ULUSLARARASI İŞLETME - Deneme Sınavı - 10

Today globalization refers to the shift toward a more integrated and interdependent world economy. That is why, domestic economies can not be indepedent.

Hill and Hult (2019: 11) summarized drivers of globalization into two macro factors. One of them is declining trade and investment barriers, and the other one is technological change. Intense rivalry from foreign competitors is a firm level consequence of globalization.

In the IP model, there are two types of variables: state and change. The change variables are the crucial ones since these processes change the characteristics of the focal firm and its environment and then trigger further changes. They involve knowledge development processes, including learning, creating and trust-building; and commitment processes, including reconfiguring resources and coordinating. The state variables include both operational (resources, skills, relationships, and organizational culture) and dynamic (integrating, building and reconfiguring competencies) capabilities, commitments (the distribution of resources over the firm’s functions, its product lines, the countries where it is active, and the networks in which it has invested), and the performance of the firm. The IP model portrays internationalization as a cyclical process: state variables affect change variables and vice versa (Vahlne & Johanson, 2017).

The LLL framework has three pillars: linkage, leverage, and learning. Linkage refers to connecting and making business with resource-rich companies or companies already active in the target market. The linkage can be affected through strategic alliances.

-In particular industries and economic environments, significant economies are associated with first-mover or early-entry positioning— being the first or one of the first to enter a market. These include catching learning effects, which are essential for increasing the market share, achieving the economies of scale which accrue from opportunities for capturing that more significant share, and forging the alliance with the most attractive (or in some cases the only) local partner. In the developing economies that are undergoing rapid changes such as privatization and market liberalization, there may be a narrow window of time within which these opportunities can be best exploited. In these conditions, first-mover advantages allow entrants to displace competition and influence the evolving competitive environment in a manner conducive to their longterm interests and market position (Luthans & Doh, 2018: 212).

-Late-mover advantages comprise free-riding on first movers’ pioneering investments, avoiding considerable technological and market related uncertainties, and evading being locked into a set of fixed assets or cannibalizing the existing product lines in favor of the new ones.

-As a result of rapid globalization between the 1990s and the 2010s, we have witnessed the emergence of a new type of small-andmedium-sized enterprise: the born-global firm, a young entrepreneurial company that initiates international business activity very early in its evolution, rushing into foreign markets. 

-The born-global firm refers to a young entrepreneurial company that initiates international business activity very early in its evolution, moving quickly
into international markets.

International management is the process of applying management concepts and techniques in a multinational environment whereas International business (activity) is a commercial transaction that crosses the borders of two or more nations. Internationalization is “the process by which a firm gradually changes in response to the
imperatives of international competition, domestic market saturation, desire for expansion, new markets, and diversification. Globalization refers to the shift toward a more integrated and interdependent
world economy.  Denationalization is the process of removing from ownership or control by the national government.

Globalization means shrinking time and shrinking space. The lives of all individuals are more connected, and events occurring in one place
affect other parts of the world almost in real-time (Wall, Minocha and Rees, 2015: 17). As an example, coronavirus has emerged in China and spreaded rapidly all over the world.

-There are two types of exporting: direct and indirect exporting. Direct exporting refers to the sale of products made by firms in their home country to customers in other countries. This strategy is attractive because firms can reach foreign customers directly. When domestic markets experience some downturns, sales abroad may compensate for such drops. Indirect exporting involves selling
through domestic-based intermediaries (such as foreign distributors, sales representatives, and local agents).

-Export intermediaries perform an essential middleman function by linking domestic sellers and overseas customers who otherwise would not have been connected (Peng, 2014: 299-300).

-Exporting has many advantages (Çavuşgil et al., 2017: 377-378):
1. It increases overall sales volume, improves market share, and generates profit margins that are often more favorable than in the domestic market.
2. It increases economies of scale, reducing per-unit costs of manufacturing.
3. It diversifies the customer base, reducing dependence on home markets.

-There are some disadvantages of exporting (Hill & Hult, 2019: 439):
1. Especially for bulk products, high transport costs can make exporting expensive.
2. Tariff barriers can make exporting costly. Similarly, the threat of tariff barriers by the host-country government can make it very risky.
3. In indirect exporting, intermediaries often carry the products of competing firms and so have divided loyalties. In such cases, the intermediary may not do as good a job as the firm would if it managed its marketing itself.

There are four significant motivations for firms to enter strategic alliances (Clegg, Kornberger & Pitsis, 2016: 568):
1. Transferring technology across borders more easily,
2. Accessing new markets by using the complementary resources of local firms,
including distribution channels and product range extensions,
3. Leveraging specific capabilities of partners and saving costs of duplication, such as fixed costs,
4. Sharing risks among the alliance partners

Contractual alliances are based on contractual provisions. They include contract manufacturing, licensing, franchising, research and development contracts, joint marketing, consortia, turnkey projects, build-operate-transfer arrangements, and management contracts.

Joint marketing is an agreement between two or more partners based in different countries that focuses on international market expansion through access to capabilities and resources in international markets.

A greenfield investment refers to an entry mode through which a firm invests directly in another country by establishing a new wholly-owned subsidiary.

A joint venture is a separate organization formed by two or more firms that have
equity ownership in the new entity.

Brazil, China, India, Indonesia, Mexico, Russia, and Turkey are today
labeled as E7 countries.

As a philosophy, individualism is based on the belief that people should be free to pursue economic and political endeavors without restrictions. This is very much related to the capitalist economic system and market economy. As its name suggests, the market economy prioritizes individuals. Factors of production are privately owned and managed. In
a pure market economy, the law of supply and demand determines the price and the control of the market. Since supply and demand determine the level of production, consumers become sovereign.

The “ISO is an independent, non-governmental international organization with a membership of 164 national standards bodies. Through its members, it brings together experts to share knowledge and develop voluntary, consensus-based, market-relevant International Standards that support innovation and provide solutions to global challenges.” For example, different carbon dioxide (CO2) emission standards have been adopted worldwide. So, to resolve this or any similar issue, an international standard is required. The ISO provides standards, through which companies across the globe evaluate their quality standards.

Cultural values affect technology transfer, managerial attitudes, managerial ideologies, and business-government relations. That is why, it is not correct to say that culture is irrelevant in terms of managerial attitudes and ideologies.

Trompenaars’s dimensions are as in the following:

• Universalism vs. Particularism
• Individualism vs. Communitarianism
• Neutral vs. Affective
• Specific vs. Diffuse
• Achievement vs. Ascription
• Attitudes toward Time
• Attitudes toward the Environment