Globalization and Impact on Companies Essay Example | Topics and Well Written Essays - 1750 words

Globalization and Impact on Companies - Essay Example The major problems faced by the MNCs in the current era are  Problems associated with differences in the culture across the national borders. It is very decisive to recognize that key to winning globalization lies in both economic cultural aspects. Due to cultural differences, the workforce within an organization cannot converse with each other efficiently then this obstructs the overall efficiency of the company. Human resource (HR) management becomes highly complex for the company’s that operates across different markets. There are problems faced by the HR managers in while coordinating diversity in workplaces. Lesser diversity in organizations lowers its business efficiency (International Labour Organisation, 2004). This model will help to analyze that since globalization, the business expansion process of a firm in the international market, makes it go through structural changes. This implies that at different stages of business internationalization, the multinational co rporations (MNCs) should go through separate organizational structures (Veder, 2008). At this stage, an MNC either only increases its geographical spread of business or increases product diversity. If the geographical spread is diversified, then the companies entail less product diversity. However, if the product diversity is more, the firms expand its business within the limited geographical spread.If the scope of internationalization is wide, then a firm should not allocate much money is product diversification. This is because under such cases the strategy of expansion should be guided by duplication or coordination. Hence the firms should encourage specialization of its factors of production under this strategy (Schenk, 2011).