Multinational Corporation Subsidiaries - Essay Example

Comparative Management Introduction The constellation of economic, political and sociological events in many countries has created significant impact on the values and attitudes of any work force. At the most general level, organizational behavior is influenced and affected by the culture in which each person operates. The critical role that culture takes in global organizations need to be closely examined especially in American firms where globalization proliferates. The growing importance of national and world trade creates the need to understand the cultural diversities in different regions and countries. The saying that organizations need to plan globally, think nationally, and act locally is very apropos in many ways and more so in relation to cultural differences. It is in this regard that the essay aims to proffer a comparative analysis of selecting to transfer to a multinational corporation (MNC) in either India or the Philippines after conducting an extensive research on the MNCs operations, human resources, scope and locations of operations, types of positions available, among others. Other relevant factors that are deemed crucial for the decision-making process such as the opportunities and threats in the political and economic environment would likewise be considered. In addition, the living conditions on the chosen country would be determined, prior to delving into an analysis of the pros and cons of working in either of the stipulated options. The concluding portion would finally identify and rationalize which country one would prefer to work and live in. Multinational Corporation Subsidiaries One of the most famous MNCs globally is Coca Cola, operating for already 125 years. According to its official website, there are approximately 139,600 worldwide employees of Coca Cola that operates in more than 200 countries around the world[The116]. The operating groups of the Coca Cola are indicated as Eurasia & Africa Group, Europe Group, Latin America Group, North America Group, Pacific Group, Bottling Investments Group, McDonald's Division[The116]. For the chosen potential countries to transfer, Coca Cola has likewise been identified to operate both in India and in the Philippines, with additional details below: DETAILS INDIA PHILIPPINES Date of Operations 1993 1912 Scope of Operations 56 Bottling Plants 23 Plants, 42 Sales Offices Number of Employees 25,000 7,800 direct employees Community Programs Educational Opportunities Little Red Schoolhouses Health care Access and Rainwater Housing When selecting career opportunities, usually the official website would forward search opportunities to the Pacific region where there are currently 297 job openings announced [The117]. Under the Pacific group, the site explicitly states that “The Coca-Cola Pacific Group includes a diverse group of rapidly developing markets such as China, the Philippines, Thailand, Indonesia, Vietnam and other Southeast Asian nations”[The118]. In terms of political and economic conditions in India, the EDC (2011) provided the following general outlook: Political Outlook: The present political scene in India is quite exceptional due to the relatively strong position of the ruling Congress-led UPA coalition; the governing coalition continues to maintain its majority in parliament. At the same time, the government’s standing among voters has been somewhat tarnished due to some very high profile corruption cases. The Government is likely to refrain from pursuing unpopular reforms throughout much of 2011 due to upcoming state assembly elections. The security environment is dominated by the threats posed by the Islamic militants and Naxalite insurgent activities. Market Spotlight: GDP growth remained slowed to 8.2% y/y in Q4, largely as a result of the slowdown in government spending and private investment. The pace of import growth has slowed markedly in recent months, in line with weaker industrial activity. The FY2011/2012central government budget is soft on fiscal consolidation efforts, but reinforces the commitment to infrastructure and education. With inflation remaining above target and an acceleration of bank, the central bank has returned to a tightening stance by raising interest rates early in the year and is expected to do so again in coming months. [EDC11]. For the Philippines, however, the report written by Thomas White entitled “Philippines: Uniquely Rising from Its Past” reveal that economic projections remain optimistic as: “The International Monetary Fund expects the Philippines to grow 3.6% in 2010. Inflation to rise to 5%. The ADB raised its growth outlook for the Philippines economy, stating that with private consumption rising, and helped by ‘robust remittances,’ GDP may expand to 3.8% this year. The World Bank projects the Philippines will grow at 3.5% in 2010 and 3.8% in 2011”. Further, White noted that “The Philippines is the second largest producer of geothermal power in the world after the U.S. Geothermal power accounts for about 50% of domestic power generation, followed by hydropower, which represents about 33%. One of the most competitive aspects of the