Management Theories Essay
There have been changes in the manufacturing processes. These changes occur over a short period, and all the competitors must change their operations to produce products with the same quality in the market. With the changing trends in the global market, international organizations have set rules and principles governing these multinational and global corporations at resolute constancy in all spheres of operations in the global market (Levitt 1983, p. The paper covers on the management theories and the effects of globalisation on the global market on these multinational and global corporations about Levitt’s view on global economic strategy. Multinational corporations (MNC) are institutions or enterprises managed and run from the home country and function in other nations (Cohen 2007, p. Unlike a multinational corporation, global corporations market their products in all global markets by the branding of their products and services.
An excellent example of global companies is the Coca-Cola Company and Apple Company. Market globalisation is the increasing integration and interaction of economic activities between different societies across the globe. Market globalisation has made these corporations considered stateless. These corporations utilise the technology and cultural practices as their tools to gain international market of their goods and services. This approach works best for organization handling processes with repetitive procedures. Secondly, in this strategy, Taylor believed in the differentiation in piece rate plan. Taylor suggested that different employees are paid differently depending on their work rate in the company. Thirdly, for the success in an organisation, there must be good supervision team for the operations. The supervising team assigns duties to specialized employees and makes sure the work is well done.
This reduces the production time with improved efficiency. Another principle for administrative management is the use of authority and responsibility (Abuthahir 2014, p. Managers and top officials have authority over their subordinates in the line of duty. They give orders and directions to operations in the organisation. Employees as managers urged to be responsible for their duties. Top-level manager in these global and multinational corporations must follow these rules in controlling their employees. Secondly, according to Weber in this system, there must be work division and specialization (Farazmand 1994, p. This help to reduce the time consumed for changing from one job to another. He further suggested that, for an organisation to be successful an organisation must develop a hierarchical organisational structure. Lastly, Weber suggested that the organisation must keep a record of their rules and policies, administrative activities, and decisions.
Operation management is another process involved in qualitative management theory. It consists of the production and controlling the process of production (Brandimarte 2011 p. During operation management, various techniques such as inventory analysis, networking, and statistical quality control are used to analyses the process. Today multinational and global corporation uses sophisticated software such as SSP in analysing statistical data. Another process involved is the use of Management Information Systems (MISs) to make decisions concerning the organisation. Today this approach is used to make decisions for managerial problems that may arise within the corporations. Management in Multinational and Global Corporations Over the years, the industrial revolution emerged. The ‘factory system’ was introduced, companies developed their manufactured goods and products. These products were later introduced into these existing multicultural markets.
The various producing factories managed the development process of their goods. In connection with this, both multinational and global corporations have today implemented different management strategies. There exist different types of management strategies. The following are examples of management and management strategies namely; budget control, contingency planning, human error reduction strategies and strategic management. Most successful corporations apply a common strategic planning management framework commonly branded as the POLC framework (Planning Organizing Leading Controlling framework). This framework is widely used by the management body to make choices on developmental issues concerning the management of the corporation (Nicolescu, Pleșoianu, and Cîrstea 2017, p. Most global corporations are excellent examples of companies that require external social networks to introduce new technological advances in their production in the global market.
The multinational enterprises should additionally understand the culture of the foreign countries they intend to introduce these products. For instance, KFC's’ management boards must understand the eating habits of chicken and chicken products from different regions before introducing their business in these regions. The third stage of strategic management is the leading process. The manager together with the management board should implement the leadership skills for the success of the entire process. Lastly, in strategic management controlling the entire system and process is another critical stage to effective strategic management. Strategic human resource management falls into this category. The managers and management team should have the experience in human resource allocation and control management skills. In the POCL framework, using the corporate strategy, the multinational corporations can compare the effects their products on the market regarding competition with their rival competitors (Saylor 2012, p.
Moreover, the multinational corporations exit on the basic principle of providing goods and services at a low price. These factors may include; labour conditions, environmental standards, the existing competition, the general world market, products health and safety issues, product standards and lastly, sponsorships. Through international trade relationships and experiences, these multinational corporations and global companies adopted international trade frameworks developed by international trade organisations. These frameworks involve agreements that exist among the corporations and the international market. These agreement frameworks contain the binding operational code of standards for these multinational corporations involved in these countries involved in the multinational trade ( Islam 2014, p. Excellent examples of the agreement frameworks for multinational corporations are Labour and Business in the Global Market (LBGM), and the International Confederation of Free Trade Unions (ICFTU).
The consumer awareness involves in various factors like their products’ health safety issues, workers’ rights, and responsibilities, workers health and security safety issues, working conditions, terms, and agreements of operation of these global corporations. Moreover, these multinational corporations ensure customer understanding on the principles of their entire operations, customer satisfaction, the company discloses information to their workers, and consumers on vital details transforming them, this informations may include their interest rates as seen in most of the global banking corporations such as the Barclays Bank. Otherwise, the multinational corporations ensure collective bargaining and agreement with their consumers as well as their competitors. In connection to the formation of the operational codes of standards for corporations, the involvements to these agreement frameworks by these corporations is by mutual acceptance to agree to the set rules and guidelines concerning the business in question.
