Assignment Sample on How Can MNE’s Respond to Labour Market
Discussion
Multinational companies have struggled to maintain an effective labour market in emerging target markets. However, the labour market void has created challenges for multinational companies, as labour is the base of productivity of companies. Emerging markets can be described as a new market having severe economic advancement and a proper unemployment system in the new market.
The emerging-market has consisted of around 36% market in 2012, due to the severe development of the emerging market labour market has focused on the employment of new markets than multinational companies. However, volatile circumstances and underdeveloped organisational structure has created a void in emerging markets. The less insufficient organizational market has become a reason for the creation of a void in multinational companies. Increment of trading and capital expenses has gradually expanded the void level in the new market. The effective void situation has played a role of barrier in the entry point of the labour market.
Application of theory
Implementation of modern emerging market, small and medium enterprises have focused on emerging market development with gathering more labour. As opined by Koval, Polyezhayev and Bezkhlibna (2018), MNEs has focused on emerging market development by collaborating with other developed companies to mitigate issues in the labour market void. Multinational companies have focused on mitigating relevant issues to resolve void circumstances in emerging markets (Theses.ubn.ru.nl, 2021).
Replication of copied business model
Multinational enterprises should be focused on adopting or replicating new business strategies from developed market circumstances to mitigate void issues in emerging markets. According to Akbar et al. (2017), business owners of companies such as Shell, GlaxoSmithKline are willing to develop emerging markets by increasing the employment rate. Moreover, these companies are willing to copy new business models from successful companies such as Tesco, Unilever in the UK. Development of local information and brand awareness of companies can be effective ways to mitigate issues, these will help multinational organizations to solve capital and talent problems by delivering more effective ideas (Researchgate.net, 2021).
Collaboration of successful MNEs
Collaboration of successful MNEs will be beneficial for MNEs to copy effective business models from other companies to navigate labour market voids and build up an effective organizational environment. According to Garrone, Piscitello and D’Amelio (2019), multinational companies are willing to make effective partnerships with successful big companies such as Vodafone, SSE to collect developing ideas to improve market situations and decrease employee decrement gradually. MNEs can collaborate with developed countries to improve the employment rate in emerging markets to acquire capabilities through partnerships with other companies (Researchgate.net, 2021). It will be helpful to gather more labour and develop products in emerging markets and assist to navigate the void in the labour market after the implementation of the emerging market situation.
Weakness of theory
Weakness of theory has been discussed in this section of the study module, however, MNEs in the UK has focused on implementing these two theories to navigate the labour market void.
Weakness of Replication of copied business model
Replication of copied business models from other MNEs can be beneficial, however, several times it can impact negative ways. Business models have been implemented based on market situation and companies’ circumstances and business models for different companies should be separated from each other. According to Akbar et al. (2017), business models shouldn’t be copied from other companies, MNEs should make effective business models by gathering effective information from others. Implementation of similar types of business models can become a huge curse for MNEs in mitigating labour void in emerging markets.
Weakness of Collaboration of successful MNEs
Collaboration of successful MNEs cannot be an effective decision for MNEs in the UK as the situation can be dissimilar from one to another. On the other hand, successful MNEs can gather more labours from small MNEs at a huge rate (Garrone, Piscitello and D’Amelio 2019). This will be a harsh reality after collaborating with successful multinational companies.
Summary of key arguments
- The emerging-market consists of a large proportion of the global market and labour market void is a big problem that is required to be dealt with by MNEs.
- Based on the consideration of labour market theory, the labour market should include a proper supply of labour-power and requirements of labour in manufacturing firms.
- One effective way available to the MNEs to make responses to the issue is the use of a replicated business model.
- According to labour market theory, unstable political circumstances, industrialism gaps and less effective labour laws should be diminished to navigate the labour market void.
Reference
Akbar, Y.H., Balboni, B., Bortoluzzi, G. and Tracogna, A., 2017. SME export performance, capabilities and emerging markets: the impact of institutional voids. European Journal of International Management, 11(2), pp.201-226. Available at: https://www.researchgate.net/profile/Guido-Bortoluzzi/publication/299038101_SME_export_performance_capabilities_and_emerging_markets_the_impact_of_institutional_voids/links/5cee20f692851c1ad49a6d48/SME-export-performance-capabilities-and-emerging-markets-the-impact-of-institutional-voids.pdf
Garrone, P., Piscitello, L. and D’Amelio, M., 2019. Multinational enterprises and the provision of collective goods in developing countries under formal and informal institutional voids. The case of electricity in Sub-Saharan Africa. Journal of International Management, 25(2), p.100650. Available at: http://centaur.reading.ac.uk/79820/1/Manuscript_rev3_JIM_notrack.pdf
Koval, V., Polyezhayev, Y. and Bezkhlibna, A., 2018. Communicative competences in enhancing of regional competitiveness in the labour market. Baltic Journal of Economic Studies, 4(5), pp.105-113. Available at: http://www.baltijapublishing.lv/index.php/issue/article/download/544/pdf/
Researchgate.net, 2021, Why do institutional voids occur in emerging markets? How can multinational enterprises (MNEs) overcome these voids and why may this enhance their performance?, Available at: https://www.researchgate.net/publication/329207405_Why_do_institutional_voids_occur_in_emerging_markets_How_can_multinational_enterprises_MNEs_overcome_these_voids_and_why_may_this_enhance_their_performance, [Accesses on: 02.07.2021]
Theses.ubn.ru.nl, 2021, Dealing with institutional voids in emerging markets, Available at: https://theses.ubn.ru.nl/bitstream/handle/123456789/6823/Dijk%2C_Philip_van_1.pdf?sequence=1#:~:text=Investing%20in%20emerging%20countries%20is,institutions%20are%20called%20institutional%20voids, [Accesses on: 02.07.2021]
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