The Motivations of Chinese Emerging Market Multinational Enterprises to Acquire Overseas Companies - Research Paper Example

The paper “The Motivations of Chinese Emerging Market Multinational Enterprises to Acquire Overseas Companies” is a germane example of a business research paper. Emerging Market Multinational Enterprises (EM-MNEs) refer to those international companies, which had started off as an extension of the emerging markets and have been involved with outward Foreign Direct Investments (FDIs). EM-MNEs are often argued to retain immense control on the overseas organizations, thereby undertaking value-added activities therein.

These EM-MNEs have been facing increasingly intensified competition with remarkable transformations and versatility in their operations (Cao, 2012). A key problem faced by these EM-MNEs in the current era is the shortage of required assets in the form of R&D facilities, managerial expertise, advanced technical assistance, and talented human resources. In order to mitigate the issue, these organizations, such as Lenovo in China, have focused largely on the concept of expansion into the international market, especially with Mergers and Acquisitions (M&As) as the appropriate entry mode strategy (Cao, 2012).

There is however a subtle difference between the operational strategies applied by MNEs and EM-MNEs. For instance, EM-MNEs completely eliminate competitive advantages of ownership within the foreign boundaries unlike that of the MNE's (Cao, 2012). Moreover, the EM-MNEs are mostly considered to be late-comers into the markets, which provides them with an opportunity to understand the market conditions and take an entry therein with adequate natural resources as well as highly competitive labor costs in comparison to that of the normal MNEs (Cao, 2012).

EM-MNEs are also not a part of a homogeneous group similar to MNEs, as all the enterprises falling under this category have their individual characteristics, such as different markets of expansion, mannerisms in which the ownership is rejected, and their individual competitive advantages among several others. These differences, therefore, eliminate the concept of generalized features present within the EM-MNEs, on the basis of which the FDIs applied for by the enterprises vary from one another (Ramamurti, 2008).