Multinational Corporation from Emerging Markets - Coursework Example

Multinational Corporation from Emerging Markets Name Date Course Table of Contents Table of Contents 2 Introduction 2 Discussion 4 Firm level factors that have contributed to the success of the company 4 Country level factors that has contributed to the success of the multinational corporation 6 Lessons for international managers 8 Conclusion 10 Bibliography 11 Introduction An emerging market is considered as an economy that is transforming from a dictatorship to a free market. Most of the emerging markets are based in Asia, Africa, South America and some parts of Europe. In an emerging market, the middle class is expanding and the quality of life is improving (Khanna & Palepu, 2013). An improvement in the living standards plays an important role in ensuring that the citizens are able to afford the basic services. An emerging market offers a huge opportunity for a multinational corporation. This is because of the ready market that is in place. The BRICS countries are considered an emerging market since the economy in those countries is increasingly becoming stable (Claessens & Yurtoglu, 2013). However, it is also important to note that an emerging market has not yet obtained the status of a developed country. The fast rate of economic growth means that businesses can thrive and the multinationals can easily access the local market. China is one of the emerging markets that have attracted multinational corporations from different parts of the world. Johnson Electric is one of the top multinational corporations that were established in China. The company has been able to register a considerable percentage of growth in China as well as other countries (Johnson Electric, 2016). A multinational corporation is however bound to face some challenges when operating in the foreign market. The firm level and country level factors play an important role in influencing the success of a multinational corporation in the emerging markets. The paper thus discusses the firm level and country level factors that have contributed to the success of Johnson Electric from in China. Discussion Firm level factors that have contributed to the success of the company The company has put in place a research and development center in China where it is operating. Research and design center at the company has played an important role in terms of developing new products in the market (Hong & Hong, 2014). The new products that are usually developed are usually in line with the taste and preferences of the local people. Through research and design, the company has been able to establish the needs of the local people. In China and other countries where it operates, the local products are highly valued and the companies that develop the products that meet the needs of the local people usually achieve a lot of support. Through research and development, the company has been able to improve on its ability to be innovative. The use of innovations has been useful to the company in ensuring that it is able to meet the needs of the people (Hong & Hong, 2014). Expansion of a business is an important factor that facilitates its growth. The strategies of the company with regards to expansion are based on the research and development. It is through research and development that the company has been able to expand to in different regions. The company has been able to achieve a lot of growth and expansion by understanding the needs of the customers. It is through research and development that the corporation has been able to blend different cuisines. Currently, the company has been able to import different types of products which have been successful in the global market. The policies of the corporation have also played an important role in contributing to its success. The corporation is working closely with other organizations in the country it operates. It has also entered into a joint venture with other local companies operating globally. Strategic alliances have also been formed with the local companies for the purposes of manufacturing and distributing the products of the company. The local companies therefore benefits from the corporation. A good relationship with the local companies is an important factor that contributes to the growth and development of a multinational corporation (Perkins, 2014). The local companies are always willing to work with the multinational corporations that offer them growth opportunities as opposed to driving them out of the market. The multinational corporation also has policies that require the local people to be hired in different positions. Most of the staff members at the Corporation are the local people. This includes the top management staff at the corporation. The local people better understand the local market and hence making it easy for them to develop successful strategies (Cuervo-Cazurra, Newburry & Park, 2016). The hiring of the local people has also led to a good relationship between the company and the local people. The brand image of the company globally has been enhanced through the involvement of the local people. The company is also involved in corporate social responsibility which has led to a good relationship with the local community. The company has therefore been able to carry out its activities in the country without much difficulty from the local people. A strong sense of corporate social responsibility has played an important role in improving on the relationship with the employees. The company has been able to win different awards in China including the Top employer award in the country. The workforce of the company is highly motivated and the company has put in place measures to improve on the talent management. Satisfying the needs of the employees is an important motivational factor (Darmani, Arvidsson & Hidalgo, 2016). The brand image of a multinational corporation is determined by how it treats the employees. Most of the multinational corporations are known for exploiting the employees in the emerging markets and this has contributed to their failures. However, the situation is different for the company as it has been able to provide faviourable working conditions for the employees. Diversification strategies are also in place at the company which has seen it offering different types of products that are required by the customers in the market. The strategies of the company in the local market are also aggressive which has seen it distribute its products to most parts of China. This is despite the vast geographical area of the country. The diversification strategy that is in place at the company has played an essential role in terms of spreading the risks. This has seen the company avoid losses which has negative impacts on its growth and development. Country level factors that has contributed to the success of the multinational corporation In China, the multinational corporations are usually provides with financial support in the form of loans and grants. The provision of financial support by the government plays an important role in ensuring that the company is able to carry out its activities effectively (Darmani, Arvidsson & Hidalgo, 2016). The companies are also provided with financial support to expand their businesses abroad. It is through the presence of the financial support to expand the company that has been useful in enabling the corporation to set up different branches and plants in different countries. The relationship between the government and the multinational corporations is good. This is because the government is aware of the contributions that the multinational corporations make in the growth and development of the economy. Most of the multinational corporations usually make more profits from investments abroad as compared to the home country. This has therefore played an important role enhancing the support from the government. The level of transparency and accountability in the Chinese society is improving. This means that the incidence of corruption which was rampant in the past is on the decline. The companies are required to main high standards of ethics when carrying out their duties. In China managers can be hanged for engaging in corrupt activities (Cooke, 2014). The sense of responsibility has thus been imparted on the company. The company therefore exercises a high level of ethics and integrity