Internationalization of the University of Bradford - Dissertation Example

?Internationalization of the of Bradford: Feasible strategies and key issues in implementing such strategies Introduction The concept and definition of internationalization has been a subject that economists and other intellectuals are yet to agree on. For the purpose of this study however, internationalization will be defined as a process that focuses of increasing a business’ involvement in the international market. There are various internationalization theories that attempt to explain the reasons behind the internationalization of activities. The University of Bradford is one organization that seeks to go the international way as a way of expanding its market share with the added advantage of increasing its profits among other benefits. However, there is a high risk associated with the internationalization of organizations evident in the number of organizations that have failed in the process. Some of the main challenges associated with internationalization is the complexity of the process of going international, the high costs involved and the complexity of managing internationalized entities. Objectives of the Study 1. To determine how feasible it is for the University of Bradford to internationalize 2. To determine the key issues that the University of Bradford will have to deal with in its internationalization 3. To establish the best strategy that the University of Bradford can adopt to successfully go through the internationalization process Research questions In achieving the objectives of this study, a number of questions will have to be answered. The following are the research questions for this project. 1. How feasible it is for the University of Bradford to internationalize? 2. What are the key issues that the University of Bradford will have to deal with in its internationalization process? 3. What strategies can the University of Bradford adopt in its bid to go through the internationalization process? 4. What is the best strategy that the University of Bradford can use to successfully internationalize considering the business environment in which it operates? The following section will be dedicated to discussing the reasons why entities opt to venture into international markets through the process of internationalization. Reasons behind the Internationalization of Organizations Most economies thrive on the notion of imports and exports. Penetration into the foreign market is one of the major reasons why firms are venturing into internalization (Taylor, Walker and Beaverstock, 2002). In the 21st century, a lot of firms and businesses have been involved in international markets. Companies have been looking for ways to maximise their productivity and profitability by tapping into markets other the ones in their own home base of operations. There are different theories that have been formulated to explain the increase in international activities among different firms all across the world (Gankema, Snuif and Zwart, 2000). The absolute cost advantage is an internationalization theory that propagates the idea that institutions and firms should specialize in those products in which they have a sure advantage. This theory was popularised by Adam Smith and it implies that if a company can make a product without having to spend a lot in terms of costs per production unit (Welch and Welch, 1996). This view supports the idea that companies that have a comparative advantage do not have to have an absolute advantage to prosper in a market. Companies therefore internationalize so as to gain from comparative advantage (Taylor, Walker and Beaverstock, 2002). The prospects of new markets are another major driving force for internationalization. Internationalization opens up many opportunities for business, big and small. Advances in technology have led to the development of production techniques which ensure that companies can mass produce (Vahlne and Nordstrom, 1993). As a result, many of these companies have ventured into the international scene in search of new markets in which to sell their products. These new markets also give companies a chance to gauge the effectiveness of new products without having to undergo costly losses (Oviatt and McDougall, 1997). When companies enter into new international markets, they forego the risk of closing down in case their home based market collapses. This means that these new markets give international companies a means of survival if and when one part of the business fails (Gankema, Snuif and Zwart, 2000). The idea of comparative cost advantage is another reason why companies are opting to go international. If a company can find a place where labour and production costs are as low as possible then it will most probably set up its operations there. For instance, if company A, realizes that doing business in a certain region will enable it to maximize on production and profits, and therefore gain a competitive advantage over its competitors, it will do it can to enter that particular market (Oviatt and McDougall, 1997). This reason is closely related to how companies enter international markets to take advantaged of cost differences. Different regions in the world are endowed with different types of resources. A company will try to enter an international market that is in a region that has plenty of the resources that the company needs in order to succeed. Entering into such a market would definitely reduce the company’s cost of production (Yip, Biscarri and Monti, 2000). Another reason related to why companies are internationalizing is technological advancement which has made communication more efficient than it has ever been (Johanson and Vahlne, 2003). Many companies rely on different communication channels to get their products to their target customers. With the latest technological advances, it is now very easy for organizations to sell their products to a many people as possible. Communication technology that is available in this day and age has broken geographical barriers that had earlier made it hard and sometimes impossible for businesses to venture into market outside their own borders. Now, big and small companies can set up operations in many different countries without having to worry about how the operations will be carried out. This has enabled numerous companies to gain economies of scale and make profits, while at the same time they are able to meet all the needs of their customers from all