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BMAN 73172Institutions and Firms

InternationalizationStrategiesProf Mo YaminMo.Yaminman!"ester.a!.u#

Yusuf $urtYusuf.#urtman!"ester.a!.u#

1

mailto:Mo.Yamin@manchester.ac.ukhttp://var/www/apps/conversion/tmp/scratch_2/yusufhttp://var/www/apps/conversion/tmp/scratch_2/yusufmailto:Mo.Yamin@manchester.ac.uk

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%&er&ie' of (oda)sSession

Introdu!tions %rganizational Matters

Assessment

Textbook *ourse aims + and &alue added *ourse outline

,e!ture 1 Pro-er

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Presentations No more t"an 14 minutes

Sti!# to t"e 5uestions t"at are as#ed No des!ri-ti&e 0a!#ground on t"e !om-an) 6se Po'erPoint or some ot"er soft'are to

-resent. Please send Yusuf and me ele!troni! !o-ies

of t"ose slides 0efore t"e -resentation You 'ill not re!ei&e etra mar#s for 8fan!)

animation

9a!" -resentation 'ill 0e follo'ed 0) a 1

minute dis!ussion

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Assessment II: Indi&idualAssignment

+elect two multinational companies from di,erent countries thatcompete in the same market!

xamine their ownership and control structures! In '"at 'a)s do t"e) di;er< =o' do t"e -riorities of t"e !om-anies di;er >if at all? as

a result@emem0er )ou ma) onl) need

to fo!us on t"ose as-e!ts of t"e institutionalen&ironment t"at are most im-ortant to t"e !om-an).?

1ow do the rms/ home-country institutional contexts a,ect

their resources and capabilities1ow ha&e these institutional di,erences a,ected the ways inwhich the rms ha&e internationalied!

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.imensions ofinternationalisation

Proportion of assets located abroad Proportion of technology development located abroad Type of foreign technology development (new products

for world market, new processes for international operations,

product adaptations for local markets)

Type of foreign investment in different locations(greenfield, acquisition, joint ventures)

Type of international trade (finished goods, intermediate

goods) Type of subsidiary manager (expatriate, host society, third

country) Internationalisation of domestic management

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Assignment II

Indi&idual assessment >/ of o&erallmar#?

Word 3imit4 2560 words 'excludin

references and tables) * plus or minus tenper cent#

.eadline4 7y 8pm Thursday 6th 9ay 20:;

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(et0oo#

Best to 0u) ingrou-s

enae 3earnin

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*ourse %utline %0Ce!ti&es

("e o0Ce!ti&es of t"is !ourse are: to illustrate how rms alliances and markets

are oranied di,erently around the world to examine the ways that this &ariation leads

to the de&elopment of distincti&e capabilitiesin rms in di,erent parts of the world

to analyse the ways in which rms fromdi,erence countries internationalie and

to assess how di,erent multinationalcompanies manae &arious acti&ities aroundthe world!

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*ourse %utline + ,earning%ut!omes

("ose '"o su!!essfull) !om-lete t"is unitare e-e!ted to 0e a0le to:

compare the institutions of di,erent countries analyse the preferred strateies and

capabilities of rms from di,erent countriesand sub-national reions

understand how companies from di,erentlocations internationalie in distincti&e ways

and understand how manaers seek to o&ercome

the manaerial and oraniational challenesthat are associated with multinational

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("e Dalue Added

*ourse -ro&ides a more detailed a!!ountof "o' Erms &ar) 0et'een !ountries

9na0les more !on&in!ing e-lanations ofErms internationalization strategies to

0e -ut for'ard

Pro&ides )ou 'it" a 0etter understandingof large Erms

=el-s )ou to understand '") !ertainde!isions are or are not ta#en 0) )ourfuture em-lo)er

Sets out t"e !"allenges t"at Erms fa!e

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*ourse %utline Introdu!tion 3ecture : '@theb 20:;) 9( and (= 4 The World is lat

Institutions and Why 3ocation 9atters 3ecture 2 ':: eb ) 9( and (= 4 irms >ountries and omparati&e Ad&antae in Industries

Institutional Dariation 0et'een *ountries 3ecture 8 ':Bth eb ) '9( and (=)4 Who ?wns * and >ontrols *

>ompanies around the World 3ecture @ '26th eb) 9( and (= 4 The +tate/s +take in

>ommercial Acti&ities 3ecture 6 ' 8rd 9arch) 9( and (= 4 3abourin to ind

Appropriately +killed mployees 3ecture ; ':0th9arch) 9( and (=4 >hanes in the nancial

system

Managing In!reasing *om-leit) in t"e Multi0usinessMN*

3ecture 5 ':5th 9arch) 9( and (=4 9anainInternationaliation4

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Institutions and Firms

InternationalizationStrategies

,e!ture 1: ("e orld is FlatErms asso!iations unions state

an on&en ona e n ons

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2013 Cengage Learning. All rights reserved.

