How Multi National Companies Operate In Different Countries Commerce Essay

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This task is built around cultural understanding and strategies for globalization. It embraces how multi-national companies operate in different countries where they are present and how the cultural differences that exist amongst the host countries and between the companies and the host companies are managed to ensure the companies maintain a standard term of operation. The companies in focus include:

Canon Incorporation




Ted Levitt's (1983) in the HBR article "The Globalization of Markets", the process of globalization has made effect as companies increase and trade across different borders.  As globalization has the stuff to improve on the state of all parties involved, it often has unwell effects.  Some groups have called for the redirection of the world economy.  Effective international rules are required to handle the complexities of financial flows, trade laws, energy supply and political relationships. As companies cater for local differences, they must also use potential global scale economies in order to succeed in the present day competition. To achieve both objectives requires advanced strategies, methods, and technologies.


A virtual business uses electronic means to transact business as against a simple way that uses face-to-face transactions with physical documents and physical currency or credit to achieving the business target.


The objective of the task includes:

To select three multinational and international organizations.

Detailed investigation about the three companies' cultural understanding.

A report on the value of the analyzed cultural understanding that were developed.







The need to know cultural differences is clearly known today. Many human environments are multicultural, and many people and organizations get across geographic and cultural boundaries. Although it is evident for people to see themselves as different (Reed 1986, 1) and to be somewhat parochial, parochialism is not a good strategy for the future. According to Adler (1997, 10) "parochialism means viewing the world solely through one's own eyes and perspective. A person with a parochial perspective neither recognizes other people's different ways of living and working nor appreciates that such differences have serious consequences."

Today we live in a world that is somehow smaller than it was. New communication system has made it easier to a certain extent to cross previous boundaries and communicate across time and space. However, the new technology system does not necessarily make it easier to collaborate and communicate inter-culturally. To effectively collaborate and communicate we have to share meanings. This often requires that we understand cultural differences and share cultural information.

This is what Canon Incorporation, Samsung and Philip has considered at its inception when it was planning to go global. Globalisation requires putting in place all required mechanisms which would be necessary for effective communication and smooth running of the business.


According to Adler (1997), Cross cultural differences do affect communication relationships. In the business world this occurs every time, where people from different cultures mix and are expected to perform and take decisions. Cross cultural training aims to develop awareness between people where same/an accepted way of life does not exist in order to promote distinct systems of communication and good relationships.

Therefore, the afore-mentioned companies adopted strategies to achieve the value placed on cultural understanding. This they did by training members of staff in order to keep them abreast of cultural values.

According to Adler (1997) to cross cultural training there are lots of benefits to be gained by both members of staff and businesses. These include:

People Learn About others: Through cross cultural education and knowledge, people get to know more about there culture, existing ideas that they may otherwise not have doubted.

Strengthens Confidence: Cross cultural knowledge promotes self-confidence in individuals and teams members through enabling them with a sense of authority over previously difficult challenges in the place of work.

Reduce Barriers: We all have certain barriers which make our understanding of other people somehow difficult. Cross cultural training makes all other cultures easy to understand. Through learning about other cultures, barriers are slowly thrown away and so allowing for more open relationships and dialogue.

Build Trust: When people's barriers are reduced, mutual understanding is strengthened, and trust gives room for mutual living.

Motivate: One of the results of cross cultural training is that people begin to see their roles within the work environment more clearly. Through self-analysis and diagnosis people begin to recognise areas in which they need to improve and become motivated to develop and progress.

Develop Interpersonal Skills: Through cross cultural training participants develop great 'people skills' that can be applied in all walks of life. By learning about the influence of culture, i.e. the hidden factors upon people's behaviours, those who undertake cross cultural training begin to deal with people with a sensitivity and understanding that may have previously been lacking.


Professor Stiglitz in his book on Globalization explains 'it is often described as an inevitable force that, depending on your perspective, will either benefit or destroy the planet. Much of the controversy surrounding globalization-such as trade agreements, currency reserves, and intellectual property rights-involve issues that may be either unfamiliar or obscure'. Many may find these topics difficult to grasp.

