Challenges Faced by Investors in Managing Multinational Companies - Essay Example

The expansio of companies into international countries is a rapidly accelerating activity due to the multiple advantages associated with it. This helps in market expansion and also in exploiting less captured countries. It is however recommended that leaders or management in companies opting to invest in other countries to consider the followin to avoid potential landmines. In foreign countries, there is the challenge of labor costs from the residents.

With huge labor costs, companies will require the have to employ expatriate employees from other sources or their home countries. However when the cost is low then the company can comfortably employ the locals. This problem doubles with a shortage of skilled manpower to manage managerial and technical positions. There is also the need to assess the local market in the foreign country. The business environment in foreign countries is at times unfriendly with insecurity, the market is flooded with similar companies, and poor transportation or communication networks.

The other major consideration that should be done is in line with the local government, the general public in the foreign country, and the policies and laws in the country. When going international, the general organizational structure of the companies has to change to carter for the expansion. The creation of offshore company locations demos for the expansion and formulation of a leadership structure to manage all the departments that are created in the process. 

Through this means, the companies ensure that whoever they employ has the best skills and knowledge on how to handle problems and make decisions for the company. It is however notable that due to some of these decisions, the residents of the host country may display some dislikes to the company. Meeting exemplary performance while at the same time improving the relationship between the company and the locals may as well prove difficult for the company. Conflicts with the host government policies, rules, and regulations may be a great hindrance.