NO PLAGIARISM
[Pick the date]
,[Type the company name]
MNB3701 MAY JUNE
PORTFILIO (COMPLETE
ANSWERS) Semester 1 2025
- DUE 2 June 2025
NO PLAGIARISM
[Year]
,Exam (elaborations)
MNB3701 May/June Portfolio Memo | Due 2
June 202 Course
Global Business Management IA (MNB3701)
Institution
University Of South Africa (Unisa)
Book
International Business
MNB3701 May/June Portfolio Memo | Due 2 June 2025. All questions fully
answered.
Question 1 Identify and explain the formal and informal institutions in China
that affect Uber’s operations. Give TWO examples for each institution from
the case study to support the arguments made. (15)
Definition of Institutions
Formal institutions are rules, laws, and regulations that are officially established by
governments or governing bodies. These include laws, policies, licensing requirements,
and legal enforcement mechanisms.
Informal institutions are unwritten rules that arise from culture, traditions, values, and
social norms. They influence behavior through expectations, reputation, and societal
pressures.
Formal Institutions in China Affecting Uber’s Operations
1. Government Regulations and Licensing Requirements
China’s government imposed strict regulatory requirements on ride-hailing platforms, such as
driver licensing, data storage laws, and foreign ownership restrictions.
🔹 Example 1: The Chinese government required that all ride-hailing companies store their data
locally. This policy created compliance difficulties for foreign companies like Uber, which were
not initially equipped to manage data in China.
🔹 Example 2: Uber faced challenges in getting legal approval for its operations because the
government favored local firms and imposed barriers for foreign competitors. For example, Uber
, drivers had to be licensed under Chinese laws, and many did not meet the criteria, leading to
service disruptions.
Informal Institutions in China Affecting Uber’s Operations
1. Guanxi (Relationship Networks)
In China, strong business relationships and networks (guanxi) are critical for navigating
bureaucratic hurdles and gaining market access.
🔹 Example 1: Uber lacked strong local partnerships and networks initially, which made it
harder for them to establish influence with government officials and local stakeholders. This
contrasted with local competitors like Didi Chuxing, which had deeper guanxi.
2. Consumer Preferences and Nationalism
Chinese consumers often prefer domestic brands and companies, especially when there's a strong
sense of nationalism.
🔹 Example 2: Uber struggled to gain the trust and loyalty of Chinese consumers who preferred
to use Didi, the local ride-hailing app, which they viewed as more in tune with local needs and
culture.
Summary
Type of
Explanation Examples from Case Study
Institution
1. Data localization law
Formal Government laws and regulations
2. Licensing and compliance issues
1. Lack of guanxi (business
Cultural norms, business practices, relationships)
Informal
societal values 2. Consumer preference for local
brand (Didi)
[Pick the date]
,[Type the company name]
MNB3701 MAY JUNE
PORTFILIO (COMPLETE
ANSWERS) Semester 1 2025
- DUE 2 June 2025
NO PLAGIARISM
[Year]
,Exam (elaborations)
MNB3701 May/June Portfolio Memo | Due 2
June 202 Course
Global Business Management IA (MNB3701)
Institution
University Of South Africa (Unisa)
Book
International Business
MNB3701 May/June Portfolio Memo | Due 2 June 2025. All questions fully
answered.
Question 1 Identify and explain the formal and informal institutions in China
that affect Uber’s operations. Give TWO examples for each institution from
the case study to support the arguments made. (15)
Definition of Institutions
Formal institutions are rules, laws, and regulations that are officially established by
governments or governing bodies. These include laws, policies, licensing requirements,
and legal enforcement mechanisms.
Informal institutions are unwritten rules that arise from culture, traditions, values, and
social norms. They influence behavior through expectations, reputation, and societal
pressures.
Formal Institutions in China Affecting Uber’s Operations
1. Government Regulations and Licensing Requirements
China’s government imposed strict regulatory requirements on ride-hailing platforms, such as
driver licensing, data storage laws, and foreign ownership restrictions.
🔹 Example 1: The Chinese government required that all ride-hailing companies store their data
locally. This policy created compliance difficulties for foreign companies like Uber, which were
not initially equipped to manage data in China.
🔹 Example 2: Uber faced challenges in getting legal approval for its operations because the
government favored local firms and imposed barriers for foreign competitors. For example, Uber
, drivers had to be licensed under Chinese laws, and many did not meet the criteria, leading to
service disruptions.
Informal Institutions in China Affecting Uber’s Operations
1. Guanxi (Relationship Networks)
In China, strong business relationships and networks (guanxi) are critical for navigating
bureaucratic hurdles and gaining market access.
🔹 Example 1: Uber lacked strong local partnerships and networks initially, which made it
harder for them to establish influence with government officials and local stakeholders. This
contrasted with local competitors like Didi Chuxing, which had deeper guanxi.
2. Consumer Preferences and Nationalism
Chinese consumers often prefer domestic brands and companies, especially when there's a strong
sense of nationalism.
🔹 Example 2: Uber struggled to gain the trust and loyalty of Chinese consumers who preferred
to use Didi, the local ride-hailing app, which they viewed as more in tune with local needs and
culture.
Summary
Type of
Explanation Examples from Case Study
Institution
1. Data localization law
Formal Government laws and regulations
2. Licensing and compliance issues
1. Lack of guanxi (business
Cultural norms, business practices, relationships)
Informal
societal values 2. Consumer preference for local
brand (Didi)
