Daffodil International University

Assignment on-2
Managerial Functions in Multinational Companies

Prepared For
Dr. Sheikh Abdur Rahim
Associate Professor
Department of Business Administration
Faculty of Business and Economics

Prepared by
Shah Md. Sazzad Mahmud
ID: 182-14-2778
Course: CHRM
Department of Business Administration
Faculty of Business and Economics

Submission Date
10.08.2020
Managerial function is one of the most important to develop the total managerial functions. In
a multinational company there have some issue which is totally dependent on the managerial
functions in the organization. The four basic functions of management are planning,
organizing, leading and controlling. These functions work together in the creation, execution
and realization of organizational goals. The four functions of management can be considered
a process where each function builds on the previous function. To be successful, management
needs to follow the four functions of management in the proper order.

Managers first need to develop a plan, then organize their resources and delegate
responsibilities to employees according to the plan, then lead others to efficiently carry out
the plan, and finally evaluate the plan’s effectiveness as it is being executed and make any
necessary adjustments.

The Functions are given below:

1 Planning in the MNC

2 Organising in the MNC

3 Staffing in MNC

4 Leading in the MNC

5 Controlling in MNC

1. Planning in the MNC

Planning involves analyses of international and external environment to find out the
strengths, weaknesses, opportunities and threats. After conducting the SWOT analysis, the
management sets the objectives. It is very difficult to analyse the external environment. This
is because the world markets, are changing continuously.
Even large MNCs find it difficult to compete in the world markets. Therefore, they form
Global Strategic Partnerships with local companies. Due to GSPs, planning becomes easier.
That is because the managers of the local branches have full knowledge about the local
environment. Some MNCs use consultants to study the external environment of foreign
countries.

2. Organising in the MNC

Organisation is a structure, which helps to achieve corporate objectives.

A MNC can select an organisation structure from the following options:-

1. A MNC may appoint one Vice-President for all its foreign branches. He will control
all the foreign branches from the MNC's head office.
2. A MNC may use geographic structures. It may appoint a head in every single country
or region in which it operates. For e.g. A manager may be appointed as a Head for the
Asian region or for India; another manager may be in-charge of the European region,
etc.
3. A MNC may also organise the structure on the basis of production lines. One manager
may be in charge of one product. Another manager may be in charge of another
product, etc.

3. Staffing in MNC
Staffing involves selecting the right man for the right job. It also includes manpower
planning, promotion, transfers, training and development, compensation, etc.

Staffing function of an international business is very important, especially while appointing

the top-level managers. The top-level managers must be competent and committed persons.

A MNC has three options to select managers:-

1. Managers from the home country who are working in the headquarters of the MNC.
These managers know about the MNC's policies and operations.
2. Managers from the host-country can be selected to manage the operations in that
country. These managers know their countries environment, i.e. culture, legal,
educational, political, etc. This environmental knowledge is very important for the
success of the MNC.
 3. Managers from a third country who have worked in the MNC's parent headquarters,
or experienced managers from some other MNC, can be selected.
4. The MNC must select the right managers to manage the international business. They
must consider factors, such as compensation, labour laws of the host country, level of
competence of the managers in the host country, etc.

4. Leading in the MNC

Leading is the process of influencing the subordinates to perform willingly towards group
objectives. Leading involves motivating and communicating. Managers must have effective
leadership qualities.

Leading and motivating employees require an understanding of employees and their cultural
environment. Participative management may work well in democratic countries, but it may
confuse the employees in a country having a dictator.

Communication is a problem for MNCs because they do business in countries where different
languages are spoken. However, their communication problems can be solved by having local
managers.

5. Controlling in MNC
Controlling involves monitoring actual performance and taking corrective measures, to
correct deviations, if any.

Controlling is a bit difficult in international business due to certain reasons:-

1. Revenues, costs, and profits are measured in different currencies.

2. The ratios between currencies are subject to foreign exchange fluctuations.
3. Accounting practices, and financial reporting differ from country to country.

The above problems can be easily solved with the help of computers.