Multinational Enterprises

Chapter 11 Questions

What is innovation? What are innovation advantages that all multinational firms have? What disadvantages are there in using  SMEs as large multinational enterprises for innovation?

            Innovation is defined as a process of putting into place new ideas to add value to an organization. This may involve creating a new service, process, system or just enhancing the existing ones. Large multinational enterprises have better technology and possess more resources as compared to SMEs. These two are fundamental for continued innovation in an enterprise.

How do mental maps help us better understand market selection decision making in small firms?

            Mental maps are used to represent the risk perception and the foreign market orientation of decision makers within a sample of dynamic small firms. This helps the SME to understand better what kind of a market they are getting into and the kind of competition they are going to meet. Therefore this may guide the firm on whether to get into a market or not.

Why do national governments need specific criteria for defining an SME? Why might different governments use different definitions?

The different definitions given by different governments are mainly aimed at helping the small entities grow leading to the general growth of the economy. This is through business rate reductions and offering subsidies for the SMEs.

Give one example of “local-for-global” innovation (from one of the case studies in this chapter if you can find it).

Organizations have now realized that innovations made locally can be used in other places with similar characteristics. An example is the remote health care being applied in Indian can be used in some parts of Africa, where the conditions there are comparable to conditions in rural India.

Chapter 12 Questions

Why are MNEs interested in new product development? Why do they not simply focus on improving their current offerings?

In the recent years, there has been intense competition between multinational companies dealing with the same line of product. This has driven the multinationals to invest highly on invention so as to outplay their rivals as they meet the customer’s satisfaction. For instance, in the fears competition between Samsung and Apple led to Samsung introducing the smart watch. This was a great invention and at the same time looked to complement its line of other products.

Why is speed-to-market such important production strategy? Explain

The main advantage of reaching the consumers first is the competition advantage. This is whereby; you are the first to get to the market with a new product or innovation. This gives the firm a clear foot in front, as its competitors will find the product already in the market when they come.

What do time-to-market accelerators mean? In what way is concurrent engineering part of these accelerators?

The competitors are the speed to market accelerators their focus is in engineering, sales response, production and customer service. Concurrent engineering ensures that the company’s machinery is always in shape to avoid breakages that may occur during production. Resulting in delayed availability of the product in the market

Why do most MNEs use global sourcing? Why do they not produce all parts and materials in-house? Be complete

MNEs settle in a foreign country and operate there. So as to balance the economies around the world, they buy complement goods from the local companies so as to balance the economies around the world. This also saves time as the companies outsourced deliver the required items on time

Chapter 13 Question

 Why are some goods and services sold internationally without having to undergo much, if any, modification? Explain

            Standardization is the factor behind goods and services being sold internationally without being modified. This is whereby a company produces one global product in the belief that the product will be accepted across all nations without significant changes on the product. This can be explained by the Intel processor which is the same around the world.

When should an MNE use the same promotion strategy overseas that it uses at home? When should it modify the approach?

            The key aspect that is considered while marketing a commodity is the social life and culture of the general public. If a country shares the same culture like the one that is at home, then the MNE can use the same promotion of the product. If a country’s culture is different from where the MNE originates from then, the promotion can be change to suit that culture.

When can an MNE use the same promotion strategy overseas that it uses at home? When should it modify the approach?

            The cost of production, marketing and distributing a product is highly put into consideration while pricing a commodity internationally.  The other key factor is the actual location of the production plant. If a production plant is located far away from a given country, then the cost of the commodity in the country will relatively be on a higher price. The currency exchange rate is the other factor considered. If the currency of a country is strong at some point, then its exports would have a higher price compared less stronger currency.

In choosing their best distribution system, what types of methods do MNEs use? Identify and discuss three.

The distribution system already in place is highly determinant of the criteria to be used by the MNE in distributing its product. This is so because many MNEs mostly outsource the task of distributing to already available local distributors as they do not want to take this risk and get into the market they don’t know and start distributing.

Chapter 14 Questions

What are some of the most common screening criteria for individuals being chosen for international assignments? Identify and discuss four of them.

            The use of a selection panel consisting of a manager from the given assignment is always advised. This enables the company to gauge each one intending to be assigned to be thoroughly scrutinized. Choosing candidates that have completed similar international assignments is another criteria that are commonly used. As this would prove that the individual has the capabilities to complete the given assignment. Prioritizing individuals that are fluent in the language of the given assignment is the other criteria that would prove beneficial.

Why do MNEs tend to prefer interviews testing when selecting people for international assignments?

A panel of highly qualified experts comprising of the assignment manager is highly preferred by companies sending people out for assignments. The panel seeks the understanding of the individuals towards the given assignment. The interview seeks to come up with the best as the panel consists of highly qualified individuals.

In what way is repatriation proving to a major problem for MNEs? How can they deal with this issue? Offer two substantive recommendations.

            Many workers who have been assigned to international duty find it hard to go back home. This is due to the different cultures they were exposed to while they were away. This can be controlled by raising cultural awareness to the expatriates before they are assigned so that they don’t get confused while in a different cultural setting. Executive coaching is the other method that can work for the employee being assigned out as it offers an experienced approach to the matter.

What are some of the most common forms of training and development offered to people going international or already operating abroad? Identify and describe three of them.

            By offering international communicates, international assignment training program to employees being assigned abroad would assure a company’s success. This can be done through a combination of the host countries information, cultural theory and practical case studies as it will help people going abroad to adopt quickly to the new environment.

Chapter 15 Questions

What is meant by the term political risk? Is there a political risk in every country of the world? Explain

Political risk is the risk faced by investors, Governments, and co-operations that political events in a country will adversely affect the profitability of a business. Every country in the world has a political risk ranking, therefore, every country has a political risk.

How does macro political risk from micro political risk? Compare and contrast the two

The macro political risk is a risk that affects all the business organizations operating in a foreign country. An example of this risk is when a certain country increases taxes, a country falling into civil war or devalue its currency. Micropolitical risks, on the other hand, are political risks that do not affect every business in the country. An example of this is if a country enacts environmental protection act, as it would only affect industries and not other businesses like restaurants and service.

Why does corruption tend to be more prevalent in poorer countries?

            Many people in poorer nations are not involved in decision making by their governments. Therefore, they are left in darkness whenever a critical decision is being done by the government.  The people’s Lack of information on their government spending is another key factor that promotes corruption in poorer countries. Producing this information would reduce wasteful spending.

Why is improving transparency important for investors and local populations in less developed countries?

             Transparency ensures that there is the availability of information that can be used by both the people and the investors to measure the performance of the ruling team, and to guard against any possible misuse of power. Therefore, the authorities will be held accountable for any embezzlement that may occur in the government. Transparency builds trust between the people and the authorities, as every transaction is available to the general public and investors who want to gauge the economy’s performance for them to invest.


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