Global Economic Expansion
Global economic expansion has greatly benefited MNEs. It is in this view that many people feel that the MNEs should address the issue of unequal distribution of their benefits. Basing on this and the statement given by Bartlett & Beamish, this essay is going to discuss, using the article “Serving the poor, profitably.” how true this statement is , and also look at ways through which managers can implement it.
Wide disparity in the distribution of resources in the world can only be addressed if the big, multinational companies are willing to explore and invest in the very poor markets. For these companies to radically improve the living standards of the millions of poor people and create a stable less dangerous world, they must start at the vey bottom of the economic pyramid by stimulating commerce and development. They need not do these as charity, because there are many business benefits that they can get by venturing into these developing markets. Statistics show that already many companies have tapped into these and have realized astounding gains. Of course the economic ills of the developing world can not be corrected by big companies alone, financial aid will be needed from the developed world and governance improvements of the developing countries themselves, but still the greatest contribution will be from the multinational countries because they will be gaining in the process. There exists a large market in the world’s poor who constitute a bigger percentage of the world’s population, and if the conception that the poor have no money is wiped out. These companies will gain a lot. The individual incomes might be low, but the aggregate buying power in these poor regions is quite high. This is what should be tapped into by the MNCs to help themselves and at the same time helping the poor by providing employment. Another wrong perception about the poor economies is that goods sold there are usually cheap. This is not true because the poor usually pay more than the rich because they don’t buy much that can attract discount, they more for services than the rich. If this tapped the big companies that have large economies of scale will gain a lot. The article has clearly shown that the big multinationals are the biggest gainers from the businesses the do in the developing economies. And as it is known’ big companies should solve big problems and poverty being the biggest problem for the poor, these big multinational companies have no excuse but to solve it. Multinationals can bring to the poor markets some accountability for performance and resources that has never been there through completion. This market at the bottom can not be ignored; it can be used to generate real growth and radical innovation there developing the poor countries. These is not much to ask from the MNCs, in any case they are the one’s to benefit (Prahalad & Hammond, 2002).
There are many ways through which managers can contribute to this process, to understand how this can be achieved; we look at four types of managers and what they can do.
- The global business management Manager.
He is responsible for developing global efficiency and competitiveness across nations and functional specialties. As a global business strategist, he can reconcile different views from the different corners of the economy. As the architect of asset and resource configuration, he oversees the distribution of key assets and resources worldwide. As the cross border coordinator, he determines sourcing patterns and also manages cross border transfer policies and also mechanisms.
- The worldwide functional management manager
As a worldwide intelligence scanner he facilitates communication, serving as repositories of specialist information. As a cross-pollinator of best practices, he identifies best practices and where they are developed so that he can implement and expose others to new ideas. He also works as a champion of transnational innovation by picking those local innovations that have application elsewhere, linking and leveraging intelligence sources with centers of excellence internally.
- Geographical subsidiary management manager
He acts as bicultural interpreter; he makes sure that country managers are comfortable in both local and corporate cultures. As national defender and advocate, he defends national responsiveness and differentiation. He is the frontline corporate strategy implementer; he makes sure that he is aware of the negotiating range within which he can operate.
- Top-level corporate management manager.
By providing purpose and direction, he gives an effective, energizing strategic vision to the company. By leveraging the performance of the corporate, he balances the centralization, socialization and formalization processes with the aim of exploiting synergistic potential. He also ensures that there is continual renewal of the company (Bartlett, Christopher, Ghoshal, Sumatra, & Beamish no date)
All these are efforts which, if fully supported can go a long way in helping the poor economies be able to stand on their own. The MNCs should therefore come up and see these ideas realized for their own benefit and for the benefit of the world as a whole.
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