Multinational Companies And Managers Doing Business

Multinational Corporation - business enterprise with manufacturing, sales, or service subsidiaries in one or more foreign countries, also known as a transnational or international corporation. These corporations originated early in the 20th century and proliferated after World War II.

Q10. Although forces in the foreign environment are the same as those in the domestic environment, they operate differently. Why is this so?

Every country differs in culture which has been there for centuries. The international market is growing rapidly, with more and more multinational organisations entering new markets each day. In this assignment I will evaluate how the difference in cultures affects the performance of international businesses.

Multinational Corporations have always been and are currently now under harsh criticism. They are mainly condemned for exploiting resources and workers of third world countries, taking jobs away from the US industry, and destroying local cultures. Although there are negatives of multinational corporations, there are also positives. Business done overseas provides jobs for the people of the host country, improving the standard of living, and transfers technology. Richard T. De George explains moral standards, in five basic theses, that multinational corporations must adhere to in order to maintain corporate ethics.

Italy, the place where thousands of people go to get away from their normal lives, has been facing many struggles of its own. The ancient buildings, rivers, and popular attractions make Italy look like a perfect, easy living society. Yet, Italy has lots of problems, from governmental money issues to the everyday lives of people. Italy’s economy is continuing to get worse, causing the European and other country’s people to worry.

Italy’s economy is a free-market economy. It is an industrial economy. The economy is mixed between privately owned and publicly owned industries.

Since the mid-1800s, organized groups of crime, known as mafias, have emerged throughout Italy. They often specialized in drug trafficking, murders, counterfeiting, and political corruption. Their exploits were estimated to be worth over $100 billion annually . Because of the intricate structure and substantial power within these groups, they were able to grow and attain economic and political power over many parts of Italy . Their rapid growth caused a threat to local governments and social structures because the mafia had control over every decision both political and economic. The mafia’s size, authority, and potential within and outside of the government called for special tactics in governmental retaliation, which began in the 1990’s.

Italy is a country in Europe, well known and distinctly identified on maps by its shape of a boot that is flanked by the neighbouring countries of France, Switzerland, Austria and Slovenia. As of May, 2016, the current population of Italy is approximately 60 million people. On the one hand, Italy is a country of grand culture, scenic landscapes, rugged mountains, and rich history and art. On the other hand, Italy is an important gateway and client of Latin American cocaine and Asian heroin entering the European market, money laundering by organized crime, and various smuggling operations. Italian mafia activity accounts for fourteen percent (14%) of Italy’s GDP (gross domestic product), which is one of the primary indicators

The ability of the citizens of a country to become entrepreneurs and stimulate the economy by starting up companies is essential for the success of a country. There are many variables that can have a negative effect on an economy and one that is currently hurting Italy’s economy is the mafia. An indirect side effect of the mafia’s impact on the Gross domestic Profit is the government’s ability to aid small business growth. Thus, the government must spend more money to help businesses to manifest and to put Italy in the best situation to have a raging national economy. Gross Domestic Profit stands for the measure of a nation’s total economic activity. In more relative terms, Gross Domestic Profit represents the monetary value of all goods and

International management is defined as the practice of business operations in multiple countries. To be involved in international management professionals must be familiar with many different types of language, culture, economies, and environments. One of the main goals of international management is to link businesses globally and make a profit, while being able to connect various cultures.

It seems like the only sector of Italy that has thrived is its underground black market. These lucrative and subversive activities account for over 25 percent of the country’s GDP. This puts a burden on the Italian government since all this lost revenue is not subject to taxation. Italy’s chief of state, or president is Giorgio Napolitano, who has served since May 15, 2006. Napolitano’s main responsibilities are to approve the Council of Ministers and to provide the prime minister with advice. Berlusconi leads the Forza Italia, a Christian-democratic, liberal majority political party in Italy. Forza Italia was founded in December 1993 and was merged into The People of Freedom March 2009.

Administrative differences in Italy are the most important to look at. The “constitution provides the basic freedoms of thought, speech, press and the right to work (Welcome to Italy)”. Furthermore, workers have the right to form and join unions as well as the right to strike. As a result labor unionization is very high; in 2002, 40 percent of Italy’s labor force was unionized (Italy - Labor). Geographic differences also increase the costs and risk of doing business. Italy is divided into geographic and administrative regions, some of which are autonomous and have different regulations (fig. 3). Generally however Italy is divided into two regions the Northern Region and the Southern Region. The north is characterized by high industrialization and urbanization while

Due to their vast plains, Italy began to industrialize late in comparison to other European nations because it was a largely agricultural country. “It wasn’t until 1950 that industry began to develop rapidly, and by 2006 industry contributed to 30% of the annual gross domestic product.” (Columbia Electronic Encyclopedia 2012). The country relies heavily on tourism, it is one of their major industries and also an essential source of foreign exchange. Italy’s economy has gradually been diversifying, shifting from food and textiles to engineering. Although many of Italy’s important industries are state-owned, the trend in recent years has been toward privatization. “The service sector has growing importance in Italy and employs well over half the labor force. Italy has large foreign trade, facilitated by it’s large commercial shipping fleet.” (Columbia Electronic Encyclopedia 2012). Their leading exports are motor vehicles, clothes, and engineering products. Their chief trade partners are Germany, France, Spain, and Great Britain. Italy’s economy has deceptive strength because it is supported by a substantial “underground” economy that functions outside government controls.

On the other hand, Italy’s economy relays secondly on the industry sector. The manufacturing sector within the industry sector makes up for the other one-fourth of Italy’s total GDP (“Economic Forecasts”). Twenty-five percent of Italy’s economy is made up of producing manufactured goods (“Economic Forecasts”). These goods are a main contributor, and they make up a big portion of Italy’s GDP. The economy of Italy is conformed of different size firms, and ninety-three percent are family-owned (Pike). The small and medium firms specialize in a particular part of production. Italy also has large industries that contribute to its economy, and these industries

INTERNATIONAL MANAGEMENT: CULTURE, STRATEGY, AND BEHAVIOR, EIGHTH EDITION Published by McGraw-Hill, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY 10020. Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Previous editions © 2009, 2006, and 2003. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited