Multinationals Corporations free essay sample

Multinational corporations (MNC’s) also known as International Corporation, transnational corporation, global corporation and many more. Due to the political changes that have occurred during the years, the opportunities for multinationals corporations have increased considerably. As a fact multinationals corporations are growing with rapidity. For example in Mauritius we have KFC, Mac Donald’s, Pizza hut which are all multinationals and have branches throughout the island. According to the United Nations a multinational corporation is an enterprise which owns or controls production or service facilities outside the country in which it is based. In the words of W H Moreland, Multinational Corporations or Companies are those enterprises whose management, ownership and controls are spread in more than one foreign country. Thus a multinational company carries on business operations in two or more countries. Its headquarters are located in one country (home country) but its activities are spread over in other countries (host countries). We will write a custom essay sample on Multinationals Corporations or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The transnational corporation as it is known today, however, did not really appear until the 19th century, with the advent of industrial capitalism and its consequences: the development of the factory system; larger, more capital intensive manufacturing processes; better storage techniques; and faster means of transportation. During the 19th and early 20th centuries, the search for resources including minerals, petroleum, and foodstuffs as well as pressure to protect or increase markets drove transnational expansion by companies almost exclusively from the United States and a handful of Western European nations. Sixty per cent of these corporations investments went to Latin America, Asia, Africa, and the Middle East. Fuelled by numerous mergers and acquisitions, monopolistic and oligopolistic concentration of large transnationals’ in major sectors such as petrochemicals and food also had its roots in these years. The US agribusiness giant United Fruit Company, for example, controlled 90 per cent of US banana imports by 1899, while at the start of the First World War, Royal Dutch/Shell accounted for 20 per cent of Russias total oil production. Demand for natural resources continued to provide an impetus for European and US corporate ventures between the First and Second World Wars. Although corporate investments from Europe declined somewhat, the activities of US TNCs expanded vigorously. In Japan, this period witnessed the growth of the zaibatsu (or financial clique) including Mitsui and Mitsubishi. These giant corporations, which worked in alliance with the Japanese state, had oligopolistic control of the countrys industrial, financial, and trade sectors. The characteristics and features of Multinational Corporations (MNCs). The distinctive features of multinational companies are as follows. 1. Large Size: A multinational company is generally big in size. Some of the multinational companies own and control assets worth billions of dollars. Their annual sales turnover is more than the gross national product of many small countries. 2. Worldwide operations: A multinational corporation carries on business in more than one country. The MNCs operate in many countries with multiple products on large scale. A MNC may operate both manufacturing and marketing activities in a number of countries. Some MNCs operate in several countries, whereas, others may operate in a few countries. Mostly MNCs from developed countries dominate in the world markets. Multinational corporations such as Coco cola have branches in as many as seventy countries around the world. 3. International management: The management of multinational companies are international in character. It operates on the basis of best possible alternative available anywhere in the world. Its local subsidiaries are managed generally by the nationals of the host country. For example the management of Hindustan Lever lies with Indians. The parent company Unilever is in The United States of America. The Parent company works like a holding company. The subsidiary companies are to operate under control and guidance of parent company. The subsidiaries functions as per the policies and directions of parent organization. 4. Mobility of resources The operation of multinational company involves the mobility of capital, technology, entrepreneurship and other factors of production across the territories. 5. Integrated activities A multinational company is usually a complete organisation comprising manufacturing, marketing, research and development and other facilities. MNCs undertake both Manufacturing and Marketing Activities and they are predominantly engaged in hi-tech and consumer goods industries. Majority of the MNCs are engaged in pharmaceutical, petrochemicals, engineering, consumer goods, etc. 6. Several forms A multinational company may operate in host countries in several ways i. e. , branches, subsidiaries, franchise, joint ventures. Turn key projects. 