Multinational companies - Essay Example

Multinational Companies Multinational companies are those who operate in more than one country. Multi, in this context, may mean more than one and national may mean countries or nations. Hence the term multinational companies define itself as a company which operates or executes its business operations in more than one country. There are a number of famous companies which we deal with. These companies are famous around the world rather than just operating in their host countries. Nike, Honda, McDonalds, Pizza hut, Walmart and Tesco are some examples of multinational corporations.

The dealings of such companies and management of these companies is a complex phenomenon. Since McDonalds is a fast food chain, the operations and reputation is dependent on the compliance of local regulations prevalent in the regions it is operating in. The products that McDonalds offer range from Hamburgers to Ice creams and coffee. Another Example of a multinational corporation is Pizza Hut. The specialty of Pizza Hut, as its name portrays, is Pizza/ The other products it offers are Salads, Drinks, Cheese Cake, and Sandwiches and so on.

The Governments of various countries are giving much priority to the health concerns of high-fat and ‘junk’ food. The advertisement campaigns and awareness about the nutritional facts are somehow important for the local residents and the government. Licensing is one of the issues that companies have to deal with when opening a new business or a new franchise. The tax rules of the country that McDonalds, Pizza hut and other companies work in must be adhered to in order to maintain good relationships with the government.

Laws and restrictions on the protection of employees, requirement of safe working environment and quality of food to the customers are some of the issues that need careful attention. Laws relating to quality assurance and any deviation from the employment or other regulations may not only result in fines, penalties and huge reputational risk but may also threaten the success of the organization like McDonalds and Pizza hut. Laws, Politics and regulations play a major role in the successful running of the company.

McDonalds is of the opinion which provides the franchises with strict rules on following the local rules to prevent any loss or damage to the reputation of the company. The economic conditions prevailing in a country also predict the future of fast food restaurants like many other industries. People’s purchasing power of luxuries and expensive food supplements is dependent on their earnings ratio. McDonalds, hence, faces the risk of price sensitive customers who may avoid fast food to cut off their expenses.

To curb this issue, McDonalds pay particular attention to value for money. Similarly, Pizza hut attracts customer by offering various deals and discounts along with maintaining the level of quality at each of its franchises. They offer services at prices which attract more customers or allow them to pay in for the deals which provide flexibility of prices on the deal products. Cultural and social influences are of immense importance to McDonalds and Pizza hut both, as due to the competitive environment of the fast food restaurant industry, the expectations of the customers are higher from the international fast food chains.

Their preferences range from price flexibility to quality consciousness and service manners. The preferences are also dependent on the cultural background of the customers. The American population prefer big-sized menu, Muslims (specifically Pakistanis and Arabic nation) avoids pork, and Indians are reluctant to take beef in their meals and so on. The decentralization of McDonalds operations help in maintaining the cultural preferences answered adequately (Heskett 1997, p. 169). To match the preferences of customers, Pizza hut offers vegetable and non-vegetable products for the customers.

Strategically positioning the products and taking various steps to meet the cultural demands of the local residents where multinational corporations operate. Bibliography: Heskett, J. L., Sasser, W. E., & Schlesinger, L. A. (1997).The service profit chain: How leading companies link profit and growth to loyalty, satisfaction, and value. New York: Free Press.