A multinational corporation

A multinational corporation is a business firm operating in different countries, under centralized control, producing commodities and services for profit (Bornshier & Chase-Dunn 1985) The demise of communism, the fall of trade barriers, and the rise of networked communication have unleashed a revolution in business. Market capitalism guides every major country on earth. Goods and services flow across borders more freely than ever; vast information networks instantly link nations, companies and people.

The results—twenty first century capitalism! Increasingly, the world is becoming a global village. (Business Week, 1996) International businesses have been around for a long time. Siemens, Remington, and Singer, for instance, were selling their products in the nineteenth century. According to Coulter & Robbins, (1999), the Ford Motor Company set up its first overseas sales branch in France in 1908. By the late 1920's other companies including Fiat, Unilever, and Royal Dutch/Shell had gone multinational.

But it was not until the mid 1960's that Multinational Corporations (MNC's) became commonplace. Today however, these Multinational corporations – large companies which operate in more than one country – make up twenty-nine of the world's 100-largest economic entities. The biggest corporation, Exxon Mobil, is the 45th largest entity – sandwiched between the economies of Chile and Pakistan. Plant, equipment, materials, and people do not make a business more than airplanes, tanks, ships and people make an effective military force.

One other element is indispensable: effective managers. Weihrich & Koontz (1993). The success of the organization is a significant contribution of managers who thus need to be selected with a lot of caution and care. According to Weihrich & Koontz (1993), Selection is a process of choosing from among the candidates, from within the organization or from outside, the most suitable person for the current position of for future positions.

The need for managers initiates the recruitment process which involves attracting qualified candidates to fill organizational roles, from among whom, managers, or potential managers are selected. The selection process involves choosing from among the available candidates, the most suitable ones. The entire process aims to place managers in positions which allow them to fully utilize their potential and contribute to the success of the organisation.

An employer needs to sell its job to potential employees so as to ensure that it can generate an adequate pool of applicants. According to Barber (1998) it is important that employers do not consider the recruitment process to be finished at this point. It continues during the short listing and interviewing stages and is only complete when the offer is made and accepted (Torringotn, Hall & Taylor, 2002).

MNCs have grown faster than national economies in recent years: in 1990 they accounted for only 3. 5 per cent of the world's GDP, but by 2000 this figure had risen to 4. 3 per cent. The scope of MNC activity has increased over the past two decades as states have deregulated their economies by removing barriers to foreign investment, and functions traditionally performed by states have been devolved to corporations through privatization, for example in the telecommunications and energy sectors.

(http://www. cafod. org. uk) MNC's are thus an interesting area for those interested in the developing countries, which are now emerging as huge markets for world trade. MNC management has been studied in detail by quite a few researchers well-known in the field of management such as Harold Koontz etc, but the researcher could not find any examples of detailed case studies from a developing country such as Pakistan.

The country's culture, economy and business trends set it apart from the others and should thus be studied individually. Managers run organizations and are instrumental for the profitability and survival of these entities. They thus need to be selected with extreme caution. While there are many selection and recruitment techniques highlighted in text and practice, the researcher is more interested in the origin of these managers, whether they are chosen from the home country, etc.

The researcher is also interested in a deeper understanding of the international business environment of his home country i. e. , Pakistan. Furthermore it is also felt that familiarity with business environment and an insight to the economic conditions of the country will help gather more pertinent facts and authentic data for a high caliber of research. The purpose is to look at the managerial theory with specific focus on different cultural scenarios and then to match this with the practice adherent in MNCs.

Multinational organizations function in culturally diverse environments and would thus need to adapt themselves according to each one. The managers in each area would be the key to this cultural adaptation and operational success. Where they come from is a phenomenon which brings insight to their values, cultural beliefs and insights and practice mechanisms. This is thus not a mere observation but in fact a critical choice for multinational organizations, the importance of which can by no means be undermined.