Concepts of International Business - Rolls-Royce Group - Case Study Example

The paper "Concepts of International Business - Rolls-Royce Group" is a perfect example of a business case study. Multinational Enterprises play a crucial role in the global economy. Additionally, due to their wide geographical areas of operation, they face many challenges. Some of these challenges are brought by differences in culture. This report analyses the issues that confront the Rolls-Royce Group. Rolls-Royce Group has its headquarters in the United Kingdom. The company operates in many parts of the world. The analysis is done by analyzing the issues confronting the company, so as to understand some concepts and theories pertaining to international trade and providing some recommendations on how the company can maintain its global aero-engine market leadership.

Introduction

The operation of the world economy is dominated by the activities of giant companies, called Multinational Enterprises (MNEs). Multinational corporations are corporations that move resources, goods, services and skills across national boundaries without regard to the country where their headquarters are located (Gitman & McDaniel, 2008, p, 128). Some of these corporations are so rich that they have numerous employees and can be described as small countries. Multinational corporations are heavily engaged in international trade. Some of the largest global corporations include Marubeni, GM Mitsubishi, Ford, Rolls-Royce, Exxon, Toyota, Ford and Wal-Mart (Morgan, 2003, p, 282). These enterprises have annual sales figures that exceed the gross national products of many nations. As a result, Multinational Enterprises are described as sovereign states that have a major impact on international politics and the world economy.

Multinational Enterprises play a key role in globalized economies. They employ a significant number of employees in the European Continent and the United States (Navaretti, Barry, & Venables, 2006, p, 2). They also sell the majority of the commodities in these regions. Since MNEs are not like portfolio investments, which may be divested easily, and do not have a significant influence on the management of the firm, they normally understand Foreign Direct Investments (FDI) (Navaretti, Barry, & Venables, 2006, p, 3).