The corporations must comply with the set rules and in most agreements in each enterprise must give their annual report on their operations. In connection with this, for the existence of successful management, the leader should possess certain management principles. The Managers and leaders of various organisations have several similar characteristics. These groups of people form the driving factor for the success to their success. According to Grace Hopper (1906-1992), an admiral in US Navy, she defined managers as people who make things happen to achieve the primary goal. For managers, they have subordinates who comply with their command while leaders have followers who will follow their leaders’ rules. Such information if leaked to the public may ruin the companies’ reputation and may even lead to their ban by international organisations.
Informational skills also require managers to have information dissemination skills. Lastly, informational skills need managers to be good spokespersons for the company. A good manager acts as the spokespersons of the company in the international organisations. He presents the companies grievance, requirements, and recommendations to both the global markets and worldwide organisations (Saylor 2012, p. The managers should also create and widen the company’s social network. Effects of Market Globalisation Over a few decades ago, there have been tremendous changes in the global market. These changes are pioneered by some operational and structural changes emerging in the market and the various industries. The general globalisation has caused most of these changes. The rise in new technologies and other rising trends have been associated with globalisation.
Due to the existence of these online stores, companies opt to regulate the standard prices for different products. As an effect of market globalisation through this technology products market prices have been standardised to almost equal for all similar products. Besides, some companies tend to sell their products at much lower prices compared to others. This causes the fluctuation in the consumer purchase patterns (Olaitan 2016, p 82). To resolve these problems, the affected corporations provide alternative or supplement services in the purchase of their products. China preferred coffee-free drinks and beverages. These global companies are also faced with competition from upcoming local corporations such as the Monster Energy Drink Company has influenced the purchase pattern for Coca-Cola drinks The BRIC nations have tremendously influenced the global markets.
These countries have created tension between countries with a large number of multinational corporations. Recently, China purchased UNOCAL, a relatively small oil company based in the United States of America (Stiglitz 2007, p. The purchase caused anxiety to the US government over the purchase. These industries utilise the local resources to develop similar products offered by the multinational corporations in their countries. The local industries offer these products and services at lower prices outsmarting the multinational corporation in the market. This increases the competition in the markets as to Levitt’s view on factors to the fall of these global and multinational corporations (Levitt 1983, p. Additionally, the local government of these states poses higher taxation to products from these multinational corporations. Political ideologies in these countries some oppose the multinational corporations.
For example, McDonald in 2006 adopted the branding technology in the uniform packaging of the products (Kroc 2016, p. These brands contain appealing information about the product. The brand attracts customers both locally and globally. Another problem arising from the increasing market globalisation facing these multinational corporations is the ever-increasing complex and fragile business environments (Adekola and Sergi 2007, p. In this era of technological advances, information security has become a critical issue in this technology age. The companies have also developed rules and precaution to prevent internal security breaches. Furthermore, market globalisation has led to short time frames decision making for these multinational enterprises. More sophisticated and complex products are manufactured to replace the existing products in the market (Adekola and Sergi 2007, p.
Excellent examples of products associated with rapid technological changes are electronic gadgets such as mobile phones. Examples of mobile phone companies faced with this problem are Samsung, Techno, Nokia, and Apple mobile industries. Additionally, the rapidly changing industries and markets have also characterised market globalisation (Curwen, Haucap, and Preissl. 2009, p. Due to falling trade barriers, the trade markets have been redefined globally. Other factors such as advanced technological development have been blurring lines between some corporations involved in activities such as telecommunication and entertainment. The existing stiff competition in the global market has led to continuous innovations adjusting these changes rapidly to a higher scale. For example, in 2000 while the Brazilian economy faced slow economic growth, they invested in other institutional investors to help them with implementing new corporate governance strategies to boost their economic growth rate.
Public views on products from global corporations based on the health related issues have raised concerns and reduced the purchase of their products. For example, Coca Cola has been facing health issues in their products. Lastly, global marketisation has led to rolling out of emerging new businesses into multiple markets. This a common activity seen in most multinational corporations affected the early stages of globalisation (Parker 2005, pg. Similar products from the different multinational and global corporations, despite their differences in costs in production, have been standardised to certain price range. Managing these multinational and global corporations have been highly affected by the changing global markets. The global corporations have introduced the product branding marketing strategy resulting from market globalisation. The management boards of these multinational and global corporations must be keen to detect, analyse the emerging trends in the global market.
The change has made these multinational and global enterprises to be watchful and prepare for the rising risks in the global market. Multinational and global corporations have been struggling to outsmart each other in the global market. For example, Coca-Cola and Pepsi Cola have been struggling to outsmart each other in the global economy. Due to global marketisation, international unions and organisations have developed standards regulating the business activities in all aspects in all the multinational corporations. The is done to protect and avoid conflicts between multinational corporations and the individual multinational corporations. In conclusion, basing on Levitt’s view on global strategy, operations in most multinational corporations and global corporations have dramatically changed. and Sergi, B. Global Business Management: ACross-cultural perspective.
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