7. Origins. The development of MNCs dates back to several centuries, but their real growth started after the Second World War Majority of the MNCs are from developed countries like U. S. A, Japan, UK, Germany and European countries. In recent years MNCs from countries like Korea, Taiwan, India, China, etc. are operating in the world markets. 8. Profit Motive. MNCs are profit oriented rather than social oriented. Such corporations do not take much interest in the social welfare activities of the host country. 9. Quality Consciousness MNCs are quality and cost conscious and managed by professionals and experts. They have their own organization culture and systems. MNCs believe in the concept of total quality management. Aims of multinational corporations Multinational companies make investments in different countries with the following aims. (a) To take tax benefits in host countries; (b) To exploit the natural resources of the host country; (c) To take advantage of Government concessions in host country; (d) To mitigate the impact of regulations in the home country; (e) To reduce cost of production by making use of cheap labour and low transportation expenses in the host country. (f) To gain dominance in foreign markets; (g) To expand activities vertically. Advantages of multinationals corporations. The merits of a multinational corporation may be enumerated as follows: 1) Costs Controls. Operating overseas can take advantage of lower labor costs in the same way as outsourcing, while allowing greater supervision and control to ensure quality. A multinational corporation can also benefit from reduced transportation costs. For example, a jewelry company could save money by setting up a branch in a country with gold mines, making rings locally, then shipping them to the home country for retail, rather than shipping the gold to the home country for local manufacture. Multinational corporations carry on operations on a large-scale, which ensure economics in material, labour and overhead costs. 2) Taxations. Having operations in multiple countries may allow the company to take advantage of tax variations. The company could place its business officially in the country with the lowest tax rates, even if management is elsewhere. Running a multinational corporation can help the business benefit from the tax systems of countries that require the company to have a physical presence to benefit from low rates, rather than simply operate a shell or paper company. 3) Consumer benefits. A multinational corporation that benefits from both low production costs and low taxes should be able to make increased profits while reducing prices, which benefits consumers. The company may also have access to knowledge and skills in multiple countries that could help it produce better products. 4) Research and development activities. Developing countries lack in research and development areas. Expenditure on research and development is essential for the promotion of technology. Multinational corporations have greater capability for research and development activities in comparison to national companies. Multinationals survive in the international market through their advanced research and development activities. 5) Far-reaching effects on the economic, social and political conditions of the host country. Multinational corporations provide a number of benefits to the host country in the form of (a) Economic growth; (b) increased profits; (c) Developing of new products; (d) Reduced operational costs; (e) Reduced labour costs; (f) Changing social and political structure, etc. Thus, it helps in the exploitation of resources of host countries for their own economic advancement. ) Product innovation Multinational corporations have research and development departments engaged in the task of developing new products, diversification in the product line, etc. Their production opportunities are far greater as compared to national companies. 7) Marketing superiority Multinational corporations enjoy market reputations and face less difficulties in selling their products by adopting effective adv ertising and sales-promotion techniques. 8) Financial superiority Multinational corporations generate funds in one country and use such funds in another country. They have huge financial resources at their disposal as compared to national companies. Moreover, multinational corporations have easier access to external capital markets 9) Technological superiority Multinational corporations can participate in the industrial development programmes of underdeveloped countries because of their technological superiority. They can produce goods having international standards and quality specifications by adopting the latest technology. Generally, multinationals transfers technology through joint venture projects. 0) Potential source of capital and advanced technology Economically backward countries invite multinational corporations as a potential source of capital and advanced technology to generate economic growth and to create employment opportunities. 11) Expansion of market territory Multinational corporations enjoy extension of activities beyond the geographical boundaries of their countries. Multinational corporations can enhance their internati onal image by expanding their operations activities. 