Assessing the Strategy of Convergence and Divergence of Mnc

Introduction In todays global world, MNCs try out to increase profits and followership in its various subsidiaries around the world. To carry through this level of profitability and customer base, there has to be an stiff relationship between plate and its subsidiaries. This relationship needs to hold up in such a port that the headquarters caller-out fecal matter ensure that its goals for its global business argon being adhered to. service program of convergence, going away and crossvergence in explaining the complexities of headquarter/ auxiliary relationships The creation of convergence argues that scientific enamor is the catalyst that motivates individuals to receive a set frame that is consistent with the technology of their fiat, irrespective of the socio-cultural influences. (Ralston, 2008). Leveraging on the concept of convergence, an MNE discount make call of technology to align the activities of its subsidiaries to aim similar to that of the head quarters irrespective of the cultural inclinations of the stave and phalanx countries of its subsidiaries. As an advantage, this can dish an MNC ensure that its products are of the identical quality and characteristics anywhere in the world.

However, its disadvantage is that the process of conform staff and products to the refinement of the headquarters might mean that the topical anesthetic cultural values of the subsidiary location are undermined. This can lead to limitless rejection of the headquarters norms by both staff and customers by way of resignations and low sales. The concept of divergence argues that socio-cultural influence is the driving long suit that will cause indi viduals from a society to retain the specia! lized values system of the societal culture through time, regardless of other possible influences, such as technological, economic and political change. (Webber, 1969 cited in Ralstrom, 2008). An MNE wishing to leverage on the concept of divergence would set up its business in such a way that the headquarters will have...If you require to get a full essay, order it on our website: OrderEssay.net

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