Summary MNB3702 - GLOBAL BUSINESS MANAGEMENT (2022 Textbook notes)

MNB3702




GLOBAL

BUSINESS

MANAGEMENT



2022 Summarized notes as per prescribed
textbook

, TABLE OF CONTENT



PG#

STUDY UNIT 1: CHAPTER 1: GLOBAL BUSINESS OPERATIONS............................................
2




STUDY UNIT 2: CHAPTER 2: GLOBAL DIVERSITY MANAGEMENT AND LEADERSHIP ...................
7




STUDY UNIT 3: CHAPTER 3: BUILDING STRATEGIES FOR GLOBAL COMPETETIVE
ADVANTAGE .... 15




STUDY UNIT 4: CHAPTER 4: STRUCTURING GLOBAL ENTERPRISES AND OPERATIONS ..............
20




STUDY UNIT 5: CHAPTER 5: THE POLITICAL ECONOMY OF FOREIGN EXPANSION ...................
27




STUDY UNIT 6: CHAPTER 6: COUNTRY ATTRACTIVENESS ................................................
34




STUDY UNIT 7: CHAPTER 7: FOREIGN MARKET ENTRY STRATEGIES & ALLIANCES (P 110 – 117)
... 41




STUDY UNIT 8: CHAPTER 8: EXPANSION STRATEGIES IN EMERGING MARKETS: ....................
49




STUDY UNIT 9: CHAPTER 9: GLOBAL OPERATIONS AND SUPPLY CHAIN MANAGEMENT: ..........
58




STUDY UNIT 10: CHAPTER 10: GLOBAL MARKETING STRATEGIES ......................................
68

,STUDY UNIT 11: CHAPTER 11: INTERNATIONAL HUMAN RESOURCE MANAGEMENT .................
73




STUDY UNIT 1: CHAPTER 1: GLOBAL BUSINESS OPERATIONS


DEFINE MULTINATIONAL CORPORATIONS (MNCS).

MNC’s are business enterprises that operate in more than one country. These organizations operate
across international borders irrespective of their size or contextual orientation. The Evolution of
MNC’s:
• MNC’s are the driving force behind globalization.
• MNC’s are business enterprises that operate in more than one country.
• They operate across international borders irrespective of their size or contextual orientation.


TRENDS IN THE EVOLUTION OF MNC’S:
• MNC’s production chains have been defragmented: with activities outsourced o situated
offshore in various locations.
O Referred to as the co-ordination of global value chains.
O Undertaken in an effort to minimize and MNC’s worldwide tax liability.
o Usually use complex tax planning structures, incl. intra-group transfer pricing, investment
through offshore financial centers and special purpose entities, to alleviate tax liabilities.
• MNC’s need a change in attitude regarding environmental and social issues.
o Because of tighter regulations and higher environmental and social standards imposed by host
countries, apart from its own self-regulation and CSR requirements.
• The application of the principles of corporate governance and the crafting of global
business strategies.
o MNC’s are being influenced by the global economy, with its transmission of foreign direct
investments (FDI) in developed and developing countries. (Often motivated by market-seeking
an efficiency-seeking considerations.)
• Complex ownership structures and sophisticated technology and strategies to support
their
Internationalization initiatives. (For SME’s too)
• MNC’s in developed countries expanding into developing countries.
o Has implications for the differences between conventional and unconventional MNCs and their
modus operandi, in host countries.

, GLOBALIZATION AND THE TRANSIENCE OF MNCS
• MNCs from developing countries: less conventional, late comers.
• MNCs from developed countries: conventional, early movers. (in terms of when and how they
achieve competitive advantage)
o Emphasizes strategic importance of the time and method of entry into global competition.
• Typically unconventional MNCs are small, obscure, and operate in fragmented, low tech industries
through joint ventures to exploit low cost advantages of developing countries. Also found in
developed countries. Already investing directly in developed countries through acquisitions and
joint ventures: thereby gaining access to more sophisticated tech and market channels. They follow
unconventional modes of operating by