International-Business-Dr-R-Chandran-E-book
International-Business-Dr-R-Chandran-E-book International-Business-Dr-R-Chandran-E-book
112 International Business- Dr. R. Chandran c) Major decisions related to new product development, plant location and managerial decisions are taken only at the headquarters. At times, the head-quarters may be quite autocratic towards its subsidiaries. d) They may be quite old fashioned in their day-to-day functioning. e) They do not bring sentiments and emotions for the local population into their dealings. f) They exercise complete control in their deals. g) They run their business through power. Sympathy, compassion and human approach are generally far off in their approach. Lower is the prime motive in their style. Age old colonialism and imperialism got percolated to follow such style. Due to rigidity in their style of functioning, such organizations may invite opposition from citizens in developing countries at any time. Fortunately, such multinationals changed became adaptable to local environment. 2. Umbrella Model Multinationals HQ S1 S2 S3 S4 Here the headquarters acts as a facilitator. Such MNCs believe in a) Mutual exchange of knowledge and technology. Only for Private Circulation
) Constant motivation of subsidiaries. 113 International Business- Dr. R. Chandran c) Building an image for both headquarters and the subsidiary. d) Harmony between employees at different levels, and between employees and employers. e) High respect for the sovereignty of the county where they operate. Such organizations are concerned about their image, goodwill and reputation. For them doing business is a way of life. They invite representatives from the subsidiaries to the headquarters for strategic decisions. They do not practice favoritism, nepotism, parochialism and racial superiority. Merit is the only consideration for growth and career enhancement. An Indian is the CEO of Mc.kinsey, Afghani is the head of HR in Yahoo, Indonesian is the research head in Biorad and Indian woman is heading Pepsi world-wide operations. 3. Inter-conglomerate Multinationals Conglomerate indicates grouping of business activities aiming at high profits and revenue generations, whether it is related to existing core business or not. Inter –conglomerate multinationals are aggressive in expansion and achieving a high turnover. Such multinationals enter into any business where the profits are exponentially high. They generally do not consider any other aspect, except high profits, as a performance indicator. Only for Private Circulation
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112<br />
<strong>International</strong> <strong>Business</strong>- <strong>Dr</strong>. R. <strong>Chandran</strong><br />
c) Major decisions related to new product development, plant location and<br />
managerial decisions are taken only at the headquarters. At times, the<br />
head-quarters may be quite autocratic towards its subsidiaries.<br />
d) They may be quite old fashioned in their day-to-day functioning.<br />
e) They do not bring sentiments and emotions for the local population into<br />
their dealings.<br />
f) They exercise complete control in their deals.<br />
g) They run their business through power.<br />
Sympathy, compassion and human approach are generally far off in their<br />
approach. Lower is the prime motive in their style. Age old colonialism and<br />
imperialism got percolated to follow such style.<br />
Due to rigidity in their style of functioning, such organizations may invite<br />
opposition from citizens in developing countries at any time. Fortunately,<br />
such multinationals changed became adaptable to local environment.<br />
2. Umbrella Model Multinationals<br />
HQ<br />
S1 S2 S3 S4<br />
Here the headquarters acts as a facilitator. Such MNCs believe in<br />
a) Mutual exchange of knowledge and technology.<br />
Only for Private Circulation
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