Challenges Faced by Multinational Organizations and Solutions Report

This report delves into the multifaceted challenges encountered by multinational organizations, particularly within the realm of human resource management. It examines difficulties arising from adapting to diverse cultures, navigating foreign government regulations, and managing product policies and operational coordination across different regions. The report highlights the impact of cultural differences on HRM practices, including recruitment, selection, and employee management. Furthermore, it provides recommendations for addressing these challenges, such as developing robust product portfolios, leveraging advanced technologies, fostering strong relationships with local businesses, and establishing comprehensive business strategies. This analysis underscores the complexities of global business operations and offers practical strategies for success.

Challenges Faced By Multinational Organizations and How to Address Such Challenges 1
CHALLENGES FACED BY MULTINATIONAL ORGANIZATIONS AND HOW TO
ADDRESS SUCH CHALLENGES
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Challenges Faced By Multinational Organizations and How to Address Such Challenges 2
Abstract
In the present business society, companies do not just operate while focusing on their locations
or primary market base, but most companies also consider operating in the other markets around
the global business community. In such contexts, several companies start to operate the
multinational business in several regions around the world. This article will address some of
challenges that multinational organizations face as they try to expand their operations in new
markets. The article also states some of the recommendations that the management of
Multinational Corporation need to concentrate on as a way of overcoming such challenges.
Besides, this article illustrates different challenges that can affect operation of management of
the company as well as workers. The recommendations outlined in this study can be used by
different organizations and authorities in ensuring that companies are able to operate freely in
every business setting around the global community.
Introduction
Various challenges affect the operations of most companies that try to expand their
business operations in new markets around the world. One of the significant challenges that most
contemporary business organizations face when they grow into other countries is the process that
focuses on adaptation to their existing diverse cultures. Presently, in the era of globalization,
various organizations are gaining the status of multinationals by focusing on developing and
expanding business operations to several regions of the globe (George and Nazeh 2019). The
process that focuses on adaptation of a company to the local cultures of subsidiaries is one of the
necessary primary challenges that businesses are unable to accomplish is the development of a
dynamic environment for business (Sharma 2017).. Therefore, the primary objective of this
research paper is to identify and evaluate a selection of challenges that multinational

Challenges Faced By Multinational Organizations and How to Address Such Challenges 3
organizations face within human resource management. The paper concludes by addressing some
of recommendations on how multinationals organizations can work to address or deal with
identified challenges during their operations in the global business communities.
Challenges faced by multinational organizations about human resource management
The function of managing an organization with multinational operations presents
different challenges. These challenges relate to regulations of policies by different government in
foreign nations, standardization of products, product adaptation, barriers to entry into the market,
the culture of a region, and human resource management among other factors (Peterson 2011).
Some of the major challenges that multinational organizations faced can be grouped into diverse
major categories. These categories comprise of social, financial, and environmental factors.
Some of the known major challenges that affect operations of multinational companies include
cases of terrorist attacks, the conflict between people in different nations, and natural disasters
that rarely happen in the society. Besides, other challenges that affect operations of the
organization in global society include the presence of business competition that comes from
other businesses around the world (Barbero and Puig 2015). Other challenges consist of
strategies of marketing products, poor communication as well as transport systems, political
instability in some regions, along with occurrences of natural disasters. Al these challenges have
a negative influence on the growth and operations of multinational organizations
Foreign government laws as well as regulations
The multinational organization in most cases faces the challenge of dealing with diverse
sets of authority laws together with regulations that might cause the organizations to incur extra
charges of operations. Phukan and Basu (2014) stated that foreign governments are increasing

Challenges Faced By Multinational Organizations and How to Address Such Challenges 4
taxes of value-added duty in various goods alongside services in addition to tightening
compliance laws and regulations. The shift in compliance regulation in most cases means that
multinational organizations have to adopt effective to their operational policies as well as on how
they deliver their products to different countries that they export their merchandise targeted
consumers (Bonga 2017). Such operations may need enhanced charges to appoint local experts
who are capable of keeping abreast of variations together with agree openly with administrators
of global authority.
Product policy
In the process of introducing the product to different global markets, the organization
needs to survey the market. The research aims to determine whether adaptation required to be
made during the operation. The use of brand titles, logos, Together with product attributes might
all require to be modified to ensuring success in different markets (Zaroff 2011). Such operations
remain to be the challenge for multinational organizations that are entering strange customs
alongside markets. Besides, translations of the language of names as well as advertising slogans
might also prove to be the challenge as wording together with the structure of sentence might
skew the intended meaning. For instance, the company that deals with different products such as
food might need to market their products under different brand title than in its home nation. Such
changes occur due to the potentially unfavorable interpretation (Krug and Kavanagh 2014).
Additionally, manufacturers might also require producing a different line of flavors to appeal to
various tastes and preferences among the people in local markets.
Operation coordination

Challenges Faced By Multinational Organizations and How to Address Such Challenges 5
Various multinational corporations face the dispute of choosing how to harmonize as well
as update actions amid their habitat nation together with their foreign functions. Different
marketing decisions within these organizations have to be created concerning when as well as the
manner of creating the regional physical charisma and how to achieve the foundation of regional
organizations like unions of labor alongside dealers of different parts. Their lack of operation
makes it tough for the company to expand its operations due to a lack of effective network and
communication system to be used in foreign markets around the world (Caligiuri and Bonache
2016). Therefore, this challenge requires business operators within multinational organizations
need to stay consistent as much as probable amongst nations that could guide to enhanced
duplication of services.
Human management resources
The management that deals with profit together with wages often attests to be the test for
the operations of global organizations. Diverse conditions of labor markets might cause the firm
to offer the collection of advantages that in some instance it is unable to offer (Dismas, and
Aketch 2016). Therefore, for multinational organizations to attract as well as retain the talent, it
finds it challenging to maintain the balance amid its costs of administration along with recruiting
the necessary human capital to perform in the foreign nations efficiently. Another essential
challenge in operations of the multinational organization is in determining policies of human
resources that are influenced by different cultures. The same management of human resource can
potentially produce diverse outcomes for multinational organizations and thus be challenging
and ineffective when implemented in different regions around the world (Subramanian, Allcock,
and Lathlean 2011). Problems that are caused by culture change are the most severe aspect of
organizing operations of multinational organizations.