Imaginative and bold new prescription for global equality, one which he argues will result in a fairer world. He is concerned that globalization has not benefited as many people as it could and should have. Accordingly, he outlines what needs to be done to make this process work for the poor and for developing countries. He tells us why changes are needed in government policies, in world economic institutions, in the rules of the game, and in the general mindsets of the public at large.

Professor Stiglitz knows that development is complex. He has seen how the "one size fits all" solution does not work for everyone. Yet, he also understands that there are common principles, which, if suitably adapted, will be effective in helping those in need.

Virtual Organizations

A key feature of virtual organizations relates with the high level of informal communication. Due to rules not been active as per procedures, clear reporting relationships and norms more extensive informal communication is required (Monge & Contractor, in press). Formal communication is non-interactive, impersonal, and involves use of media such as reports and structured meetings. It is a function of the formal hierarchy embedded in the system. Formal, imposed, or mandated networks (Aldrich, 1976) represent the legitimate authority of the organization reflected in the organizational chart.

By contrast, informal communication is personal, peer oriented, and interactive; it involves media such as face-to-face meetings and email. Informal interaction determines a network's structure that emerges as the members perform the organizational tasks (emergent structure).


He made lot of useful contributions to the economy which has to do with customer relations, interest rates and the economic value.

Stiglitz in globalization and its discontent express his opinion for different economic policies on the issues that his knowledge of theoretical work has raised over time. This include what happens when people does not have information that holds on the decisions they have to make, or when markets for serious kinds of transactions are insufficient or don't exist. "Stiglitz says the outcome of each of these absence left on their own do not necessarily give the true outcomes expected of them.

As a result, Stiglitz expresses that governments can improve the benefit through adequate concentration. He tried to explain what government can do to improve on the outcomes and expectations of the populace.

Stiglitz also expresses his mind that the IMF has caused a great deal of defect through the economic policies it has prescribed asking countries to follow so as to to qualify for IMF loans, or for loans from banks and other private-sector lenders that look to the IMF to indicate whether a prospective borrower is credit worthwhile.







From the Canon incorporation web site, it was founded on August 10, 1937 with headquarters at 30-2, Shimomaruko 3-chome, Ohta-ku, Tokyo 146-8501, and Japan.

The chairman and CEO of the Canon incorporation is Fujio Mitarai. Key people in Canon incorporation include Fujio Mitarai the Chairman and CEO, and Tsuneji Uchida, President and COO of Canon Incorporation.


Canon incorporation website shows its vision as 'Simple advanced solutions freeing people to live their dreams and lead enriched lives at home and at work'.


Canon Australia and New Zealand are market leading suppliers of consumer and business imaging solutions. We are a Canon Oceania team committed to our customers' ongoing satisfaction through the empowerment and development of our staff. To be the preferred supplier we will be easy to deal with and provide quality, value for money products and services. The company information on the website reveals its mission as 'To ensure success for all stakeholders we will deliver profitability, growth, job fulfilment and have a positive impact on the community'.

Canon corporate headquarter building


Canon incorporation launched three calculators in Europe known as the "Green Calculators". These are manufactured from the use of recycled canon copiers.

The Corporate Social Responsibility (CSR) strategy gives equal importance to other areas, including ethics, human attitudes, aid assistance and disaster assistance coupled with science and education with welfare concerns.

It also donated to the Red Cross during the earthquake in China and some other parts of the world especially third world countries. The company also sponsored English football deal from 1983 to 1986 and has also sponsored Champions League and other UEFA games as either an official sponsor or a supplier of imaging equipment.




According to the company website, the foundations of Philips were laid in 1891 when Anton and Gerard Philips established Philips & Co. in Eindhoven, the Netherlands. The company begun manufacturing carbon-filament lamps and by the turn of the century, had become one of the largest producers in Europe. Strengthened by the industrial revolution in Europe, Philips' first and initial research laboratory commenced introducing its first innovations in the x-ray and radio technology. Over the years, the list of inventions has only been growing to include many breakthroughs that have continued to enrich people's everyday lives.


