MNB3701 ASSIGNMENT 2 REPORT 1 (SHELL PETROLIUM)

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Table of Contents
DISCLAIMER ................................................................................................................. 1

Executive summary ........................................................................................................2

Background: Shell Petroleum’s (Nigeria) ....................................................................... 2

Literature search ............................................................................................................ 4

Institution-based view .................................................................................................... 6

Formal institutional frameworks ..................................................................................... 6

Informal institutional frameworks ....................................................................................9

Bibliography ................................................................................................................. 11

IMPORTANT NOTES TO CONSIDER .........................................................................15




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Executive summary

The concept of a multinational enterprise (MNE) business amination has gained
prominence over the past few years in the field of management. In this regard,
multinational corporations exist in several different forms, including some
international mutual funds that invest in corporations overseas for diversification
purposes. Over the past several decades, research on multinational companies'
(MNEs') strategies has been heavily anchored in the internalization theory. It mainly
identifies the foreign market entry as a transaction cost challenge but does not
specify how MNEs can build and maintain competitive advantages. Thus, this
portfolio aims at understanding how the nature of strategic thinking has influenced
the research in the field of MNEs’ strategy. This report highlights the discovery of the
story of Royal Dutch Shell which is also known as Shell Petroleum from its early
beginnings as a London antique shop, to its present-day as one of the largest and
most innovative energy companies in the world. The report establish that Shell is one
of the big names in the energy industry, globally. With a specific focus on Nigeria,
the report shows that Shell has been exposed to various institutional challenges as
well as resource constraints. However, the company has managed to leverage its
success through the threats and obstacles posed by the institutional and resource
framework in the Nigerian energy sector. From the report, it can be viewed that the
economic integration of Nigeria adds on the success factors for Shell as it created
more opportunities and business for the company. However, there are high currency
risks in Nigeria which require the company to improve on its financial management
capabilities for long term success.

Background: Shell Petroleum’s (Nigeria)

Royal Dutch Shell is an energy and petrochemical company in the Netherlands
created in 1907 through the full merger of “Royal Dutch” and “Shell Transport and
Trading”. As one of the leading energy companies worldwide with a history of over
more than 100 years, the company overseas business all over the world. During its
international market entry process, Shell employs different modes of market
development to gain and enlarge its share in the local market. Archer (2014) reveals
that most of its mode choices based on different situations are appropriate and



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