Strategic alliances can be seen as one of the fastest growing trends for business today; Alliances are sweeping through nearly every industry and are becoming an essential driver for their super growth. A strategic alliance, by definition, is a form of affiliation that involves a mutual sharing of resources for the benefit of all of the strategic partners. “Mutuality” is key. The business consideration is whether both alliance partners need each other. Strategic alliances range in size and scope from informal business relationships based on simple contracts to joint venture agreements, some times where corporations are set up to manage the alliance. Strategic alliances are cropping up across the global arena mainly due to the maturation of several trends of the 1980s, such as: intensified foreign competition, shortened product life cycles, soaring cost of capital, including the cost of research and development, and ever-growing demand for new technologies. However, strategic Continue reading
International Business Management
Advantages and Disadvantages of Strategic Alliances
A global perspective is necessary for businesses since it assists in the process of identifying the prevailing threats and opportunities in the contemporary marketing arena. In spite of the fact that it is necessary to safeguard a business against global competition, it is vital to note that firms should seek ways and means of penetrating into international marketplace. For example, Barnes and Nobles bookstore entered into strategic alliance with Starbucks way back in 1993. The rationale behind the partnership was to put in place in-house coffee shops, an alliance that would benefit both parties. As a matter of fact, there are myriad of opportunities that are usually created when businesses penetrate into the global market. At this point, it is often of great importance for a firm to choose the most appropriate entry mode. While there are a host of entry modes that can be chosen by a business organization, it is Continue reading
Multinational Corporations and Technology Transfers
In this world many things can be shared, transformed and utilized which helps to the development of civilization, but knowledge is the rarest of rare wealth that cannot be stolen and it remains intact with a person until it is expressed. Once it is expressed, there is no guarantee how it is used and manipulated. To control this unauthorized use of technology several laws like patent laws, copyright laws etc. were drafted all around the world. Knowledge is recognized as one of the capable resources for dynamic global business environment. Technology transfer is not an easy issue it has potential to influence the political and financial relations of countries also. Multinational companies are having a rare opportunity to transfer the new technology to the developing countries. In recent times the link between the technology transfer and foreign direct investment through multinational companies became central plank of the issue in all Continue reading
Costs and Benefits of Foreign Direct Investment (FDI)
Many governments can be considered pragmatic nationalists when it comes to FDI. Accordingly, their policy is shaped by a consideration of the costs and benefits of FDI. Here we explore the benefits and costs of FDI, first from the perspective of a host country and then from a perspective of the home country. Host Country Effects: Benefits There are three main benefits of inward FDI for a host country: the resource-transfer effect, the employment effect, and the balance of payments effect. Resource transfer effects: Foreign direct investment can make a positive contribution to the host country’s economy by supplying capital, technology, and management resources that would otherwise not be available. If such factors are scarce in a country, the FDI may boost that country’s economic growth rate. Many of the MNEs by virtue of their size and financial strength, have access to financial resources not available in the host country Continue reading
Max Weber and Postmodernism Theory Concepts
It is not difficult to argue that Max Weber has outlived all his competitors in the classical tradition. His ideas have inspired scores of sociologists in a host of areas for more than sixty years. The contemporary vitality of these ideas is in no small measure due to the fact that he is the most prominent advocate of modernism and that he has both resisted and justified some of postmodernism’s most convincing criticisms of modern social science and society. When analysing the statement that “the fate of our times is characterized by rationalization, intellectualization and about all by the disenchantment of the world” one must look into all aspects of the 3 ways of thinking that Weber has described; rationalism, intellectualization and disenchantment. When focusing solely on the rationalism that Max Weber talks speaks about we can see a connection to the way of thinking he described in his writing Continue reading
Foreign Direct Investment and the Business Environment
Direct investment abroad is a complex venture. As distinct from trade, licensing or investment, Foreign Direct Investment (FDI) involves a long-term commitment to a business endeavor in a foreign country. It often involves the engagement of considerable assets and resources that need to be coordinated and managed across countries and to satisfy the principle of successful investment, such as sustainable profitability and acceptable risk/profitability ratios. Typically, there are many host country factors involved in deciding where an FDI project should be located and it is often difficult to pinpoint the most decisive factor. However, it is widely agreed that FDI takes place when three sets of determining factors exist simultaneously; the presence of ownership-specific competitive ages in a transnational corporation (TNC), the presence of locational advantages in a host country, and the presence of superior commercial benefits in an intra-firm as against an arm’s-length relationship between investor and recipient. The Continue reading