A Comparative Study of Management Practices in Multinational and National Organizations in Pakistan

Abstract

Today’s organization are facing the challenge and threats then ever before due to rapid changes in the business environment. It is not only the change itself; it is the pace of change and the speed of the communication of that change that presents such a great challenge. Thus this creates the need that the profession of management must be harmonized to cope with the speed of these changes. The specific objectives of this study are to obtain an understanding of the general management practices of organizations operating in Pakistan vis-a vis understanding the differences in management practices among national and multinational organizations. A large number of studies and analysis have been conducted in developed countries like USA, UK, Japan, France, Germany etc to gain an insight of the specific management practices and its peculiar aspect that are responsible for performance improvement of organizations. The research in this area is minuscule in Pakistan with a limited number of certain agencies whose research was circumscribed within a restricted domain. However the contribution of Lahore University of Management Sciences (LUMS) is worth mentioning. This study aimed at comparing management practices among national and multinational organizations; therefore the target population was a specified number of national organizations of size medium to large from various fields compared with multinational organizations of various disciplines. Since the basic parameters of management are same for any type of organization, the focus of study was concentrated at its various aspects such as planning mechanism, leadership style, motivation and teamwork, production management, and corporate social responsibility. The diversity of the organizations provided an opportunity to obtain an indepth investigation and determine the causes for the similarity and dissimilarity of the management attributes, which is the main essence of this study. Organizations serve as the backbone for the economic development and prosperity of a country. Pakistan though being an agricultural country but industrialization precedes agriculture in the sense that agricultural developments and advancements is possible through industries only and industries can thrive if they are successful in applying the appropriate and timely management techniques. Pakistan is a country which is of strategic importance to the world; it serves as a hub by linking the economies of the world. The location is strategic with a view that Pakistan is the nucleus of three powerful economies namely Central Asian economy including China, South Asian economy including populous India, Bangladesh and Indonesia; and on the west Middle East West Asian economies which are major sources of oil supply and reserves to the rest of the world. China is one of the fastest growing country in the Central Asian economy. According to PricewaterhouseCoopers (PWC) one of the top business consultancy in its report said that by 2030 the top ten world economies would be China, United States, India, Japan, Brazil, Russia, Germany, Mexico, France and Britain. The Current ten largest economies according to 2008 data from the International Monetary Fund (IMF) are the United States, Japan, China, Germany, France, Britain, Italy, Russia, Spain and Brazil. The World Bank in its annual report 2009 of ‘Ease of Doing Business’ recognized Pakistan as the 85th most business friendly country in the world. The Ease of Doing Business index is an index created by the World Bank and it is based on the average of ten sub-indicators with the input and verification of more then 5,000 government officials. In this scale Singapore stands top and Central African Republic stands last on serial 183 in the list. Pakistan’s position as compared to neighboring countries is; China is ranked 89, India 133, Afghanistan 160 and with respect to South Asian Countries Pakistan’s rank is better as compared to Sri Lanka which holds 105, Bangladesh 119 and Nepal 123. Unfortunately for the last few years the country is facing a situation of uncertainty and crisis that it had not faced before. The internal turmoil and chaos within the country, the rising rate of inflation, deteriorating law and order situation, terrorism, extremism, shortages of general commodities, electricity crisis, foreign policy issues, and many other related factors has affected the corporate world also that demands an effective management system to survive in the face of these competitive forces. A comparative study of management practices reveals that although Pakistan is suffering a number of anomalies but still the country is ranked to be a business friendly country and their exist immense potential that can be materialized and explored. This requires that the organizations must consider those management areas which need to be focused such as managing quality and productivity through effective planning and proper leadership without creating an imbalance condition in organizations responsible for creating frustration among employees. Thus the organizations in Pakistan have the opportunity to play their roles in this regard by stressing for an effective management system that will allow them to realize benefit from this opportunity.