Project Scope
Discuss About The Business Research Method Research Proposal?
Global management teams of a company are the section that operates in handling the issues that are faced in the global market. Their duty is to manage the companie resources in the global level. There are some Organizations like the Multinational Enterprises that are large global organizations that is incorporated in one country but operate in global level. A MNE can be identified from some of its major characteristics. These types of companies are large in size and they operate in global level, but their activities are primarily controlled centrally by their parent companies. This paper will be focusing on the challenges that are faced by the management teams in global levels of their management. In other words, the paper will be discussing about challenges of global management of the companies operating in the global market. Literature review is highlighted in the paper, prior to which, scope and the objective of the project is also presented.
The project will be carried forward keeping its central focus on the challenges that are faced by the management teams of the companies in global context.
- To identify the challenges that is faced by the global management team around the world.
- To preparing new global management strategies eliminating the problems and to ensure the growth of the company in the globalization market.
- To manage the outsourcing of innovation.
Challenges in HR management
The human resource management team of different international companies is currently facing challenges due to the changes in the economy, domestic diversity, globalization and technology. All these changes have placed new demands in front of the industry and propelled the field in some entirely new direction. This is a major challenge for the industry as they have to bring variety of changes in the organization. With greater challenges came new opportunities for the HR and the organization (Stone and Deadrick 2015).
The complexity in the interaction due to globalization increased the challenges for the Multinational Enterprises in managing them. The MNEs have to manage two levels of multiple embeddedness, one at MNE level and another at subsidiary level. In order to exploit similarities and differences of their host locations effectively, they have to set their network in accordance with that. On the subsidiary level, they have to balance the internal and the external embeddedness of the company. Thus it creates both challenges and opportunities for the company, where the challenge lies in operational part and the opportunity on the other hand is in business growth (Meyer, Mudambi and Narula 2011).
The alignment of capabilities and the charters are required in order to bring changes in subsidiary level. A managerial coordination is essential for the purpose which are interaction based, charter and experience coordination. Implication of these mechanisms can result in alignment of the charters. It can also introduce us to the new insights into the misalignments which can become a useful source for distinguishing the HQ mandates and subsidiary actions. (Friesl and Silberzahn 2017).
Project Objective
With the growing globalization of the business in today’s market bring complexity in Multinational Enterprises and highlights the challenges of managing headquarters’ subsidiary relationships. Hoenen and Kostova highlighted various subsidiary relationship issues in a wide range of MNEs and concluded that implementation of the agency theory; specifically recent progression can advance the understanding of the issue and provide guidance for resolving it. Static multilateral, static bilateral, dynamic and social and contextual streams of agency theory can is suggested by the authors (Hoenen and Kostova 2015).
Regional management centers are often replaced by the regional headquarters or management mandates in the field of multinational enterprises. It is to operate the subsidiaries. In the article, ‘Multinational enterprise regional management centers; Characteristics and performances’ the authors have identified several differences in the characteristics and the performance gap between RMMs and RHQs. Longitudinal sample of 855 Japanese RMCs in 41 countries has been used in the article for this. The authors suggested a structural complement to regional strategy extensions of the integration responsiveness framework and gave an important large sample baseline. It results new theoretical and empirical research into MNE regional management strategy and structure (Chakravarty et al. 2017).
Parrot (2013) highlighted the challenges of mainstreaming microfinance and the role of socially responsible investment. It also integrated illustrations of the micro credits generated by the pilot and pointed the potential sales that will generate the promotion of housing microfinance and the number of people will get impacted.
Lou in is article ‘Toward a reverse adaptation view in cross-cultural management’ in 2016 identifies the need of maintain the independence of both global and local level management. He further stated that, these global MNEs often approach their local talent needs in an unproductive and uncoordinated way. On contrary, the MNEs can also create competitive advantage by taking a global approach to its talents. This transformation and cultivation of local into global talent necessitates endeavor from a wide range of corporate, individual and subsidiary level in cultural, structural, professional, organizational and informal aspects.