in the countries that it operates. The Chinese national culture plays an important role in influencing the organizational culture of the multinational corporations. At the country level, the political situation is increasingly becoming stable. Unlike the past where there was a lot of political unrest, such incidences have greatly reduced. The stable political environment has played an important role in providing a conducive environment for the growth and development of the multinational corporation (Thite, Wilkinson & Shah, 2012). The risks due to political unrest are usually high and it has the potential of impacting negatively on the growth and development of a business organization. The Headquarters of the company is in China and this is where most of the strategies are developed. The economy of China has been experiencing a lot of growth and development. As an emerging market, the economy has been experiencing growth every year. This is unlike most of the economies that have been experiencing a decline or recession. The economic growth and development has positive impacts of the growth and development of a business organization. As the economy grows, more people are able to afford different products and services. This translates to a direct benefit to a business organization. China is one of the countries that have been successful in transforming its economy and lifting millions of people out of poverty. This has played an important role in ensuring that the companies operating in the country is able to get a ready market for its products and services (Zhong & Peng & Liu, 2013). The economic improvements in the emerging markets have played an important role in enhancing the growth and development of the multinationals. The policies and regulations in China are increasingly becoming flexible. This therefore plays an important role in promoting the growth and development of the businesses. The flexibility of the policies and regulations has seen the corporation improving on its capabilities. The corporation is only required to abide by the rule and regulations that have been put in place by the authorities (Lee, Abosag & Kwak, 2012). The corporation is fully compliant with all the rules and regulations. This has seen it avoiding the legal challenges and hence impacting positively on its growth and regulations. In China, different cities may have different rules and regulations which must be observed by the organizations. It is also important to note that multinational corporations have to fully understand the rules and regulations in order to avoid the legal challenges that may affect its operations. Technological advancement is an important aspect in China as an emerging economy. Technology has been embraced in most of the sectors of the economy (Lu, Liu, Filatotchev & Wright, 2014). The use of technology plays an important role in terms of reducing the cost of production. The company has been able to embrace technological concepts which have impacted positively on its growth and development. The use of technology has also played an important role in enabling the corporation to manage its investments that are located in different parts of the world. The country level factors are an important external factor that contributes to the growth and development of a multinational corporation in an emerging market. Lessons for international managers The international managers can lean important lessons which can be used to interplay the firm and country level factors in order to achieve success. A multinational corporation should align its internal strategies to the external factors that involve the national level (Alkire & Avey, 2013). Developing a good relationship with the government is one of the important aspects that should be considered by the international business mangers. The presence of a good relationship with the government plays an important role in ensuring the business is able to operate without much hitches. The strategies of the multinational corporation should be based on the national level factors such as the economy. The internal strategies of the corporation should consider the economic conditions in the emerging market. This can be useful in determining the growth and development of the organization. The international business managers should also familiarize themselves with the local laws and regulation and the impacts that it may have on their business. All the activities of the company should be within the local laws and regulations (Cullen & Parboteeah, 2013). This will plays an essential role in avoiding the legal challenges that may be costly to the organization. It is also important for the international business managers to avoid illegalities as it may impact negatively on their businesses. The laws and regulations differ from one emerging economy to the other. However, one of the common characteristics of the laws in the emerging economy is its strictness. The strict laws may lead to the jailing of the managers or closure of their businesses. The international managers should carry out extensive research in order to fully understand the market conditions. The needs of the customers in different markets differ due to taste and preferences. The international managers should therefore ensure that they have put in place measures to ensure that the needs of the customers are understood. This will play an important role in ensuring that the products developed are consumed by the customers in the market. Research and development in the market is therefore an important factor that needs to be considered by the international managers. The formation of strategic alliances as well as partnership may also be important to the managers in terms of ensuring that the organization is able to familiarize itself with the local market (Wang, Luo, Lu, Sun & Maksimov, 2013). Diversification of the products may also improve the chances of success of the company. The human resource issues should be considered by the organization. It is important for the mangers to understand the labour as well as the employment laws. This will ensure that the exploitation of the workers is reduced. The relationship between the employees and the community members where the multinational corporation is operating is also useful. The managers should ensure that such considerations are made in order to avoid a poor relationship with employees and the community members. The level of technology in the host country should be considered by the managers. This will plays an important role in ensuring that it is well equipped to utilize the technological tools (Wang, Luo, Lu, Sun & Maksimov, 2013). Conclusion In conclusion, it is evident that the country level factors as well as the firm level factors play an important role in influencing the success of a multinational corporation. The multinational corporations from emerging economies also have a higher chance of success as is the case for Johnson Electric from China. Internal policies of an organization determine its growth strategies. The growth and development of the corporation is dependent on how it treats the employees. The corporate social responsibility is an important aspect that contributes to the success of the multinational corporation. The laws and regulations in China are strict and the organizations have to comply in order to carry out its operations. It is evident that the economic success as well as political stability of China played an important role in contributing to its success. It is evident that the international managers should ensure that they are fully aware of the laws and regulations of the host country. Technological aspects as well as the political stability are factors that have to be considered by the managers when coming up with policies. The firm level factor should be interplayed with the country level factor in order for the corporation to be successful. Bibliography Khanna, T. and Palepu, K., 2013. Winning in emerging markets: A road map for strategy and execution. Harvard Business Press. Claessens, S. and Yurtoglu, B.B., 2013. Corporate governance in emerging markets: A survey. Emerging markets review, 15, pp.1-33. Johnson Electric. 2016. About the Company. Retrieved on 22 March 2016 from, . Hong, S.I. and Hong, S.C., 2014. Corrigendum: The torque landscapes of a Johnson electric motor (2013 Phys. 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