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An exploration of how Multi-national companies

need to survive in modern-day business

Nguyen DieuLinh
4 week Pre-sessional English course
September, 2013.

According to Mitroff (1987: ix), for all practical purposes, all business today is global. Those
individual businesses, firms, industries, and whole societies that clearly understand the new
rules of doing businesses in a world economy will prosper; those that do not will perish.With
the concept of a world economy, the business sector has seen significant growth of companies
that have registered and expanded their operations in more than one country, or, multi-
national companies.However, in prospering, multi-national companies have come up against a
different set of issues than just those that only relate to doing business globally. These issues
are focused more on the way in which working practices exist in different countries, particularly
in respect to selection process, the pressure of training, and culture-shock phenomenon in the
working environment. This paper argues that, in long-term, multinational firms need to
concentrate on three areas in order to achieve success: the selection process in terms of
Human Resource strategies including, preparatory training courses and raising cross-cultural
sensitivity awareness.
The selection process is the first important reason why multi-national companies would achieve
success.Not only could this process support for identifying potential candidates but it also
might be a way to respect them. This process has probably included numerous steps such as
written tests, oral examinations and handling unexpected situations in order to challenge the
applicants. To achieve an occupation in a multinational company, they have to conquer these
tests and also be able to speak international different languages. This rigorous selection process
could filter those who have real ability, expressing outstanding attitude and a passion for a
global job. It leads to fewer challengers, who understand profoundly their ability, applying for a
vacancy in a multinational firm while the domestic one has much more applicants who have
lower required standard. Because of the surplus of candidates, domestic firms seems to think
that they could easily hire and fire their employees. Therefore, the salary of workers could be
reduced and they would not be respected because the domestic firms can dismiss them and
find the other candidates easily. Moreover, from candidate viewpoint, after conquering all
challenging tests, they would feel proud of themselves and then devoting their energy for
working. As a result, it is probable that with this concept of the recruitment process, multi-
nationals could select the best employees who satisfy required knowledge, appropriate skills
and good attitude to support the company to achieve its goal.

Secondly, preparatory training courses for international workers would be another necessary
consideration for the success of multinational firms. The main purposes of these courses are
building sustainable development and sharpening specifiable skills of workers. In his journal,
Columbia Journal of World Business, Tung (1981) remarked that the percentage of Japanese
companies conducted preparatory training program was nearly doubled that of US, respectively
57% and 32%. Besides, the same figure reported in early research by Baker and Ivancevich
(1971) also noted that this figure has remained virtually unchanged over the last two decades.
Then, Mendenhall &Oddou (1985) concluded that the deficiency on US corporations in setting
up preparatory trainings led to its high expatriate failure rates 25 40% when compared with
Japanese. According to the aforementioned statistics, no sooner do firms contribute the
preparatory courses for their international employees than they can increase workforces
standard and ultimately achieve sustainable business goals. In addition to the benefits of
company, the employees could study necessary skills for the particular recruitment
requirements. Consequently, preparatory training courses can be considered as an essential
foundation of human resource management of multinational companies.
Finally, cross cultural sensitivity would be the final key factor that multinational firm need to
understand and manage to get success. Cross-cultural sensitivity is a phrase describing the
cultural awareness and acceptance. Multinationals examine and utilize this key not only to
integrate with the local market but also to create differences and uniqueness in their products.
In fact, to integrate with a particular market, the firm has to investigate about its local custom
and flavours, and then, produce appropriate goods. If the firm produce food and services which
have similar taste with the local, their products would easily be accepted. For example,
Kentucky Fried Chicken (KFC) has been successful in China with more than 4000 outlets because
it has adapted with local taste by using local herbs and rice, changing its recipe as similar as the
taste preference of Chinese customers and markets. As a result, according to Ruggless (2013),
KFC is the most preferred global chain supplying fast food in China, exceeding its rival -
McDonalds. Beside, the cultural diversity can create differentiation in firms products. Adler
(1986) discussed about the cultural synergy, he stated that when they need differentiation,
firms that recognize cultural diversity can use the differences to gain multiple perspectives,
develop wider ranges of options ... heighten creativity ... increase flexibility in addressing
culturally distinct client. Consequently, recognizing and managing cultural differences would
have an essential role for the success of a multination company.

In conclusion, to develop and obtain victory in global business, all kinds of firm have to realize
and practice new global business concepts as Ian Mitcroff stated. This essay has provided the
reason and evidence about the essential areas in human resource management that these
global firms should consider thoroughly. Although multinational firms have struggled with
particular difficulties due to its working pressure and high-standard requirement, these firms
will expect success and visibly exceed the domestic ones if they provide a focus on three areas,
specifically in human resource management: the selection process, the preparatory training
courses and the acknowledgement of cultural diversity. These sections potentially might play an
important role in the success of global companies not only at the present but also in the future.

Adler, N. J. (1986), Human Resource Management, New York: Walter de Gruyter.
Baker, J. C and J. M. Ivancevich (1971), A Global Perspective. In Pieper, R. (ed.) Human Resource
Management: An International Comparision. New York: Walter de Gruyter. Press: 235-244.
Mitcroff, Ian I. (1987) Business not as usual, San Francisco: Jossey Bass Publishers.
Mendenhall, M. E. and G. R. Oddou (1985), A Global Perspective. In Pieper, R. (ed.) Human
Resource Management: An International Comparision. New York: Walter de Gruyter. Press:
Tung, R. (1981): Selection and training of personnel for overseas assignments, Columbia Journal
of World Business, 16/1: 68- 78.
Ruggless, R. (2013) KFC, McDonalds among most powerful brands in China. Available from: Accessed September,