12) Creating employment opportunities Increase in the scale of operations results in more job opportunities. The entry of multinational corporations helps in creating employment opportunities in production and marketing activities. Disadvantages of multinational corporations. The possible disadvantages of a multinational investing in a country may include: 1) High Profit Low Risk Investment The multinational company prefers to invest in areas of low risk and high profitability. Issue like social welfare, national priority etc. have less priority on their agenda. Mostly they invest in consumer goods industry. 2) Interference in Political Matters. The multinational company from developed countries interferes in the political affairs of developing nations. There are many cases where multinational company has bribed political leadership for their own economic gains. Multinational investment can be very important to a country and this will often give them a disproportionate influence over government and other organizations in the host country. Given their economic importance, governments will often agree to changes that may not be beneficial for the long-term welfare of their people. 3) Create Artificial Demand. These companies create artificial and unwarranted demand by making extensive use of advertising and ales and promotion techniques. 4) Exploitation. These companies are financially very strong and adopt aggressive marketing strategies to sale their products, adopt all means to eliminate competition and create monopoly. 5) Technological Problem Technology they use is capital intensive so sometimes that technology does not fully fit in the needs of developing countries. Also, multinational company is criticized for transferring outdated technology to developing countries. 6) Foreign Exchange go outside the Country The working of multinational company is a burden on the limited resources of developing countries. They charge high price in the form of commission and royalty paid by local business subsidiary to its parent company. This leads to outflow of foreign exchange. 7) National Threat. Sometimes outdated technology is used by domestic industries which hamper the quality and price of their products so they cannot compete with those multinational company. Hence, there is a threat of nationwide opposition to multinational company. Arrival of these companies creates an atmosphere of uncertainly to the domestic industries. 8) Cultural and social impact Multinational company imposes their culture on developing countries. Along with the products they also indirectly impose the culture of developed nations. These companies have imposed the culture of fast food and soft drinks onto the developing nations. For examples: burger and coke. Large numbers of foreign businesses can dilute local customs and traditional cultures. For example, the sociologist George Ritzer coined the term McDonaldization to describe the process by which more and more sectors of American society as well as of the rest of the world take on the characteristics of a fast-food restaurant, such as increasing tandardization and the movement away from traditional business approaches. 9) Environmental impact Multinationals will want to produce in ways that are as efficient and as cheap as possible and this may not always be the best environmental practice. They will often lobby governments hard to try to ensure that they can benefit from regulations being as lax as possi ble and given their economic importance to the host country, this lobbying will often be quite effective. 10) Transfer pricing. Multinationals will always aim to reduce their tax liability to a minimum. One way of doing this is through transfer pricing. The aim of this is to reduce their tax liability in countries with high tax rates and increase them in the countries with low tax rates. They can do this by transferring components and part-finished goods between their operations in different countries at differing prices. Where the tax liability is high, they transfer the goods at a relatively high price to make the costs appear higher. This is then recouped in the lower tax country by transferring the goods at a relatively lower price. This will reduce their overall tax bill. 11) Access to natural resources. Multinationals will sometimes invest in countries just to get access to a plentiful supply of raw materials and host nations are often more concerned about the short-term economic benefits than the long-term costs to their country in terms of the depletion of natural resources. 12) Export of Profits Large multinational are likely to repatriate profits back to their home country, leaving little financial benefits for the host country. Conclusion. A multinational corporation/company is an organisation doing business in more than one country. In other words it is an organisation or enterprise carrying on business in not only the country where it is registered but also in several other countries. It may also be termed as International Corporation, global giant and transnational corporation. Like every concept multinational corporations (MNCs) also have certain advantages as well as some disadvantages both to the host country and the home country.