over the world (Taylor, Walker and Beaverstock, 2002). Some companies normally opt to venture into the international markets in a bid to protect their home base markets (Welch and Welch, 1996). Internationalization is commonly used as a defensive move to counter the effects of new market entrants. Many companies are seeking to expand their operations by opening up bases in new countries. These companies normally pose the problem of increased competition in the host countries. This leads to those companies in the host countries to look for other means of coping with this pressure. By internationalizing, the companies can gain a wider market and operational base that enables them to counter the effects of having to compete with other international companies in their home bases (Vahlne and Nordstrom, 1993). Internationalization Strategies Franchising is rapidly becoming a common strategy for foreign market entrance among enterprises. Franchising involves a company that is interested in internationalization giving authorization to other companies to do business for them in a particular manner. Many soft drinks and fast food firms have venture into internationalization by use of franchises. There are many benefits that come with franchising (Welch and Welch, 1996). For one, the franchisors get a chance to make a quick entry into a foreign market. This helps them to expand their business and achieve more profitability. Franchisees on the other hand can access new and successful business ideas and concepts while at the same time avoiding or reducing major business risks. However, it is not that easy to get into a franchise partnership in many countries due to the politics and red tape involved. There are countries that are known to charge exorbitant duties for products brought in by international firms. Franchising as a strategy for market entry is also compounded by financial uncertainties, imitation and trademark issues as well as logistical problems (Oviatt and McDougall, 1997). Another common means of new market entrance by international companies is through international joint ventures (IJVs) (Gankema, Snuif and Zwart, 2000). The IJVs are important for companies that want to market their products without having to face the problem of trade barriers and also facilitate the attainment of skills, both technological and managerial. International joint ventures also give companies the opportunity to achieve maximum economies of scale, gain access to resources and raw materials and operate complex business projects with minimal risks. In short, international joint ventures are used as a strategy to reduce operational costs and improve competitive advantage. However, this internationalization strategy comes with some risks. For instance, if the ventures are mismanaged, the company may make losses (Buckley and Ghauri, 2006). The establishment of wholly owned subsidiaries is another internationalization strategy that many companies are engaging in. this is currently the most costly strategy of international market entry for organizations. This is due to the fact that the companies have to bear all the costs and risks that come with setting up business operations in new areas. However, there are some positive aspects that come with setting up wholly owned subsidiaries. One of these aspects is the fact that there is reduced risk of loss of control of business operations. This kind of control is necessary for companies that are planning to strengthen their global businesses. Having wholly owned subsidiaries is also important as it enables companies to integrate and centralise operations when need arises (Welch and Welch, 1996). Another common strategy of internationalization is forming global strategic alliances with multinational competitors. Companies go in this direction when they want to reduce risks and operational costs while at the same time avoiding loosing important technology, resources and skills to the competitor. Global strategic alliances enable companies to get into the international scene without having to worry that they may be crushed out of business by competitors. Companies are able to share high costs that are normally associated with internationalization. It is also a strategy that many companies use when they want to develop and integrate skills and assets that they could not have developed or integrated on their own (Buckley and Ghauri, 2006). Issues and Problems of Internationalization One of the main issues facing internationalization is the belief that it is solely guided by the principles, political interests and belief systems of the rich countries. This leads to the problem of internationalization being seen as to benefit only one side. Most international companies or those companies that can afford internationalizing their operations are based in the countries that have a stable and dominant economy compared to the rest of the countries in that particular region and in the world as a whole. This makes internationalization the business of only a few who have the power to enter new markets (Yip, Biscarri and Monti, 2000). Another key obstacle for internationalization is lack of financial support. For many enterprises, a lot of capital is needed to set up operations in a new market based in a new country. Most lending institutions are not ready to offer loans for use as capital for international businesses. This leaves only a few companies that can afford to venture into the international scene. This lack of financial support for internationalization has affected the plying field, in which some companies are more advantaged than others (Johanson and Vahlne, 2003). 