Philips company website reveals the mission statement of Philips is 'To improve the quality of people's live though timely introduction of meaningful innovations'.


The company website shows the company vision as "In a world where complexity increasingly touches every aspect of our daily lives, we will lead in bringing sense and simplicity to people."


The company values include:

Delight Customers

Deliver great results

Develop people

Depend on each other


"Vision 2010" strategy establishes the character of Philips as a people-focused and concentrated, market-driven company that is centred on its customers and markets. By understanding system in society and getting deep knowledge into situations confronting people in their daily activities and life pursuit.



Samsung Group website shows that in 1938, Lee Byung-chull (1910-1987) of the large landowning family in the Uiryeong county came to the nearby Daegu city and founded Samsung Sanghoe (a small trading company with forty employees located in Su-dong (now Ingyo-dong). The company manufactures a great deal of electronics which serve homes like televisions, cameras and other household equipments, offices, health institutions, information gadgets and a host of others which benefit every forms of the world.


Samsung's vision according to its website is "to become a leader of the digital convergence revolution". To achieve this goal, the company has changed its operational activities, putting digital technology at the fore front. The underlying strategy for this vision is the company's mission to be a Digital-ε Company.

Digital: Samsung is committed to being a market-driven solutions provider and leader in the digital convergence marketplace.


The company website of Samsung Group reveals the company's entire supply chain, from sales, marketing and communications to research, manufacturing and distribution, is conducted electronically through an elaborate Internet-based network. This "speed and simplicity" model has increased productivity and ensured that services and products are customer-oriented.

Company: Core competencies in semiconductor, mobile communications and consumer electronics technologies enable Samsung Electronics to create digital solutions for the home, mobile user and office that enable seamless communications, facilitate business transactions, provide access to the Internet and offer digital entertainment to all its varying customers due to the nature and segments from cultural differences. The management of Samsung believes in understanding the nature and systemic concern of every culture and how it can affect its business in the host countries and thus provides the goods to the cultural taste of the customers.



According to Pearce & Manz (2005), the organizations that need continuous innovation, self-leadership are essential. Namely, when organizational members are encouraged to lead themselves influence in making decisions, solving problems, and identifying opportunities for the future, wide spread creativity and innovation is encouraged (Pearce & Manz. 2005). Similarly, Houghton and Yoho's (2005) contingency model of leadership and psychological empowerment, argued that the empowering leadership approach that encourages follower self-leadership will result in high level of follower creativity. Therefore, self-leadership positively related to creative behavior. Carmeli, Meitar and Weisbug's (2006) study have provided empirical evidence that support this assertion.

(Pearce & Manz (2005), 'the organizations that need continuous innovation').


The objectives to be achieved in this second task include the following:

To write a report on each of the chosen organisations describing the different management practice for alternative cultures.

To also include how these organisations have developed formal and informal multicultural relationship.


FROM: Management Consultant

TO: Board of Directors

DATE: 22nd July, 2010



Kroeber & Kluckhohn in their classic review of culture (1952) explain there are many ways to see the alternative cultures in organizations.

These duo explained that although these ways can be useful and may tend to encourage a rather mechanical way of cultural difference.

The chosen organisations include:




Management practice of the afore-mentioned organisations deals with how they manage the activities of their companies everywhere they operate. The following areas of practice fix to all the three organisations. They include:

Corporate Social Responsibilities

Human Resources - Recruitment

Product development

Market strategy

Remuneration policy

Environmental technology

Corporate Social Responsibility (CSR) is the section of company's activity that guides all company activities in the protection and promotion of international human rights, labour and environmental standards and compliance with legal requirements within its operations and in its host community.

Canon, Philips and Samsung all have corporate social responsibility incorporated in their company profile. They ensure that the host community have a positive feel of their presence through contributions made to the environmental requirements of the host community. They ensure this is done to the global economy and everywhere they are present.

