Bringing History Back into International Business - Essay Example

A JOURNAL REVIEW ON “BRINGING HISTORY BACK INTO INTERNATIONAL BUSINESS” Name Current University School and/or Department Building and/or Street City, State, Zip Code Tel: Fax: e-mail: ABSTRACT This essay will review the journal and explain how history matters in the field of international business. It will display how history acts as an advocacy tool on how scholars, academicians, business analysts should consider use history to obtain solutions for present issues affecting business. Moreover, it will highlight ways through which historical variation can help illuminate conceptual issues that affect the contemporary business world. Indeed, it will illustrate how historical evidence helps provide current explanations to present determinants that shape the course of international business. Furthermore, the essay will establish that history provides business with the needed information on how to boost innovativeness in the organization to achieve competitive advantage. It will conclude by giving an explanation on why scholars should embrace historical analysis to ensure success in international business. INTRODUCTION Evidently, the article provides an in-depth understanding on how international business scholars track world history to explore issues affecting business. It indicates that histories matter as it provides an evolutionary approach that explains manufacturing investment in the United States. The article provides evidence from numerous historical origins on the largest multinationals in America such as research projects conducted by Harvard University (Jones& Khanna, 2006). The large source of data provides a historical evolution on firms to prove how a strong historical dimension provided strong business strategies for organizations. For instance, John Dunning published world FDI historical estimates that indicate the importance of the world economy in business (Richard, 2008). Subsequently, many international scholars such as Mark Cassons build on these achievements by demonstrating how a transaction cost theory could be used to provide an understanding on business historical patterns. For instance, the vertical and horizontal integration of manufacturing and natural resource companies indicate that they adopt historical organizational strategies to exploit entrepreneurial opportunities. Nonetheless, other business historians used the transaction cost theory to demonstrate the multinationals companies changing modes in entering the foreign markets before the Second World War (Sullivan, 2001). A more recent approach utilizes a quantitative and qualitative historical study to illustrate the international diffusion of management principles and how influences competition in the global market. Thus, it is evident that management principles readily influence the world economic systems and helps boost corporate innovations. In fact, Sullivan (2000) provided a detailed historical research that indicates how corporate governance affects economic development and innovation capabilities of a country. As such, he used patent data to highlight how historical shifts in countries affected the innovation capabilities of industries. In this regard, this essay will provide a journal review on the article and establish why it is necessary to help a business establish international success. DISCUSSION The article provides a broad generalization that may make the reader ascertain that their systematic study on historical evidence provides a platform for scholars to teach the basic tenets of international business. As much as this phenomenon may provide strong business discipline, it will be at the expense of business multidisciplinary and other departments that deal with topics in international business such as communication. Thus, this will kill the work of business historians who have worked extensively to build on the tenets on international business. The historians have pursued topics to be included in international business such as FDI relationship, portfolio capital flows, and international business research studies. Therefore, it is imperative that scholars should include historical studies when teaching international business (Jones& Khanna, 2006). Such a phenomenon will enable students to learn multinational strategies that will shift the pattern of organizations competitiveness in the globe. Indeed, the journal provides four reasons on how history illuminates the contemporary issues that interest international business scholars. First off, it is apparent that historical variation provides cross-sectional contemporary direction that helps illuminate present issues facing society. Secondly, it is evident that history helps one avoid the labeling of some occurring phenomenon as ‘new’ and this helps people understand such an error. The third reason implies that history helps people to move beyond issues that are less important to issues that actually affect business operation in the contemporary world. The fourth reason indicates that history helps an individual expound on their inquiry domain in the field of international business. Actually, these reasons are effective providing evidence on how studying history helps individual address contemporary issues facing business (Jones& Khanna, 2006). Actually, it helps individuals to draft effective management strategies that help to put their business in the global map. The journal explores historical works in a broad context and uses vast literature material to help people understand how it shapes the discipline of international business. it also opts for a broad definition of business history so that it cannot enter into an argument with business historians who require a specific definition of business terms. Thus, the journal utilized an academic inquiry to help understand how business had grown as an industry and its development over the years. Therefore, the journal studies business groups and by extension, other independent business to help understand how social and economic ties help businesses delve into new markets (Jones& Khanna, 2006). It uses works of prominent economists’ historians to understand how business groups operated in the 1980s especially in the developed countries. It emerges that business groups formed a consensus, which was controlled by family members. The business groups did not serve any social or useful purpose because families did not provide proper management. The view was illuminated in the 1990s whereby financial economists focused on how families control most shareholders and provided major characteristics for dominant business (Buckley, 2009). The reality indicates that business formed under this union poorly functioned in the markets they operated. For instance, families were dysfunctional and failed reasonable to allocate the best talent needed to perform a specific job task. Evidently, a diverse business function requires that there is a robust talent market so that it can penetrate into new emerging opportunities. A striking conclusion emerging from scholars on this argument indicates that business groups are important in spearheading an organizational success. For instance, business groups help