Philippine economy has been the rapid growth of its services sector since 1980. Contributing to 53.2% of the GDP, segments such as telecommunications, business outsourcing and financial services have leapfrogged into the limelight, making the country one of the fastest growing BPO (Back Office Processing) destinations in the world. A member of the World Trade Organization, the Philippines’ most important trading partners are: The U.S., Japan, Netherlands, Hong Kong, China, and Singapore” [Whi11]. Living Conditions In general, the living conditions as viewed and conducted by the World Health Organization (WHO) are comparatively presented below: For India, “census data of 2001 has estimated that 64.8 percent of Indians are literate. The female and male literacy rates were 53.7 and 75.9 percent, respectively. In India, 73.2 percent of rural and 90 percent of urban households have access to safe drinking water. As of 2002, 37.7 percent of the population has access to improved sanitation facilities” [WorND]. According to Skoda, a German traveler, “the Philippines is a country in South East Asia with breath-taking natural features and scenery on over 7.000 islands. You will find pristine beaches, volcanoes, rice terraces, hot springs and waterfalls aplenty in a very pleasant tropical climate. People are genuinely friendly and most of the Pinoys can speak English, so easy communication is guaranteed. Despite its continuous economical downturn over the recent years, more Expats and Westerners love to move here for retirement and longer vacations. And for a good reason – the Philippines offer very comfortable and affordable Cost of Living conditions for the avid long-term traveler” [Sko08]. The National Family Health Survey (NFHS) in India revealed that the basic living conditions are generally surmised as: Throughout India, unhealthy environments and poor living conditions impose a heavy burden on families and communities. Nationwide, only 29 percent of households have improved toilet facilities. Almost 9 in 10 households (88 percent) use an improved source for their drinking water. About one-fourth of households have water used for drinking piped into their homes or yards; other households rely on public taps, tube wells, or boreholes [NatND] In terms of expatriates’ finding appropriate housing or transportation, there are a wide variety of options and alternatives provided by the expatriates.com site in both India and the Philippines. The article published by The Times of India (2010) revealed that “Bangalore once again emerged as the best Indian city when it comes to the quality of living for expatriates, even as New Delhi, Mumbai and Kolkata improved their rankings in the global list of cities compiled by HR consultancy Mercer for 2010” (Bangalore best Indian city for expats 1). A check with magicbricks.com, a property site in India reveal that rental rates in Bangalore range from INR8,500 to INR26,000 (when converted in US$188 to US$576). Diverse transportation modes are available for expatriates: one could rent a car or take a taxi. Car rental rates in Banglore average from INR900 to INR 7000 for eight hours (US$20 to US$155) (Bangalore Car Rental 1). On the other hand, if one chooses to transfer to the Philippines, expatriates who would be working within the area where the Coca Cola office is near (Makati) could find a place for only P5,000 to P8,000 per month (US$118 to US$188). Car rental in the Makati is only P3000 inclusive of driver and gas for 8 hours [exp11], which is equal to only US$71. Taxi cabs are also very accessible and readily available within the city and suburbs. The foreign currency rates are: American Dollar to Philippine Peso: $1 = P42.43 American Dollar to Indian Rupee: $1= INR45.16 Self-Analysis After some personal reflection, honestly, I would enjoy working in either of the two countries, because both of them give me the chance to live somewhere different and experience another culture which manifest diverse traditions and values from mine. Being of White descent, and married, the decision would really depend on factors that would affect, not only me, but also my spouse. I have a third world country before, which was Eby in the Marshall Island atoll. The experience made me think how lucky I am to live in country with running water and an air conditioner that worked. I am married so part of the factors that would be considered in the decision making process is to find events that would make it fun for married couples to do. We enjoy a lot of outdoor activities; so which ever country has that would more than likely be preferred as it would best suit me and my wife.   