Human resources - recruitment policy. These companies have a policy which incorporates the people in the host community or country in the workforce. For example, Canon incorporation in Nigeria employees vast a lot of there staffs from Nigeria. This will help in strengthen their internalization policy and commitment to the global economy.

Product development. Construction/development of products with new or features that offer new or additional benefits to the customer. It may involve changeson an existing product or its presentation, or formulation of an entirely new product that satisfies a newly defined customer desire or market request. Canon incorporation with the other companies gave much concentration to the quest of the different countries where they are present and doing business. They develop products to the standard of the host countries.

Market strategy. Written plan (usually a part of the overall corporate plan) which combines product development, promotion, distribution, and pricing approach, identifies the firm's marketing goals, and explains how they will be achieved within a stated timeframe. Marketing strategy determines the choice of target market segment, positioning, marketing mix, and allocation of resources. See also strategic plan. Canon, Philips and Samsung all have developed the market strategy to suit various countries where they have presence. The market situation in every country defers and they have been able to design an acceptable strategy to ensure growth and success in these countries.

Remuneration. This has to do with the entitlement received for work done. Some organisations are good in expatriation policy which Canon incorporation adopted in some countries like in Britain, and some parts of Africa. These represent the company in strategic areas like engineering.

The amount to be paid and which currency of pay also defers from country to another.

Environmental technology. Viewing the product lifecycle in terms of its three stages - produce, use and recycle - Canon contributes to minimizing environmental burden through the effective application of environmental technologies. This it has done at a global stage so as to reduce excessive damages resulting from its production.



The informal organization is the structure that sees to how people participate in different organizations. This expresses human behaviour in an organization and how they communicate with each other in the work place or community.


The nature of the informal organization becomes more understandable when its functions are considered with those of the formal organisations. Canon, Philips and Samsung have the following characteristics embedded in the informal organisation:

Key characteristics of the informal organization:

It is motivational

It requires insider information and knowledge

Uses individualistic approach

Proves hard to fix

Good for situations that change instantly

Key characteristics of the formal organization:

missionary/one way


excellent at alignment

easily seen

people roles

systemic nature

observes rules and laws

easy to understand


This according to; a strategic partnership is a formal alliance between two commercial enterprises, usually formalized by one or more business contracts but falls short of forming a legal partnership or, agency, or corporate affiliate relationship. A good example is the relationship between Canon and Philips in Nigeria.

Philips incorporation and Samsung Group also have relationships with some other visual organisations that assist in keeping the business on going. They include Panasonic, LG and other micro chips companies because of the dealings in parts used for their products.


The selected companies which include Canon incorporation, Philips and Samsung all have relationships with other virtual organisations globally. These companies work together to ensure a network of activities are carried out which involves sales, recruitment, marketing, purchases and other functions for the business. The following are some of the relationships maintained by the companies:

Relationship with Suppliers

Suppliers are one of the major stakeholders any company would have. These organisations work with companies that supplies materials required for the production of the items they sell i.e. their finished products. Maintaining relationship with suppliers especially through a visual market adds more advantages to the organisation thereby reducing bureaucracy involved in person contact dealings.

Sales Executives Relationships

With the latest improvement in technology, most sales are done online which reduces a great lot of bottle necks. Canon, Philips and Samsung get resolved most of their sales through the internet for overseas transactions or over the phone before the items are dispatched to their various destinations.

Recruitment and Selections Agency Partnerships

Many organisations these days do online recruitment and selection of members of staff. This is a globally accepted easy system of recruitment and selection. Some agencies are in the business of recruitment like KPMG consultants, they recruit for other organisations around the world. Canon, Philips and Samsung do patronise these agencies to ease human resources.

Distribution Network Relationships

The fastest system of distribution of goods and services in the world today is through virtual means. This Canon, Samsung and Philips incorporation do to attain easy distribution of there goods.



A virtual organization is a world wide unique system of a trading company in this recent years that uses the support of sophisticated ideas like that of the internet to transact business locally and internally. This is a swift system that encourages quick flow of transactions and makes trading so easy for customers of a trading outfit.


