MIBO lectures:

Reading 1:

Two dominant internationalization approaches:

• Gradual vs Rapid internationalization
• Timing of initial expansion and speed of internationalization

Gradual internalization research is rooted in Uppsala model à relationship between learning and commitment

Rapid internationalization research is rooted in research on born globals and international new ventures à prior experience and learning (learning by doing).

Profile is important (so see the industries) à read the paper and develop profile

Examine the internalization approach of Netflix. Did Netflix persuade gradual rapid internationalization, also argue why Netflix adopted this approach

Reading 2: 

Overview of entry mode research à key antecedents and multiple theoretical perspectives (docus primarily on external and internal antecedents.

Antecedents:

• Higher the cultural distance, higher the likelihoods to opt for collaborative entry modes (e.g. do a joint venture)
• Higher the market attractiveness, higher the likelihood to opt for higher control (e.g. a wholly owned subsidiary
• Higher the uncertainty, higher the likelihood to opt for collaborative entry modes
• Higher the desire to control or monitor the subsidiary, higher the likelihood to opt for higher control
• Higher the international experience in similar markets, higher the likelihood to opt for higher control
• Higher the desire to safeguard specific assets, higher the likelihood to opt for higher control

What entry mode would an MNC prefer for a distant subsidiary located in highly attractive market in terms of its customer base

Reading 3:

How do MNC changes foreign operation modes

• Shows how MNCs make mode change decision over time (make a distinction from entry mode decisions
• Types of mode changes
• Antecedents mode change (firm and environment level antecedents) à increase level of commitment

Can de company reduce the level of ownership? à of case study

Reading 4:

De-internationalization vs Internationalization à help with case presentation.

• Understand the antecedents, outcomes and moderators of de-internationalization

Internal dynamics:

• Ownership
• Pace of internationalization
• HQ-Subsidiary differences
• Subsidiary performance

Which are important for your own case study and which ones are least important?

If you are hired as a consultant for you assigned companies, would you advise them to re-enter the markets they have exited? Also, provide a justification for your response. For example would you advise target to re-enter Canada?

Reading 5:

Findings apply do de-internationalization

Antecedents of de-internationalization à superior understanding of antecedents in relation to reading 4

Host country experience increases the likelihood of divestment (or de-internationalization)

Reading 6:

Overview of distance research à negative perspective on distance

Drawbacks and benefits of distance:

• Drawbacks: costs, complexity, uncertainty
• Benefit: better decision-making (psychic distance paradox

Impact on key MNC decision à skewed focus on cultural distance

Higher the distance:

• Lower the FDI
• Lower the market attractiveness
• Lower the research commitment or ownership
• Lower the knowledge transfer or willingness to transfer knowledge
• Lower the ability of HQ to make sense of the knowledge
• Lower the ability of the HQ to monitor or control the activities of the subsidiary
• Lower the subsidiary performance

Does distance really lead to better decision making? Can you think of examples or situation where multinational companies have not made better decision when entering distant markets

Reading 7:

Overview of research done of foreignness à takes a more positive perspective on distance in relation to reading 6

Drivers and response to over liability of foreignness:

• Gaining legitimacy (fit in)
• Be unique (stand out)

Presents assets of foreignness as a contrary notion to liability of foreignness

Can you think of specific actual example where multinational companies have used their foreignness to gain benefits?

Reading 8:

• Show how the size, role and importance of the corporate HQ varies across firms
• CHQ has three main roles: administrative, loss preventive and entrepreneurial
• Corporate strategy is the key determinant

Unilever and shell have recently decided to base their HQ in the UK only, previously they had their HQ both in the Netherlands and the UK. What are the benefits and costs of having multiple corporate HQ. Do you agree with their decision to bade the corporate HQ in the UK, not in the Netherlands?

Reading 9:

• How should MNCs manage their subsidiaries à because subsidiaries have more roles (previous only one role) some need more autonomy then others
• Different roles and functions of subsidiaries
• Subsidiaries are taking on advanced roles in MNC’S making it challenging to manage subsidiaries

• Role of subsidiary can change over time à strategic assets not only receiving knowledge, however it is creating knowledge
• Main distinction, is it creating knowledge are using already existing knowledge
• Knowledge only usable for 1 product or for everything is also one thing to keep in mind

Key findings:

• In low wage countries, investing for manufacturing purposes, otherwise R&D units
• Expatriates can help communicating with the HQ and control subsidiaries and make the subsidiaries aware of the everything the HQ wants

Many Dutch companies use home country nationals expatriates in distant subsidiaries, like China and Brazil. They are given top positions in the subsidiary such as country manager or president. What are the pros and cons of this policy?

Reading 10:

Are multinational companies always successful? à Do multinational companies hold an advantage over domestic companies

Research on multinational and performance had mixed results

Performance of MNCs is linked with FSAs not multinationality à exploit FSAs and develop new FSAs in foreign markets

Perspectives à empirical findings (last two are both non-linear)

Churros wants to open an second shop after amazing success in Groningen. He is thinking of Hamburg as an option. Would you recommend him: stay in Groningen only or open a shop in Hamburg (make cost and benefit analysis)

Reading 11:

Provide a supply chain or global value chain perspective

Role of location advantages and institutions

Discussion of the notion of governance and upgrading  

• Location advantage: what activities are carried out in a particular country
• Second one is governance: How does the lead firm make sure that several things are distributed for example
• Upgrading: activities that are happening in the down-stream
• Institutions: home country government and international organisations (supranational) how do they influence the global value chian

We can observe upgrading at the country level in Bangladesh. How have they made it possible? Why is upgrading happening at firm level, as there are no textile brand from Bangladesh?

