Lecture 2 Flashcards
What is an international company?
An international company is a company that operates in more than one country. It may export/import, invest abroad,
or get involved in any form of collaborative arrangement
Collaborative arrangements:
- licencing agreements,
- management contracts,
- long-term contractual arrangements.
The definition of multinational company used in the textbook is:
a
company with foreign direct investments.
Companies with foreign direct investments may be referred to as:
multinational corporations (MNCs)
multinational enterprises (MNEs)
transnational companies (TNCs)
The transnational corporation is
an enterprise comprising entities in more than one country which operate under a system of decision-making that permits coherent policies and a common
strategy.
The entities (subsidiaries) of a TNC are so interlinked that normally one (HQ or parent company) exercises a significant influence over the others and, in particular, it shares knowledge, resources and responsibilities with the others.
Where are strategic decisions taken in an international company?
Strategic decisions at groupwide level are taken in HQ, by the board of directors
Composition of a typical Board of Directors:
- Chairman and Non-executive Directors,
- CEO, CFO, COO, etc. – Executive Committee
At the level of the subsidiaries strategic decisions are implemented according to the directives of HQ;
adaptation and conformity has to be made to the specific role of each
subsidiary, and to the particular environmental characteristics of each locatio.
What is globalisation ?
Deepening relationships and wider interdependence among
people from different countries and parts of the world in all areas of life:
Scale economies in:
- Production
- Marketing
- R&D
- Logistics
- Sourcing
- manufacturing
- global brand/advertising
- collaboration
- distribution centers
- buying worldwide
