Management in multinationals

If asked to define a multinational, most people would say that it is a company doing business in more than one country. Many experts, however (однако), would not be satisfied (удовлетворены) with this definition. They believe that it does not indicate the size and scale of the multinational’s activities (хоз.деятельность). To be a ‘true’ multinational, they say, an organisation should operate in at least six countries and have no less than 20% of its sales or assets (активы) in those countries. In addition, it should ‘think internationally’. That is to say, the management should have ‘global perspective’. It should see the world as inter-related and inter-dependent.

An example of this global approach is provided by the Massey Ferguson company. Its tractors are assembled from parts made in several countries. As one of their executives say, ‘We combine French-made transmissions, British-made engines, Mexican-made axles and United States-made sheet metal parts to produce in Detroit a tractor for sale in Canada.’

The size and international organization of some multinationals is impressive. The larger enterprises, like IBM, British Petroleum and Mobile (мобил) Oil, have subordinates in sixty to eighty countries.

Because of their global approach, multinationals often make decisions, which are against the interests of their host countries. They may decide, for example, to close down their plant in country A because they wish to concentrate production in country B. Obviously (абвиосли-очевидно), this will be unpopular decision in country A. The government of that country will probably put pressure on the multinational to change its mind. Multinational are criticised by foreign governments for other reasons too. Difficulties often arise when a multinational wishes to transfer its earnings back to Head Office. The host country may feel that the transfer will have bad effect on exchange rate of its currency. Or, it may want the multinationals to re-invest profits in the business. The interests of multinationals and foreign government frequently (часто) clash (расходятся). This can lead to friction (разногласия) between the two sides, and even bitterness (битэнис-горечь).

Multinational will spent much of their time working overseas. They will, therefore, be living and working in a strange environment. They will have to deal with people who have a different language, customs (обычаи), religion and business practice (прэктис). They will find that they cannot do things the way they did at home.

In a book entitled International Business Blunders (промах, ошибка), the authors give some examples of what happens when managers do not take foreign conditions into account (счёт). They describe, for example, how an American company sent sewing-machines to a developing country. Unfortunately (унфотчинэтли-к сожалению), the machines became rusty (заржавели) because the native drunk the lubricating (смазочное) oil. They believed it to be a fertility potion (зелье изобилия)! In another example the authors describe how an American manager in Japan offended a very important Japanese executive because he did not show the executive enough respect. The two man had met first in the Japanese man’s office. This was small and had little furniture in it, so the American assumed (предположил) the other man was a low-level executive. He did not realise that, in Japan, a top executive does not necessarily have a plush (шикарный) office.

Managers working abroad need various skills. Clearly, it is a great advantage if they know the language of the country they are working in. But this is not the most important requirement. A recent study has shown that they need these qualities: human relation skills, an understanding of the other culture and the ability to adapt (адапт). Human relation skills are vital because, to be effective, the manager must persuade (пэсвэйд) local staff to cooperate with him.

Differences in culture are important when a manager is negotiating in a foreign country. For instance, many Europeans and Americans like to get to the point quickly when negotiating. This is not so in some countries, like Brazil, where people prefer to beat around the bush more. They take their time, trying to create a relationship of trust. In such countries, the European or American manager must be patient, or else he will come away from deal empty-handed. In Japan, there are often long silences during negotiations – especially if things are not going smoothly (гладко). European and American executives tend to react in the wrong way when this happens. They make a concession (уступки) or talk in an over-eager (повыш.тонах) way, so that they lose ground in the discussion.

Finally, those working abroad must remember that a deal is not always a deal. In some countries, a person may say ‘yes’ to a proposal simply to be polite, or agreeable. Even written contracts, in some areas, may not be worth (ценность) much.