provide diversification on trade service, FDI resources and boost processing. More pertinently, business groups turn out to form important function in the contemporary setting. Harrisons & Crossfield Company depicts a classic example for this phenomenon. The company was founded on a Liverpool partnership that engages itself in tea trading whereby it obtains tea from India and sells in Britain. Since its inception, the firm opened many branches in Sri Lanka, India, Indonesia and New Zealand. When it started the branches major, the aim was to trade tea, but they soon developed and started incorporating a wide range of export and import business (Sullivan, 2001). Actually, the branches began acting as insurance agents for shipping companies in the globe. Indeed, tea trading provided a good ground for business and this lead to the company purchasing tea estates in south Asia, which resulted to the development of many distribution facilities across the globe. Thus, this provides a quality example on how partnered or group companies of organized in a particular way may diverse into many emerging markets. The systematic influence that helps a company to achieve such a phenomenon includes strong incentives that accrue from asset finance. Others include opportunism frequency and the uncertainty that accrues from transactions. For example, Chang (2001) when analyzing the behavior around contemporary data, he indicated that group partnerships help an organization boost their corporate activity in the globe. Evidently, diversified activities provide equity for this business groups. In fact, business group act as investment mechanisms and boost an organization equity roles in a wide range of the market. Apparently, the journal provides evidence that business group longevity helps boost organizations trade functions. It provides an example of how European trading companies survived radical improvements that occurred in progressive stages under group management. Such changes give rise to new forms of communication such as the introduction of telegraphs that occurred in the 1800s and the present internet revolutions. Moreover, the changes provided momentous shift technological environments and political environment. Thus, this ensured that the companies continuously reinvented themselves so that they could keep up with contemporary trends. By 1980s, there were increased capital pressures, which resulted from investors growing preference that organizations should focus on diversified businesses (Chang, 2001). As such, this resulted into a dramatic high competitive nature of companies that tried to emerge into new business areas so that they could match up with the industry competition. Nonetheless, the journal provides a second argument, which seeks to provide a historical analysis of business functions. The role of history helps to maintain the dynamics of business and its statistics in a central manner. For instance, it stipulates that the political and social environments shape organization strategies. Such environments may radically change and this may affect business operations. Thus, it is vital that IB scholars understand these changes and illustrates how the shifts may influence business activities in the international realm. Presently, there are business enterprises that have been operational for a long period. When scholars obtain such data concerning the business enterprises, they are able to analyze how certain variables affect organizational activities in a given environment. For instance, an issue on trends of globalization can help firms initiate changes that can help an organization operate internationally. In fact, companies that have been able to go global in the twentieth century were established in the 19th century (Chang, 2001). The companies in business literature are known as freestanding firms because they were created with a primary intention to pursue an investment in the international front. More pertinently, it is evident that these companies had insufficient governance and were not able to survive in conducting cross borders business so many of them collapsed. Such information is necessary for helping new companies to understand the traits that make global giants in the resources and service industry. As such, the firms will be able to implement corporate governance that will enable the organization to become efficient in the domestic and international market. The last argument explains that history is a vital determinant that helps identify an organization competence. A firm development and growth largely rely on its history because it is a necessary step needed for the organization evolutionary process. The journal indicates that for a company to gain cumulative growth, it needs to acquire collective knowledge. The collective knowledge helps an individual to understand business resources and this helps shed light on conceptual organizational issues. For example, Foley (2002) indicates that firms accrue major benefits in the labor market when multinationals specialize in knowledge transfer. It is apparent that firms define a community they exist and this helps them transfer and communicate knowledge to community members through repeated interactions. As such, repeated interactions help individuals and groups to develop a common understanding through which they can transfer knowledge and use it in marketing their services. In fact, recent evidence indicates that multinationals exchange information that concerns the firm operation such as technological knowledge (Foley, 2002). CONCLUSION Through the provision of four sensible arguments, the article is able to illuminate how history complements the present business operation. The journal outlines strong historical evidence provide an in-depth analysis on the contemporary business variation that emanate from historical practices. Thus, the article urges that the current generation should be trained on quantitative techniques that can help them avoid naïve mistakes performed by past businesses. The article concludes by indicating that there are numerous benefits accrued from studying history as it will ensure business gain a competitive advantage in the labor market. However, the author feels that academicians and analysts disregard this phenomenon (Jones& Khanna, 2006). Thus, the article urges that there should be a scholarly scrutiny to help bring to light the benefits of studying history in helping entrepreneurship. REFERENCES Buckley, J. 2009. The internalisation theory of the multinational enterprise: A review of the progress of a research agenda after 30 years. Journal of business studies , 134-190. Chang, J. 2001. Analyst Activity around the world. Harvard Business School Working Paper , 156-189. Foley, C. 2002. Essays on the economics of multinational. Business History , 189-190. Jones, G &Khanna, T. 2006. (2006). Bringing History(BACK ) into the international business. Journal of international business studies , 453-468. Richard, E. 2008. Research on international business:problems and prospects. Journal of international business study , 156-178. sullivan, E. 2001. 'The origins of British-based multinational manufacturing enterprise. Business History Review , 156-189. Read More