MULTINATIONAL COMPANY FROM EMERGING MARKETS
MULTINATIONAL COMPANY FROM EMERGING MARKETS
MULTINATIONAL COMPANY FROM EMERGING MARKETS
An organization is bound to encounter some opprtunities and threats in its globalisation course and expansion in the new market.Internationalization and globalization is increasingly becoming a common trend in organisation and companies globally.The organisation course to spread its operation to the foreign markets is claimed to be instigated by need to increase the companys or organisation profit margin.However organisation globalisation course has proven to be a quite sensitive issue for organisations especially on staffing. Globalisation course has also led to more complicated issue for an oranisation especially on management structures. Organisation management in the global environment has bore for challenges which these organisations have been forced to deal with other that the dificulty in management it has also proven to be time-consuming for these organizations.This might require looking for employees best fit for to work for the organization, ensuring that the organisation abide by the laws in the new market and the culture in the new market relate to the organizations culture in order for them to enjoy smooth organization management. This paper, therefore, highlights on the opportunities and threats that globalisation presents for decision makers in a multinational cooperation.
Lenovo Company was first established in 1984, over the years it has grown to become a pacesetter brand in international technology equipment manufacturing. This emerging market MNC started off as a high-tech start-up in Beijing that deals with manufacturing of Personal Computers and other technological gadgets however, it has now grown to be a global cooperation that even incubates entrepreneurs for the whole society. The internet age has also contributed to Lenovo Company growth that has forged it into a real Networked emerging market MNC. The internet age has contributed to the Company’s manufacture of cutting edge quality Personal Computers which have received a great reception in the global market. In the recent years Lenovo Company has set it sight on expanding to global markets more so in the South American market. However the company is cautious on taking up this expansion step due to the perception of the public in these countries entailing the products manufactured in China which constantly raises questions on their quality levels.
Lenovo being an MNC from an emerging market like china faces significant threats. The management of Lenovo Company is faced with a foremost threat in Organising and staffing due to globalization.This is one of the constant challenges facing most MNCs from emerging markets. Most of the organisations which have expanded their operation into the global market have reported this problem. This problem is blamed on the lack of a direct touch and proper task allocation of tasks to employees. This threat was significantly experienced in its penetration in to the Australian market in the year 1999. Lenovo Company particulary experienced these dificulties in its effort to reciprocating its local productivity back in Beijin, China in to this new maarkets. Nguyen (2011) argues that The most significant differences between the local market and the new markets for Lenovo Company is the hindrance to the organizations. He claims that this has caused this Company to exerence some manegerial and decision making difficulties in its course to ventrue into the new markets. In particular the companys efforts to build its reputation in its new market have been hampered by a lot of challenges which has been a foctr that has slowed the success of this particular course. The other common problem that Lenovo Company has faced in its penetration course into a new market is cultural barriers; this particular challenge has slowed its smooth transition of operation in these new marets.
For any Lenovo Company’s workforce to be able to withhold the adaptation to the changing environment in the course of the company’s penetration into the Australian market, a lot of time and finances needed to be availed by the company. However all investements are not a gurantee pf success as evident in Lenovo penetration into the Australian market.However, Lenovo efforts to overcome this problem were characterised by the use of expatriates in its workforce for its overseas market.On the other hand this option will also cost the company since it will have to invest finaces in training and time on recruitment while on the other hand instant success is not guranteed (Kumar & Pattnaik 2014). Other relateable significant challenges that Lenovo Company management is bound to face in its entry in the new markets include; compliance with the internationals laws, training, and development and cultural diversity (Kadish, n.d.).
Globalisation also poses the threat of contrasting cultures in management. This was experience in Lenovo Company penetration in to the European market early 1996. The contrasting European culture from that of the Chinese the company place of origin sowed down the company’s penetration course due to contrasting cultural practices and values which directly impacted the company. Culture is currently a major issue especially due to the current growth and development taking part in the business environment. In this case contacts are also a significant issue in this environment especially with the organisation goal towards globalisation. Organisations and companies globally are increasingly embracing intercultural communication which has resulted to a number of unforeseen problems. Lenovo Company’s penetration into new markets from an emerging economy has faced intercultural communication as the most significant problem. This particular challenge has also resulted to language barrier problem to the employees new to either the company’s culture or that on the new country where the company has penetrated into (Gao & Sarraf 2009).In this case, communication between two individuals from different cultures might also result to foreseen problems (Merchant 2008). This might be as of different rules, laws, environment or way of life. In this particular communication, tension is easily fostered which in the ends leads to intercultural miscommunication.