Upon assessment of the MNCs, both career opportunities are basically the same because when one would apply, the job site would both lead to the Pacific region where applications would be reviewed and evaluated by the department HR personnel. The advantage of working in the Philippines is that Coca Cola has been operating with them longer, since 1912, and has therefore established confidence and competencies in the ability of expatriates to adapt and adjust to the Philippine culture. Further, a quick view of the locations of plants and sales offices in the Philippines indicate that there are options to be located in one of the prime commercial districts in Makati City (which is similar in other busy Asian cities). The cost of living is very cheap compared to the United States. As previewed, an expatriate could opt to “stay in a studio type apartment which costs from P5000 to P8000 a month, depending with the type of apartment you’re living in and location. Some apartments have shared restrooms and some have their own individual comfort rooms. This is good for people who don’t want to share their rooms and want to have some privacy… Electricity and water consumption (using regular appliances like TV, Ref, Lights), (one would) spend at most P2500 per month on electric bills. Internet Access can cost as low as P1000 per month and P5000 per month if you want 2MB speed or more”[LegND]. The only really headaches I perceive would I could meet would be things not going right like they do in the United States. Another headache would be if day to day operations at work in either of the two countries were different then the United States. For example longer work days or maybe the holidays aren't the same. Also it would be bad if there are no diverse options for various activities that I can do with my wife outside the workplace.  To avail of outdoor activities like going swimming to the wonderful beaches, I believe that Coca Cola also has plants in Cebu City. According to Skoda, “very popular with Expats or western Retirees are for instance the southern regions around Cebu, which offer cheaper costs of living, less traffic and pollution and short ways to natural wonders. The Philippines is also a more westernized country than Indonesia, with more international food options and fast-food chains, than anywhere else outside the United States. It features also some of the biggest shopping malls in Asia – if not the world – around Metro Manila” [Sko08]. Further, the cultural background of the country has emphasized that the influence of Spanish colonization and American rule have paved the way for the people to share preferences for America’s way of life. White noted that “the Philippines’ indigenous culture was almost completely transformed by the Spanish and American influences it was subject to for centuries. Under American occupation, the Philippines rose to become one of the most westernized nations in Southeast Asia”[Whi11]. More importantly, the means of communication is crucial in moving from one country to the other. According to my research, from a list of countries by English speaking population, 92.58% of the Philippine population speaks English as compared to only 11.38% in India[Gor05]. Conclusion From the research results provided by various sources on the MNC, The Coca Cola Company, from the head office in the United States, to its subsidiaries in India and the Philippines, in conjunction with other relevant factors such as economic, political, living conditions and communication, one has definitely decided to seek employment in The Coca Cola Philippines. For one, career opportunities were the same, regardless of being employed in the Philippines or in India: meaning that the remuneration would basically be defined and dictated by the standards imposed by the head office. In terms of cultural diversity, since the Philippines have been revealed to be influenced by American settlers, there are vast traditions and way of life that has already been westernized as revealed from the research. Although, there have been reported incidents of terrorist groups that instigate fear and unrest, these groups also focus on bringing violent attacks in the United States. The Anti-Defamation League (2004) actually indicate that “the Philippines is a strong political, economic and military ally of the United States and a close partner in the global war on terrorism. With the spread of Al Qaeda across the globe and the growth of the Al Qaeda-linked South East Asian terrorist network Jemaah Islamiyah (JI), the stability and security of the Philippines and U.S.- Philippines counterterrorism efforts take on a new urgency” [Ant04]. The problem remains a global concern. After reviewing the external factors, the living conditions, in particular; as well as options for outdoor activities which I can do with my spouse, there are more benefits in living in the Philippines, than in India. There would not be any difficulties in language as the majority of the population in the Philippines knows how to speak and understand English. Further, there are living options that offer predominantly the same amenities and features as living in America, except the costs are relatively cheaper. What more can any expatriate ask for? Works Cited The116: , (The Coca Cola Company 1), The117: , (The Coca Cola Company 1), The118: , (The Coca Cola Company 1), EDC11: , (EDC: Canada 1 & 2), Whi11: , (White 1), WorND: , (World Health Organization 3), Sko08: , (Skoda pars. 1 & 2), NatND: , (National Family Health Survey India), exp11: , (expatriates.com), LegND: , (Legaspi Land Corporation 1), Sko08: , (Skoda 1), Whi11: , (White 1), Gor05: , (Gordon), Ant04: , (Anti-Defamation League 1), Read More