The David essays

The David essays You may be wondering who is David? Or what is the David? Within the next few pages I will be answering your questions like : Who is David? Or what is the David? His importance in history? When was the David sculpted? Why was the David sculpted? And finally a comparison between other Davids, like Vercchios David and Donotellos David. Oprea del Dumo di Firenze ordered the statue in 1501 after Michelangelo had come back from Rome. It took Michelangelo two and one half to three years to complete the David. The David was originally placed in front of Palazzo Vecchio, but in 1873, to protect it from the elements, a copy of the David was put outside of the Palazzo Vecchio to replace the real one which was put into the Accademia Gallery. David was the youngest of eight sons of Jesse. He was a shepherd that had saved his fathers sheep from a lion and a bear only using a sling and smooth stone. These were common weapons in those days. If you practiced long and hard enough, you could shoot one rock up to one hundred miles per hour and you could hit anything you wanted to, like a tree , a bird, or any animal you wanted . When David was about fifteen years old, he was sent by his father, Jesse, to go to the army with food and bring back tidings of the battle. While he was there, the Philistine champion Goliath [who was a giant from the town of Gath which was in Philistine territory] came out and challenged the Israelites to send their greatest warrior to fight him and whoever lost would become the victors slave, meaning that if Goliath won, the Israelites would become the Philistines, or vice versa. No one would challenge Goliath except for a young shepherd boy named David. David fought Goliath with only a sling and a stone. He later became one of the greatest kings of Israel of all time. Imagine what a difference from shepherd boy to king! Michelangelo was twenty-six years old when ...

Site Visit Paper Essay Example | Topics and Well Written Essays - 1000 words

Site Visit Paper - Essay Example It made me to feel free. There were about 1000 or more people there. The church has space for almost 4000 people (Faith Family Church). There are special buildings for children and teens, and also a pretty chapel. I decide to not take notes because service is recorded and put on church website archives, so I can see it again if I need to (Faith Family Church). Also, it was very different from my experience in prayers at the mosque, so I know I will not forget what I see and hear and feel in new place. If I take notes, I cannot have experience but only be outside experience. It is important to be inside experience. We had a paper that tell us what happens, what songs and who is speaking and when to pray. My friend explained things when I ask him. I pay careful attention until 11:40 when the service end. Couple days later, I looked carefully at the website to see if I had forgotten anything. Faith Family Church started as a Bible Study in local businessman’s home 25 years ago, with Pastor Mike, the same pastor that I saw. After few months they had 40 people so they moved to restaurant. When restaurant is too small, they make their own building. Finally they build wonderful set of buildings where they are now (Faith Family Church). It is very nice and comfortable with room for growing membership. One big difference is that in Mosque men and women (over age 7) are at the same prayers but they are not together, not next to each other. At Faith Family men and women are all in the same place and are together. Men do not touch women in Mosque, and women do not touch men, but in this church men and women touch and hug, and they are comfortable like that. The service was done in personal way, like free gift for new people, and we were welcomed. Participation in music and helpful social activities was encouraged. They show a video that asks people to bring a friend to church for Easter weekend. Their prayers were personal because they talk to God like He

Unit 13&14 Essay Example | Topics and Well Written Essays - 750 words

Unit 13 - Essay Example The film scenario exemplified Andrew being discriminated from undertaking his responsibilities as a lawyer upon the discovery of his affliction. Besides being unfairly and unjustly prejudiced towards his condition, the case affected senior management, who wrongfully dismissed him, and society, in general, who scorned people afflicted with the disease. The lawyer, who Andrew initially approached to defend him, Joe Miller, played by Denzel Washington, was first apprehensive to take the case given the sensitivity of the issues. As it turned out, the court ruled in favor of Andrew and ordered the firm to award him for damages for wrongful dismissal. It is fortunate for Beckett to have been remunerated for the discrimination case filed in court. According to the Organisation for Economic Co-operation and Development (OECD) (2008) â€Å"proving a discrimination claim is inherently difficult, since the elements of proof are generally in the hands of the defendant, i.e. the employer† (5). Most victims choose to ignore the matter of filing appropriate cases