Friday, December 6, 2019

International Business Management and Capital †Free Sample

Questions: 1. Foreign direct investment (FDI) occurs when a firm invests directly in new facilities to produce and/or market in a foreign country. FDI may take the form of Greenfield investments (i.e., the establishment of a new operation in a foreign country) or mergers with/acquisitions of existing firms in the foreign country. Please answer the following questions regarding FDI. Discuss the benefits and costs (inward) FDI offers/imposes on host countries. Discuss the benefits and costs (outward) FDI offers/imposes on home countries. Likewise, address some of the home-country and host-country policy options for encouraging/restricting outward and inward FDI, respectively. 2. If a firm is changing its strategy from an international to a transnational strategy, what are the most important challenges it is likely to face in implementing this change? How can the firm overcome these challenges? 3. You are working as a general manager for the headquarter organization of Toyota in Japan. The firm has recently opened operations in the emerging market of Argentina. You have been asked by the CEO to recommend someone from your department to send to the firms subsidiary there. What aspects would you need to consider in identifying the right person for the job? Moreover, how would you prepare the selected individual for this overseas assignment? Discuss. 4. In a world of zero transportation costs, no trade barriers, and nontrivial differences between nations with regards to factor conditions (i.e., resources such as land, labour, and capital), firms must expand internationally if they are to survive. Discuss. Answers: 1. Benefits and Costs of Inward FDI on Host Countries The four important benefits of FDI for host countries are effect of resource transfer, effect of added employment, balance of payment effects and impact on economic and competition. Management, capital, technology are the effect of resource transfer. The MNEs and local suppliers create direct and indirect jobs. Current account surpluses and deficits are occurred as a result of balance of payment effects (Dowling et al., 2009). The costs include loss in economic independence, importing of things by subsidiaries (foreign) and outflow of earnings. Benefits and Costs of Outward FDI on Home Countries The benefits include creating demands in exports, new jobs in the field, more foreign earnings, providing benefits to consumers at lower prices, higher value activities of resources and employees and gathering knowledge on operation on a foreign location. The costs include loss in the local jobs and loss of trade balance due to exports. Home Country and Host Country Policy Options Home country policy includes tax incentives, capital assistance and political pressure on companies. Other policy options include prohibiting companies while investing in particular countries. Host country policies include loans with low interest, subsidies, tax concessions, etc. 2. Strategies of internalisation are also known as globalisation. Strategies of globalization are different from transnational strategies. It can be related to the concept of glocalization. There are certain things that internalization or globalization strategies consider. However, if a company changes its strategies from globalization to transnational, then it will face problems both at organizational level and at global level (Dowling et al., 2009). The values of their products to the customers are also changing. It can create a change in perception of the customers towards the particular brand. Transnational strategies must have different sets of goals to the community as well as to the company. The company can also face in the management issues of the subsidiaries that are present in the different foreign locations. The challenges can be overcome by planning the transnational strategy in a particular time in a way so that they can be implemented in the right time. A proper channel of communication is being maintained so that the companies can take necessary action in the challenges faced by them in the marketplace as well as in the organizational level. In many cases, new transnational strategies must be formulated to mitigate the gaps created due to change. 3. The company is headquartered in Japan. In its Argentina operations, one employee must be chosen so that he can successfully fulfil the requirements of the Argentina branch. There are different types of assignments that companies have in their subsidiary branches. They are traditional assignments and short-term assignments. If the operations of Argentina branch fall under traditional assignments, then some considerations are there that the management of Toyota have to emphasize. The considerations are development of management, filling various positions in the skill gap, organizational development, managerial control, etc. While selecting the desired candidate for sending him in Argentina branch, some factors will be considered such as cross-cultural stability, technical ability, language, requirements of the MNE (Toyota), family requirements, etc. The candidate should be trained in a way so that he can get a detailed idea about the project or assignment he will be handling in the foreign location. The measures of effectiveness should be communicated to the candidate so that he will not face any issues in handling problems (Dinnie, 2015). 4. In the world of globalization, a country cannot produce its own required goods and services of its own. Every country is depended on products of other countries to provide the necessary goods to its people. Hence, export import of goods is a common practice in the field of business (Peterson et al., 2012). Now the concept of free trade and zero transportation cost is valid all over the world. Hence, it is very easy for the countries to trade with other countries. Compared to previous situation, the legislations of governments of the countries are flexible enough so that they can also take advantage from the host country (Wild et al., 2014). Firms can expand their operations, easily by considering some factors. International human resource management is common practice that are followed by many domestic companies in order to expand their operations in the target foreign countries. Proper selection of entry modes along with PESTEL analysis is to be conducted by the companies while penetrating into foreign markets. References Dinnie, K. (2015).Nation branding: concepts, issues, practice. Routledge. Dowling, P., Liesch, P., Gray, S. and Hill, C.W., (2009). International business. McGraw-Hill Australia Pty Ltd. Peterson, M. F., Arregle, J. L., Martin, X. (2012). Multilevel models in international business research.Journal of International Business Studies,43(5), 451-457. Wild, J., Wild, K. L., Han, J. C. (2014).International business. Pearson Education Limited.

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