MNB3701
Principles of Global Business Management
Assignment 6
(UNIQUE NUMBER: 722963)
DEPARTMENT BUSINESS MANAGEMENT
1
,DECLARATION
Note that the portfolio or any part thereof will not be marked if this declaration has
not been completed.
Declaration of own work
I hereby declare that the material which I now submit for this assessment is entirely
my own work and has not been taken from the work of others. Work that was
constructed from other sources has been duly referenced.
Full name and surname:
Student number:
Signature: _
(electronic/digital handwritten signature/initial[s] and
surname)
2
, Table of Contents
1 Executive Summary ......................................................................................................5
2 Literature search ...........................................................................................................8
3 Background.....................................................................................................................9
4 Formal institutional frameworks ............................................................................ 10
4.1 Overview ................................................................................................................ 10
4.2 Evaluation of the determinants to success or failure of an MNE in a
formal institution and key implications for management action of formal
institutions ....................................................................................................................... 11
4.2.1. Political system............................................................................................. 11
4.2.2. Economic system ......................................................................................... 12
4.2.3. Legal System ................................................................................................. 13
5 Informal Institutions frameworks ........................................................................... 13
5.1 Overview ................................................................................................................ 13
5.2 Evaluation of the determinants to success or failure of an MNE in a
informal institution and key implications for management action of informal
institutions ....................................................................................................................... 13
5.2.1. Culture ............................................................................................................. 14
5.2.2. Language ........................................................................................................ 14
5.2.3. Religions ......................................................................................................... 15
5.2.4. Ethics ............................................................................................................... 16
6 Resource Appraisal ................................................................................................... 16
6.1 Resource-based view ......................................................................................... 16
6.2 Identifying Key Resources ................................................................................ 17
6.2.1. Primary resources ........................................................................................ 17
3
, 6.2.2. Capabilities .................................................................................................... 19
6.3 Key Resources and Capabilities of MTN ....................................................... 20
6.3.1. The MTN Reputation .................................................................................... 20
6.3.2. Technology .................................................................................................... 20
6.3.3. Physical Asserts ........................................................................................... 21
6.3.4. Human resources ......................................................................................... 21
6.4 Evaluation of Resources: The V.R.I.O. FRAMEWORK ............................... 22
6.4.1. The Question of Value Creation................................................................ 22
6.4.2. The Question of Rarity ................................................................................ 23
6.4.3. The Question of Imitability ......................................................................... 23
6.4.4. The question of organisation .................................................................... 24
6.5 Strategic implications drawn from resource appraisals ........................... 24
7 Challenges trading internationally ......................................................................... 24
7.1 Institutional and Resource Related Challenges .......................................... 25
7.2 Challenges for Managers of MNE’s Trading International ........................ 25
8 Foreign Direct Investment........................................................................................ 26
9 Exchange rate.............................................................................................................. 28
9.1 Evaluation of Currency Risk exposure: Expected Revenue and
expenses........................................................................................................................... 28
9.2 Evaluation of Currency Risk exposure: Long Term Movement Informed
by PPP ............................................................................................................................... 29
9.3 Evaluation of Currency Risk exposure: Changes in Productivity and
Balance of Payments .................................................................................................... 30
9.4 Evaluation of Currency Risk exposure: Due to perceptions of Investors
30
9.5 Implication for managing currency ................................................................. 31
4
Principles of Global Business Management
Assignment 6
(UNIQUE NUMBER: 722963)
DEPARTMENT BUSINESS MANAGEMENT
1
,DECLARATION
Note that the portfolio or any part thereof will not be marked if this declaration has
not been completed.
Declaration of own work
I hereby declare that the material which I now submit for this assessment is entirely
my own work and has not been taken from the work of others. Work that was
constructed from other sources has been duly referenced.
Full name and surname:
Student number:
Signature: _
(electronic/digital handwritten signature/initial[s] and
surname)
2
, Table of Contents
1 Executive Summary ......................................................................................................5
2 Literature search ...........................................................................................................8
3 Background.....................................................................................................................9
4 Formal institutional frameworks ............................................................................ 10
4.1 Overview ................................................................................................................ 10
4.2 Evaluation of the determinants to success or failure of an MNE in a
formal institution and key implications for management action of formal
institutions ....................................................................................................................... 11
4.2.1. Political system............................................................................................. 11
4.2.2. Economic system ......................................................................................... 12
4.2.3. Legal System ................................................................................................. 13
5 Informal Institutions frameworks ........................................................................... 13
5.1 Overview ................................................................................................................ 13
5.2 Evaluation of the determinants to success or failure of an MNE in a
informal institution and key implications for management action of informal
institutions ....................................................................................................................... 13
5.2.1. Culture ............................................................................................................. 14
5.2.2. Language ........................................................................................................ 14
5.2.3. Religions ......................................................................................................... 15
5.2.4. Ethics ............................................................................................................... 16
6 Resource Appraisal ................................................................................................... 16
6.1 Resource-based view ......................................................................................... 16
6.2 Identifying Key Resources ................................................................................ 17
6.2.1. Primary resources ........................................................................................ 17
3
, 6.2.2. Capabilities .................................................................................................... 19
6.3 Key Resources and Capabilities of MTN ....................................................... 20
6.3.1. The MTN Reputation .................................................................................... 20
6.3.2. Technology .................................................................................................... 20
6.3.3. Physical Asserts ........................................................................................... 21
6.3.4. Human resources ......................................................................................... 21
6.4 Evaluation of Resources: The V.R.I.O. FRAMEWORK ............................... 22
6.4.1. The Question of Value Creation................................................................ 22
6.4.2. The Question of Rarity ................................................................................ 23
6.4.3. The Question of Imitability ......................................................................... 23
6.4.4. The question of organisation .................................................................... 24
6.5 Strategic implications drawn from resource appraisals ........................... 24
7 Challenges trading internationally ......................................................................... 24
7.1 Institutional and Resource Related Challenges .......................................... 25
7.2 Challenges for Managers of MNE’s Trading International ........................ 25
8 Foreign Direct Investment........................................................................................ 26
9 Exchange rate.............................................................................................................. 28
9.1 Evaluation of Currency Risk exposure: Expected Revenue and
expenses........................................................................................................................... 28
9.2 Evaluation of Currency Risk exposure: Long Term Movement Informed
by PPP ............................................................................................................................... 29
9.3 Evaluation of Currency Risk exposure: Changes in Productivity and
Balance of Payments .................................................................................................... 30
9.4 Evaluation of Currency Risk exposure: Due to perceptions of Investors
30
9.5 Implication for managing currency ................................................................. 31
4
