What factors influence policies and practices of multinational firms Discuss - Essay Example

To initiate and actualize the entry, MNCs have to set targets and formulate various strategies according to the situation prevailing in those foreign markets. While formulating the strategies, the organizations’ leader and the management team will firstly look at the factors that may aid them to make a successful entry. After analyzing the positive factors, the firms will or should have to analyze the negative factors or challenges that may impede its entry. As every foreign market or country will have different political, social, economic conditions as well as different customers, competitors, prospective employees, etc, etc, there will be many challenges, which will block the firms’ success.

Thus, both these factors could influence the practices and policies of MNC’s particularly in its foreign operations. Among the many economic based movements, globalisation is the one which had and is still having major impact on the economic development of many countries and its people worldwide. “The word globalisation marks a set of transitions in the global political economy since the 1970s, in which multinational forms of capitalist organization began to be replaced by transnational” (Appadurai, cited in Meyer and Geschiere 1999).

Economic part of globalisation is the key because with the whole world becoming a kind of global village, barriers between the countries are broken with integration happening mainly in the economic aspects. In this scenario, foreign organizations particularly MNCs, using the globalisation plank, have entered and will also enter various sectors of the businesses leading to the establishment of many industries. With these MNCs providing good employment and the resultant good development, people of those countries have became financially stable and are going in search of material comforts, causing impacts on social change. For a