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经济学论文代写 Motivations Behind Firms To Become Multinational Enterprises

经济学论文代写 Motivations Behind Firms To Become Multinational Enterprises

Also MNE’s have had a history to travel abroad in respect to utilize the grants that are provided by the host country governments. Host country government provided with grants to MNE’s as they are employment generators and are often seen utilizing low rated land very efficiently. Also the presence of MNE’s in an economy says lengths about the prospect prevailing in the area. This induces other big players to invest in the economy that in turn raises the standard of living in the host country. Hence the host government encourages the arrival of these global giants.

An MNE needs to be futuristic in its approach if it wants to stay and be a competition to others. This requires the multinational corporation to be aware of its surrounding and adapt to the changes that are present. To successfully meet the above requirements multinationals travel to various economies to scan what is new that is happening and then it tries to adapt it in its work culture to be ahead of the competition. MNE also have a hunger learn whatever new they can. This is another very imperative motivation for the organizations to travel across national boundaries.

An organization never directly enters a market as multinational. There are a series of procedural step that are followed with a vague variation by different organizations to enter a market as a MNE. To be a MNE an organization has to have direct investment in a foreign country and this is involves a huge cost. Hence this is the last step organizations take in order to go international.

Organizations initially start the process of being global by the method of exports. The company stays in its original country and tries to meet the demand arising in other parts of the world by the exporting the goods. This enables the organizations to have a global reach and that too at a very low level of risk. Exporting has a benefit that a company can cater an international market by not having to take the risk of traveling abroad.

Another way that any corporation uses to go global is by the way of licensing and franchising. Under licensing an organization (licensor) allows another organization (licensee) sell its goods in return of a monetary sum. Under franchising the franchisor giver the right to the franchisee to use the name, technology and expertise that have been developed by the franchiser company for a specified fee. These methods involve significantly low cost attached with a huge risk. The USP (unique selling proposition) of the franchiser can be lost, as the control of the USP has to be distributed among all the subsidiaries.

Some companies also prefer to use a simple pathway of distribution of products via distributors in the home country. This is another convenient method that is very popular in order to go global. Distributors have no say in the working of the company whatsoever; they work for what is called commission pay. Commission pay can be referred to as an income to the distributor for his efforts in distribution of the products.

One of the most widely used practices to appear on the global stage is joint venture. Joint venture is defined as ‘a commercial collaboration between two or more unrelated parties whereby they pool, exchange, or integrate certain of their resources.'(D.Laughton, 1995). In simple terms a joint venture is an agreement between two or more companies on a profit sharing basis that enables all the companies in a joint venture to use each other’s assets, names, technology to be successful as well as achieve the purpose of being global.

After going through all the above steps in becoming global if the company survives, it finally invests abroad to establish a fully owned ancillary. This is the last and the most crucial step for an organization in becoming an MNE, as the cost involved is huge is irreversible without a significant loss. Hence it is evident from the above that different organizations have different motivations and so they have to travel on different paths to realize the status of an MNE.

经济学论文代写 Motivations Behind Firms To Become Multinational Enterprises