Multinational Corporations Around the Globe When Considering Term Paper
- Length: 8 pages
- Sources: 15
- Subject: Business
- Type: Term Paper
- Paper: #15650711
Excerpt from Term Paper :
Multinational Corporations Around the Globe
When considering the ever-changing and highly competitive global landscape of business today, large firms must be able to effectively globalize their operations in order to reach a greater potential client base, stay at the cutting edge of their respective fields and sustain profitability in the long-term. With the current exponential growth of technology and computerization of business and learning, consumers have become much more connected to the businesses they patronize (Kurzweil, 2001). Due to the variety in the effects of the globalized market realized by different nations and regions, some areas of the world have targeted specific business sectors and have subsequently gained a competitive advantage . The manufacturing industry provides a superb example of an industry that has grown, been geographically compartmentalized, and transformed to meet the ever-changing needs of customers around the world. The strategy and product lines of many companies around the world have been determined by the needs of such clients as well as the economic structures and capacities present in the nations in which they operate.
Firms like Google, and even Apple to a certain extent, have relied on creativity, ingenuity and innovativeness in the construction of their products, many of which have fallen into the recently devised category of "intellectual" property or goods. Through the use of internet distribution schemes and computerized marketing, these companies have been able to achieve massive global operations while realizing substantial savings in transportation and facility expenses. While the western United States is littered with companies producing intellectual property, other areas of the world continue to rely on more traditionally manufactured products. Latin America and Asia are perfect examples of such regions. The Hangzhou Artsun Garment Company, which primarily manufactures blue jeans in eastern China, is a company whose production and exportation metrics fit a much more conventional model (Global Sources, 2011). This firm has strict and uniform production mechanisms designed to meet specific deadlines and target production quantities. Additionally, the Hangzhou Artsun Garment Company has achieved success in the global market through its strategic formation of partnerships and business alliances (Cooke, 2002). In doing so, this company also had to manage the stringent limitations on business activities mandated by the Chinese government (Pyke, Robb, & Farley, 2000). Thus with the vast differentiation of products and economic constraints, a comparison of the formation of the industrial cornerstones for each of these manufacturing entities will likely encompass a multitude of vital inputs requiring specific examination.
The manufacturing industry of the United States is certainly not very competitive in the customary (factory-oriented) sense of the word. With uncompetitive wages and material costs, the United States struggles to produce and export its factory-made products at the same cost-effective rates as its global opponents (Jaffe, Peterson, Portney, & Stavins, 1999). As a result of this reality, the manufacturing industry of the United States has shifted its primary focus to the production of intellectual and technological products, which have shown to be equally (if not more) profitable for many firms (Benkler, 2002). As the International Accounting Standards Committee has classified intellectual property as, "a mechanism capable of generating revenue though not possessing physical substance," its production does not require much machinery or massive facilities (The International Accounting Standards Committee, 2007, p. 1). Conversely, the manufacturing of this type of product requires creativity and innovativeness in business models and production processes. Leadership must be able to fruitful promote and integrate structures that allow for out of the box thinking as well as candid inventiveness (Barbuto, 2005). A perfect exemplar for illustrating the essentiality of effective management can be found in the analysis of the Apple Corporation. This company was "treading water" until their progressive and charismatic CEO Steve Jobs returned to the company ten years ago (Anthony, 2010). Upon his arrival, Jobs became increasingly participative in the innovation and design process and utilized transformational leadership concepts to align the moving parts of his company with specific objectives. Mr. Jobs went on to instill several revolutionary initiatives that have since made Apple the third most valuable company in the world (Anthony, 2010). He was directly involved in the firm's shift away from focusing solely on the actual creation of great products and towards the creation of better more intellectually founded business models. Consequently, Apple designers began to concentrate more on the origination of new ways to create and deliver such products, while also precisely capturing their ultimate value (Anthony, 2010). In knowing the great benefits that one compelling individual had on this massive organization through his generically proactive and participative approach, one can better understand the importance of such techniques in the manufacturing of intellectual and technological product lines.
Another superb illustration of the many advantages of this type of collaborative structure and leadership style can be found in the vast success of the Google Corporation. Similarly to Apple, Google has placed most intellectual production responsibility on the shoulders of their Vice President of Search Products and User Experience, Marissa Mayer (Iyer & Davenport, 2008). Mayer has been the creator of many inventive programs at Google and continues to believe that innovation is the engine driving Google's corporate car into a profitable future (Iyer & Davenport, 2008). She also participates in ongoing interactions with members at all levels of Google's corporate ladder. With the vast importance of innovation at this company, Mayer continues to promote an "entrepreneurial spirit" within the company (2007, p. 1). She claims that "ideas can come from anywhere" and is always ready to listen to the proposals of all designers and employees (2007, p. 1). Through the fruits of Mayer's labor, it has recently been determined that more than 50% of all product releases by Google were initially generated from the entrepreneurial ideations of designers and average employees (Google on Innovation, 2007).
As can be inferred from the case studies above, the great innovative and intellectual property manufacturing success of both firms was a result of the generally participatory approach taken by their respective leaders. The organizational structure that allows for such an approach is depicted below:
(Principles of Accounting, 2010)
While this illustration deals specifically with a budget process, the structural aspects remain the same throughout all business processes. By creating reliable and direct lines of communication throughout all levels of the corporate hierarchy, managers at companies like Google and Apple have been able to create and utilize many different sources of innovation . Knowing that innovation is extremely vital to the production process in these firms, this structure is a perfect catalyst for facilitating such important ideas.
Considering the ever-growing demand for technological convenience and intellectual consumer goods, Apple and Google have both adapted their product lines and diffusion strategies accordingly. Additionally, since the bulk of the demand for their products comes from highly developed nations and regions, these firms have specifically targeted certain geographic segments (most notably the United States and Western Europe). And as will be the case with The Hangzhou Artsun Garment Company, Apple and Google have had to intricately recognize their capacity to secure a competitive advantage and utilize the proper channels of expansion to meet the growing global demand (Hejazi, 2011). Though each of these entities (that is Apple/Google and The Hangzhou Artsun Garment Company) have targeted a different demand segment within the manufacturing industry, each business has certainly been able to successfully achieve a profitable means of meeting consumer demands in the developed nations in which they primarily retail their goods.
Both of the aforementioned intellectually-based organizations have chosen to set up their operations in the western United States (California in this case). In doing so, both firms have taken advantage of the progressively minded legal initiatives that promote technologically and intellectually founded businesses . With such attractive legal structures and with proximity to Asian markets (for the purpose of recruiting employees and technological mechanisms), this region provides the ideal operational location for this kind of company. And with many excellent universities in this state and innovatively minded young entrepreneurs, the pool of potential employees is fully loaded. All of the factors listed above have helped these organizations to secure a comparative advantage in their respective industries .
Unlike Apple and Google, more traditional manufacturing companies such as The Hangzhou Artsun Garment Company, have had to be more dictatorial in their approach to management in order to effectively secure a dominant role in meeting the growing demands of developed nations. Being that low-skilled factory employees are required to operate massive, complicated and often hazardous machinery, employee safety is a chronic concern in this type of workplace. As a result, leaders must implement a more dictatorial management approach, which requires absolute employee obedience and little time wasted in the collection of lower-level laborer inputs (Morris & Pavett, 1992). Such an authoritarian business structure is designed to be the polar opposite of the aforeposed model implemented by Apple and Google:
A bottom-down business metric, like the one presented above, typically allows managers to accurately monitor and manipulate the production…