International Business Policies

Technology Transfer in International Business

Technology is a new variable in the equation of economic relations. Traditional  theories of international business assumes that all nations have equal access to technology and, therefore,  that there is no need to transfer technology from one county to another. Recent  research findings have invalidated this assumption. In addition, they point to  technology differences as primary cause of international inequalities in  economic achievements. To reduce the inequalities, technology capabilities of  the backward nations must be strengthened. The quickest way to do so is to  transfer technology from the developed to the developing nations.

Technology is any device or process used for productive purposes.… Read the rest

Abey Francis

Multinational Corporations and Home Country Relations

Public attitudes toward Multinational Corporations (MNCs) are biased by a nation’s position as a home or  host country. Historically, home countries have perceived MNC activities as  desirable extensions of their domestic business systems. Conversely host  countries have viewed MNCs as agents of foreign influenced and exploitation.  This historic dichotomy is now shot through with conflicting perceptions of the  MNCs. Different segments of society, such as labor, investors, consumers,  traders, and farmers, see their interests affected in different ways. As a result, a  multi-sided controversy about the societal merits and demerits of MNCs has  grown in both host and home countries.… Read the rest

Abey Francis

Conflicts Between Multinational Corporations and Host Countries

Although the Multinational Corporations (MNCs) has no power over the host government, if may have  considerable power under that government. By being able to influence certain  factors, the MNC has the opportunity to help or harm national economics; in this  sense, it may be said to have power against host governments. Critics of the  MNC perceive these powers as potential perils to host societies.  The strategic aspects of a host country’s national policy that are subject to the  influence of the MNC include:

1. Planning and Direction of Industrial Growth

Host nations have viewed with concern the tendencies of many MNCs to  centralize strategic decisions in their headquarters.… Read the rest

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Multinational Corporations Adaptability to Host Environments

All Multinational Corporations (MNCs) are not equally likely to cause friction and tension in their host  economies. Some adapt with relative ease and become closely integrated with  their host environment, both economically and socio-culturally; others remain  isolated and insulated, often forming alien enclaves in the host society. There  appears to be a causal relationship between the MNC’s organizational structure  that is, its organizational design as well as its underlying objectives and  strategies and its capacity for social adaptation to host country conditions.  In terms of inducement to social conflict, MNCs fall into three categories: home  dominated, host dominated, and internationally integrated.… Read the rest

Abey Francis

Transnational Corporations (TNCs) and Foreign Direct Investment (FDI) Decisions

Knowledge-intensive production, technological change, shrinking economic  space greater openness have also changed the context for Transnational Corporations (TNCs). There are new  opportunities and pressures to  utilize  them. The opening of markets creates  new geographical space for TNCs to expand in and access tangible and intangible  resources. It also permits wider choice in the methods firms can use (FDI, trade,  licensing, subcontracting, franchising, partnering and so on) to operate in  different locations. At the same time, advances in information, communication  and transportation technologies, as well as in managerial and organizational  methods, facilitate the trans-nationalization  of many firms, including SMEs. The  combination of better access to resources and a better ability to  organize  production  trans-nationally  increases the pressure on firms to  utilize  new  opportunities, lest their competitors do so first and gain a competitive advantage.  … Read the rest

Abey Francis

Foreign Direct Investment and the Business Environment

Direct investment abroad is a complex venture. As distinct from trade, licensing  or investment, Foreign Direct Investment (FDI)  involves a long-term commitment to a business  endeavor  in a foreign country. It often involves the engagement of considerable assets  and resources that need to be coordinated and managed across countries and to  satisfy the principle of successful investment, such as sustainable profitability  and acceptable risk/profitability ratios. Typically, there are many host country  factors involved in deciding where an FDI project should be located and it is  often difficult to pinpoint the most decisive factor. However, it is widely agreed  that FDI takes place when three sets of determining factors exist  simultaneously;  the presence of ownership-specific competitive ages in a transnational  corporation (TNC), the presence of locational advantages in a host country, and  the presence of superior commercial benefits in an intra-firm as against an  arm’s-length relationship between investor and recipient.… Read the rest

Abey Francis
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