Answer

Multinational Enterprise: Weekly Journal Entries

            The major focus of this assignment is to present weekly reflection journal entries about the major concepts studied about the multinational enterprise and global expansion. The major factors presented in the journal entries includes the factors which motivate firms to expand internationally, the means of international expansion, conflicting environmental forces and how they influence the performance of the MNEs, and how to respond to the forces. Moreover, aspects such as the establishment of transnational strategies with an aim of establishing a competitive advantage within the international market, how to come up with a transnational organization, creating worldwide innovation and learning, and the challenges faced by MNEs are also addressed. Different frameworks such as Porter’s model are also implemented alongside various case studies to promote an understanding of the outlined areas of learning.

Week 2 Journal - Expanding Abroad: Motivations, Means, and Mentalities

            The key topic covered in week 2 of study includes the concept of the multinational enterprise and the factors which motivates their international expansion.

Factors which motivate international Expansion

Different factors encourage business entities to consider international expansion such as the need to expand the market and seeking new resources which will support the performance and operations of the business (Bartlett and Beamish 2018). Moreover, businesses are also motivated to venture into new international destinations with an aim of competitive positioning, specifically with an aim of matching the efforts of the competitors in the market (Bartlett and Beamish 2018). Considering the case of Australian mining companies, the managers of the outlined firms have considered it a strategic move to expand internationally to destinations such as Africa to derive the benefits associated in the outlined market (Bartlett and Beamish 2018). The presence of the firms in the African market is depicted in Appendix 1 (Australian Listed Companies in Africa). Additionally, the need to understand what the global market offers is also a fundamental factor which motivates players to expand into international markets. Arguably, foreign markets should have the ability to offer benefits which are location-specific to encourage players to expand into the outlined destinations (LI, Zeng, and Zhang 2013).

Means of International Expansion

            Entering into international markets is achieved through various mode of entry such as licensing, exports and the formation of joint ventures among others. However, before choosing the proper mode of entry, the business should have a proper understanding of the international market as guided by the Uppsala Model. The framework provides a depiction of how firms can start investing within nearby markets as a result of the available distance noted between the domestic and foreign markets (De Villa, Rajwani, and Lawton 2015).

Week 3 Journal - Understanding the International Context: Responding to Conflicting Environmental Forces

            The fundamental topic covered in week 3 of study includes having an understanding of how to respond to the conflicting forces common within the international business environment. Culture is an external force which influences businesses within the internal context as represented by Hofstede’s cultural dimensions in Appendix 2.

Conflicting Environmental Forces

Notably, the conflicts can be categorized into various sets of demands which are directly tied to the success of an organization in the international market. For instance, worldwide learning and innovation force, national responsiveness and differentiation, and cross border integration and coordination are some of the external demands considered by businesses within the internal context. The primary economic forces which drive the processes and transformation of the business include economies of scope, economies of scale, and the cost and availability of productive resources (Yaprak, Xu, and Cavusgil 2011). The outlined factors form a basis for the global coordination. The case of Tobacco Companies in Africa presented in Appendix 3 is also effective in illustrating the conflicting environmental forces in the global market.

Responding to the Forces

 Looking at economies of scale, it is evident that businesses combine their intermediate processes within a single plant while further relying on the use of continuous-process technologies to ensure that a large volume of production is delivered at a low-cost (Bartlett and Beamish 2018). This is mainly common in sectors such as automobile and chemical industries whereby the players are focused on scaling its economy volumes to exceed the sales volumes through an international market expansion. Economies of scope force are evident in less capital intensive sectors. Factor costs provide a depiction of the total amount of costs of the involved factors utilized in the production of a commodity (Buckley 2011).

Week 4 Journal - Understanding the International Context: Responding to Conflicting Environmental Forces

            The primary topic addressed during week 4 of study includes the macro environmental factors which constrain, encourage and shape the industries thus allowing MNEs to compete on a global scale.

The Macro Factors

Social and political forces are also macro factors which shape the industry which can encourage MNEs to ensure changes to their operations and activities as a means of responding to the regional, national, and local demands (Klimek 2016). Moreover, external pressures, such as competition threat, is also examined as a force which forces MNEs to come up with innovative responses and initiatives which are likely to result to the development of a competitive advantage which is knowledge-based (Bartlett and Beamish 2018).

Responding to the Macro factors

Continuous changes need to be implemented within the international business environment (Bartlett and Beamish 2018). The proposed changes can be carried out to guarantee that it matches the shifts noted in the political, social, economic and technological forces which mostly results to the challenges experienced by the MNEs. Free trade is one of the forces of change which business managers can consider. Notably, with free trade, businesses or jobs can be outsourced to regions likely to benefit the business such as those with reduced consumer prices (Klimek 2016). Partnering and recruiting local business players is a strategy which can be considered by MNEs to manage political risk, thus ensuring a continued business performance over different regions such as in the case of Telkom in week 4 whereby technology was implemented to diffuse innovation. Appendix 4 (Which companies are spending most in research and development?) shows the companies which have invested more in research and development to boost its innovation.

