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Issues facing today’s multinational organizations Essay

The complexity of an organization’s life is rapidly increasing rather than decreasing, reflecting the conflicting demands posed by multiple stakeholders. Today, the different shareholders – employees, unions, customers, collaborating firms, government agencies, the local community and the general public interact with each other as active stakeholders in the organization, each imposing its own demands on the management. Surviving and succeeding in today’s global competitive business environment is obviously a challenging task.

International competition among nation states and corporate firms to dominate the global market have created a struggle for survival, in which constant innovation and continuous improvement play a major role. Cross-cultural working, managing changes, technological advantages give the much needed edge to set organizations apart. Developments in recent years have reinforced the view that we are moving from a world in which we determined our destination to one in which we must learn to navigate a path between myriad future possibilities (Stickland,1998). Given the rationale for business development or even survival, it goes without saying that the ethics involved would surely be compromised.

Most organizations of today and probably of the future face critical labor shortages. Managers have to realize that the era of employer’s market or buyer’s market is no

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longer out there. The age of the Disposable Employee corresponding to the late 1980s and the mid 1990s has no remnant traces today. The new millennium has seen the emergence of the Indispensable Employee. The growth in economy surging ahead of the population growth resulted in labor shortages. The ‘skills gap’ or the gap in the expertise required for a task and that actually available in the workforce is also a cause of concern.

Managers increasingly need to understand what is required to manage the present day workforce, given the changing relationship between employer and employee. To effectively manage today’s workforce, they must determine and analyze factors including whether the labor shortage is going to be a permanent one; how to recruit and retain a diverse workforce and the way the workforce has changed. Employee turnover, which is the transit of people into and out of active employment, is a crucial issue which today’s organization have to face.

Turnover costs include both, the costs associated with the person leaving and those associated with the new recruit. Another important issue facing present day organizations, including those operating on a global level is managing change. Changes are anticipated to move the organization to a future different state, in line with its purpose and mission. The factors necessary for changes are more prevalent and influential today than ever before. To achieve change, it must primarily be recognized that change is desirable and feasible. People must then be made to realize that change is required (Carnall, 1995).

The growth and expansion towards globalization are increasingly led and dominated by corporate organizations. A casual bird’s view of corporations, their functioning and their contribution to regional economy looks encouraging for all; however under that wonderful, lies the hidden harsh reality of corporations. Perhaps one of the lesser known facts about corporations, in a global context, is that the economies of many organizations is much better than that of several countries!.

It should be noted here that about 51 corporations worldwide have such a huge economy that they are qualified to rank among the 100 of the largest economies in the world. Advancements in globalization aided by technology development have accelerated the growth of corporations. Corporations grow larger and multinational at an unprecedented pace, carrying with them their influence and interests. Corporations more often ignore issues, like environment, ethics and even law in their efforts to make profits. As most media companies are either influenced or owned by corporations, their propaganda is highly successful and resistance to their decisions and actions are easily scuttled.

Human rights violation is a common breach by organizations. When free trade replaced  cold war, several issues gradually cropped up like increase in rich–poor divide which had rich people becoming richer and poor becoming poorer. Human rights abuses, once carried out by anti-people governments is now perhaps continued by corporations, in a veiled way. Big companies most often strive to get favorable conditions by manipulating trade pacts and agreements to get larger profits using cheap labor. Paying the work force is perhaps the biggest factor in their productions costs for the corporations.

Companies obviously look to position themselves wherever cheap labor is available. International agreements generally incorporate an atmosphere of increasingly cheap labor. Whenever a nation takes steps to improve their worker’s conditions, which obviously mean more costs to companies, the companies pack up. They hunt for places with cheap labor and lesser restrictions. Improving the working conditions of its labor force is not in the interests of the corporations. The corporations lust for profits is reflected in their functioning and involvement in pharmaceutical and medical fields.

Although several developing countries have many tropical diseases affecting millions of people, corporations are more focused on addressing baldness, impotency and beauty enhancement. Thus, despite a large market, companies are not interested in addressing such markets because the people there are poor who wont be able to afford such medications. Their profit attitude is evident in the fact that the pharmaceutical industry had advocated to the U.S government to impose sanctions on the South African companies producing cheaper and more generic AIDS drugs.

Multinational corporations exert considerable influence in law making bodies of most countries. Such corporations have very close links to even world bodies like the World Trade Organizations (WTO). Such links ensure that their interests are taken care of irrespective of public welfare and public concern. The failure to implement strict gun control laws, stricter regulation of alcohol, cigarette advertisement and marketing etc., in many countries can be attributed to such unholy connections. The corporations need to act ethically and hold public interests above profits.

Multinational organizations indeed have considerable power and influences, not only in issues involving business, but also on other issues facing today’s globe. They need to realize that unless they act proactively in the general interests of the people, they are making this globe a very difficult place to live in, with a future uncertain.


Stickland, F.; (1998) The Dynamics of Change. Publisher: Routledge, London

Carnall, C., (1995).Managing Change in Organizations 2nd edition. Publisher: Prentice Hall Year of publication

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