This document discusses several emerging challenges for multinational companies (MNCs) operating in various jurisdictions. It outlines key challenges such as regulatory issues due to expanded regulatory landscapes, cultural differences across countries and organizations, governance practices, sustainability reporting, money laundering, marketing locally, intellectual property rights protection, and responding to increased competition. Views from business leaders emphasize challenges of brand building, innovation, excellence in execution, and working in multicultural teams for MNCs globally.

1. EMERGING CHALLENGES FOR MNCs
OPERATING IN VARIOUS
JURISDICTIONS
NESAR AHMAD
PRESIDENT, THE ICSI
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2. GLOBALISATION AND INDIA-SOME
THOUGHTS OF VISIONARIES
"India’s computer scientists are among the
leaders of companies worldwide."
Bill Gates, Microsoft Corporation
“In this century India's economy will be larger
than the United States.“
Bill Clinton, Former US President
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3. Challenges faced by MNCs -
Views of N R Narayanamurthy-
Chief Mentor Infosys.
 Creating a Brand Equity
 Openness to accept good ideas
 Be proactive
 Acceptance of meritocracy
 Becoming a learning organisation
 Embracing the speed
 Innovation and imagination
 Excellence in Execution
 Creating better governance
 Learning to work in multi cultural teams
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4. Key Challenges
 Regulatory
 Transfer pricing
 Cultural
 Governance
 Sustainability
 Money laundering
 Marketing
 IPR
 Competition
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5. REGULATORY
 Expanded Regulatory Landscape (Leads to
multiple filings)
 To be in pace with Policy Changes of
Government
 Mode of Compliances. (i.e Different technology
used for same compliance in different countries)
 Level of Compliances. (Some mandatory
compliance in one country may be a voluntary
compliance in another country)
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6. TRANSFER PRICING
 Multinational companies should tailor their global
transfer pricing platform to local requirements in higher-
risk, more complex countries.
 Multinational companies should consider a more
proactive approach to controversy management.
 Service, intangibles and financing transactions are
increasingly in the sights of tax authorities. The
documentation of these categories of transactions
often lags behind documentation for tangible goods
transactions. Multinational companies should develop
or enhance their documentation for these transactions.
Ernst & Young Global Transfer Pricing Survey 2010)
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7. CULTURAL
 Culture usually is a soft concept; it is a set of
implicit influences that people cannot account
for completely or accurately.
 Culture consists of the long-standing, largely
implicit shared values, beliefs, and
assumptions that influence behavior,
attitudes, and meaning in a company (or
society).
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8. CULTURAL
 Cultural differences in MNCs may be Cross-
national, Cross-organisational, Cross-functional
 Cultural integration calls for integration in terms
of decision making process, communication
mechanism, working style, informal aspects,
attitude and aptitude of employees
 Language hinders communication channels
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9. Strategies to address
Cultural Issues
 Analyze and identify the common aspects
and Consider strength of both cultures
 Change management workshops
 Setting up of Synergy Offices.
 Informal Meeting of employees
 News letters/continuous interactions
 Language Training
……Contd
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10. Strategies to address
cultural issues
Conducting of cultural due diligence and providing solutions.
 leadership vision
 management practices
 governing principles
 policies and procedures
 informal practices
 relationship management
 employee satisfaction
 customer satisfaction
 key business drivers
 organizational characteristics
 organizational perceptions
 communication mechanism etc.
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11. GOVERNANCE
 Transparency and Disclosures
 Perception of the Board on their role and
responsibility
 Board Evaluation/Compensation
 Board Room practices
 Stakeholder Analysis Mechanism
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12. SUSTAINABILITY
 Environmental issues
 Social issues
 Profitability while satisfying societal
needs.
 Sustainability Reporting
 Integrated Reporting
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13. MONEY LAUNDERING
MNCs may encounter money laundering in at least
two distinct ways:
 Payments for goods made with illegitimate funds: The
corporation and/or its products may be used by criminals
in the process known as "layering" -- distancing the ill-
gotten gains from the criminal activity by moving it further
from the illegitimate source; and
 Legitimate corporate funds used for an illegal purpose,
such as bribery, diversion of funds for personal use, or
cash bonuses
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14. Addressing Money
Laundering issues
 Training of personnel
 Employing principal officer
 Strong customer due diligence
 Anti-Money Laundering as part of Risk
Management
 Boards’ role in addressing money Laundering
issues
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15. MARKETING
There is a saying "THINK GLOBALLY, BUT PLAN
AND ACT LOCALLY".
Glocal Marketing should take in to consideration
 Customers characteristics
 Segmentation of the market
 Targeting of the company
 Positioning of the product
 Product Offered
 Customers perception about the product the sales
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16. IPR
 The protection of Intellectual Property Rights
is an important challenge for MNCs
 Need for strong IPR policy and strategy for
management of IPR portfolio
 Need for strengthening IPR institutions for
effective implementation of IP laws
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17. COMPETITION
 Implementation of an effective Competition Law
Compliance programme
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18. THANK YOU
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