MGMT1101 Lecture Notes - Lecture 2: Foreign Direct Investment, Change Impact Analysis, Anti-Globalization Movement
19 May 2018
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Chapter 2 – Multinational Enterprises
MNE – Multinational Enterprises is any business/firm that has productive activities in 2 or more
countries (engages in international trade and investment)
Role of MNE:
- Provide standard products worldwide
- Facilitates the convergence of consumer taste
- Main actor of global production (eg. Toyota, apple, Samsung)
- Facilitates global trade of intermediate and finished goods (between subsidiaries and
headquarters)
- Influence local players and firms (supplier, distributors, employees) with global standard and
value.
Benefit:
- Eg. Technology Spillover
- Japanese style of manufacturing – transfer to other countries – create the environment
globally – bring prosperity
All MNEs are not equal in terms of:
- Size/ Resources
- Geographical scope/diversification
- Experience/Process of internationalisation
- Management attitude and structure
- Degree of control over foreign op.
- Foreign/Total Assets
- Foreign/Total Sales
- Foreign/Total Employment
Eg. Agriculture, technology -> producing different things, what company is capable of doing (goals),
hence not equal.
- Heterogeneous set up of organisation
Firm internationalisation: The process by which firms establish and conduct transactions with firms
and customers in other countries, and international operations have an increasing influence on their
future.
- Evolutionary process over time as firm expand their geographical reach and mindset
find more resources at oneclass.com
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Document Summary
Mne multinational enterprises is any business/firm that has productive activities in 2 or more countries (engages in international trade and investment) Main actor of global production (eg. toyota, apple, samsung) Facilitates global trade of intermediate and finished goods (between subsidiaries and headquarters) Influence local players and firms (supplier, distributors, employees) with global standard and value. Japanese style of manufacturing transfer to other countries create the environment globally bring prosperity. All mnes are not equal in terms of: Agriculture, technology -> producing different things, what company is capable of doing (goals), hence not equal. Firm internationalisation: the process by which firms establish and conduct transactions with firms and customers in other countries, and international operations have an increasing influence on their future. Evolutionary process over time as firm expand their geographical reach and mindset. Inward: servicing domestic customers through transactions with foreign firms.