As an international organization, the MNEs have to operate in a global level, therefore, not only deal with people of various geographies, but also from various cultures. This is a major issue that every MNE’s manager has to face. Moreover, there are various issues are related with the geographical and cultural phenomena, which are, linguistic, spatial, political, economic and societal issues which needs to be dealt with a single HR plan. It puts the manager in a tough situation to prepare a strategy for all these (Allen, Lee and Reiche 2015).
Literature Review
CSR or Corporate Social responsibility is a recent trend which gained importance in 1960 and is closely related to the MNE industry. It is the responsibilities to the society and a large section of the stakeholders beyond the shareholders of the organization. In order to manage the social obligations, different MNEs have established dedicated organizational units to explore the variety of options for their corporate engagements. MNEs have to have broad management strategy in order to handle the CSR issues. The sole reason for this is that the MNEs have to work in a global market in a broad geographical territory. Hence, they have to deal with more than just one society. Various social obligations need to be considered while forming the CSR policy of the company (Wang et al. 2016).
Lopez and Fornes (2015) in their paper ‘Corporate social responsibility in emerging markets: case studies of Spanish MNCs in Latin America’ discussed about the CSR policies of MNCs in emerging markets from developed countries. They supported their thought with eight case studies which they collected through in-depth interview of the senior managers. Their findings indicated that the MNCs under study faced similar kinds of challenges in forming CSR policies for their respective companies. Diversity of culture and ethnicity of the operating countries possessed threat for the company to form a proper CSR policy which can be resolved with the help of instrumental theory. The theory is guided by the strategic tool to achieve economic objective, positive relation between the financial performance and them and use these to strengthen their reputation (Lopez and Fornes 2015).
According to Gashu (2016), the companies should operate by the rules of the home country as well as the host country and the international laws. Which means, that the company should make a versatile policy for the legal environment to handle all the societies under operation. They should also consider prepare separate flexible and adaptable law and other legal rule for each society. The knowledge of the operational countries is essential for the management of the company to make these rules which can be a challenge. These laws and regulations can also increase the risk factors for the country as the investors will withdraw their branches from the respective countries if the laws do not fit profitable for the company. It impacts the company in an identical manner as they may lose a strong market for their company.
Challenges in HR Management
MNE also faces challenges in the technological grounds which is an important source of economic advantage for both the company and the host country. For that, the company needs to have superior technological capabilities in comparison to the domestic companies of the host country as it leaves an opportunity for the company to grow. It will also result in increase in productivity (Narula and Driffield 20125).
Another essential factor that plays a vital role in the success is the talent and here lies the challenge. MNCs often come across competition for talent worldwide by increasing their efforts in global talent management. MNCs often incorporate information and communication technology to increase the efficiency of the strategic alignment of Global talent management. Companies face hurdle in this part, where they have to properly align these two for the success of the company (Ruël and Lake 2014).
Klitmøller, Schneider and Jonsen (2015) in their paper worked on relation between media choice, language difference and social categorization in the global virtual terms where they came across with various hurdles a MNC faces. They found that there is a significant gap between verbal media and language proficiency difference which lead to social categorization in the employees and also in dealing with the client. Surprisingly, they received a different feedback in case of the written media. It became a challenge for the MNCs in managing its employees in the organization. Eventually it decreases the efficiency of the team as the team members find distance between themselves because of the language issue. Similar problem arises when a team is relocated in a different part where there is a difference in language. For example, if a American team is relocated in their office in France, it drastically reduces the efficiency of both the team and the office where they are posted due to the language barrier. This obstacle lies within every global company and no solution have been proposed for resolving it.
Outsourcing the innovation is another vital challenge that a MNC faces. It is hard for a MNC to come up with an innovative strategic idea in this era of globalization. The companies need to bring adjustments in outsourcing the research and development. The problem arises in decision making at the time, when there is a characteristic gap between the home country and the host country. Heterogeneity between the host and the home country impacts on the autonomy of the innovation at the host country which results in higher transaction cost. As the transaction cost in the primary determinant of making decision, it leaves direct impact on the outsourcing of the innovation (Yeo et al. 2017).
