14 Oct A-Brian: The first article explores global adaptation and corporate foundations using the transnational strategy. These three international companies and their corporate foundations were se
The first article explores global adaptation and corporate foundations using the transnational strategy. These three international companies and their corporate foundations were selected for this study. This research also identifies some of the responsibilities that should be managed locally and those that should be managed globally. There is a discussion on the comparison between globalization and localization. The idea of this article is to help an organization decide which strategy would be best when taking a company to a global scale. This article emphasizes the importance of (Ceren Altuntas, 2014) a global presence by creating a network of balanced businesses. The finding of the research is that as companies migrated to a global scale the corporate foundation adopted a transnational strategic orientation. The research is also broken down by country and the state of their economy. The purpose of this study is to help managers with decision-making. It was determined that companies should not only provide their products or services in an international market but also their social responsibility and contributions.
The second article also addresses corporate social responsibility in an international market. Focusing on some of the concerns of corporate social responsibility and challenges. It has been determined that this has been an issue for centuries. This article categorizes the issues in terms of theoretical, methodological, and empirical. This article's emphasis was on external environmental influences and CSR practices (Pantelitsa P. Eteokleous, 2015). Some of the major concerns according to (Pantelitsa P. Eteokleous, 2015) were human rights abuses, unhealthy working conditions, and anti-social behaviors. It does discuss the strategic approach regarding corporate social responsibility and its findings that further research needs to be conducted and broken down into particular issues, countries, and economies.
The comparison between the two articles is that regardless of the strategy selected to assist the company in broadening their footprint and being profitable their values come from how they affect the communities surrounding the organizations. How are they providing a benefit to their consumers? How are they affecting the global economy by providing their products or services which could lead to their overall success?
Ceren Altuntas, D. T. (2014). Local or Global. Analyzing the internationalization of social responsibility or corporate foundations.
Pantelitsa P. Eteokleous, L. C. (2015). Corporate social responsibility in international marketing: review, assessment, and future research. Corporate social responsibility in international marketing: review, assessment, and future research.
Is there any research suggesting which strategic approaches work best in the global environment?
If a company wants to be multinational, they must look at every aspect of what and where they want to operate, then form a detailed strategic plan. If a company is successful in one country, there is no guarantee that they will enjoy the same success in other markets. Any plan requires specific research into several areas that may not seem normal to a business where it currently operates. Ghemawat and Matters (2001) created seminal work into the CAGE Distance Framework that aptly applies to companies wanting to expand internationally. The theory encompasses cultural distance, administrative and political distance, geographic distance, and economic distance. Together, they are considerations that form a framework or matrix for analysis that companies can understand the impact of exploring new markets abroad.
Each of the four categories from the framework show considerations that can be evaluated to determine which strategy may be best for a company to consider becoming multinational. The considerations include cultural, administrative, geographic, and economic factors. As an example, if the cultural differences are large from operating in the United States to Vietnam, it may not be best suited to begin operations there immediately without understanding the nuances. The leadership styles in one country may not be culturally appropriate in another, causing a cultural issue. Administrative problems arise when one country uses different human resource systems and follows local laws that could be very different from the current one. Geography plays a large role as well, if the company that one company wants to partner or work with is thousands of miles away, the distance and travel costs could be prohibitive.
Once a complete understanding of the operating environment is garnered, then organizations can begin to decide what is the best plan for moving into a new market. The first planning consideration is evaluating the size of the company that wants to expand. Large companies oftentimes have a better success rate transitioning to a multinational company due to their larger networks they already have established (Contractor, 2012). Smaller companies tend to not be as well versed in international business practices like laws and norms that lend towards seamless integration.
Once all the factors have been identified that could influence a strategy, the next step is to pick a method of expanding internationally. Depending on the product or service that is to be offered globally, that can drive which expansion strategy is used. Garcia-Canal et al. (2002) suggests partnerships or alliances for small to medium-sized businesses, to offset the risk but have local companies that truly understand the market. Aliouche and Schlentrich (2011) suggest franchising has become easier due over the years due to barriers to economies have been removed in so many countries. The types of entries which were found to be negative was a subsidiary or Greenfield Venture and an acquisition. Berringer and Greening (1998) argue that creating a new entity in a foreign country face many unforeseen legal and cultural challenges that oftentimes don’t have stakeholder concurrence, whereas Bashan and Armon (2019) discourage acquisitions for the same reasons. So there is debate as to which method is the “best”, each company should look at their own situation and determine which strategy is right for them.
Aliouche, E. H., & Schlentrich, U. A. (2011). Towards a strategic model of global franchise
expansion. Journal of Retailing, 87(3), 345-365.
Bashan, A., & Armon, D. (2019). Quality management challenges in a dynamic reality of
mergers, acquisitions and global expansion. International Journal of Quality & Reliability Management, 36(7), 1192-1211.
Contractor, F. J. (2012). Why do multinational firms exist? A theory note about the effect of
multinational expansion on performance and recent methodological critiques. Global Strategy Journal, 2(4), 318-331.
Garcı́a-Canal, E., Duarte, C. L., Criado, J. R., & Llaneza, A. V. (2002). Accelerating
international expansion through global alliances: A typology of cooperative strategies. Journal of World Business, 37(2), 91-107.
Ghemawat, P., & Matters, D. S. (2001). The hard reality of global expansion. Harvard Business
Review, 79(8), 137-146.
Berringer, B. R., & Greening, D. W. (1998). Small business growth through geographic
expansion: a comparative case study. Journal of Business Venturing, 13, 467–492.
Vanninen, H., Keränen, J., & Kuivalainen, O. (2022). Becoming a small multinational enterprise:
Four multinationalization strategies for SMEs. International Business Review, 31(1), 101917.
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