Transforming Internal Governance: The Challenge for Multinationals

Decent Essays

The essential skills a manager of a multinational company needs to operate in multicultural environments are effectively highlighted in Oosterveld and Prahalad’s Article Transforming Internal Governance. They address the challenges of multinational organizations in emerging countries and the difficulty that managers have in leading their organizations from the traditional to the innovative. They believe that part of the struggle is due to the rate of change in emerging environments is much faster than the speed that management are able to adapt. The article postulates that traditional processes slow or hinder changes not innovative technology or budget constraints. They believe that managers are entrenched in their old fashion ways and when faced with difficulty relapse to old reliable methods, cutting cost or reallocating efforts. The problem is the discontinuity defined as “an abrupt change” (Oosterveld, 1999, p.2) that multinational managers are faced with which includes access to new customers from previously closed markets, the internet, deregulations and technological and life cycle changes and increased social responsibility.
It is speculated that managers perceive the loss of market share, eroding profits and new competition as a result of inefficiencies within the company and management rather than correctly seeing the changing landscape as the problem. As a result managers have been attempting to correct a new problem with old solutions with inefficient

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