Challenges in Subsidiary Level
The above studies discussed about the challenges that are faced by a company’s global management team. Various articles gave insight on issues in various grounds. But there are still a lot of scopes to conduct research. There is clear need of further research in cross-cultural management. Though there are some articles available in the ground, further research is always welcomed in the field. The existing studies discuss very few on about the outsourcing of the innovations of the global companies which can be the primary focus of the company.
Conclusion
From the above the discussion, it can be concluded that there are various challenges that are face by the MNE management in the changing market. The changes in the management of the industry are essential to cope up with the changes in the global market. The challenges that are currently faced in outsourcing of innovation are a field where much opportunity is available to carry out the research as there are only few works has been conducted. On the other hand, the communication gap due to cultural differences is a forever issue of the MNC industry. It can never be completely eradicated as the ethnic and linguistic gap can never be minimized as the industry operates in global level. Though numerous studies have been conducted on the issue, but there is much scope to work in it as it requires more advancement to manage the issue. Multiple embeddedness, subsidiary management issue, culture issues, CSR management challenges, technological problem and some other issues have been highlighted in the proposal.
References
Allen, D., Lee, Y.T. and Reiche, S., 2015. Global work in the multinational enterprise: New avenues and challenges for strategically managing human capital across borders. Journal of Management, 41(7), pp.2032-2035.
Chakravarty, D., Hsieh, Y.Y., Schotter, A.P. and Beamish, P.W., 2017. Multinational enterprise regional management centres: Characteristics and performance. Journal of World Business, 52(2), pp.296-311.
Friesl, M. and Silberzahn, R., 2017. Managerial coordination challenges in the alignment of capabilities and new subsidiary charters in MNEs. Organization Studies, p.0170840617693271.
Gashu, Mekoyet, 2016. Challenges faced by Multinational Companies: The Case of Castel Winery Company in Ethiopia, International Journal of Scientific & Engineering Research, vol-7.
Hoenen, A.K. and Kostova, T., 2015. Utilizing the broader agency perspective for studying headquarters–subsidiary relations in multinational companies. Journal of International Business Studies, 46(1), pp.104-113.
Klitmøller, A., Schneider, S.C. and Jonsen, K., 2015. Speaking of global virtual teams: language differences, social categorization and media choice. Personnel Review, 44(2), pp.270-285.
Lopez, B. and Fornes, G., 2015. Corporate social responsibility in emerging markets: case studies of Spanish MNCs in Latin America. European Business Review, 27(2), pp.214-230.
Luo, Y., 2016. adaptation view in cross-cultural management. Management, 23(1).
Meyer, K.E., Mudambi, R. and Narula, R., 2011. Multinational enterprises and local contexts: The opportunities and challenges of multiple embeddedness. Journal of Management Studies, 48(2), pp.235-252.
Moran, T., 2014. Multinational corporations.
Narula, R. and Driffield, N. 20125. Does FDI Cause development? The ambiguity of The evidence and why it matters, The European Journal of Development Research, Vol.24, no.1, 1-7.
Perrot, Fran¸cois, 2013. Organizational Challenges of Multinational Corporations at the Base of the Pyramid: An Action-research Inquiry. cahier de recherche 2013-01.
Ruël, H.J. and Lake, C., 2014. Global Talent Management in MNCs in the Digital Age: Conceptualizing the GTM–ICT Relationship. In Human Resource Management, Social Innovation and Technology (pp. 155-178). Emerald Group Publishing Limited.
Stone, D.L. and Deadrick, D.L., 2015. Challenges and opportunities affecting the future of human resource management. Human Resource Management Review, 25(2), pp.139-145.
Wang, H., Tong, L., Takeuchi, R. and George, G., 2016. Corporate social responsibility: An overview and new research directions thematic issue on corporate social responsibility. Academy of Management Journal, 59(2), pp.534-544.
Yeo, C., Yeo, C., Saboori-Deilami, V. and Saboori-Deilami, V., 2017. Strategic challenges of outsourcing innovation in global market. Asia Pacific Journal of Innovation and Entrepreneurship, 11(1), pp.5-16.
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