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Essay: Multinational corporations (MNCs)

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  • Subject area(s): Business essays
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  • Published: 30 September 2015*
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  • Words: 1,179 (approx)
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Usually large companies like MNCs have their own websites that monitoring the actions of MNCs in different countries. This website is used to make it more easily to see by visitors and enables them to look benefits that earned by multinational corporations. Not to mention, by having own website can attract visitors to invest in MNC around the world. If MNC do not have their own website, this multinational company may be exposed to face abuse, fraud and uncertainty if it does not have a personal website to update their own company data that may be useful or can be a source of reference to visitors who visit their website. The difference of time and distance between one branches to another branch in multinational companies lead to some problem issues whereby they need to understand the differences between cultures, perception, norm and language.
a) Is exploitation endemic?
Nowadays, exploitation endemic always happened. The stranger can manipulate the data information, financial data and management of companies that can give benefits to them. In addition, the lack of communication between branches can also cause some multinational companies been left out and had to rely on local management to resolve the problems that they encountered in the MNC.
One of the abuses of internet technology today is cybercrime. There are various categories of cybercrime which has been detected today. This cybercrime is usually done by internet users to fraud, damage or modifies the program or information data in computer, private information theft, unauthorized access to its systems; software unauthorized copying, espionage, pornography, hackers, viruses and email spam.
b) Are MNCs self-regulating to reduce exploitation?
The emergence of the internet as a communication tool promises a medium-to-date with full of information dissemination. However, no one can control the information in cyberspace; millions of websites have been switched on. Miscellaneous information (whether true or false), idea, ideology, propaganda and there are also disseminated pornography through the Internet. Admittedly, Internet act as a communication tool capability far beyond the means of communication that exist now. Internet technology allows a misuse of information and different types of services provided.
However, most people believe that online scams applies only to individuals and careless of personal information that they believe can visit the official website without any doubt. To tell the truth, all of it instead of exclusive rights for any aggression, manipulation and deception can be done by those who are malicious. Legal and official website is at risk and can pose a threat to visitors without they realize it.
c) Are there effective forms of regulation emerging at the international level, e.g. the UN Global Compacts?
In this case, effective control can be done by formulating the design of the structure of multinational companies. The structure is divided into four of multinational structure which is functional structure, product structure, structure by region and matrix structure. For one thing, functional structures suitable for multinational companies who is producing similar goods or in small quantities and do not have many branches. The advantage of functional structure is can improve the efficiency and management expertise in specific areas if done repetitions. Thus, productivity can be improved soon. Besides that, facilitates training in which managers only need to be responsible for a specific part dedicated to only one functional. This functional structures can also reduce duplication of resources for instance sharing production machinery parts for all types of products that produced. Hence, firms can save costs. In addition, the functional problem can be solved faster and efficiently. In other words, collaboration and consultation can be done effectively in order to find solutions for all levels of staff that have the same skill specialization.
The structure of the product is also suitable for many multinational companies with innovative products and experiencing rapid goods and services. This structure is used to improve coordination tasks in the same product group and each of them are responsible to share the benefit of production which related to the products. Much less, the concentration of resources and facilities for certain product groups can save cost and time for the transfer. It also regulates quickly to the needs of foreign markets as a dedicated and skilled staff in the relevant product group. Troubleshooting on foreign markets products is faster because the full attention given by the staff responsible for certain product groups and it is more sensitive to the problems of its product groups. As a solution, they increase the number of experts in a particular group because this structure requires managers who are knowledgeable and understand the management functions for groups of related products.
Structure according to geographical regions are suitable for multinational companies operating in many places all around the world. This structure can help managers to has better understanding about local market conditions and find a way to settle the problems that occur in that place. In addition, face to face communication with foreign people can help firms produce products that can capture the interests of foreign markets. Besides, the concentration of resources and facilities in an area can save cost and time for the transfer. Establishment of more expert’s manager in the field of local expertise requires managers which are knowledgeable and understand to local market conditions that enable them to manage it smoothly.
On the other hand, the matrix structure suitable for multinational companies often exposed to changes in the environment whereby the product is in the form of reservation. The advantage of matrix structure are communication will be more stable and can allows information to be processed with more quickly. So, resource sharing expertise can assist employees in term of improving their performance and skill in workplace. It also improves collaboration skills among workers of different functions and foster a good working environment and accelerate the decision-making process through the transmission of authority to lower levels of management.
d) Are national governments losing the power to regulate MNCs?
As has been noted, the national governments will be losing the power to regulate MNCs. This is because many firms are now deeply close with the agencies under government sector. When the federal government is classified as a customer (as in the defense industry), such participation is welcomed. More impressive yet is the relationship between the organization and supervision of agencies such as the Federal Communications Commission (FCC) and OSHA. These agencies have formed and enforce basic rules that define the operating environment in an industry.
Government intervention in business has resulted in a troublesome restrictions on free enterprise and those who insist that the government is supposed to protect people and the natural environment from the effects of competition. This can be seen from the efforts of the government to check and tighten controls on exports of high technology in the interest of national security handicapped by the recommendations of forging responses supervision by the companies themselves. If the concept of corporate social responsibility is continues to gain a foothold, this agreement and compromise between the parties of the company and its stakeholders can reduce the pressure of government intervention.

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