Economic challenges Assignment Help For MNC’s
Economic challenges: MNC’s face various economic challenges from international competition, negotiating strategic alliances, dealing with changes in international monetary and financial system and establishing joint ventures. MNC’s face challenge of recession and boom in economy. In economic recession, national income and profits as well as wages and investment are decreased. In business expansion, organizations have to adjust different changes in international economy and business trends.
Political challenges: The main political challenges for MNC’s are political risk and political instability. Political risk is greater for MNC’s, because they have to deal with home country politics, host country politics and international political constraints and conditions. Political instability includes political conflicts, religious tensions and wars that disrupt business operations of local and international companies. At the same time, MNC’s can benefit from political conflicts by seizing opportunities to increase sales and contracts for rebuilding of war destroyed country. For example, many American and European companies took benefit from the Gulf war by investing in the rebuilding of Kuwait.
Technological challenges: It is main challenge for MNC’s to achieve sustainable growth through continuous development and use of new technology by innovative, creative and well trained employees. There are various technological factors that affect the process of doing business in multinational countries. These factors include level of technology required by different operations in different countries, availability of local technical skills and expertise, technical requirements by host country, level of knowledge and technology transfer required in each country and international, regional and local laws of environmental protection.
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