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International Business issues - Essay Example

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This research is aimed at providing a report on issues of international business. In particular this research is being carried out to evaluate and present challenges of international business; international institutions and ethics in international business. …
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International Business issues
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International Business issues

Download file to see previous pages... It is evident from the study that the success of multinational firms in the global market is influenced by a series of factors; the ability of these firms to adopt foreign practices, which have been proved effective in the context of the host country, is often limited. However, in order for MNEs to secure their position internationally, it is necessary to develop flexible plans, which would be easily alternated, if necessary. In accordance with Rugman and Collinson, three different integration strategies, as related to organization structure, are available to MNEs in the context of the modern market: the backward integration, meaning the acquisition ‘of equity assets used earlier in the production process’, the forward integration through which the company ‘comes closer to its customers’, as for instance in the case that a firm which is well known in the television industry acquires a series of well known retail stores, aiming to use these stores for promoting its products. Also, there is the horizontal integration, i.e. the acquisition of a competitor; the above form of integration aims to increase the firm’s market share so that its profits are improved. All these forms of integration can result to critical changes on the organizational structure, at the level that after promoting one of these forms of integration a firm needs to align its structure accordingly so that the activities of the acquired firm are effectively monitored and supported. From another point of view, Aliber (1993) notes that the challenges of the global market are many; even MNEs that are well established in the international market face difficulties in competing their rivals. At this point, coalitions have been proved to be quite a valuable strategy for responding to the demands of the global market (Aliber 1993). Establishing teams with other firms allows MNEs to secure their position internationally controlling the risks related to their activities in host countries that are quite far from the home country (Aliber 1993). On the other hand, the design that a firm chooses when operating globally is not standardized (Neelankavil and Rai 2009). In most cases, it seems that factors such as ‘the industry in which a firm operates or the size of the firm’ (Neelankavil and Rai 2009, p. 315 ...Download file to see next pagesRead More
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