19. Multinationals

A multinational corporation  is a corporation enterprise that manages production or delivers services in more than one country. Multinational is a corporation that has its management headquarters in one country, known as the home country, and operates in several other countries, known as host countries. An example of multinational company is Loreal, the French cosmetic giant . This company uses different strategies – Maybelline is positioned as a mass-market name available in supermarkets and department stores. Loreal paris is on offer department stores only, while Lancome is sold in just the most exclusive outlets. Multinations can benefit from emerging markets like China. The government’s more open outlook , combined with a growing urban population , have combined to produce a consumer base with disposable income and a taste for modern, western goods. Western corporations have been expanding throughout China. Beijing has the distinction of being the site of the largest Kentucky Fried Chicken restaurant in the world.McDonald’s, the rival fast-food chain, operates more than 235 outlets in 41 Chinese cities and hospitality group Hyatt opened the third tallest in the world in Shanghai. (p.39 PROFILE) Some multinational corporations are very big, with revenues that exceed some countries' gross domestic product (GDP). Multinational corporations can have a powerful influence in local economies, and even the world economy. They play an important role in international relations and globalization. Research always shows that globalization is a best way of fighting poverty. As a rule, poorer countries benefit when they open up to foreign trade and encourage foreign investment. In the other hand, take commodities , raw materials like rubber or coffee. Most of the time , western firms dictate prices and take advantage of producing countries. The producers rarely see the larger part of the value added. But rich countries should be worried. It’s fine to export manufacturing if you keep the creative knowledge in your own country. That is where your comparative advantage lies. But once this know-how is exported as well, then the advantage is lost.

20. Questions of company culture

We can divide culture in the company on 4 main groups:

• The family culture (highly personal with close face-to-face relationships, but also hierarchical. The leader is the caring father)

• The Eiffel Tower culture (has a steep hierarchy, broad at the base and narrow at the top. Impersonal. Authority comes from a person’s role and position in the hierarchy)

• The guided missile culture (egalitarian and oriented to tasks typically undertaken by teams or project groups. Impersonal)

• The incubator culture( the organization serves as an incubator for self-expression and self-fulfilment. Personal and egalitarian with almost no structure at all. Often a strong emotional commitment to the work)

Organizations should strive for what is considered a "healthy" organizational culture in order to increase productivity, growth, efficiency and reduce counterproductive behavior and turnover of employees. A variety of characteristics describe a healthy culture, including: Acceptance and appreciation for diversity; Regard for and fair treatment of each employee as well as respect for each employee’s contribution to the company; Employee pride and enthusiasm for the organization and the work performed; Equal opportunity for each employee to realize their full potential within the company; Strong communication with all employees regarding policies and company issues; Strong company leaders with a strong sense of direction and purpose

Organizational culture is the collective behaviour of people that are part of an organization, it is also formed by the organization values, visions, norms, working language, systems, and symbols, it includes beliefs and habits. It is also the pattern of such collective behaviours and assumptions that are taught to new organizational members as a way of perceiving, and even thinking and feeling. Organizational culture affect the way people and groups interact with each other, with clients, and with stakeholders.