Contrasting cultural practices problems to Lenovo Company management can best be shown in the following scenario where China and European culture is compared. In this case in European market where Lenovo Company in the late 1990’s the company faced a lot of constraints as a result of contrasting culture.
Divergently, globalization presents opportunities to MNCs from emerging markets, one opportunity presented to Lenovo Company decision makers in the course to entry in the Taiwan market in the year 1996 is innovative work culture. Lenovo Company falls into the high-tech equipment manufacturing this means that there is a high possibility of company’s management to improve. Lenovo Company’s innovative culture in the Taiwan market ensures technology evolution is embraced by the company which ensures a maturity and development of the company’s staffs (Pillania & Fetscherin 2009). Digital advertising is another benefit that the company will benefit from which is fostered by innovative culture taken up by the company management.
Inventive work culture is also likely to foster Lenovo Company decision makers through easing employee supervision and creation of a fostering relationship with the employees. This will foster the creation a good relationship between different levels of the company’s workforce which ensures that there is ease in management in the company. Innovative work boosts unity and teamwork within the company (Singh 2010). Through innovative culture the company decision makers will foster physical, cognitive and emotional connection of the company’s workforce. In line with this the Innovative culture will also enhance employees dedicated, enthusiasm, and desire in the firm (Canegrati 2009).
Innovative culture in the company’s penetration in the Finnish market in the year 2001 also ensured that Lenovo Company decision makers benefit from promotion of a strong work culture within the company and accelerated global expansion. This is claimed to be the most crucial factors behind the company’s continued success in its entry in a new market. Through a strong work culture fostered by Innovative culture the company’s decision makers will benefit from effective and efficient workforce. This embedded culture will also exerted a considerable amount of influence on company’s workforce behaviour, therefore, leading to increment in performance. A strong work culture fostered by innovative culture will promote Lenovo Company creativity and diversity through creation of user friendly quality products that will fostered the employees-customer relationship (Xia, Qiu & Zafar 2007).
The most significant lesson to be taken up by international business managers regarding
Lenovo Company penetration into the Australian market is that organizations are increasingly becoming globalized thanks to innovation and technology (Oakland and Tanner 2007). In this case, huge responsibilities have been put on organization managers regarding the coordination of an organization operation and disregarding the distance problem.
Additionally, international managers have learnt from Lenovo Company’s penetration into the European market in the early 1990’s that organisation culture is an important issue for an organisation globalisation course. Through Lenovo Company’s entry into the European market international business managers have learnt the magnitude of company culture especially its impact on job values and employee engagement. ‘Employer of choice’ is another issue that international business managers have learnt in this particular issue the have acknowledged the importance of talent in an organisation workforce.(Pillania & Fetscherin 2009).
International business manager have also learnt on the importance of workforce diversity and how it is a sensitive issue. In this case international business managers are therefore given the responsibility of finding an organizations workforce that is best fit for a particular company.
Another lesson that can be learnt from the expansion of an emerging market MNC like Lenovo Company is that the contemporary business environment in the global market is experiencing frequent changes due to the evolution of technology and an invention. In Lenovo Company penetration into the American in the early 1990’s the company experienced these changes. This has therefore led to the increase of goods and services (Merchant, 2008). International business managers have also learnt that industrial revolution and globalization is the main instigator of these challenges. They have also learnt that the transformation in management is mostly caused by managerial trends (Machado and Ricardo, 2014).
Similarly, international business managers have learnt that the contemporary business environment is faced with increasing pace of change. This can be drawn from Lenovo Company’s penetration into the Taiwan market in the year 2001 Due to globalization the issue of change is becoming quite essential especially due to variety of new products and services in the market. Organization or business managers in this case have found these changes to be quite difficult to keep up with. Emerging markets like china have had a global dominance in developing countries due to MNCs like Lenovo Company. On the other hand, the other thing learnt by international business managers is the increasing difference in the consumer taste and preferences in the global market. Rossi (2012) claims it is too risky for organizations to venture into a new which is untested due to the high likelihood of making a loss and the organization operation failing.
