International Business and Global Companies. The main focus will be Multinational Enterprises: MNE. MNEs have directly invested billions of dollars overseas. Most of these foreign investments have been two-way. MNEs have recently been turning their atten

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ORGANISATION AND MANGEMENT

                                                                  Lourdes Fuente Mugica

                                                                 

                                                                   

INDEX:

Introduction……………………………………………………................................        3

What is globalization? ...............................................................................................        3

Nature of multinational enterprises……………………………................................4

Global companies ………………………………………………..............................        6

Strategy management of multinational enterprises…………....................................        6

Authors………………………………………………………...................................        7

E-Business system…………………………………………….................................        10

Conclusion……………………………………………………….............................        11

Bibliography..............................................................................................................        12

Introduction:

International business is the study of transactions taking place across national borders for the purpose of satisfying the needs of individuals and organisations. These transactions can be trade (importing, exporting) and direct investment.

The main focus will be Multinational Enterprises: MNE. MNEs have directly invested billions of dollars overseas. Most of these foreign investments have been two-way.

MNEs have recently been turning their attention to developing countries. Another international business activity has been the international joint venture (agreement between two or more partners to own and control overseas business).

SME

Many small and medium-sized businesses are involved in international business. We include here service industries that currently employ 70% of work force in USA, Canada and Europe.

Large multinational enterprises tend to influence the success of smaller businesses because they rely on small business for goods and services.

What is globalization?

We understand globalization as the political, economical, social, cultural and ecological process that it is happening nowadays. Thanks to this process, there is a bigger economic interrelationship between different countries, no matter how far they are, and always under the multinational companies’ control. Each time there more ambits regulated by the free market, neoliberal ideology is applied with more intensity in almost all the countries and the big corporations achieve  each time more power.

GLOBALIZATION is the process that emerges from:

  • The internationalisation of production and services
  • Stateless corporations
  • The existence of world markets (Ford, McDonalds, Coke, Hollywood, Revlond, Sony, Levy’s)
  • Increase integration into the international division of labour: China and Eastern Europe specialising in cheap labour
  • Internationalisation of financial markets: transnational banks and subsidiaries of multinationals.

We can define globalization in some different levels:

  • Worldwide level:

Growing economic interdependence among countries reflected in cross border flow of goods, services, capital and know-how.

  • Country level:

Extent of a country’s inter-linkages with the rest of the world

  • Industry level:

Degree to which a company’s competitive position within that industry in one country is interdependent with that in another country

Why is important globalization?

  • It can lead into cultural homogenisation
  • It make markets to converge
  • It leads to globalization of customers
  • Globalization is characterised by cost drivers:         

-     Economies of scale and scope

-     Increase in levels of fixed costs

  • Globalization has lead to fundamental changes in industry structure (deregulation, privatisation, technological change)

Nature of Multinational enterprises:

Multi-Domestic Industries vs Global industries:

International trade incorporates many different types of competition and industries differ markedly in their patterns of international competition.

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  1. Multi-domestic industries:
  • Competition in one country is independent of competition elsewhere
  • This lead to a collection of domestic industries
  • A firm can and should manage its world-wide activities as a portfolio of independent subsidiaries in each country.
  • The firm therefore should adopt a country-centred strategy.

  1. Global industries:
  • Competition in one country influenced by competition elsewhere, leads to international rivalry
  • To be a leader a firm must develop and implement a strategy that integrates its activities in various countries but some portions of the firm’s activities must take place in each individual country.
  • ...

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