Tm-Chapter 1

TM-Chapter 1 (Motivations, Means and Mentalities)

In this chapter, a number of important questions that companies must resolve before taking the leap to operate outside their home environment.

1. What market opportunities, sourcing advantages, or strategic imperatives provide the motivation for their international expansion?

2. By what means will they expand their overseas presence-through modes such as exports, licensing, joint ventures, wholly-owned subsidiaries, or some other means?

3. How will the management mentalities – their embedded attitudes, assumptions, and beliefs- that they bring to their international ventures affect their chances of success?

Operating in an international rather than a domestic arena presents managers with many new opportunities. Having worldwide operations not only gives a company access to new markets and low-cost resources, it also opens up new sources of information and knowledge and broadens the options for strategic moves that the company might make to compete with its domestic and international rivals. However, with all these new opportunities come the challenges of managing strategy, organization, and operations that are innately more complex, diverse, and uncertain.

What is multinational enterprise?

* Multinational enterprise has substantial direct investment in foreign countries (Not just the trading relationships of an import-export business), and actively manage and regard those operations as integral parts of the company, both strategically and organizationally. (They are engaged in the active management of these offshore assets rather than simply holding them in a passive investment portfolio. )

What’s different about MNE management?

1. Multiple operating environment

* Diverse patterns of consumer preferences, channels, legal frameworks, etc.

2. Political demand and risks

* Need to mesh corporate strategy with host country policies

3. Global competitive game

* Multiple markers, new...