Management in MNCs

Management Principles in MNCs

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The reliance on management Principles in multinational corporations (MNC) is today more pervasive than ever given the rapid pace of globalization and the need to bring diverse cultures together for attaining common goals. The reliance on the six management principles of vision, people-driven values, robust communication, sense of urgency, execution and extreme customer focus all combine to create a strong platform for future growth of an MNC. Given the pace of innovation that continues to accelerate, these six management principles are essential for the effective growth of any MNC over time (Cveykus, Carter, 2006)

The intent of this analysis is to define the role of each of these six management principles in an MNC, defining which is the most critical to its success.

Assessing Management Principles in MNCs

The six management principles of vision, people, robust communication, sense of urgency, execution and extreme customer focus are the foundation of any effective MNC structure and performance. Of these, vision is critical for unifying the entire organization, across cultural boundaries, to a common and shared series of objectives and goals (Fujimoto, Hartel, 2010). The people aspect of the six management principles is what is the most difficult to manage and lead over time, as resistance to change is often the most common reason that initiatives fail. Communication across the many cultures must take into account large variations in how each , what its core values are from a task ownership standpoint vary, and how the perception of time itself is different. All of these factors influence execution of a given series of strategies, so from the perspective of getting things done, the first five management principles are tightly integrated with each other (Underdown, 2010). Finally, all lasting success within an MNC relies on an extreme customer focus, which is the sixth management principle. All of these elements together form a system of continued improvement and alignment to customer needs while taking into account the innate constraints and limitations of any organization over time.

The Catalysts of Cultural Agility in the Six Management Principles

For any MNC to be resilient in the face of significant change globally, the vision must be a galvanizing force that transcends any cultural differences to create a unified mission and set of objectives. A corporate vision however will need to be moderated by the cultural values and norms of the specific countries the MNC operates in. This sensitivity to cultural differences is crucial for any organization to achieve its global goals. Inherent in the vision of an MNC is the need for creating value not just for shareholders but also for the countries and cultures they operate in (Kim, 2011). Without this , no MNC can hope to be profitable across all geographies for example. It is also now common for many Asian nations including India to require MNCs to provide a thorough impact analysis of how their operations will enhance the quality of life in the country and bring wealth to the surrounding communities. As a result, the vision of an MNC must encompass more than just its own operations and the intricacies of creating its own supply chain. Instead the focus needs to be on how to do well by doing good, as is often said about (CSR) programs (Kim, 2011). The vision of MNCs must therefore encompass the entire community and enrich it by its presence if it is to succeed.

People, communication and a sense of urgency can only be made effective if there is a compelling, challenging vision. The MNCs who are excelling at not just their primary business objectives but also the attainment of CSR objectives are the ones who create value both in the products and services they deliver and in helping communities to get to their goals too (Kim, 2011). As the world is much more transparent due to social networks and the Internet, the need for MNCs to seek out opportunities to have their vision unify people and communication with a sense of urgency has never been greater. In that sense, the role of any MNC is to devise a vision so compelling that is employees can easily see their role in it, and also provide for the corresponding growth of the communities they operate in as well. CSR initiatives are not a major requirement in many American cities and state or local governments. Yet in 3rd world nations the needs are so great and the budgets of nations themselves so small, MNCs have a great opportunity to create a strong, loyal brand by aligning their vision, people, communication and sense of urgency to a nations’ needs (Kim, 2011).

Execution and Customer Focus

The final two management principles of execution and customer focus also combine to propel MNCs to their objectives, despite the challenges and high level of economic turbulence globally today. These are the two most critical aspects of any MNC growth strategy as they combine to keep the entire cycle of management moving forward. Of these two, customer focus is by far the most important (Fujimoto, Hartel, 2010). The customer focus of an MNC will serve to validate and strengthen the vision of the company over time as well. Customer focus also can drive the development of more effective metrics of performance as well, as MNCs must stay accountable to the delivering of experiences and delighting customers to survive. All aspects of management as it relates to MNCs must revolve around the customer in order to also stay relevant. With this galvanizing force of customer centricity, even the CSR programs become more valuable and focus on results as well (Kim, 2011). Vision, employees, communication, sense of urgency, and execution also all stay relevant over time when customer focus permeates the culture of an organization as well. The ability of any MNC management team to stay credible is based on the knowledge of customers as well (Underdown, 2010)


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