A multi National is a company that has unlimited boundaries, unlimited areas, unlimited aspects and unlimited people under one roof. These international organizations operate globally, crossing their borders and territories. They serve different cultures, economies and people. The question is that do these multinationals follow the same policies, procedures and codes of conduct that are pre defined by their parent company? Well, the answer is obviously a big “No”.
In every nation, specific mores, laws, ethical standards and culture exist, which differ from any other country. Sometimes, these differences are so wide that an MNC operating in those two regions has to work out from the beginning for each of them. This is the major reason why most international businesses have a mixture of diverse cultures since there are dissimilar people operating within the corporation. Under this condition, it becomes critically important for the MNCs to know the ways to adjust to different cultures of the countries in which they are operating, otherwise, their policies that are conflicting to the laws and norms of any particular country might bring severe problems.
- Legal and political forces: MNCs must understand the legal structure of the country they have decided to enter.
How to understand: Since these forces are the major influencers, multinational corporations must satisfy them by shaping their policies and rules according to them.
- Economic forces: MNC must analyze the profitability before entering any economy or nation.
How to analyze: The overall economic scenario, purchasing power of buyers, interest rates, taxation policies etc are some of the factors to be considered in order to be adjust.
- Social culture: This is the most important factor for an MNC to penetrate in the consumer market of any region. Unless and until they get the support from the potential consumers, they won’t be able to be recognized among the masses.
How to penetrate: For this purpose, they must engage themselves in people friendly activities and social welfare programs. They must take care of the basic norms of that society, their values, religions and culture. MNCs can do this by market themselves and their brand in that society culture’s friendly manner.
- Work force diversity: Since MNC also holds a diverse work force belonging to different regions, cultures, beliefs and values; they must try to create a professional harmony among their work force.
How to create harmony: MNC can achieve this objective by establishing and implementing a harmonious and valued organizational culture that teach people how to behave in a corporation and what are the acceptable ways to be within the workplace.