due to the costs involved in pursuing discrimination cases. Regular-average-everyday Americans can make a profound difference to transform this country by acts of random kindness to others. With no thought of reward, the Good Samaritan in the Bible stops to help a man who has been beaten and robbed. That is the essence of an altruistic act: unselfishly giving help when it is needed, no strings attached. If each and every American believes in simple, unselfish acts, then each would be instrumental in making this nation a more conscientious one. Most men do some thing or behave in a certain way because we expect to get a reward for doing so. Naturally, one does not do something because the cost of doing it would be great. The leadership model that must be manifested in contemporary societies should assist in transforming the society through focusing on encouraging others

Abacus Business Solution Case Study Example | Topics and Well Written Essays - 1750 words

Abacus Business Solution - Case Study Example Industry Definition Point of Sale is the checkout place where a transaction is completed. In other words, it is the point where customers make payments for the goods or services they have purchased. POS systems are usually used by retail industry and restaurant industry. However, in this context, the study will focus only on the restaurant industry. According to David Gilbert, COO of the National Restaurant Association, POS systems are one of the most essential tools for a restaurant as it helps to make their business operation secure, fast and reliable. POS systems are simply the synthesis of hardware and software and business model of the companies belonging to POS industry is also simple. In general, the supply chain model of the POS industry includes POS manufacturers and developers, POS distributors, POS VARs and business owners. Figure 1 –POS Supply Chain Model Some of the major players of POS industry are Micros Systems, Inc., Restaurant Data Concepts and NCR among others. The industry is characterised by variety in product features, services and prices. According to the reports published by IBIS World, the industry reached a value of $1.2 billion in the year 2012. The industry growth rate is 1.8 % annually, but it is expected that, the growth rate will be 2% for the next five years. The major customers of this industry include hospitality sector, retail sectors, and foodservices sector. The share of revenues of POS industry is presented below. Figure 2 – Share of Revenue in POS Industry

Ethnocentric Approaches to HRM

Ethnocentric Approaches to HRM 1 Introduction Human resource management (HRM) refers to the activities an organization carries out to utilize its human resources effectively, including determining the firms human resource strategy, staffing, performance evaluation, management development, compensation, labor relations. The staffing activity is concerned with the selection of employees who have the suitable skills required to perform a particular job. To perform staffing function effectively, there are three main approaches within international business identified: the ethnocentric approach, the polycentric approach, the geocentric approach (Dowling PJ, Festing M and Engle AD, 2008). In the article, the ethnocentric approach will be comprehensively and deeply analyzed, and then the advantages and disadvantages of ethnocentric approach will be figured out. Combined with analyzing the case of Hilton Group, we will see that the reason why the ethnocentric approach to HRM for multinational company (MNC) is out, that how an internatio nal human resource management (IHRM) effectively plays its part under the global context. 2 The ethnocentric approach to HRM for MNC is out. 2.1 General situation of Hilton International Group Whichever major city you find yourself in you may have a big shot to coming across a Hilton Hotel. Hilton International Group is a leading global hotel brand; the company operates 380 hotels all round the world and has subsidiaries located in 66 countries. Its 80,000 strong workforce looks after and serves an average of 8 million guests every year (Article, 2002; Annual Report, 2003). The quality of the Hilton brand is base on the customer service and its operational excellence is higher than in most industries. The same as all service businesses, the contribution of people is of central importance to Hiltons success. Hilton International is quite decentralized: splitting into countries, cities and individual hotels. This meant that hundreds of its managers have to be convinced about the initiative an exercise in which Skill-Soft plays a fundamental role to tackle different issues arisen from its 66 country subsidiaries. (Article, 2002) 2.2 Recruitment analysis of Hilton International Group The broad recruitment strategy determines the nature of the international manager development program and the type of IMD, suggested by Perlutter (1969) and later on by DAnnunzio-Green (1997). Besides the ethnocentric approach which tends to use expatriates in key positions abroad, there are other two different approaches available for managing and staffing companies