Corporate Environment (Essay Sample)

Multinational Corporate Environment
Institution
Student
Instructor
Date Liberalization of cross-border Movement of Good, Services and resource
Liberalization of movement of goods, services and resources is one of the fundamental aspects of international trade as well as international relations. In the modern society, both developed and developing countries have been liberalizing the cross-border movement of resources, commodities and services. Governments that believe and practice liberalization always get themselves having good relationship with the international community while spurring local economic growth. Therefore liberalization is an important aspect of international trade.
The trade liberalization is part of the issue that determines the consequences of economic growth of the movement of capital, labor, goods and services across the borders freely. Labor market liberalization in both developed and industrialized countries greatly benefits the developed nations more than any other trade policy. The International Monetary Fund (IMF) observed that the low international trade level makes various countries to be more volatile to debts. It insisted that the high debt levels in low developed countries are due to low revenue on export (Spanu, 2003). Therefore, both developed and industrialized countries practice cross-border liberalization to enhance local economic growth. While developed countries liberalize trade to reduce their debt crisis by increasing their export revenues.
The governments enhance trades in goods liberalization to reduce poverty. According to World Trade Organization (WTO) (2015), liberalization in trades in goods has been the main contributor of poverty alleviation in history of humankind. Governments also liberalize services movements to foster innovation and technology transfer. Countries that practice service liberalization have developed innovation in products and process. Technology enhances Foreign Direct Investment (FDI). FDI brings new technologies that distribute into economy in different ways. Local employees learn new skills and spread them. Domestic firms apply new techniques as well (WTO, 2015).
The in-person brief visits like the business trip enhance trade between the two counties. The capital generated from such a visit or meeting depict the reason the demand for air ticket for the business class for traveling in and out of the U.S.A is highly linked to the U.S. export of goods especially manufactured goods. The in-person visits and meetings are essential in promoting the export of goods that are meant for specific customers or goods meant to facilitate a given research and development (Anér, 2013). Belenkiy & Riker (2012) observed that in U.S., there is low cost air travel out of the U.S. as well as flexed requirements to obtain visa into the U.S. Both promote U.S. trade particularly the exports (Belenkiy & Riker, 2012). Hence governments promote cross-border movement of people for trade purposes to promote the local manufactured commodities and services.
The companies in a given country need to get access to necessary human skills. This makes such companies to stay competitive in the global and/or local market. According to Anér, (2013), when there is inadequate supply of skilled labor required on national labor market, the companies will be compelled to either employ or contract labor from abroad. The companies can also relocate, close, cut down or stop expanding their expansion. When a company decides to relocate, its decisions will be guided by availability of competent labor force, the speed and flexibility of migration process of such labor force for the international hire (Anér, 2013).
Governments tend to enhance cross-border import of labor to attract foreign investors into their countries to tap on the available competent human resource they have. This will in long run create employment to their citizens as well as generate revenue to the government through tax. All this leads to economic growth. Governments that allows for export of its labor might suffer brain drain but its labor force exported will also add value to the Gross National Product. This is because the citizen that move abroad to look for job will likely to bring back home the resources they obtain abroad.
The approaches international managers understand when instituting change in the international arena
The international managers have to be intelligent and demonstrate good skills than the traditional managers in the national level. These managers need to be multi lingual; have knowledge about the current global issues and theories of management, psychology, philosophy and how they can be applied practically and; understand and be sensitive to different cultures. Acquiring such skills is needed for an international manager to be successful. This is because global market is likely to expand for the uncertain and unpredictable future. Therefore managers should use appropriate approaches in initiating changes to realize the unpredictable future smoothly.
Basically there are three approaches for the international managers they need to understand and apply. These are polycentric, ethnocentric, and geocentric. Each approach has its merits and demerits. None of them can be fully successful. Therefore, managers should understand the strengths and weaknesses of each approach and problems involved in applying them (Sharp, Undated).
Polycentric approach is the method where international managers opt to employ the local people as the main workforce and apply to the Human Resource policies of the host nation. The employees of the host nation are hired and promoted. The approach involves recruiting and training of the employees at a low cost with little problem of communication barrier and adjustments because all employees come from the same region speaking at least one similar official language (Tiwari, 2013). Polycentrism is the attitude that various countries have different cultures in which the foreigners cannot easily understand and need to be left for the locals if their work is profitable. Once polycentrism is implemented it has obstacles. The problem of control and coordination will arise. The management will lose control of the international organization mainly due to the fact that the organization will be forced to independently operate from its subsidiaries since it tends to adopt to host country policies. The company’s products are marketed country-by-country basis while market research is carried out independently (Perlmutter & Heenan, 2000). The approach is best applied in situations where there is much comfort in allowing the host country to make major decisions.
Ethnocentric is the approach in which the international company uses the human resource practices of the main parent ...