an on&en ona e n onsstress more t"e 8regulati&e as-e!ts ofinstitutions

P9NH and MY9@ regard institutions as Formal and informal -oli!ies -o-ularl) #no'n

as t"e rules of t"e game.J

Peng and Me)er: Institution0ased &ie'is -ers-e!ti&ein '"i!" Erms su!!ess is !orrelated to

monitoring de!oding and ada-ting to!"anging rules of t"e game:

This seems to imply that institutions are Foutside/ of the

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2013 Cengage Learning. All rights reserved.

,%1: (% (YP9S %F INS(I(6(I%NS

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2013 Cengage Learning. All rights reserved.

,%1: (% (YP9S %F INS(I(6(I%NS

Formal institutions:

laws, regulations, and rules.

Regulatory pillar:

coercive powerof governments

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2013 Cengage Learning. All rights reserved.

,%1: (% (YP9S %F INS(I(6(I%NS

Informal institutions:norms, culture, and ethics.

Normative pillar -how the values,beliefs, and actionsof other relevantplayers influence the

behavior of focalindividualsand firms.

Cognitive pillar internali!edvalues and beliefsthat guideindividual and

firm behavior.

,%3: "at Ko Institutions Ko< ") are

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2013 Cengage Learning. All rights reserved.

,%3: "at Ko Institutions Ko< ") are("e) Im-ortant or 8&oids? in "ost !ountries

ma) 0e limited 0e!ause t"eir a0ilities and-ers-e!ti&es are s"a-ed too strongl) 0)t"eir "ome institutions

MN9s !annot al'a)s 0e su!ientl)

8!osmo-olitan or ada-t su!!essfull) to "ost!ountr) en&ironment >!onsider (es!osfailure in t"e 6S ?

30

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*ase Stud)(es!o P,*: Fres" O9as) in t"e 6nited

States

31

(9S*% P,*

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(9S*% P,*

*AS9 S(6KY 69S(I%NS

"o o'ns (es!o P,*< "at does t"is tells us a0out its main goals< "at are t"e -riorities of its Enan!ial

0a!#ers < (o '"at etent did Fres" and 9as) ada-t >its

-rodu!ts and t"e (es!o 8'a) of doingt"ings? to t"e 6S mar#ethief xecuti&e T+>? )!

9any of Tesco/s in&estors >s"are"olders?ha&e

been callin for the company to Kuit the $+market and focus on its protable &entures!

.oin Pnot ood enouhQ in the $= market bycomparison to its ri&als!

PThey ha&e taken the riht decision RKuittin from$+ marketS for s"are"oldersQ 'Andrew=asoulis analyst at >redit +uisse)! 3

"o is 8!alling t"e s"ots and '")

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Tim 9ason came under re from s"are"olderslastyear with se&eral criticisin a @!8m pay-out herecei&ed despite the $+ failin to turn a prot andne&er ettin a serious foothold in the market!

Dearly half of all shareholders failin to back TescoUsremuneration report at the 20:: annual meetin!

PAs >hairman my primary duty is to s"are"oldersVdeli&er the loner-term performance our s"are"olders

expectQ! 'T+>? 20:6 annual report p!2)

S"are"olders are o'ners of !om-anies and-la) role in Enan!ing o-erations0

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Hlo0al Su!!ess @e5uirest"at !om-anies

a--re!iate di&ersit) anddistan!e rat"er t"an

see# to eliminate t"emJ'

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*oasian &ie'

I7 is inGuenced by this &iew an assumed to be auni&ersall) e5ui&alent !on!e-tin terms of theecient boundaries between hierarchy and markets

("e !om-arati&e &ie' of t"e Erm : ("enature of t"e Erm is 8!ontingent . PThe nature of the rm as the key collecti&e

economic actor is &aria0leacross di,erentlyoranied market economies and cannot be

assumed to be basically the same reardless of itspolitical and social contextQ !

3ooks at Fwhat oes on/ within rms far more thanthe >oasian &iew does! 2Institutional (ers(ective

*on!lusions and

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*on!lusions + and@e!ommendation

Pla!e matters Institutions matter ("ese institutions &ar) from -la!e to -la!e. Firms di;er in fundamental and im-ortant

'a)s ("eir #e) o0Ce!ti&es di;er ("is 'ill a;e!t t"e etent to '"i!" t"e)

internationalize.

Please read and reread t"e Ta!#son andKeeg >2/? -a-er listed under le!ture 3. It'ill -ro0a0l) 0e "ard going 0ut it is