International Management - Global business Essay

International Management - Global trade - Essay ExampleMultinational companies uncoerced to expand their operation in everyplaceseas have to face quite few challenges like regulatory environment of the host country, culture and so forth.In general, the advent of the modern Multinational companies was largely because of the fast industrialization in the western society. The industrial revolution accelerated new technologies of production and distribution that necessitated big operations than firms had managed before. Conversely, mass production technologies demanded a constant and dependable stream of input, and the pursuit for new economical long term sources of materials and supplies was the incentive that drove galore(postnominal) companies in the foreign countries.1 In fact, firms choose to operate in different countries of the world for a good many reasons, as an example, to reap the benefit of economies of get over, tacky labor cost etc. We can see today that extensive n umber of companies like Coca Cola, Volvo etc. are operating in different parts of the globe. In this paper, the author attempts to shed light on the activities of the multinational companies in relation to various international production theories.Companies want to expand their business base aboard for mainly efficiency seeking and strategic asset seeking reasons. ... intended to capture the benefits of disparity in the availability and cost of traditionalistic factor endowments in different countries of the world 2) the second sort is that which takes place in those countries which have largely comparable economic structures and income levels and is intended to reap the benefits of the economies of scale and scope, and of distinction in consumer tastes and supply capabilities. For instance, many U. S. companies transferring production to lower-cost Mexico and then exporting finished products back to the USA. An example of the second is American enthronement in European countries. Europes stable move toward economic integration over the preceding years has given U. S. firms bigger opportunities and scope for attaining increased efficiencies and rationalization.Among all the purposes for foreign direct investment over the 1990s, strategic asset seeking was amongst the most significant. The aim of the strategic asset seeker is to increase companys prevailing portfolio of assets in such a room that strengthens the firms existing competitive advantage. Examples of strategic asset seeking investment include Fords acquisition of Volvo of Sweden and Jaguar of the United Kingdom, and Land Rover from BMW in early 2000, ternary acquisitions that helped boost the Fords product niche in the luxury automobile market.2 Global business is now driven by in excess of 60,000 multinational enterprises (MNEs) with over 800,000 subsidiaries in foreign countries. The worlds top 100 non-financial MNEs are the main drivers of global production. Their foreign assets amounted to $2 trillion in 2000, with over 6 million employees crossways the world. They focus mostly in electronics and electrical equipment, automobiles, petroleum, chemicals, and