Finding the Right Fit – MNC or SME?

Now that you’ve decided on the industry you aspire to enter, the next step is all about finding the right fit. To MNC or SME; that is the question.

According to an article published by The Straits Times in March 2017, the Randstad Workmonitor, an online questionnaire, revealed that 75 percent of Singaporeans between the ages of 18 – 65 years old prefer to work for MNCs. Do you fall within the majority of Singaporeans, or are you part of the remaining 25 per cent? How will you determine the best fit for your career goals?

To get things started, we’re going to examine the characteristics of both MNCs and SMEs before taking a quick glimpse into the main differences, benefits and drawbacks of each option. With a clearer understanding of MNCs and SMEs, you will be able to make a well-informed choice when you choose an organisation for your next internship.

What are MNCs?

A multinational corporation, often abbreviated as MNC, possesses assets in at least one country outside its home country. It is typical of MNCs to set up offices, factories or facilities in various countries. These companies typically have a central head office and regional headquarters where they coordinate international operations. American denim label, Levi Strauss & Co, is headquartered in San Francisco, California, but has an Asia Pacific office in Singapore and a Europe office located in Belgium.

An interesting point to note is that MNCs are predominantly American, Japanese or Western European; such as Coca-Cola, Apple, Toshiba, Sony and BMW.

What are SMEs?

According to the Ministry of Trade and Industry, a Small Medium Enterprise in Singapore is one that has an annual sales turnover of less than $100 million, or that employs less than 200 workers. SMEs have smaller employees, fewer offices and less global reach compared to MNCs.  Examples of SMEs in Singapore include Honestbee, Home-Fix, oBike, and Shopback.

What’s the difference?

Organisational Structure

MNCs tend to be stricter on hierarchy, and information generally flows via a top-down approach. Think of the organisational structure of an MNC as a pyramid — with the chief executive officer at the top of the pyramid, followed by the board, presidents, vice presidents, managers, then employees. The chain of command starts at the top, with instructions from the CEO trickling down level by level down to the employees who execute them.

Due to their smaller size, SMEs tend to have a flatter hierarchy, and bosses are often communicating and collaborating with entry-level employees on a frequent basis. Decisions made at the top tend to be communicated more quickly since they do not have to pass through several levels of hierarchy to reach the junior employees. Due to the quicker flow of information, faster decision-making and implementation can take place in an SME.

Work Environment and Job Scope

In an MNC, an employee’s role is quite fixed. Marketing executives will report to marketing managers and assist them in campaigns, the preparation of marketing collateral such as EDMs, web content, brochures and so on. You will take charge of the same duties and with time and experience, chances are you will end up being very skilled at what you do. The downside about having a fixed role is that over time, tasks may feel quite repetitive and leave employees feeling restless.

On the other hand, job scopes in SMEs tend to be less defined and can be blurred — even as an intern, you may find yourself dealing with responsibilities that are normally accomplished by full-time employees. No work day is the same, and critical thinking is highly required as you will have to tackle a different set of challenges every day.  Wearing multiple hats will prove to be a challenge at the start, and often requires one to invest longer working hours to get things done. While this may appear daunting, it is no doubt a great opportunity to try your hand at different tasks, thus enhancing your skill set. SME employees benefit in terms of the exposure gained from managing different responsibilities, plus self-discovery as they will discover the kind of tasks or roles they perform best.

Prestige and Remuneration

There’s a certain prestige attached to working for an MNC, and this makes working at one a very attractive endeavour. For example, if your resume states that you have previously interned or worked at a company like Google, the brand of the company speaks for itself and automatically “sells” your resume. MNCs certainly have more prestige as compared to the lesser-known SMEs.

In terms of monetary remuneration, MNCs definitely trump SMEs since they have a bigger budget to work with. The employee welfare and benefits tend to be more attractive at MNCs as well. Medical insurance is typically more comprehensive; on top of the standard medical benefits, some companies cover dental expenses and even offer medical coverage for the employee’s dependents.

In recent years, SMEs have realised that attracting and retaining talent is crucial to their growth. The National Wage Council (NWC) has also encouraged variable payments that commensurate with the firm’s performance and employee’s contributions. With this in mind, SMEs would be willing to offer lucrative remuneration to attract capable candidates and offer increments to existing employees to retain them.

Larger MNCs, such as Google, are also able to afford its employees greater luxuries such as free meals and access to nap pods and an on-site gym. MNCs such as SAP offers its employees a healthy work-life balance through employee engagement programmes, while the Havas group offers employees “family days” on selected Fridays, where staff get to knock off at 3pm. As an intern, you may not have access to the full suite of employee privileges, but these are things to consider if you have the intention to work for the organisation full-time.

Finding Your Fit

Both MNCs and SMEs each have their share of pros and cons. At the end of the day, choosing between the two business entities is really a decision that’s made based on individual preferences. Be clear on what you wish to achieve and how either interning at an MNC and SME can bring you a step closer to your future goals.

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