This task is basically to carry out the following:

Carry out appropriate research into at least 2 organisations which operate in a virtual manner.

To identify and develop suitable areas which management of Furniture Works needs to look into when setting up a virtual organisation.

To produce a presentation advising management on a sound management practice in a virtual organisation.

The organisations include:

Sainsbury - (fruit suppliers, bread suppliers, grains like rice, corn etc.)

Nigerian Breweries Plc - (wheat suppliers, barley suppliers, bottles, corks, labels etc.)


The management of Furniture Works has developed a successful 'internet sales' strategy which will make the company a virtual organisation. This is a good development which has its merits and demerits. To fully appreciate the development, more concern should be given to the areas the management need to look into when setting up a virtual organisation.

The following areas need be attended to:

Definition of its objectives

Implementation level as it affects the members and employees of the company.

Cost of setting up the virtual outfit.

Cultural differences issues.

Technology requirement issues.

The objective of the virtual organisation must be clearly defined and understood by everyone in the organization. This will help in empowering members and employees and will place them in control of their objectives.

The virtual organisation portal provides a workplace solution on which members and employees can perform all their daily transaction on the internet cutting across all the stakeholders.


The management of Furniture Works need to understand vividly management practice in a regular organisation and how it can be extended to a virtual organisation. This is so because virtual organisation is not in isolation of the normal management principles other than the fact that virtual organisation is an extension of the normal requirements of a single company.

The following model would be used to address the form of sound management principle expected in a virtual organisation.

The core organisation model

The core organisation may either be the face of the virtual organisation or it may create another image to be the level of the virtual organisation. The other organisations that make up the virtual organisation provide the resource, product which the core organisation lacks and needs in order to catch up with the requirements of the customers. The core organisation does not manage the partners, but manages the relationship between itself and the partners and between partners where needed.

The distributed organisation model

The second model is different since there is no one overall organisation pushing the virtual organisation; all organisations/enterprises have their part to implement. All members rely on each other to fulfil the needs of the market and the customers. The establishment of the virtual organisation is the only strategy for its members to meet market requirements; the sum of their parts is greater than those of the individuals. The customers sees and interacts with one virtual organisation but at the same time may be aware of its members but will not be able to interact with them directly.


There are varying obstacles to be overcome in the virtual organisation. These include infrastructure and people issues. In order for a virtual organisation to operate properly, the flow of information to enable decision-making and management is needed.

The main obstacle to be overcome by FURNITURE WORKS includes people and cultural issues. This concerns the fixing together of organisations and work practices, this is more difficult to solve than the IT challenge since there is a limitless number of paths that could be followed. The objectives of the virtual organisation should be well designed in meeting the requirements of the market and customers. If members have other interests outside that of the virtual organisation then a level of autonomy is needed.

Objectives should be set where clashes of interest between members and within members are reduced to a minimum. The other people challenges relate to the interaction between members of the virtual organisation. In the centralised structure interaction between members, other than with the core organisation, is less important than in the decentralised model. The people issues are easier to solve in the centralised model since the core organisation is in the position of power and dictates objectives and solutions, members that do not comply will not be chosen. The people challenges that need to be overcome include:

• Unrealistic expectations - expectations of any part of the virtual organisation must be reachable.

• Different culture - members of a virtual organisation must be able to work together irrespective of their cultural background. Work cultures must be similar, bit differences will lead to issues.

• Collaboration over long-distances/time-zones - people co-operate over long-distance or time zones, this should not hamper workflow, the right IT solutions must be out in place

• Diverse processes/procedures - each member must understand his/her role, responsibilities and objectives and so must the people that are included as part of the virtual organisation. These must be clearly defined.

• Management practices - each member must be able to manage their objectives as part of the virtual organisation to suit their requirements and objectives.




Effective Communication is the soul of a good organisation. Communication has always been important in any business organisation and the internet has made it efficiently and rapidly easy.


