Tài liệu International Business and the Global Companies-ORGANISATION AND MANGEMENT ppt

ORGANISATION AND MANGEMENT
Lourdes Fuente Mugica


INDEX:
Introduction……………………………………………………................................ 3
What is globalization? ............................................................................................... 3
Nature of multinational enterprises……………………………................................4
Global companies ……………………………………………….............................. 6
Strategy management of multinational enterprises………….................................... 6
Authors………………………………………………………................................... 7
E-Business system……………………………………………................................. 10
Conclusion………………………………………………………............................. 11
Bibliography.............................................................................................................. 12
Introduction:
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International business is the study of transactions taking place across national borders for the purpose
of satisfying the needs of individuals and organisations. These transactions can be trade (importing,
exporting) and direct investment.
The main focus will be Multinational Enterprises: MNE. MNEs have directly invested billions of
dollars overseas. Most of these foreign investments have been two-way.
MNEs have recently been turning their attention to developing countries. Another international
business activity has been the international joint venture (agreement between two or more partners to
own and control overseas business).
SME
Many small and medium-sized businesses are involved in international business. We include here
service industries that currently employ 70% of work force in USA, Canada and Europe.
Large multinational enterprises tend to influence the success of smaller businesses because they rely
on small business for goods and services.
What is globalization?
We understand globalization as the political, economical, social, cultural and ecological process that it

is happening nowadays. Thanks to this process, there is a bigger economic interrelationship between
different countries, no matter how far they are, and always under the multinational companies’
control. Each time there more ambits regulated by the free market, neoliberal ideology is applied with
more intensity in almost all the countries and the big corporations achieve each time more power.
GLOBALIZATION is the process that emerges from:
• The internationalisation of production and services
• Stateless corporations
• The existence of world markets (Ford, McDonalds, Coke, Hollywood, Revlond, Sony, Levy’s)
• Increase integration into the international division of labour: China and Eastern Europe
specialising in cheap labour
• Internationalisation of financial markets: transnational banks and subsidiaries of multinationals.
We can define globalization in some different levels:
 Worldwide level:
Growing economic interdependence among countries reflected in cross border flow of goods,
services, capital and know-how.
 Country level:
Extent of a country’s inter-linkages with the rest of the world
 Industry level:
Degree to which a company’s competitive position within that industry in one country is
interdependent with that in another country
Why is important globalization?
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- It can lead into cultural homogenisation
- It make markets to converge
- It leads to globalization of customers
- Globalization is characterised by cost drivers:
- Economies of scale and scope
- Increase in levels of fixed costs
- Globalization has lead to fundamental changes in industry structure (deregulation, privatisation,
technological change)

Nature of Multinational enterprises:
Multi-Domestic Industries vs Global industries:
International trade incorporates many different types of competition and industries differ markedly in
their patterns of international competition.
a- Multi-domestic industries:
- Competition in one country is independent of competition elsewhere
- This lead to a collection of domestic industries
- A firm can and should manage its world-wide activities as a portfolio of independent subsidiaries
in each country.
- The firm therefore should adopt a country-centred strategy.
b- Global industries:
- Competition in one country influenced by competition elsewhere, leads to international rivalry
- To be a leader a firm must develop and implement a strategy that integrates its activities in
various countries but some portions of the firm’s activities must take place in each individual
country.
- The firm should adopt a global strategy.
- Ongoing integration of activities on a worldwide basis.
What are the main characteristics of “Global”?
- Standardisation of large international market segments
- Product standardisation
- Reconfiguration of the value chain (distribution…)
- Global marketing function
- Multi-point competition
- Governments play two roles: “players” and “referees”
Multinationals:
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The USA has identified over 45,000 MNEs, but the largest 500 account for 80 percent of the entire
world’s foreign direct investment. These firms are engaged in operations such as automobiles,
chemicals, computers, consumer goods, financial goods, industrial equipment, oil and steel
production…

Their main characteristics are:
♦ Looking at the environment in which they operate, there are two major areas of concern: the home
country of its headquarters and the host countries in which it does business (stakeholders can
come from anywhere in the world)
♦ Their affiliates must be responsive to a number of important environment forces, including
competitor, customers, suppliers, financials institutions and government.
♦ The MNE draws on a common pool of resources, including patents, trademarks, information and
human resources
♦ Its affiliates are linked by a common strategic vision.
Firms become multinationals to:
♦ Protect themselves from the risks and uncertainties of the domestic business cycle (International
diversification)
♦ To tap the growing world market for goods and services
♦ In response to increased foreign competition and to protect world market share.
♦ To reduce costs
♦ To overcome tariffs walls by serving a foreign country from within
♦ To take advantage of technological expertise by manufacturing goods directly rather than
allowing others do it under a license (for example). MNEs are better able to protect their
international competitiveness than companies that have license agreements.
Global companies:
MNEs are also called global companies:
“A global company is one which operates with resolute constancy at low relative cost-as if the entire
world (or major regions of it) were a single entity; it sells the same things in the same way
anywhere” T. Levitt, 1983, HBR
Philosophy of MNEs:
MNEs make decisions primarily based on what is best for the company even if this means transferring
funds or jobs to other countries.
MNEs make whatever agreements are in their best interest, even if this means bringing in firms from
three or four different countries
It is the ability of MNEs to understand different consumer tastes in segmented regional markets and to

respond to different national standards and regulations that are imposed by autonomous governments
and agencies.
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