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
International Business Management
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
Types of Letters of Credit
A Letter of Credit (L/C) or documentary credit is an undertaking issued by a bank, on behalf of the buyer (the importer), to the seller (exporter), to pay for the goods and services, provided that the seller presents documents, which comply with the terms and conditions of the letter of credit. Letters of credit are classified in to various categories on the basis of their nature which are used depending on the needs of the importer/opener. Revocable Letter of Credit: A revocable L/C is one that can be amended or cancelled at anytime by the issuing bank without the notice or reference to the beneficiary, consequently, revocable credit does not constitute a legally binding undertaking between the banks and the beneficiary as it can be modified or cancelled at any time without notice to the Beneficiary. Irrevocable Letter of Credit: An irrevocable L/C constitutes a definite undertaking of the issuing Continue reading
Transnational Corporations (TNCs) and Foreign Direct Investment (FDI) Decisions
Knowledge-intensive production, technological change, shrinking economic space greater openness have also changed the context for Transnational Corporations (TNCs). There are new opportunities and pressures to utilize them. The opening of markets creates new geographical space for TNCs to expand in and access tangible and intangible resources. It also permits wider choice in the methods firms can use (FDI, trade, licensing, subcontracting, franchising, partnering and so on) to operate in different locations. At the same time, advances in information, communication and transportation technologies, as well as in managerial and organizational methods, facilitate the trans-nationalization of many firms, including SMEs. The combination of better access to resources and a better ability to organize production trans-nationally increases the pressure on firms to utilize new opportunities, lest their competitors do so first and gain a competitive advantage. Competition is everywhere – there are fewer and fewer profit reservations and market niches that remain protected Continue reading
Methods of Internationalization
In the process of globalization, a firm operates their activities globally and the internationalization process is one of the primary sites of attention. The changes in the technology in the fields of telecommunications and computer lessen the costs of cross border operations and encourage firms to engage in transnational production activities. Internationalization is a sequential process where firms internalize their economic activities characterized in terms of aggressiveness and motivated by either internal or external triggers or a combination of both. It is one of the key strategic decisions for firms to maximize or at least sustain profits to survive in the world of uncertainty and complexity. The global economic expansion has been largely facilitated by the growth of TNCs. They dominate world trade and capital movement with turnover exceeding the GNP of some countries. These corporations continue to grow and influence the landscape of the world economy. Once a firm Continue reading