The objective of this task is to write a report to the management of Furniture Works describing the various aspects of effective online and direct communications that are available to the organisation.

Problems associated with online communication and the benefits of online communication to the organisation.


FROM: Management Consultant

TO: Board of Directors

DATE: 22nd July, 2010



There are quite a lot of effective online and direct communications that are available to Furniture Works. These include:

The use of Microsoft oufits

Video messages and voice/video conferencing.

Site for business forum meetings.

Skype For Business

Intranet facilities.



communication is made easy through the use of internet and it aids communication easily amongst all the stakeholders. Canon incorporation would be able to communicate with all customers internationally and its staffs fast and easy through the use of the internet.

Cost reduction

The cost of renting or building places for sales of the company's product would be reduced to nil. Furniture items and/or other products can be sold online. It will also reduce to the barest minimum the cost of labour, business premises permit and a host of other costs which the company would have to expend on marketing and sales of its products.


information is easily passed and digested by the people concerned.


Many services are now provided on the internet such as online banking, job seeking, purchasing tickets for your favourite movies, guidance services on array of topics engulfing the every aspect of life, and hotel reservations.


this explains any form of business carried out through the internet. Virtual organizations would definitely benefit from this.



Through the internet, unwanted guests can get into your information and steal vital information.


Junks and unwanted mails can get into the company's web page.

Virus threat

The most dangerous enemy of the internet and information on the computer system is virus which can destroy a whole lot of information.


Sales over the internet are very good marketing strategy for today's businesses. It has helped to promote the services and goods of a lot of business organisations as the whole world is now a global village. Good number of shops operate without having shops on the high street for sales of there product but make their sales online.



The creation of effective global structure in the business world is such which has given room for International business arrangement which is a widely accepted business structure in the world today as the whole world has been turned into a global market Another system of business structure in organization is networking. In essence, managers in network structures spend most of their time coordinating and controlling external relations, usually by electronic means. Furniture Works may outsource its raw materials to a network of 1000 suppliers, more than two-thirds of which may be based in low-cost Asian countries and African countries. Not owning any factories, Furniture Works can be more flexible than many other retailers in lowering its costs, which aligns with its low-cost strategy. The potential management opportunities offered by recent advances in complex networks theory have been demonstrated, including applications to product design and development and innovation problem in markets and industries.


The objective of this task is to write a reflective report making suitable recommendations to the management of Furniture Works on how effective global structures could be created.


There will be many areas to check when doing business abroad. Initially when travelling overseas on business regularly, one has to get used to adjusting your system all the time and in some countries, the likes of Nigeria where time is crucial.


The easy way to do business in any part of the world is to find out about the place one is travelling to before embarking on the journey.

Here is a list of 7 quick and essential tips for doing business overseas.

1. Furniture Works should make its sales in the host country very well before trying to export or go internationally.

2. Doing business rightly, you need to involve others

3. Management of Furniture works will always think international customers are doing better.

4. Sometimes you miss out on some issues.

5. Furniture works management team and staffs need to be humble in other to enjoy smooth business.

However, the afore-mentioned are steps to global market using the internet. Furniture Works can create effective global structure using the internet sales strategy which will link it up with other organizations and make it part of a virtual organization. This it can achieve through effectively set up of the web site for such market and having all the information of the company which will enhance sales of its product online.

Below are some of the advantages for internet sale:

Catalyst for change

Business growth

Increased revenues

Better customer understanding

The bullets points above are some of the benefits that good business marketing strategy can bring to any company.



Lipnack & Stamps (1997), 'the concept of strategy'

Monge & Contractor, in press; Weber, (1947), 'Management style'

Pearce & Manz (2005), 'the organizations that need continuous innovation'.


Ted Levitt's 1983 HBR article "The Globalization of Markets"


http://www.Samsung_Group#History 'official website of canon incorporation assessed 16th May,2010.

www.nigerian 'official website of the company' assessed 16th May, 2010. 'official website of Philips Group' assessed 16th May, 2010 'official website of t he company' assessed 21st March, 2010.