Management and the Multinational Business Environment

by Thomas Bates



The multinational business environment differs from the domestic environment in the degree of its diversity. A wide range of economic, political, cultural, and legal systems characterizes the multinational environment. The increased difficulty in forecasting developments in these various systems and the increased distances of operations from headquarters have effects on the organization of a business enterprise and on the decision-making process within the enterprise, specifically, in the ways that managers deal with the additional riskiness of foreign operations. The major effects of operating multinationally on the business enterprise can be meaningfully analyzed as to their impact on the organization of the enterprise and its decision-making processes and techniques. Such operations differ from purely domestic operations primarily concerning distance, time, and additional variability of the operating environments. If today's business enterprise is to perform successfully in this environment they must be cognizant of what changes in their organization are required and how to make decisions based on broader, perhaps less reliable, but substantially more information in ways that are useful, workable, and not overly expensive considering the value of the output.

California Management Review

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