Week 5 Journal - Developing Transnational Strategies: Building Layers of Competitive Advantage

            The major topic addressed in week 5 of study includes how multinational enterprises establish transnational strategies and how to set a balance between them to ensure an improved competition in international market.

Establishing Transnational Strategies and competitive advantage

MNE managers are influenced by the pressures and conflicting demands stemming from the business environment (Bartlett and Beamish 2018). Evidently, when faced with a complex scenario, the MNE manager determines the right strategy to be implemented by establishing a balance between the factors which motivates the business to expand internationally while considering the economic capacities of the business, the industrial structure, and the existing market forces (Bartlett and Beamish 2018). To effectively operate in the current competitive business environment, MNEs are required to consider several strategic orientations such as the multinational, global, international and transnational orientation (Court and Narasimhan 2010).

For businesses to effectively operate in the global market, they are required to consider actions such as product standardization a recommended by Levitt. This includes the act of coming up with a standardized product which was going to be offered in its standardized form in different parts of the globe. However, Porter provides a contrasting view suggesting that an effective global strategy should implement the approach of a fox which implements different strategies rather than that of a hedgehog which relies on a single trick to compete (Hsiao 2014). With the noted variance, it is advisable that multinational players should be ready to embrace multinational flexibility which is the ability of firms to explore different opportunities while in the global environment to achieve a competitive edge. Building global efficiency promotes a competitive advantage as in the case of Honda. This is included in Appendix 5 below.

Week 6 Journal - Developing a Transnational Organization: Managing Integration, Responsiveness, and Flexibility

            The major topic addressed during the 6^th week of study includes an examination of how organizations can address the complex and conflicting tasks associated with transnational strategies.

Addressing Complex and Conflicting Tasks

MNEs will adopt varied organizational structures when engaging in the process of expanding internationally. The Stopford and Wells model of MNCs provides an insight into the various structures which can be implemented by different organizations (Bartlett and Beamish 2018). The model provides that during the early stages, the firms will rely on an international division structure while others (those involved in the chemical sector) will consider the worldwide product division structure to be more effective (Bartlett and Beamish 2018). On the other hand, those businesses which opt to expand into a global market only with a limited scope of products will adopt an area structure. A global matrix is implemented in the cases where the product sales and diversity within the international market are high (Eskola, Hultman and Johannesson 2007). In week 6, a case of national responsiveness is depicted showing companies which have come together to build on their capabilities to become. This is represented in Appendix 6.

Response

            The changes experienced within the international operating environment has driven MNEs to respond to the strategic requirement which advocates for a global efficiency, worldwide learning and national responsiveness (Chakrabarty and Wang 2013). However, it is a fact that implementing the proposed strategic objective is a complex process which is also difficult for businesses planning to go global. However, most businesses find it difficult to establish to establish a balance between its units and the functions carried out by the corporate staff (Acharya, Rao, Bhattacharjee, and Wright 2010). With the Stopford and Wells model of MNCs, firms can go beyond the structural fit challenge.

Week 7 Journal - Creating Worldwide Innovation and Learning: Exploiting Cross-Border Knowledge Management

            Week 7 of study addressed the topic of how MNEs can establish a worldwide innovation and learning as a means of securing a competitive advantage. The information-based and knowledge intensive economy is dominated by MNEs which are not only competing based on their traditional ability to gain an access to new markets and factor costs (Bartlett and Beamish 2018). The major challenge experienced by businesses today includes coming up with a transnational business which has the ability to sense an emerging consumer trend within a single destination, connect it to a new capability, and establish a new product or service within the third country. The new service is further diffused to the new market across the globe through the use of innovation (Russell 2011).

Creating Worldwide Innovation and learning to derive competitive advantage

Worldwide innovation has made it possible for rivals in the market to achieve parity in market through increased responsiveness (Hsiao 2014). Arguably, the transnational process of innovation is highly sophisticated in comparison to the local-to-local and center-for-global approaches which continually remained dominant as a means for cross-border innovation in the recent past (Kuznetsov 2012).

            Evidently, the locally leveraged emerging innovation model which is an example of a transnational innovation process provides an indication that the knowledge of the subsidiaries and their market capabilities are shared through the use of worldwide adaptation structure as a global strategy (Hsiao 2014). Looking at the case of Nokia, it is evident that the firm has managed to diffuse it local brands into the internal market through its innovation model. This is represented in Appendix 7 below. Additionally, the globally linked innovation model provides that the global capabilities and resources of businesses are pooled with an aim of establishing an innovation through joint efforts within the global market (Russell 2011).

Week 8 Journal - Engaging in Cross-Border Collaboration: Managing Across Corporate Boundaries

            The 8^th week of study addressed the topic of how firms can take part in cross broader collaboration to enhance their competitiveness.