Challenges Faced By Multinational Organizations and How to Address Such Challenges 6
Impacts of culture on HRM practices
Culture of people is just the broad collection of ancient beliefs that impact behaviour,
often without conscious awareness. While managers of human resources are tasked with the
challenge of following the regulations in operations as well as the implementation of appropriate
policies no matter the business is situated, local culture and business culture can create particular
changes for the department of HRM. Some aspects of culture are pertinent in developing the
structure and policies of HR. The volume of the stand of workers, company’s framework, the
conditions of the workplace, and even the environment and industry all consist of managerial
culture, and eventually affect HR plans. Some of the cultural aspects that affect policies of HRM
consist of a base of workers that shows that the number of workers that a given company
employs (Kozikoğlu and Senemoğlu 2018). The number of personnel employed by a workplace
determines its culture. Therefore, big organizations that recruit thousands of employeees must
possess a more practical culture than small business. Culture impacts policy of recruitment in
most organizations. Every organization and every nation has to follow various recruitment
policies that depend upon cultural attitudes such as polycentrism, ethnocentrism, and geo-
centrism. Culture affects the policy of selection that varies from one nation to another (Zaroff
2011). During the process of selection, workers tend to find it tough to adapt to diverse language,
dressing codes, and lifestyle that make them to be depressed or happy.
Recommendations
Approaches in which internationals organization can operate to focus on or deal with
operational contests

Challenges Faced By Multinational Organizations and How to Address Such Challenges 7
When the multinational organization decides to expand its operations around global
markets, they need to focus on the market variables. These variables always comprise of the
natural resources of a nation, type of targeted market, potential differences in standard
procedures of doing businesses. Therefore, each firm has the mandate of considering its entry
policy and whether outlining the joint scheme with the regional organizations might
appropriately suits operational targets.
Launching of product portfolio
Multinational organizations can overcome the challenge of product strategy in their
operations by focusing on the creation of product portfolio to attract more customer base in
different nations. The organizations need to focus on ideas of analyzing their product portfolio to
maintain as well as proactively follow progress in the environmental pressure groups to
anticipate changes in the market. The management of the organization can lobby with
environmental pressure groups to make their operations to be sustainable to environmental
setting instead of focusing on environmental compliance.
Use of current technologies
The use of advanced technologies that are currently advancing in business operations can
help multinational companies to improve on how they produce products that are safe and of great
quality as per the demand from different regions. The use of technologies can make
multinational organizations to understand the current markets in various places (Kozikoğlu and
Senemoğlu 2018). Through an understanding of various markets management can then plan well
on various practices to include in their operations and understand market demand. Technology
can also help in reducing instances of threats from competitors as a multinational organization

Challenges Faced By Multinational Organizations and How to Address Such Challenges 8
can learn the appropriate technique to improve on the manner they operate in different markets
(Dhanpat 2016). Therefore, technological usage help company to be competitive trough
production of superior products, creating the superior value of customers through delivery of
service, building the premium product or brand image, and employing resources that comply
with the targeted markets.
Creating a good rapport with local business
The idea of finding the right business partner as well as creating a good relationship with
different local business can help multinational organizations to adapt well in foreign markets.
During the expansion of business territories by multinational organizations make them to face
conflict with some new businesses in the market inevitably (Peterson 2011). Therefore, through
the creation of a firm relationship with different overseas corporations such as storage, shipping,
together with logistics corporations can help multinational organizations to grow their business
operations (Mughal 2011). The presence of local expertise and knowledge can make most
multinational firms to receive many benefits in their collaboration with other business in the
markets.
Developing a business strategy, plan, along with budget
The challenge that arises when multinational company rushes to international
development without proper planning can be resolved by developing a well-planned business
strategy and budget for operations. The development of such strategies can help in improving
how organizations compete with their rival around the markets (Zaroff 2011). The idea can help
multinational organizations to examine how they spend different funds in their operations.
Hence, this strategy can be effective in contriving instances of conflicts that do arise during

Challenges Faced By Multinational Organizations and How to Address Such Challenges 9
operations when the company lacks the required funds for operations (Barbero and Puig 2015).
The process of conducting due diligence as well as having a solid plan in place makes it that
much simple to avoid cases of surprises in operations around global society.
Conclusion
From the above discussion, it is clear that various challenges affect operations of most
multinational organizations that try to expand their business operations in new markets around
the world. One of the significant challenges that have been identified in this examination that
most contemporary business organizations face when they grow into other countries is the
process that focuses on adaptation to their existing diverse cultures. Besides, according to the
presentations, it is clear that changes in the external business settings in which multinational
organizations operate can either bring forth various opportunities or operational threats.
Challenges that affect the operation of multinational organizations vary from one organization to
another depending on the country of operation. Hence, this paper records that it is imperative for
multinational organizations to match the changes and challenges their operations with some of
the strategies so as they can remain relevant in business operations.

Challenges Faced By Multinational Organizations and How to Address Such Challenges 10
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