How do cultural factors influence a Multi National Company's decisions Essay

How do cultural factors influence a Multi National Company's decisions on location selection and organizational structure for it - Essay Example Transformation firms that differ significantly from national and international firms are making the later firms, are making them accountable to global markets and economic settings. Because of globalization effect, the state ability to regulate its economic activities is declining rapidly, while global markets increase in their dominance over national economic policies. These policies have to be aligned in a way that guarantees multinational companies and competitive advantage. Globalization has created ways for opportunities for increasing number of businesses to cross their countrywide borders and enlarge their market share, lessen expenses, as well as improve proficiency. Multinational companies are going global mainly because, of market saturation in the parent country; they look for new markets to bit competition. The multinational companies take advantage of the economies of scale in the targeted country to increase their business by gaining more stable profits. This as a resul t has led to increased growth of international movement of products and services rapidly. Cultural factors influence a Multi-National Company's decisions on location selection Cultural factors affect both the brand appearance and affect the structural organization of the company ranging from the management of workers, the sales of the product and the gratification of the consumers. Organizational structure has to be adjustable so that it can meet the cultural aspects in areas with varied cultures. According to research, culture comprises of a set of dogmas, moral principles, language, customs as well as laws apprehended in mutual by a country, a society, or other distinct group of individuals (Haleblian, McNamara and Davison, 2009). Currently, with many refugees in various nations worldwide, there is a wide range of cultural diversity, religious views, traditions as well as ethics, reflecting the dispersed basis of the people. Organizational culture is referred to as a pattern of mu tual understanding s around which action is organized. Alternatively, it can be taken to imply a scheme of knowledge, of standards for remarking, considering, appraising, and acting that serve to associate human societies to their environmental settings. From statistics, there has been an increase in developments in the area of transport and communications, which have made the universe a global community. Accordingly, there has been a reduction of trade barriers because of the presence free trade zones in a significant number of nations (Beamish and Lupton, 2009). However, despite the fact that there has been the lessening in trade blockades to entering new global markets, there are still various complications. Managers who deal with multinational organizations currently encounter an exterior setting that is rapidly altering multilayered, unreliable and dynamically competitive. Multinational organizations can help in the creation of competitive benefits; although only under particul ar conditions. It is of great significance to note that, issues that relate to diverse groups within the workforce are complex and delicate to handle. Therefore, this means that without substantial understanding of the diverse organizational and socioeconomic as well as cultural factors, multinational corporations may not flourish in taking full benefit of the existing resources and chances (Porter, 1998). Therefore, the practices of