A multinational company (MNC) is an enterprise that manages production or delivers services in more than one country. There are some challenges faced by MNC’s that transact business in international markets which can hinder its competitiveness hence its controversies and these are as follows; Market Imperfections It may seem strange that a corporation has decided to do business in a different country, where it doesn’t know the laws, local customs or business practices of such a country is likely to face some challenges that can reduce the manager’s ability to forecast business conditions. The additional costs caused by the entrance in foreign markets are of less interest for the local enterprise. Firms can also in their own market be isolated from competition by transportation costs and other tariff and non-tariff barriers which can force them to competition and will reduce their profits. The firms can maximize their joint income by Continue reading
International Business
International Business Management deals with the maintenance and development of a multinational operation across national borders, whose manager has the knowledge and the skills to manage and handle cross-cultural processes, stakeholders and business environments in a right way.
Family Businesses: Growth Stages and Challenges Faced
Family business can be describe when business own by one or more families members directly or indirectly and have significant ownership and commitment toward the business well being. Family business can be consist of numerous combination of family members such as husband and wife, parents and child, extended family and also multiple generations such as grandfather, father and son. These family members also play roles as stakeholder, board members, working partners, adviser and employees for the company. Generally there are three different stages of family business had gone through in order for the business to growth from inception to maturity. Different skills are required in each stage and family issues might happen when the business moving from one stage to another stage. The first stage is called as start up stage where the business is still new and varies from 1st to 5th year after the company started to venture Continue reading
Importance of Understanding Culture in International Business
As described by the famous author Edgar Schein, the culture in reference to the corporate world is the different corporation’s learning that is developed by different discoveries, invention and the development for handling the internal and the external issue effectively. These learning and development should be successful enough to be passed and taught to the coming and joining employees for handling such affairs in the future. He also remarked the famous quote, “the culture has a same meaning to the group what personality has to with individual”. Also it is well understood in the current era of global market that a successful multinational company has to have an in-depth knowledge of the environment and the different cultural background of the different countries and regions in which it is operating to have a considerable amount of success. For any of the successful MNC, it is very essential to understand the different Continue reading
Paradox of Globalization vs. Localization
In today’s continuously changing world, globalization is what every business, organization, and nation should seek and welcome as a positive change. However, many people are unaware of the main focus and meaning of globalization, especially in comparison to localization. A large number of people believe that globalization is just another common word used to refer to changes and differences that cannot be explained. Therefore, many different activities or changes are improperly labelled to be a part of or caused by globalization. Localization is the process of adapting a product or service to a particular language, culture, and desired local preferences. Ideally, a product or service is developed so that localization is relatively easy to achieve – for example, by creating technical illustrations for manuals in which the text can easily be changed to another language. The process of first enabling a product to be localized and then localizing it for Continue reading
Multinational Corporations (MNCs) – An Overview
Multinational Corporations (MNCs) are businesses that extend outside of their own country, whether they are located throughout the world or only in a couple other countries, they are considered multinational. The value adding activities which are owned by these companies are used to produce tangible goods or intangible services or the combination of both. There are many reasons as to why firms become multinational and there are various strategies for a firm to become multinational. The immediate motives of the Firms can be to expand business, to seek new market, or for additional profits and revenues. It may also be to concentrate on the economics of scale that a larger international demand can bring. The motive behind market seeking activities is strong among firms who have some advantage related to technology or brand which gives them a competitive advantage over domestic rival. Another reason for firms to become multinationals is Continue reading
Conditions for Sustainable Competitive Advantage
Competitive advantage occurs when a firm is using a strategy that is currently not being currently implemented by any of its present and potential competitors. Sustainable competitive advantage continues to exist after the efforts by competitors to copy that advantage continues to exist after the efforts by competitors to copy that competitive advantage have ceased. That means, the inability of competitors to copy the strategy makes for a sustainable competitive advantage. Achieving sustainable competitive advantage is critical for companies since it is the only way to be successful in business. With a sustainable competitive advantage, businesses may expect higher employee retention, higher product margins, more sales and a stronger focus on the company as compared to their competitors. It is difficult to sustain a significant competitive advantage over a time without periodically revisiting the firm’s identity and purpose. For instance, reducing costs is not a true strategy because it simply provides Continue reading