Questions answering 2053 Essay Example | Topics and Well Written Essays - 500 words

Questions answering 2053 - Essay Example The firm is incorporated in one country and opens foreign subsidiaries in the countries (Cullen and Parboteeah, 2013). The existing literature identifies that globalization can take two different forms namely forced globalization and participative globalization (McCann and Acs, 2011). MNCs enter the globalization through the avenue of participative globalization. The opening of companies in foreign land has received huge boost during the past three decades and this is entirely because of globalization. It has been estimated that multinational companies comprise two-third of the global trade (McCann and Acs, 2011). Reduced cost of production, expansion of market for products and earning higher profits are driving forces to expand business. The cost of labour is considerably lower in the developing countries compared to the developed countries and this motivates firms to relocate production. When domestic markets become saturated it becomes imperative to capture other consumers and foreign expansion is a lucrative option for companies (Dunning, 2012). Difference in cultures is perhaps the most formidable challenge that has to be faced by companies in their quest for expansion. Management of interpersonal relationships in the MNCs require integrating the national culture of the managers and employees (Sweeney and McFarlin, 2014). Additionally MNCs requires modifying their products and services according to the niche taste of the masses depending on the country. For instance, when New York Fresh Deli opened franchises in Dubai, vinegar had to be removed from the salad dressings as it was considered as spirit in Dubai (Guffey and Loewy, 2010). According to Hofstede (2011) culture can be treated as mental software that affects the way in which a person thinks or behaves. Effective management of human resource is important for the MNC’s as people are often exposed to