Multinational organisations, defined as organisations with operations, subsidiaries or investments in more than two countries, are becoming more commonplace as the concept of globalisation and the global economy becomes more widespread in practice. It is evident that the globalisation phenomenon has dramatically advanced in the last twenty years, as globalisation is a more advanced form of internationalisation; which includes the connection of various practices within organizations and countries to include the functional integration of cross-border economic activities. This is primarily due to technological advances enabling goods and information to travel further and faster with greater ease. It is also due to the proliferation of the more liberal political philosophies and, thus, reduced barriers to trade across borders and continents; especially since the end of the Cold War. As a result, multinational corporations are expanding in number and size, and the problems facing these corporations are different compared to those faced by domestically competitive organisations.
As multinational organisations first developed their business internationally, they encountered many initial problems, problems which still exist today. Geert Hofstede states: "For those who work in international business, it is sometimes amazing how different people in other cultures behave. We tend to have a human instinct that 'deep inside' all people are the same - but they are not. Therefore, if we go into another country and make decisions based on how we operate in our own home country - the chances are we'll make some very bad decisions." (http://www.geert-hofstede.com, accessed 19/11/04).
This lack of individual multicultural understanding has led to many multinationals initiati ...