International Business

International Business Decisions

In a world of zero transportation costs , no trade barriers , and nontrivial differences between nations with regard to factor conditions firms mast expand internationally if they are to survive . Discuss

It is not essential for firms to expand in to survive if in fact their products or services are produced for the national market alone Products and services that are designed to specifically meet local needs do not have to be sold abroad . If , however , firms create products or produce services that may be sold abroad - to cater to

the needs of international consumers - zero transportation costs , no trade barriers and nontrivial differences between nations with regard to factor conditions would be considered as perfect circumstances for international trade . The firm that decides to expand internationally is likely to meet a great degree of competition in the international markets . Even so , it may not need to expand internationally just to survive . After all , its goals for profit making may be met in the local market . What is more , the quality of its products or services may be good enough for it to keep local consumers satisfied What do you see as the main organizational problems that are likely to be associated with implementation of transnational strategy

Most nations around the world enjoy diverse cultures . Apart from different languages , there are negotiation skills that are unique to organisations functioning in different parts of the globe . Hence , the main organisational problem associated with the implementation of a transnational strategy is that the strategy may not be universal enough to become viable and successful for organisations functioning in nations with diverse cultures . Although theories of diversity management acknowledge the fact that the organisational culture must be representative of the cultures of all people that are working within a particular organisation - a transnational strategy would call for an almost global organisational culture . Seeing that problems with respect for diversity exist throughout the world , however , it appears rather farfetched to assume that a global organisational culture would be acceptable within most organisations around the world Discuss how the need for control over foreign operations varies with firms ' strategies and core competencies . What are the implications for the choice of entry mode (exporting , licensing , franchising joint-ventures and wholly owned subsidiaries

A transnational organisation that does not implement a transnational strategy because the latter might lead to problems within the organisational culture does not need to exercise as much control over foreign operations as the transnational organisation that implements a transnational strategy despite the problems associated with it Moreover , the need for control over foreign operations is expected to be little for an international organisation that simply manufactures products while allowing foreign subsidiaries to handle the distribution Undoubtedly , the choice of entry mode has a major role to play in the decision to exercise control over foreign operations . In the case of franchising , for example , a greater degree of control must be exercised so as to maintain the quality of products or services...