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Mid Term Exam Essay

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Compare and contrast the traditional motivations for internationalization with the emerging motivations.

Traditional motivations for internationalization were the starting point of expansion. The original mental outlook of foreign operations was that they needed to merely be strategic and organized extensions of the domestic business; therefore, traditional motivations reflected that perspective. For example, one of the initial, traditional motivations was the need to secure key supplies. If a company’s resources were domestically scarce and/or costly, the motivation to expend to a country where the resources needed were widespread became a priority. In addition, companies developed a market-seeking behavior that brought about …show more content…

In addition, the changes in technology called for companies to seek out new, more economical resources, which would impact factor costs in a positive way. The search for cheap labor and lower production costs was an important driver of integration and globalization.
Another one of the three conflicting forces is national responsiveness. It was essential for companies to be able to anticipate and respond to the different local environments of international countries. It was also important for companies to start being more sensitive to the national, social, economic, and political attributes of the countries to which they were expanding. For example, each country has cultural differences and it is these cultural differences that shape the assumptions, beliefs, and behavior of individuals within that country. In order for companies to overcome the obstacles of cultural differences they need to forfeit their idea of standardization and focus on responding to the opportunities of the cultural differences. described as a love-hate relationship. Although they can both benefit from one another, they can also frustrate each other because of their different motivations and objectives. The final of the three conflicting forces is worldwide learning. With transnational MNEs being as competitive as they have become, it is essential for companies that want to maintain a competitive advantage to develop worldwide learning and use it to their advantage.

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