Doing business in the global environment requires an in-depth understanding of the foundations of global strategies; such as the dynamics of global strategies, managing in a global and competitive environment, understanding the impact and influence of global institutions on MNCs, and cultural intelligence (Torres, 2010). Further, in reality, multinational enterprises (MNEs), defined as firms that engage in foreign direct investment (FDI) by directly controlling and managing value-adding activities in other countries, too often have to adapt their strategies, products, and services for local markets. For example, in the publishing industry, one size does not fit all. In the automobile industry, there is no “world car.” Cars popular in one region are often rejected by customers somewhere else. The Volkswagen Golf and the Ford Mondeo (marketed as the Contour in the United States), which have dominated Europe, have little visibility in the streets of Asia and North America. The so-called “world drink,” Coke Classic, actually tastes different around the world (with varying sugar content (Peng, 2014).
Moreover, too often, the quest for worldwide cost reduction, consolidation, and restructuring in the name of “global strategy” has sacrificed local responsiveness and global learning. And almost by definition, the narrow notion of “global strategy” focuses on how to compete internationally, especially on how global rivals, such as Coca-Cola and Pepsi, Toyota and Honda, and Boeing and Airbus, meet each other in one country after another (Peng, 2014). The current brand of “global strategy” seems relevant only for MNEs from developed economies, primarily North America, Europe, and Japan—commonly referred to as the Triad—to compete in other developed economies, where income levels and consumer preferences may be similar. Emerging economies (or emerging markets), a term that has gradually replaced the term developing economies since the 1990s, now command half of the worldwide FDI inflow and nearly half of the global gross domestic product (GDP) measured at purchasing power parity. Brazil, Russia, India, and China—now known as BRIC in the new jargon—command more attention. BRICS (that is: BRIC + South Africa) has become a newer buzzword. Many local firms rise to the challenge, not only effectively competing at home but also launching offensives abroad.6 Overall, more than a quarter of the worldwide FDI outflows are now generated by these emerging multinationals from emerging economies (Peng, 2014).
To this end, this section includes readings and an in-depth review of global institutions, applications of culture in global business, and ethics in the global business environment.
Assignment 1 Global Institutions
- Peng, M. W. (2014). Chapters 1, 2
- Williams, C., & Martinez, C. (2012).
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Main Task: Analyze and evaluate the role, responsibilities and impact that global institutions have on Multinational Enterprises (MNE)
Based on your research and the section readings noted above, develop a scholarly paper to critically address the following:
· Discuss what global institutions actually do. What is their role in global business? Provide real world examples of global institutions in your discussion.
· Analyze and evaluate how global institutions reduce uncertainty in global business. What is “informal, relationship-based, personalized exchange”? And what is “formal, rule-based impersonal exchange”?
· Compare and contrast the relationship between “an institution-based perspective of business strategy” and Michael Porter’s “Diamond Model.”
Support your paper with five (5) scholarly sources. In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included.
Length: 5-7pages not including title and reference pages
Your paper should demonstrate thoughtful consideration of the ideas and concepts that are presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards. Be sure to adhere to Northcentral University’s Academic Integrity Policy.
Learning Outcomes: 4, 7
Assess the impact and influences of global institutions in international strategic management.
Examine global strategizing, structures, and learning in international strategic management.