Multinational Organizations Have Cross Border Operations

A multinational is defined as â€Å"a company operating in several countries†, while multicultural is defined as â€Å"relating to or containing several cultural or ethnic groups within a society† (Oxford English Dictionary). Lundby Kraut (2010) explain that organizations can function in four stages of globalization: â€Å"multinational, international, transitioning to global and global† (Kindle Location 553-554). Multinational organizations have cross-border operations that are primarily decentralized and autonomous. Decentralized organizations give more authority to lower level employees giving them a sense of empowerment. International organizations have a headquarters that retains some decision-making control but the organization is still largely decentralized. International companies build one or a few facilities in another country, in trying to have a competitive edge and lower costs, they become multinational when they build facilities in a number of different countries. An example is the U.S. automakers facilities in Mexico for cheap labor and Eastern Europe for manufacturing and assembly (Noe, Hollenbeck, Gerhart Wright, 2012). Transitioning to global organizations are the ones that take concrete steps to develop worldwide business strategies and policies. Global organizations develop strategies and policies on a worldwide basis and share resources across borders. The key word here is share. Culture is defined as â€Å"patterns of doing and thinking that are passed onShow MoreRelatedThe Effects of Cultural Intelligence on Leadership Effectiveness in Multinational Organizations1354 Words   |  5 Pagesintelligence and its effect on leadership effectiveness and behavior in multinational organizations in Asia Introduction The success of corporate sector is the critical element for the sustained growth and prosperous economy of any nation. 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