MNB3701 ASSIGNMENT 2 SEMESTER 2 2023

MNB3701 Assignment 2 (REPORT)

Semester 2 2023

, Contents



1. EXECUTIVE SUMMARY .................................................................................................................. 3
2. LITERATURE SEARCH .................................................................................................................... 3
3. BACKGROUND .................................................................................................................................. 4
4. FORMAL INSTITUTIONAL FRAMEWORKS ................................................................................. 6
4.1 Overview ..................................................................................................................................... 6
4.2. Evaluation of the determinants to the success or failure of an MNE in a formal
institution and key implications for management action of formal institutions ................. 7
5. INFORMAL INSTITUTIONAL FRAMEWORKS ............................................................................. 9
5.1. Overview ......................................................................................................................................... 9
5.2. Evaluation of the determinants to the success or failure of an MNE in an informal
institution and key implications for management action of informal institutions ............ 11
6. RESOURCE-BASED VIEW ............................................................................................................ 14
7. CHALLENGES TRADING INTERNATIONALLY ......................................................................... 18
8. FOREIGN DIRECT INVESTMENT (FDI) EVALUATION ........................................................... 21
Conclusion ................................................................................................................................................. 23
9. BIBLIOGRAPHY ............................................................................................................................... 25

, 1. EXECUTIVE SUMMARY

This paper will discuss the Multinational Enterprises (MNE’s) as well as the formal and
informal institutions and the frameworks that govern them. A multinational firm or MNE is
an enterprise that engages in foreign direct investment and owns and controls value
adding activities in more than one country (Peng & Meyer 2019).


It typically has multiple facilities across the globe, derives a substantial portion of
revenues from foreign operations, manages subsidiaries with a common strategic vision
and resource pool and often places foreign nationals or expatriates in key management
posts.” (Erwee, 2017: 176). The paper will continue to evaluate the aspects of the
workings of formal and informal institutions that are key to the success or failure of the
MNE, among other things, the main objective of this report Identify and evaluate the
determinants of the success or failure of operating the MNE in the African context.


Overall, the success and failure of a firm around the globe are, to a large extent, are
determined by its ability to understand and take advantage of the different rules of the
game. In other words, how firms play the game and win (or lose), at least in part, depends
on how the rules are made, enforced, and changed. This calls for firms to constantly
monitor, decode, and adapt to the changing rules of the game in order to survive and
prosper. As a result, such an institution-based view has emerged as a leading perspective
on international business. Here, I focus on formal institutions (such as political, legal, and
economic systems) whereas I will upload an article concerning informal institutions.


(TIP: Write the executive summary only once you have completed all of the other
required sections of the first report)



2. LITERATURE SEARCH

Literature search is a systematic and well-organised search from the already published
data to identify a breadth of good quality references on a specific topic (Bryman et