International business managers have also learnt that a lot of emphasis has been placed on globalization and its influence on the organization performance and management. This particular lesson can be drawn from Lenovo Company Lenovo Company penetration into the American in the early 1990’s.They also learnt that economic competitiveness is the main cause behind these challenges. On the other hand they also learnt that these challenges also cause by technological development, change in market trend and inventions and technological advancement. (Kotabe and Kothari, 2016). Lenovo Company global managers and decision makers have learnt that the rapid changes which they are currently experiencing in the global business environment can be dealt with only if they are embraced. Many organizations have tried to be rigid to change an issue which has led to more challenges to these organizations (Kumar and Pattnaik, 2014). In line with this it is reported that the organizations which are more willing to embrace these challenges end up experiencing much belter operations transition in these new markets (Filippov, n.d.). These managers, should, therefore, ensure that they embrace these changes in the new markets in order to ensure smooth transition of the company’s operation in its new markets.
Its evident multinationals more so from emerging markets are now concentrating on the global modern-day business setting. This has caused rapid technological development causing revolution in operation in various industries. The business and organization management has also changed due to the effect of these changes at a global scale. Lenovo Company in particular has expanded its operation to multiple countries globally and being ranked number 1 in 2005 is evident enough. This has been attributed to the company’s increased goals target and profit and revenue margin. In its entry course into the market the company faced some threats and opportunities which have helped shape management of upcoming enterprises that seek to expand globally. However, this organization management has been forced to embrace these changes in order to ensure its transition of operation in these new markets is smooth. Organization managers have also to use much improved ways in implementing these changes especially in the global markets. On the other hand multinational companies in new markets are facing a lot of competition due to the size of the market; the companies are embracing innovation culture in order to have a competitive advantage. In my opinion, MNCs from emerging marketing are bring about a revolution in international business management where MNCs from developed countries dominate exponentially.
Canegrati, T. 2009. Global Account Management for Sales Organization in Multinational Companies. Symphonya. Emerging Issues in Management, 1.
Chen, R. 2008. The Cost of Doing Business Abroad in Emerging Markets and the Role of MNC Parent Companies. Multinational Business Review, 163, pp.23-40.
Filippov, S. n.d.. Russia’s Emerging Multinational Companies Amidst the Global Economic Crisis. SSRN Electronic Journal.
Gao, T. and Sarraf, T. 2009. What Causes Multinational Companies to Increase Resource Commitments During Financial Crises in Emerging Markets?. Multinational Business Review, 172, pp.13-36.
Kadish, P. n.d.. Are Large Multinational Companies Undervalued? Emerging Markets Perspective. SSRN Electronic Journal.
Kim Nguyen, T. 2011. The Significance and Performance of Listed Property Companies in Asian Developed and Emerging Markets. Pacific Rim Property Research Journal, 171, pp.24-47.
Kotabe, M. and Kothari, T. 2016. Emerging market multinational companies’ evolutionary paths to building a competitive advantage from emerging markets to developed countries. Journal of World Business.
Kumar, V. and Pattnaik, C. 2014. Emerging market firms in the global economy. Bingley, U.K.: Emerald.
Machado, M. and Ricardo, A. 2014. Global Sourcing Management of Multinational Companies in Emerging Markets: The Case of Brazilian Subsidiaries. Iberoamerican Journal of Industrial Engineering, 611, pp.179-201.
Merchant, H. 2008. International Joint Venture Configurations in Big Emerging Markets. Multinational Business Review, 163, pp.93-119.
Pillania, R. and Fetscherin, M. 2009. The State of Research on Multinationals and Emerging Markets. Multinational Business Review, 172, pp.1-12.
Rossi Júnior, J. 2012. Understanding Brazilian companies’ foreign exchange exposure. Emerging Markets Review, 133, pp.352-365.
Singh, S. 2010. Handbook of business practices and growth in emerging markets. Hackensack, NJ: World Scientific.
Wang, M., Ren, R., Hu, G., Lu, H. and Alon, I. 2011. Social burden, social venture or social responsibility? A reflection on CSR in China and CSR strategy suggestions for multinational companies in China. International Journal of Business and Emerging Markets, 34, p.339.
Xia, Y., Qiu, Y. and Zafar, A. 2007. The Impact of Firm Resources on Subsidiary’s Competitiveness in Emerging Markets: An Empirical Study of Singaporean SMEs’ Performance in China. Multinational Business Review, 152, pp.13-40.