International Business Strategy - Literature review Example

International business strategy International business strategy discusses plans, which direct commercial transactions that take place between different countries. Big companies deal with many international trading partners in their supply chain. Hence, it is essential for companies to understand the cultural, political and legal systems of their trading partner. One of the theories that companies use is the game theory (Lindstadt, 2010).From the reading, it is evident, that the game theory is an influential tool for companies to use in times of uncertainty.

This theory offers perspectives on how different players might act when faced with various circumstances. Yet many managers view it to be more theoretical than practical. Most of the time, when this theory in use it is often misused to provide a single answers which is overly precise (Lindstadt, 2010).The work on the European passenger rail deregulation is evidence to prove that game theory provides appropriate guidance to managers as they handle unprecedented and difficult situations. The key to achieve the best results is to use this theory to generate a range of results based on decisions made by reasonable players.

Then use them analyze the merits and demerits of each decision. It is clear from the reading, that the authors’ model changes game theory from a tool that gives a single answer to a discipline that gives knowledgeable support to managerial decisions (Lindstadt, 2010).We observe that factors in the economic environment propel game theory to a prominent place in strategy. The global economic crisis and the uncertain recovery, have called for shifts in industrial capacity, market price and demand.

These uncertainties paralyze corporate decision-making and worse they compel managers to make less informed decisions. Game theory contributes to a clear decision making.ReferenceLindstadt, H. Muller, J. 2010. Making Game Theory Work for Managers in McKinsey Quarterly, McKinsey&Company.