2. Internationalization in Higher Education Institutions of higher learning are revered for the important role they play in the generation and dissemination of ideas, technology and knowledge. Internationalization of higher education refers to the transaction and flow of information and knowledge across borders. In higher education, internationalization alludes to the increase in study-abroad programs that are normally characterised by the rapid emergence of satellite campuses and international-interuniversity and college co-operations (Adams, 2001). The search for knowledge and new competence levels has always been the driving force for internationalization in higher education. In response to the needs of an increasingly globalized world, most policies in higher education have become internationalized. Internationalisation has frequently featured as a major goal for higher education (Bjarnason, Farrington and Schofield, 2000). The main reason given for the quest of internationalization in higher education is the fact that it has limited accessibility. This limited access has been blamed for sustaining social inequalities in the world today (International Association of Universities, 2003). Higher education internationalization is therefore seen as a way of contributing towards a more equal, fair and democratic world. Through internationalization in higher education, people can realise the social injustices, varying life conditions and different forms of segregation that they are normally subjected to. Over time, the internationalization of higher education helps in the redistribution of welfare and resources to create a more equitable society (Wende, 2007). According to Knight (2003), the reasons given for internationalization of higher education can be grouped into: economic, academic, social cultural and political categories. The economic reason is more acceptable in the developed world where the development of knowledgeable and highly skilled workforce is seen as a means of enhancing and maintaining a competitive advantage. The academic reason revolves around the enhancement of learning and teaching processes and the achievement of excellence in scholarly work including research activities. The social cultural aspect of internationalization has to do with the impact that modern communication and information system has on inter-cultural exchanges. On the political reason, internationalization of higher education enables a country to have a particular edge over other countries if its population has had experience, skills and knowledge that can only be found beyond its borders. Knight insists that these four reasons are not independent of each other. There could be multiple reasons why internationalization of higher education takes place. The structure of the traditional university has greatly changed mainly due to the world economy changing from an industrial-based to a knowledge-based one. The pressure on institutions of higher learning to conform to the change happening in society has led to internationalization of higher education. The need for life-long learning in the education sector that was pushed by the telecommunications revolution across the world has resulted in the expansion of campuses (Altbach and Knight, 2007). These campuses were once bound to a single geographic location, and their goals were tuned to the needs of that specific location. With globalisation, everything has changed and campuses now have a chance to expand their activities and network with other regions and geographic locations in order to offer wholesome education to all their students (Wende, 2007). Furthermore, the presence of advanced technology enables teaching staff and students to have access information and knowledge that could previously be accessed only through costly means (Bjarnason, Farrington and Schofield, 2000). The time it takes to access this information has also been greatly reduced as compared to before. The population in the 21st century is one that continuously seeks knowledge through formal education, a factor that has supported changes in the structure of institutions of higher learning (Greenwood, 2002). Academic mobility and international curriculum studies are some of the other reasons why many institutions of higher learning are opting to go international. These institutions are looking for ways to offer their course to as many learners as possible, thereby making their existence well known all across the world (UNESCO, 2000). The rationale behind the acceptance of international cooperation in the academic world is grounded on the assumption that internationalization is essentially a good thing. Presumably, students and staff from poor countries get to have access to competence and new knowledge through international co-operation between academic organizations. Internationalization should not only enable students from different parts of the world get access to global competence which helps students cope with the needs of having to work in a globalised world (International Association of Universities, 2003). One of the global competences that internationalization of higher education offers to students is the opportunity to have a diverse worldview based on knowledge. Internationalization of higher education enables students to have a conceptual framework that is useful for informing them about the way they view world events. This information gives them a framework on which to analyse world politics, cultures, economies as well as technological and scientific developments. Internationalised higher education gives students a chance to understand the international dimension of their specific fields of study (Altbach and Knight, 2007). This gives them the ability to be adaptable to the changing world and foreign cultures which they might have to come across later in life. Internationalization fosters a sense of diversity in perspective as students and staff from different cultural backgrounds study and work under the same framework (UNESCO, 2000). There are some prerequisites that are necessary for internationalization of higher education to take place. One of these requirements is globalisation. Before an institution decides to go international, it has to take measure that will enable it set up operations in another country without many problems. This means that the institution will need to have a clear mission statement, vision, smart objectives, core values, modern learning facilities, relevant curriculum and staff that will ensure that proper learning is taking place (Altbach and Knight, 2007). There are five strategies for internationalization of higher education that have been suggested. One of these values is the provision of education that is at the level of international standards. Another strategy is enhancing research activities and international research networks. The promotion of international societal cooperation is another strategy that is used in the internationalization of higher education (Greenwood, 2002). Institutions seeking to internationalise their programs also make improvements on their facilities and infrastructure so as to encourage or promote internal internationalization. The last of the five strategies is to formulate internationalization plans in the long-term for the institution. These strategies can be summarised into a single