suits operational targets.
Launching of product portfolio
Multinational organizations can overcome the challenge of product strategy in their operations by focusing on the creation of product portfolio to attract more customer base in different nations. The organizations need to focus on ideas of analyzing their product portfolio to maintain as well as proactively follow progress in the environmental pressure groups to anticipate changes in the market. The management of the organization can lobby with environmental pressure groups to make their operations to be sustainable to environmental setting instead of focusing on environmental compliance.
Use of current technologies
The use of advanced technologies that are currently advancing in business operations can help multinational companies to improve on how they produce products that are safe and of great quality as per the demand from different regions. The use of technologies can make multinational organizations to understand the current markets in various places (Koziko?lu and Senemo?lu 2018). Through an understanding of various markets management can then plan well on various practices to include in their operations and understand market demand. Technology can also help in reducing instances of threats from competitors as a multinational organization can learn the appropriate technique to improve on the manner they operate in different markets (Dhanpat 2016). Therefore, technological usage help company to be competitive trough production of superior products, creating the superior value of customers through delivery of service, building the premium product or brand image, and employing resources that comply with the targeted markets.
Creating a good rapport with local business
The idea of finding the right business partner as well as creating a good relationship with different local business can help multinational organizations to adapt well in foreign markets. During the expansion of business territories by multinational organizations make them to face conflict with some new businesses in the market inevitably (Peterson 2011). Therefore, through the creation of a firm relationship with different overseas corporations such as storage, shipping, together with logistics corporations can help multinational organizations to grow their business operations (Mughal 2011). The presence of local expertise and knowledge can make most multinational firms to receive many benefits in their collaboration with other business in the markets.
Developing a business strategy, plan, along with budget
The challenge that arises when multinational company rushes to international development without proper planning can be resolved by developing a well-planned business strategy and budget for operations. The development of such strategies can help in improving how organizations compete with their rival around the markets (Zaroff 2011). The idea can help multinational organizations to examine how they spend different funds in their operations. Hence, this strategy can be effective in contriving instances of conflicts that do arise during operations when the company lacks the required funds for operations (Barbero and Puig 2015). The process of conducting due diligence as well as having a solid plan in place makes it that much simple to avoid cases of surprises in operations around global society.
Conclusion
From the above discussion, it is clear that various challenges affect operations of most multinational organizations that try to expand their business operations in new markets around the world. One of the significant challenges that have been identified in this examination that most contemporary business organizations face when they grow into other countries is the process that focuses on adaptation to their existing diverse cultures. Besides, according to the presentations, it is clear that changes in the external business settings in which multinational organizations operate can either bring forth various opportunities or operational threats. Challenges that affect the operation of multinational organizations vary from one organization to another depending on the country of operation. Hence, this paper records that it is imperative for multinational organizations to match the changes and challenges their operations with some of the strategies so as they can remain relevant in business operations
List of References
Barbero, M. and Puig, N. (2015). Business groups around the world: an introduction. Business History, 58(1), pp.6-29.
Bonga, W. (2017). Challenges Faced by SMEs on Exportation and Possible Strategies. SSRN Electronic Journal.
Caligiuri, P. and Bonache, J. (2016). Evolving and enduring challenges in global mobility. Journal of World Business, 51(1), pp.127-141.
Dhanpat, N. (2016). Emotional labor in academe. Challenges faced. Problems and Perspectives in Management, 14(3), pp.575-582.
Dismas, O. and Aketch, N. (2016). Challenges Faced by Organizations in Implementing Telemedicine in Developing Countries: A Literature Review. International Journal of Applied Information Systems, 11(6), pp.8-11.
George, J. and Nazeh, M. (2019). Challenges Faced by CIOs in cloud and IoT based organizations- A Study on IT and Business Leaders. JOIV : International Journal on Informatics Visualization, 3(1).
Koziko?lu, ?. and Senemo?lu, N. (2018). Challenges Faced By Novice Teachers: A Qualitative Analysis. Journal of Qualitative Research in Education, 6(3), pp.1-31.
Krug, E. and Kavanagh, M. (2014). Ethical Challenges Faced by Medical Students. MedEdPORTAL Publications.
Mughal, M. (2011). Challenges Faced by Judicial Academies. SSRN Electronic Journal.
Peterson, E. (2011). Socratic Problem-Solving In The Business World. American Journal of Business Education (AJBE), 2(5).
Phukan, S. and Basu, P. (2014). Ethical Dilemmas Faced by Multinational Corporations in Culturally Diverse Markets. Journal of Technologies in Society, 10(1), pp.19-41.
Sharma, D. (2017). Macroeconomic Challenges Faced by Indian Economy. SSRN Electronic Journal.
Subramanian, P., Allcock, N., and Lathlean, J. (2011). Challenges faced by nurses in managing pain in a critical care setting. Journal of Clinical Nursing, 21(9-10), pp.1254-1262.
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