Managing MNEs

The American Model of the Multinational Firm and the "New" Multinationals From Emerging Economies (Guillen & Garcia-Canal, 2009)

The authors address three questions:

1. "Do these firms (new MNEs) share some common features that distinguish them from the traditional model of the MNE?"
2. "What advantages have made it possible for them to operate and compete not only in host countries a the same or lower level of economic development but also in the richest economies?"
3. "Why have they been able to expand abroad at dizzying speed, in defiance of the conventional wisdom about the virtues of a staged, incremental approach to international expansion?"

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From the traditional viewpoint -

Why did multinational firms develop?

• What is the "liability of foreignness?"
• Vertical expansion - necessary condition? sufficient condition?
• Horizontal expansion - necessary condition? sufficient condition?

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Main features of new MNEs.

• Speed of internationalization
• Competitive advantage
• Political capabilities
• Expansion path
• Default entry mode
• Organizational adaptability

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Motivations

• Backward linkages into raw materials
• Forward linkages into foreign markets
• Home-country government curbs
• Spreading of risk
• Movement of personal capital abroad
• Following home-country customer to foreign markets
• Investment in new markets in response to economic reforms in the home country
• Acquisition of firm-specific intangible assets
• Exploitation of firm-specific intangible assets

1. Which of the drivers identified by Yip (2003) or Hill (2008) are represented in Guillen & Garcia-Canal's (2008) list? What important ones are missing?




2. Thinking about the motivations and intangible assets of the new MNEs develop a list of capabilities and skills required for managers of these new MNEs? Provide support for your list.

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The Tortuous Evolution of the Multinational Corporation (Perlmutter, 2008)


3. Perlmutter outlines three types of orientation companies can have in conducting global business. Given the drivers and motivations for global competition what perspective/orientation would you recommend a company adopt? Why?

4. Rank the skills and capabilities you listed in the question 2 in terms of their contribution toward the perspective you recommended.

5. Outline how companies can attract people with these S & C or develop S & C within their own employees.


When You Shouldn't Go Global (Alexander & Korine, 2008)

Alexander & Korine (2008) suggest not all companies should go global. One of the questions they believe companies should ask is "Do we have the necessary management skills?'

6. Come up with 6 questions you would ask about a company's management skills if the suggestion to enter a global market was raised.