strategy that focuses on cooperation, planning and implementing those programs that are essential for institutional internationalizing (Bjarnason, Farrington and Schofield, 2000). Methodologies and Limitations Given the complexity of the internationalization process, this study will involve the use of both primary and secondary data. Secondary data will be drawn from books, journals, newspapers, magazines, and credible websites that provide information related to internationalization. Further to this, information about the University of Bradford which is specifically under study will be obtained from similar sources in addition to the university’s internal sources and publications. The primary data collection methods for this research project will be interview and questionnaire surveys. The primary data will be collected by targeting administrators, workers, students and staff of the University of Bradford. The survey will be focused on the views of the staff and students about the relevance and effectiveness of internationalising the education or courses offered at the university. There will be open end questions to identify the opportunities, goals and objectives of internationalization of the University’s programs. In this respect, three sets of questionnaires will be used for the survey; one for students, one set for the staff/workers and the last for the organization’s administrators. The questionnaires will be designed such as to be simple enough to consume about 15 minutes of the respondent’s time. The University’s chancellor will be specifically interviewed given the nature of information that the administration has in store with respect to the organization’s management. Random samples of students, staff and staff will be drawn for the purpose of conducting the study, the total number of respondents excluding the University Chancellor not exceeding 300. An equal number of samples will be drawn from each of the three categories. An equal number of respondents will be drawn from each faculty, the sampling being based on the attendance list. In this respect, the primary data will be drawn within the University premises. Before administering the questionnaire, the respondents will be briefed about the nature of the study, and their rights and freedom to participate or withdraw from the study without any inhibitions. They will also be requested to sign a consent form to avoid any complications that may arise from claims that breach of freedom rights has occurred. After the questionnaires have been completed, the respondents will be thanked for their participation. The data will be tabulated and coded using SPSS software for analysis of quantitative data. The results of the analysis will focus of providing the solutions to the research questions. The main limitation with this study will be the limited number of respondents compared to the university’s huge population of learners, staff and administrators. A bigger sample would give a better of the nature of the university’s operating environment. However, the number chosen so far is statistically admissible for this kind of study with a great chance of portraying the status of the field. Yet another limitation is the non-involvement of some stakeholders in the study such as locals living around the university, government officials and other stakeholders not included in the sample. While this is the case, the University chancellor is assumed to have the capacity to represent the views of various stakeholders considering that the office deals with several issues related to the university’s management and administration. This measure will help in simplifying the study, making it less time consuming while at the same time maintaining its credibility. References Adams, S. 2001. Transnational Education Project Report and Recommendations. Confederation of European Rectors’ Conference. March, 2001. Altbach, P.G. and Knight, J. (2007). The internationalization of Higher Education: Motivations and Realities. Journal of Studies in International Education, 11(4), 290-305 Bjarnason, S., Farrington, D and Schofield, A. 2000. The Business of Borderless Education: A UK Perspective. Higher Education Funding Council for England. Accessed: www.universitiesuk.ac.uk/bookshop/downloads/BorderlessSummary.pdf. Buckley, P.J. and Ghauri, P.N. 2006. The Internationalization of the Firm. London: Thomson Learning Gankema, H.G., Snuif, H.R. and Zwart, P.S. (2000). The Internationalization Process of Small and Medium Sized Enterprises: An Evaluation of Stage Theory. Journal of Small Business Management. Vol. 38 (4), 15-27 Greenwood, H. 2002. Internationalization of Higher Education in the United States of America and Europe: A Historical Comparative, and Conceptual Analysis. Chicago: Library of Congress International Association of Universities. 2003. International Handbook of Universities. New York: Pelgrave Johanson, J. and Vahlne, J. (2003). Business Relationship Learning and Commitment in the Internationalization Process. Journal of International Entrepreneurship, 1(1), 83-101 Knight, J. 2003. Updating the Definition of Internationalization. International Higher Education, Vol (1), Iss. 3. pp. 2-3 Oviatt, B.M. and McDougall, P.P. (1997). Challenges for Internationalization Process Theory: The case of International new Ventures. Management International Review. Vol 37(2), pp.85-99 Taylor, P.J., Walker, R.R.F. and Beaverstock, J.V. 2002. Firms and their Global Service Networks. In Saskia Sassen (ed). Global Networks: Linked Cities. London: Routledge UNESCO. 2000. Internationalization of Higher Education: An Institutional Perspective. New York: UNESCO UNESCO. 2003. Higher Education in a Globalized Society. UNESCO Education Position Paper. Accessed 20 April, 2011: http://www.unesco.org/iau/pdf/unesco_position_paper_globalization_he.pdf. Vahlne, J. and Nordstrom, K. (1993). The Internationalization Process: Impact of Competition and Experience. The International Trade Journal, 7(5), 529-548 Welch, D.E. and Welch, L.S. (1996). The internationalization Process and Networks: A Strategic Management Perspective. Journal of international Marketing, 4(3), 11-28 Wende, M. 2007. Internationalization of Higher Education in the OECD Countries: Challenges and Opportunities for the Coming Decade. Journal of Studies In International Education, Vol.11, (4), 274-289 Yip, G.S., Biscarri, J.G. and Monti, J.A. (2000). Perfomance of Newly Internationalising Firms. Journal of International Marketing, 8(3), 10-35 Read More