subsidiaries, the polycentric approach and geocentric approach. The polycentric approach tends to use local nationals wherever possible and the polycentric approach tends to use a mixture of nationals, expatriates and third country nationals (Treven S., 2001; Datamonitor, 2004). For the ethnocentric approach, the cultural values and business practices of the home country put a predominant influence on the subsidiaries. The corporation headquarter determines all the standards of evaluation and controls the branchs management practice in the form of orders and commands (Miles, 1965; Malkani, 2004). For the polycentric appr oach, it is just direct opposite to the ethnocentric approach. The corporation headquarter allows its subsidiaries to develop locally but the corporation headquarter will supervise the local managers. However, this results in little communication between the corporation headquarter and its subsidiaries. For the geocentric approach, it combines the advantages of ethnocentric approach and polycentric approach. The selection of manager is based on competency rather than nationality and organizations try to combine the best from both the corporation headquarter and its subsidiaries. With regard to Hilton Hotel Group, it tries to integrate different parts of the group through the cooperation between headquarter and subsidiaries, and then implement combined standard of both universal side and local side for evaluation and management (Johnson, 2003). And at the same time, Hilton has attempted to recruit and develop a group of international managers from diverse countries for many years. These international managers constitute a mobile base for a variety of management facilities as the need arises. 2.3 The phenomenon Hilton Group unfolds and implies: the ethnocentric approach to HRM for MNC is out The recruitment approach of Hilton hotel indicates something that reveals the shortages of the other two approaches. As this article aims at the ethnocentric approach analysis, it can be concluded that the Hilton Group did not adopt the ethnocentric approach as the staffing strategy for some reason. Here what is needed to be explored is that what the reason is. Underling the phenomenon of Hilton Group not adopting the ethnocentric approach, there may exists some common truth shared the multi-national corporation, like Hilton Group. Is the ethnocentric approach out to human resource management for Multi-national Corporation? The answer to this question definitely is yes; the explanations and its analysis will be stated in the following paragraph. 3 Advantages and disadvantages of ethnocentric approach to HRM 3.1 The ethnocentric approach To analyze the question and answer above, firstly let us see what does ethnocentric approach mean and why the people use it to human resource management. Ethnocentric approach means the home country practice prevails within the company (Albrecht MH (Ed), 2001); headquarters from the home country makes crucial decisions; employees from the home country hold important positions, and the subsidiaries follow the headquarter management practice. The companies that adopt ethnocentric approach hold three reasons: firstly the company believes that there is a lack of qualified individuals in the host country to fill senior management positions(Dickman M, Brewster C, Sparrow P, 2008); secondly, the firm regards an ethnocentric approach as the best way to maintain a unified corporation culture; thirdly, the company believes that the best way to create value by transferring core competencies to a foreign branch is to transfer home-country nationals who have sufficient knowledge and competency fo r the branch. However, recently the ethnocentric is on the wane in most international business, for two main reasons: leading to â€Å"cultural myopia† and limiting advancement opportunities for host country nationals. 3.2 Advantages and disadvantages of ethnocentric approach As to the issue whether ethnocentric approach to HRM should be used in Multi-national Corporation, both the advantages and disadvantages of ethnocentric approach deserve to be analyzed and evaluated. The advantages of ethnocentric approach include: offers multi-national orientation opportunities to employees through the working experience at parent company; cultural similarity with parent company guarantees various transfer of business and management practices; permits tighter control and closer coordination of international subsidiaries for the headquarters (Grandrose CS, 1997); establish a big pool of international experienced executives for the parent country. The disadvantages of ethnocentric approach include: the subsidiaries may create problems of adaptability to the local environment and culture; the corporation may involve high transfer fee and salary costs; sending managers to subsidiaries may result in personal and family problems; it may be more possible to lead to high fa ilure rate; it may has disincentive effect on local-management morale and motivation; the subsidiaries may be subject to local government restrictions, and others. For Multinational Corporation, the ethnocentric approach shows a centralized