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PURPOSE OF THIS THESIS
The theories and study on the multinational corporations (MNCs) internationalisation has been prominent in the international business (IB) studies for many decades. Though earlier studies were dominated by firms’ from the advanced economy in Europe, USA, and Japan. Therefore, is not surprising that theories of MNCs internationalisation or foreign direct investment (FDI) would reflect on the behaviour and perspectives of advanced economies firms. Such theories, for example, …show more content…
While the study of the internationalisation process of Sub-Saharan Africa (SSA) firms in terms of their evolution and internationalisation have received less attention. Particularly, research on the internationalisation of Nigerian firms are still under explored (Bolaji & Chris, 2014; Boojihawon & Acholonu, 2013; Ibeh, 2003; Ibeh, Wilson, & Chizema, 2012) Even though, many SSA firms have emerged as high profile multinationals increasingly engaged in foreign expansion especially across the region. Such firms for examples include MTN, First Bank of Nigeria, Eco bank of Senegal, Dangote, ShopRite, Equity Group holdings, GlobalCom, SABMiller of South Africa, InterSwitch and Computer Warehouse Group to mention a few. These multinationals have emerged from different sectors of the economy, for example taking advantage of their home country favourable economic policies and domestic growth to internationalise (Initiative for Global Development and Dalberg Global Development, 2011; William, 2013).
In contrast to the attention given to the study of developed economy, Asia, and Latin America firms, SSA firms have received less attention from international
Changes in the business environment have presented a number of challenges to establish ways of doing business. Thus, managers realized that the survival and growth of firms today and in the future relies on their aptitude to operate globally. Third world countries seek to attract American MNCs for the jobs they provide and for the technological transfers they promise. However, when these MNCs entered
There are many theories given by different group of researchers about the existence of multinational enterprises or MNE's. According to John Cantwell, it was in the 1970's and 1980's that many theories on MNE's were proposed. These theories were either general theories of MNE's which were called the main institution for international production or the theories on foreign direct investment, the means by which international production is done ( Pitelis, Christos N. and Sugden, Roger, The nature of the Transnational firm, Pg 10). Amongst the most famous are the Hymer's theory of international production, the internalization theory put forward by Buckley and Casson, Dunning's Eclectic Paradigm, and the evolutionary theory
Introduction: Succeeding in international business is a tough job even for the most experienced multinational enterprise; international business has never come at a small price. There are trade barriers; cultural, political difficulties coupled with resource allocation and management strategy issues. In the mist of all these challenges some MNEs especially those from developing countries enter the international business arena with limited resources and experience and they still succeed.
Dunning’s OLI paradigm (1976) is used to support firms to locate its production in countries that are financially beneficial for them. According to Dunning, “the paradigm offers a holistic framework to take in consideration all of the important factors that influence the decision of a MNE.” (Stefanović, 2008, p.241) FDI is determined through the composition of the three powerful advantages; ownership, location and internationalisation as shown in figure 1. The thesis is to assess, ‘why go multinational?’, ‘how to choose the best location?’ and ‘what actions have to be taken to enter a foreign market?’
Over the years, Multinational corporations (MNCs) have been a source of controversy ever since the East India Company developed the British taste for tea and a Chinese taste for opium (Stopford, 1998). A typical multinational corporation (MNC) normally functions with a headquarters that is based in one country, while other facilities are based in locations in other countries. In some circles, a multinational corporation is referred to as a multinational enterprise (MNE) or a transnational corporation (TNC) (Tatum, 2010). They enter host countries in different ways and different strategies. Some enter by exporting their products to test the market and to find whether their existing products can gain sizeable market share. For such firms,
The study of the internationalisation of emerging market multinationals (EMNCs) has gained prominence in the last two decades, as a result of increased internationalisation of firms from emerging markets (EM). These internationalisation phenomena have resulted in a surge of interest from international business (IB) scholars (Cavusgil,1980; Hoskisson, Eden, Lau, & Wright, 2000; Jormanainen & Koveshnikov, 2012). This surge in EMNCs internationalisation is due to the economic growth and transformation witnessed among the emerging markets (EM) in the same period. A critical observation of extant literature shows however, that multinationals from Asia and Latin America has dominated the study of EMNCs internationalisation (Child and Rodriguez, 2005; Yeoh, 2011; Fortanier & Tulder, 2009; Sim, 2005,). Others include that of Olaya, Olaya and Cueter (2012) of 5 Latin American countries, while, Cyrino, Barcellos & Tanure (2010) study Brazil, Eren-Erdogmus, Cobanoglu, Yalcın & Ghauri (2010) study Turkish retail firms and Bianchi, (2014) that of Chilean firms. While some Sub-Saharan Africa (SSA) firms have also emerged as high profile multinationals and internationalising. Research on Sub-Saharan Africa emerging market firms from countries such as Nigeria, Kenya and South African, Angola and Ghana are lacking in the internationalisation business research and policy debate (Adeleye, White, & Boso, 2016).
One of the main objectives of any business organization includes making profits and enhancing the economic growth (Davis, 2012). Most businesses aim at discharging their economic and legal responsibilities. It is because for a business to continue as going concern, the business have to obey the law and be profitable. However, being ethically and philanthropically responsible can also affect the businesses apart from economic and legal factors.
Globalisation means the whole world is generally interconnected and MNCs are the main factors that lead to globalisation. Globalisation is a term used to refer to how technology, information and cultures have spread all over the world.
Multinational corporations (MNCs) are powerful vehicles for the transfer of not only the capital and other production functions but also managerial and technical knowledge across nations. The effectiveness of human resource management (HRM) has been seen as the key to the success of MNCs in the 21st century. (Liu, W., 2004).
With globalization and development of advanced communication systems, many firms and corporations are becoming multinational enterprises. The term multinational firm describes the situation in which a firm extends beyond the borders of its individual mother country, state or nation and operates with affiliates and branches in more than two countries. Multinational firms also extend beyond continental boundaries and hence it’s always desirable to understand the reasons and factors which prompt firms to go multinational. In most cases, multinational firms replicate the same products in their host market. However, others distribute the phases of productions beyond their nation boundaries as a way of integrating the whole process (Contessi,
A multinational company (MNC) is a business that operates beyond its geographical boundaries of its country of origin by opening branches or dealing with associates in more than one country. In other words, it is a company that engages in foreign direct investment (FDI). MNCs organize processes of manufacturing and delivering of goods and services to market in various countries, using their production firms either locally or abroad. To be able to operate in other countries, a company must be registered in these individual countries. The headquarters of multinationals are usually in the country of origin, with partly or fully owned subsidiaries abroad. Today, the world is increasingly becoming a global village. With Internet technology,
The world is becoming a global village and more companies are now operating at an international level. This essay critically analyses some of the factors which influence Foreign Direct Investment (FDI). Morrison (2006) defined FDI as the establishment of a company of a productive nature in a foreign country involving large volume of shareholding in foreign operations. The essay will investigate how important FDI is in the process of globalisation and in the activities of multinational enterprises as well as examining how international trade and FDI are interlinked. There will also be a discussion of different reasons why companies
The advent of globalisation has influenced the scope of economic growth for countries in a rapid manner. It has also notified that with globalisation, the business sector has been able to experience considerable benefits from international domain. The concept of Foreign Direct Investment (FDI) has been gain huge prominences in the recent years for getting considerable benefits for the economy and overall development of a nation. The importance of FDI has been attaining huge prominences among the economic as well as business domain. FDI is one kind of investment that influences the overall economic functioning within a country. FDI is mainly accompanied by multinational companies (MNCs)