Cross border Collaboration Efforts

 Different modes of international market entry, specifically joint ventures and the establishment of strategic alliances by players seeking to expand their operations to the international market. The case of Avaya and RingCentral are examples of firms which have effectively established joint ventures in an international scale as represented in Appendix 8. In the current 21^st century, businesses lack enough resources and capabilities required to establish the kind of multidimensional strategies as well as the adaptive organizational capabilities which are effective in establishing a competitive edge in the global market (Bartlett and Beamish 2018). Having this in mind, businesses have to collaborate with an aim of meeting the requirements of the complex global environment. Industrial convergence is an important strategy with MNEs can consider since it favors the business by reducing the competitive intensity within the global market (Luo 2001). Moreover, convergence is also effective since it aims in establishing a complex and integrated value chains which can hinder other MNEs from thriving within the global market at the expense of others.

Risks and Benefits of the Collaboration Efforts

            Collaboration within the global market comes with risks and benefits which the MNE managers should consider to avoid potential challenges likely to face the venture. Through the implementation of the Porter’s five framework, it is clear that businesses have faced the strategic challenge of profit erosion through bargaining or competition from rivals in the market (Friesl and Silberzahn 2017). This was majorly accrued to the fact that businesses opted to maintain independence in managing its operations and controlling its activities.

Week 9 Journal - Building New Management Capabilities: Key to Effective Implementation

            During week 9 of study, the major topic addressed was how MNEs can establish new management capabilities to enhance its global competitiveness, global innovation and learning, and multinational responsiveness.

Establishing New Management Capabilities Strategies

Successful transnational strategies require an organization which can establish global competitiveness and efficiency, establish global learning and innovation and come up with a multinational responsiveness to the challenges stemming from the environmental forces (Maksimov, Wang, and Yan 2019). Managers have a unique role to play within a transnational organization. The roles can be examined from the perspective of the country subsidiary manager, the worldwide functional manager and the global business manager (Maksimov, Wang, and Yan 2019). A global business manager has the responsibility of establishing means that the MNE will compete on an international scale as well as remain efficient globally (Bartlett and Beamish 2018). The major role of the global business manager is to co-ordinate the business dealings of the MNE across borders and become a global business strategist. The worldwide functional manager has the responsibility of offering support to the line of managers by transferring knowledge and diffusing innovation on a global basis (Mozgovoy 2019).

            The geographic subsidiary manager also plays a unique role which includes serving as a bi-cultural interpreter. The major focus of this role is to ensure that the members of the organization are in a position where they can understand the culture of the host country to guarantee a successful business performance and to avoid failure (Jungbae Roh 2013). Also, the geographic subsidiary manager serves the role of a national advocate and defender. Evidently, the person in this position will advocate for the roles of the subsidiary in different global operations (Jungbae Roh 2013).

Week 10 - Journal: Shaping the Transnational’s Future: Defining an Evolving Global Role

            The 10^th week of study addressed the major challenges which MNEs experience while operating in a global market. MNEs are faced with several challenges while operating internationally.

Challenges Experienced

Businesses which choose to go global have to deal with the issue of increased public resistance which is associated with the forces of globalization which further encourages their growth (Pereira and Dathein 2016).  This week’s study also informed me of the fact that there are for major postures which can be undertaken by MNEs such as exploitative, transactional, transformative and responsive. The exploitative posture includes a situation whereby the MNE takes advantage of other disadvantaged players within the global business environment (Pereira and Dathein 2016). Such players consider working conditions, wages and living standards as opportunities which can be exploited to derive benefits. This can be represented by the case of British American Tobacco for its plan to provide warning about cigarettes smoking (Bartlett and Beamish 2018). Transactional MNEs abides by the law and avoids instances whereby its dealings will be exploitative in any form. Responsive MNEs functions in a way that its activities and operations are focused on meeting the needs of the stakeholders (Bartlett and Beamish 2018). Transformative MNEs focus on broadly benefiting the society through its actions through leading initiatives (Bartlett and Beamish 2018).

            The fact that MNEs can be exploitative in nature brings about the question involving the ethicality of multinational businesses investing in poor economies across the globe (Prahalad and Hammond 2002). Despite the fact that an argument might arise that the consumers in such markets are incapable of investing in such business deals, it is a fact that even the people in the outlined markets would want to invest and adopt new technology to improve their ways of life (Prahalad and Hammond 2002).

Conclusion

            Conclusively, I learned different factors about multinational businesses and expansion which can be insightful in my future career and personal life. For instance, I mastered that the major factor which drives firms to expand internationally is the means to secure a better competitive advantage against the rivals. I considered it insightful that choosing the right means for a firm to expand within an international market will determine how successfully the business will strategically allocate itself within the international market. However, establishing a balance between the transnational strategies is also important for an MNE to secure a competitive advantage against the rivals in the worldwide market.

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