A major MNE has incredible knowledge resources but they are often underutilized.

Question

A major MNE has incredible knowledge resources but they are often underutilized. The reason: often the knowledge that is needed within one part of the organization exists within that organization but normally there is no system by which those who need info can identify and obtain that info from those who have it.

Address the following in your paper:

What are the drawbacks and benefits associated with moving a business unit and corporate HQ to another country?

If you were a CEO or a business unit head, under what conditions would you consider moving HQ?

If you were a government official in the MNE’s home country, what can you do to discourage such moves of multinational HQ out of the country?

Explanation / Answer

Solution-1

The company gets the benefit from their commitment towards regulation and laws of the new host country also there is significant gain of efficiency. If the new corporate HQ or Head Quarter is in the major financial hub like London than the MNE can do more communication with Investment bank, MNE also more efficient and more direct these are examples.

Solution-2

If the country encourage the FDI then, I will consider moving for example Panama. For conducting the business it is also required the economy must be stable. The stable economy and the law also benefit the MNE. I will consider conducting the business in such country. Some time tax is also issue because companies may lose good ratio of profit depending upon the laws.

Solution-3

You could enforce the taxes on higher side and make the law so hard to start the new business. This is common aspect which encourages the involvement of MNE inside foreign countries. The unstable economy and the high rate of crime also cause in security in the mind of foreign investor.

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