Documente Academic
Documente Profesional
Documente Cultură
Most companies move their business operations to foreign countries by going global. They take their
business overseas for different reasons. These companies adopt the reactive or defensive approach to stay
ahead of the competition. A few of them take the proactive or aggressive approach to accomplish the same
purpose. A majority of them choose to adopt both approaches to avoid a decrease in their competition. In
order to remain competitive, companies move as quickly as possible to secure a strong position in some of
the key world or emerging markets with products customized for the need of the people in such areas in
which they plan to establish. Most of these world markets are attracting companies with new capital
investments with very good incentives. Some of the reactive or defensive reasons for going global are:
In the case of trade barriers, companies move from exporting their products to manufacturing them overseas
in order to avoid the burden of tariffs, quotas, the policy of buy-local and other restrictions that make export
too expensive to foreign markets. Companies respond to customer demands for effective operations and
product assurance and reliability, or/and logistical problem solutions. Most foreign customers, who seek
accessibility to suppliers may request that supply stay local in order to enhance the flow of production.
Companies usually follow that request to avoid losing the business. For the globalization of competitors,
companies are aware that if they leave companies overseas too long without challenge or competition, their
investments or foreign operations in the world market may be so solid that competition will be difficult.
Therefore, they try to act quickly. Most companies' home government may have regulations and restrictions
that are so inconvenient and expensive, thus limiting the expansion, encroaching in the companies' profits,
and making their costs uncontrollable. Hence the reason for the companies moving to different market
environment with few foreign restrictive operations. The proactive or aggressive reasons for going global
are:
(c) Incentives
(d) Resource assess and Cost Savings
Many companies will prefer to invest their excess profits in order to expand, but sometimes they are limited
because of the maturity of the markets in their area. Therefore, they seek the overseas new markets to
provide such growth opportunities. So, these companies, in addition to investing their excess profits, also try
to maximize efficiency by employing their underutilized resources in human and capital assets such as
management, machinery, and technology. Companies seek economies of scale in order to achieve a higher
level of output spread over large fixed costs to lower the per-unit cost. They also, want to maximize the use
of their manufacturing equipment and spread the high costs of research and development over the product
life cycle. Some of the developing countries that need improvement and development through capital
infusion, skills, and technology voluntarily provide incentives such as fixed assets, tax exemptions,
subsidies, tax holidays, human capital, and low wages. These incentives seem attractive to these
companies due to their increase in profits and reduction of risks. Caution: The repatriation of profits and
foreign exchange risks due to instability in leadership of these developing countries should be put into
consideration in negotiation. Access to raw materials and low operational costs in financing, transportation,
low wages, lower unit costs, and power are attractive in terms of resource access and cost savings. Most
companies move their headquarters to overseas to avoid their respective home countries' high taxes and
Companies need to develop strategies, design and operate systems, and also work with people, different
companies, and countries around the world in the form of strategic alliance to ensure sustained competitive
advantage. Global management and management functions are usually formed by the prevailing conditions
and ongoing stable and unstable developments in the world. A few countries take advantage of these
companies, but when companies become aware that they are being used, they should then learn how they
can be useful in that different cultural environment in order to make a lot of profits.
Dr. Sidney Okolo is a professor, consultant, strategist, and Africa expert. He is affiliated to several
universities, the Managing Director of International Business Associates, a management consulting firm, and
Among other things, he engages in all aspects of learning, knowledge, organization and human change. His
achievement, business strategy, research and development. Product management, change management,
conflict management, athlete management, marketing, business development and operations. He works
with clients to adapt to change due to change in factors of production, technology, goods and services. He
engages clients in training, retraining, development, skills enhancement, association, behavior modification,
ways of thinking, and attitude adjustment. In addition to his work in the United States, his focus is also on
developing countries in the continent of Africa, their leadership, culture, economic and market structure,
community planning and development, and his created four letter word, "PIES", which stands for: poverty,