Challenges faced by local companies from multinationals

Bhat (2010, pp 284-285) points out that the Indian companies which wish to become global requires to sacrifice the local opportunities and those companies which are not ready to do this may have to face global competition in their home market.

This can be described by the fact that Bajaj Auto by stopping to go global had to face competition from a manufacturer of two wheeler giants like Honda in its own market. The local market has developed vastly in the post globalized decade and this, in beginning years, has made some export oriented units to look inwards. However, this may not help the organization in the long run because the developing competition in the local market is likely to make things critical for the local units if they fail to take benefit of other markets. The local markets’ attractiveness is acting as prevention to the internationalization of several Indian multinational corporations in present Bajaj Company. Thus leaving local opportunities is the challenge for the Multinational corporations. Carroll and Buchholtz (2011, p 307) say that the two issues of the multinational corporations is that the design and structure of organization and human resource management. The multinational corporations must employ several approaches for the organization in their markets. This is important due to the regulations of host government.

The management of multinational corporations becomes composite when the organization licenses in one country, have connection with other country and exchanges goods and services to third country. In every surroundings the organization faces various organizational challenges. Then the second major issue is the use of human resources. In the staffing arena a query emerges based on the tactical use of home versus host country nationals. The use of every concept determines benefits and costs for the organization.

Other difficult issue of human resource consists of training and selection. As the organizations globalize another challenge for the MNC’s is to enforce and create conduct codes across global operations.

References

  • Bhat M K (2010), “International Trade and Financial Environment”, Ane Books, New Delhi, pp 284-285.
  • Carroll A B and Buchholtz A K (2011), “Business and Society: Ethics and Stakeholder Management”, Cengage Learning, USA, p 307.
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