Globalization is one key environmental factor, which has brought many opportunities to the organizations, particularly Multinational Companies (MNC) to invest in an effective manner and importantly has a profitable venture. (Knowledge Management 2007).That is, the environmental factor of politics will mainly impact and shape MNCs because as they enter foreign firms, they will be optimally regulated by the government. When this external environment acts, the organization for their part has to incorporate certain practices, thus shaping itself in a particular way. One of the key practices, which ‘shapes’ the organization and thereby psychological association for the organization in the minds of the people in the recruitment function of the organization. In MNCs particularly during foreign operations, employees will be recruited mainly from the local population. This recruitment process, apart from complying with the unwritten rule of giving maximum employment to the local population and also getting cheap labor, will benefit the MNC in many ways, particularly psychological association. (Scullion & Collings 2006).That is, this functioning of the organization will elevate the organization’s image in the eyes of the local population. The local population will have a ‘psychological high’ that the MNC is recruiting them and providing them a career and livelihood. Ways in Which The Environment Appear to Shape Organizations.
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