Multinational companies need to deal with national, cultural, economic and organisational boundaries. As companies are trying to find an efficient global integration, conflicts can arise.
Local environments are diverse
Boundaries can take the form of different accounting practices or standards. It is also very common to find differences in labour laws. However, more subtle boundaries also exist, such as customer preferences when it comes to channels or cultural matters.
Internal boundaries can be found across geographies and cultures but also across functional domains. And when everything is settled and an effective global solution found, then there is a merger or acquisition and new layers of boundaries, especially organisational ones.
In the case of the merger that gave birth to Novartis, staff still identified with their original employers even years after the merger. Different cultures, attitudes and behaviours can survive for a long time, according to an article on the INSEAD business school website.
Spanning boundaries
Multinational companies need to bridge divides but still retain enough diversity and uniqueness of different locations. The end goal is creating products, processes, services and business models that cannot easily be copied by competitors. Business units as well as individuals need to develop capabilities necessary for smooth operations across different contexts, cultures, and geographies.
Clearly, shared tools and processes are needed to sustain necessary communication. Shared systems and practices, as well as common tools, protocols, and metrics must be in place; otherwise there is no solid, common foundation. A multinational organisation simply must be able to communicate well.
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