Reading 12:

• No approach is superior – standardization or adaption
• Adopt a balanced marketing strategy that fits with the external environment and reflects the internal resources of the firm
• Adaption is more common among B2C firms, while standardization is more common among B2B firms
• Product adaption, positively relates with firm performance but for other aspects, standardization had a positive relationship.

Which marketing strategy does Friesland Campina adopt, primarily terms of its products. Argue why they adopt this strategy

How do you think McDonalds finds a balance between selling products that reflects the company’s resources and identity, but also enables the company to find a strategic fit with the multiple cultural environments in which they operate

Reading 13:

Social responsibility domain of a multinational company à combination of environment, ethical, and social dimensions of MNC activities

Transition of the social responsibility domain over time à pollution control to corporate activism

Use Ben & Jerry’s as the case study to discuss the costs and benefits associated with corporate activism

Reading 14:

Overview of non-market strategies of multinational companies

Non-market strategy: actively manage the institutional and/or societal context

Purpose: gaining legitimacy, risk reduction; ultimately to maintain competitive advantage and profitability

Integrate CPA and CSR activities

Non-market strategies:

1. Corporate political activity:

• Coopetition between MNCs and governments à intensity of political ties
• Political capabilities
• Who makes the decisions? à HQ or subsidiary

2. Corporate social responsibility:

• CSR and sustainability reporting
• Human rights and sustainability issues in supply chains
• Citizenship (active)  and philanthropy (passive)

What is the purpose of sustainability reports. What information do companies include in them?

MTN was accused of giving protection money to Taliban in Afghanistan to secure its infrastructure between 2009 and 2017. Taliban had complete control of certain parts of the country and the formal Afghan governments had no writ in those areas. If you were working as and expatriate in Afghanistan, how would you have dealt with this problem?

Reading 15:

Is decision making always rational?

Heuristics: decision rules, procedures, or rules of thumb that simplify decision making à decision makers are faced with bounded rationality issues

Biased or prone to error vs. fast and frugal

Use of heuristics is prevalent in the IB contexts à imitative behaviour, availability heuristic and anchoring heuristic

Why is franchising so prevalent among fast food chains, like KFC and Burger King? Is it  the most effective entry mode strategy in foreign markets for fast food chains?

Reading 16:
ethical dimensions in decision-making

Convergence vs divergence à this paper focuses on the divergence perspective

Discusses how ethical standard vary across cultures

What explains the reactions of PepsiCo and how would you have reacted if you worked at PepsiCo à suing farmers that produce for Lays Chips

Is it wrong to bribe politicians in Iceland, but right to do this in Namibia?

Reading 17:

Understand the international expansion of digital platform firms à FSA are the users on the platform

Importance of network externalities:

• Direct and indirect
• Within-country and cross-country

Nature of network and externalities had an impact on the internationalization strategies

Bol.com only operates in Netherlands and Belgium. Should it peruse further global expansion? If no, what are they challenges. If yes, how should it proceed with the global expansion (which countries and entry mode choises)

Reading 18:

Distinction between family firms and non-family firms à long term horizon (wants to provide something sustainable for the next generation) and financial and non-financial goals

All family firms are not risk averse of careful in decision making à balance financial goals with non-financial goals (SEW)

Family firms differ in their approach to internationalization à no consensus in existing research

Social economic wealth:

• Non-financial goals, such as preserving family identity, ability to exercise family influence and perpetuation of family dynasty
• Higher the focus on SEW in comparison to financial aspects, the more risk averse a family firm will become
• Higher the focus on financial aspects in comparison to SEW, the more risk taking a family firm will  become         

Examine the global expansion patterns of Heineken. What key lessons can be learnt from Heineken as a global company, primarily in terms of maintaining successful family business over four generations

Reading 19:

Have we overestimated the capabilities and potential of emerging market multinationals

New theories are not required to understand the actions of emerging market multinationals (goldilocks story)

No evidence to support springboard perspective

Not appropriate to treat all emerging markets as being completely identical

Home markets of emerging markets multinational are characterized by institutional vulnerabilities and markets constraints.

Dependent on strategic assets of multinationals based in advances markets à pursuing strategic assets seeking investments to become global leaders

Can they easily identify and assimilate these strategic assets?

Home markets of ermerging markets multinational vary considerably from each other; do not have institutional voids

Combine market seeking investments with strategic assets seeking investments à actively investing in Africa

Not solely dependent on strategic assets possessed by multionationals in advanced markets

Do not want to become global leaders

Geely acquired Volvo Cars in 2010. It was being described as a move that will lead to Geely becoming a world leader in the automotive industry. How has Geely gained from this acquisition and how did Volvo gain from this? Did Geely pursue more global expansion after that?

Reading 20:

Explain the global expansion of state-owned companies

Mechanism for providing social welfare to citizens to serving as vehicles for political diplomacy

State-owned multinational need to manage financial goals with political ambitions of the home government

State ownership provides access to resources, but can also be a source of hostility in foreign markets à need legitimacy building initiatives
 

Indian Oil, a state-owned multinational company, has subsidiaries in Mauritius, Sri Lanka, and United Arab Emirates. Can you explain the motivation behind the choice of entering these foreign markets?
 

Are there any Dutch state-owned multinational companies and why are there so few or none