authority management style. The local subsidiaries do not have so many decision-making rights compared with the geocentric approach subsidiaries. However, the business surroundings vary from one country to another. One management decision works out in a country but may not work out in another. Obviously this is unsolvable problem faced by the corporation headquarter that adopted ethnocentric approach to HRM. Surely there are other tough issues confronted with the MNC which adopts ethnocentric approach. But all the issues are arisen from the ethnocentric approach. Thus I think the disadvantages of the ethnocentric approach put a heavier negative role on the MNC management than the positive role put by the advantages of the ethnocentric approach. Combined with Hilton hotels operational environment differences, Hilton Group made a right decision of not adopting the ethnocentric approach. 3.3 Deeply analyzing the reason why the ethnocentric approach to HRM for MNC is out. Since it is a right decision for Hilton Group not to adopt the ethnocentric approach, then put it in another way, it is a wrong decision for Hilton Group to adopt the ethnocentric approach, at least at the time of present. Then it can be concluded that the ethnocentric approach to HRM for Hilton Group is out. However, can the conclusion be applied universally into other multi-national corporation like Hilton? If the answer is yes and the ethnocentric approach to HRM for Multinational Corporation is out, then what is the reason and how does it happen. The following is to deeply analyze the reason why the ethnocentric approach to HRM for MNC is out. On the related theme, if the foreign subsidiaries of MNC intend to succeed in a particular market, they must hire, train, and afford attractive career path to the local managers in the subsidiary country (Lucas R et al, 2006). Having those who know the language, the culture, and the business customs to operate the subsidiaries is quite crucial to reach the success of the subsidiaries. All these requirements above in this paragraph cannot be realized by the ethnocentric approach. For MNC, the ethnocentric approach denies advancement to the subsidiary country nationals, which probably breed resentment and diminish the corporation public image; the expatriate managers may become insular in their attitudes and prone to the cultural myopia, and the latter may lead to management overlooking niche market opportunities. The ethnocentric approach also frequently comes into conflict with host-country laws, norms and traditions (Schuler R. and Jackson S., 2003). It is clearly that the ethnocentric approach to management is not best suited to a global market place. And as more and more companies realize that the ethnocentric approach does not yield success, gradually this approach will be abandoned in favor of a more multinational approach. 4 The right way to perform IHRM and help MNC develop. 4.1 How IHRM works in a MNC Under the context of global economic integration, if the MNC wants to achieve success in the world market, it has to adopt a more multi-national competitive strategy for human resource management, rather than the ethnocentric approach. To explore deeper what constitute the success of a MNC for HRM, the characteristics of IHRM will be stated and analyzed here. Broadly defined, international human resource management (IHRM) means all the process of procuring, allocating, and effectively utilizing human resources within a multinational corporation. If the IHRM is a art of managing different people with various cultures, then the emphasis of IHRM should be focused on dealing with the changes among the differences from both the people and the culture (Warner M and Joynt P, 2002), and then to realize the goal of managing workforce efficiently and effectively across boundaries for the company, in other word, during the process of managing, people with different culture, ethnicity, values and ethos will be well coordinated and organized. Compared with the domestic traditional HRM, there are two somewhat conflicting strategic objectives that are needed to be achieved by international human resource managers (Sparrow P. et al, 2004). Firstly, the IHRM managers need to integrate the HR practices and policies across the subsidiaries in different coun tries so that the corporation objectives can be achieved. Secondly, the approach to IHRM must be flexible enough to allow for many differences in the type of HR policies and practices that are very effective in the different business and cultural environment. 4.2 The approach for IHRM working in a MNC: geocentric approach Based on the requirements of IHRM, according to the definition of the geocentric approach, and combined with the analysis of Hilton case, it can be seen that the geocentric approach is an effective approach to the international human resource management. The geocentric approach can not only help the corporation deal well with the local issues arisen in the subsidiaries, but also can demonstrate trust in local citizenry which is good for the public relations of a MNC and increase acceptance of the company by the local community. What is more, the geocentric approach can effectively represent local considerations and constraints in the decision-making process and maximize the number of decision options available in the local environment. 