At the same time technology is playing a major role in the development and existence of the Trans national companies. The Board, chief executive officers and top level of the management always think about new strategies and systems to maintain the growth and prospects of their organisation. However the growing competitive environment and emergence of new industry houses from developing markets are compelling existing multi national companies to give shape for solid action plan for the long term existence. With the opening up of economies world over the capital flow has now become more free and margins have come down significantly. Most of these companies are now working on shoestring margins or carrying out specific cost saving measures to increase their competitive advantages. The major challenge these companies are facing today is the high competitive advantage for companies in the emerging economies such as India, China, Brazil and other East Asian countries. Companies from these areas have an inherent competitive advantage due to the availability of cheap labour, raw material and skilled human resources. Also these companies have good knowledge of their domestic market, which is now emerging as the largest global market. It is in these geographical areas that a two third of the global population lives. Also companies from these economies are also aggressively entering into the markets in developed world such as United States, European Union and United Kingdom. While they were compelled to decrease the cost of production, it was necessary to improve technology and product quality to sustain in this highly competitive global trade scenario. It is in this scenario that multi national companies are thinking of a new approach for growth.
During the post liberalization, globalization and privatization period companies have started to invest heavily on Research and Development and technology. Today technology is playing a major role in the evolution of industrial organizations working in both manufacturing and service sector. They have no choice but undergo drastic change in the organizational structure. When we talk of adapting changes, it is easy to say than practice. For a long time organizations are working in a designed frame work and there will develop an internal inertia against any change from this framework. Employees, shareholders, customers and other stakeholders of the company will view brining in any change in the total working atmosphere and structure of the organization suspiciously. So there should be a keen strategy to win the minds of these stakeholders before introducing any change.
In the first part of the 21st century global trade system has seen large number organizational initiatives in a bid to increase competitive power of the organization. It was in this period that the word outsourcing got more attention. It means that companies in developed economies, where cost is higher, will transfer jobs to cost effective emerging economies to increase their competitive strength. Initially most of the outsourcing happened in manufacturing sector. Many multi national companies had shifted their manufacturing facilities to the low cost economies such as China, Korea, Brazil and other south East Asian countries. This was followed by services sector. Here India and Philippines have emerged as new hot destinations due to their English knowledge. Though