5 Conclusions IHRM focuses on the management of human resources on a global basis. For a multi-national corporation, how to effective manage various differences from the subsidiaries located in different countries is a crucial part to its IHRM. Then choosing the right approach influences the great implementation of the major international human resource management functions. Those companies that take the ethnocentric approach attempt to impose their home country methods on their subsidiaries. But it results in bad outcomes in the subsidiaries. Various issues arisen from the ethnocentric approach are confronted by the corporations that adopt ethnocentric approach. The multi-national corporations have to find another approach to effective carry out the global competitive strategy and deal with the local tough issues in subsidiaries. Hilton Group, though using large quantities of expatriates to manage its hotels, achieved a great success all round the world. It indicates that the ethnocentric approach to HRM for MNC is out. Then by analyzing the characteristics of multi-national corporations, the right approachgeocentric approachis proved to be able to tackle the issues arisen in subsidiaries. However, varied with the business surroundings changes and differences, the approach to IHRM implementation also needs to be adjusted. Maybe one day the geocentric approach is out to IHRM, a newer approach appears to help the MNC achieve success globally; after all, all the approaches aim to make the company win. References Albrecht MH (Ed) (2001), International HRM: managing diversity in the workplace, Oxford: Blackwell Article, 2002, A skillsoft case study: Hilton hotels, http://www.skillsoft.com/EMEA/documents/Hilton%20Case%20study.pdf Boselie P., Paauwe J., Richardson R., 2003, Human resource management, institutionalization and organizational performance: a comparison of hospitals, hotels and local government, International Journal of Human Resource Management; December, Vol. 14 Issue 8, pp.1407-1429; Datamonitor, 2004, Hilton Group plc: company profile, April, pp. 1-9; Dickman M, Brewster C, Sparrow P (2008) International Human Resource Management: A European Perspective, London: Routledge Dowling PJ, Festing M and Engle AD (2008), International Human Resource Management: Managing People in a Multinational Context, London: South Western Grandrose CS (1997), Cross-cultural Work Groups, London: Sage Johnson A., 2003, Making room for recognition and reward at Hilton, Strategic HR Review, Vol.2 Issue 3, March/April, pp.10-12; Lucas R et al (2006) Human Resource Management in an International Context, London:CIPD Miles R., 1965, Human relations or human resources?, Harvard Business Review, Vol.43 Issue 4, July/August, pp.147-189; Schuler R. and Jackson S. (2003) Managing Human Resources in Cross-Border Alliances London: Routledge Sparrow P. et al (2004) Globalizing Human Resource Management London: Routledge Warner M and Joynt P (2002) Managing Across Cultures. London: Thomson

Low Savings :: essays research papers

Americans on average, save less than 1% of their after-tax income today compared with 7% at the beginning of the 1990s. U.S. citizens are saving less because, of the higher cost of housing and interest rates. Many homeowners believe that rising real estate values give them the necessary savings they would otherwise have set aside. The housing boom, like the stock market boom before it, allowed Americans to save without having to reduce consumption. As the value of their assets rise, people naturally feel richer. Consumer spending has held up not because incomes have risen, but because consumers have taken on more debt, mostly by borrowing against rapidly rising housing prices. The marginal propensity to consume is affected by consumer confidence and interest rates as they affect the rate of return on savings. With fewer dollars available as savings to banks and other financial institutions, interest rates are higher for both savers and borrowers than they would otherwise be. That makes it more costly to finance investment in factories, equipment, and other goods, which slows growth in the GDP. The lower savings rate meant a higher consumption rate, which stimulates more spending, more income, and thus more spending, in a self-feeding process known as the multiplier effect. People do not save for the sake of saving. They save to spread consumption over their lives. Also the U.S. has a consumer culture, with consumers always having to â€Å"keep up with the Joneses† Kids seem entitled to deserving goods that other kids own. Since consumers will be spending more rather than saving, equilibrium GDP will not be balanced. Unemployment and inflation will occur since low spending by investors does not balance the low savings rate of consumers. Our high consumption, low savings economy has worked only because our European and Asian allies have been willing to save and produce more than they consume.