Global Business: Internationalization of Multi National Companies & European Economic Community

This article discusses the European Economic Community and the Internationalization of Multi National Companies in Global Business. It covers the pros and cons of EEC, reasons for internationalization, challenges faced by companies, and more.

Global business

Table of Contents
ASSIGNMENT 1.............................................................................................................................3
Individual notes 1 .......................................................................................................................3
European Economic Community............................................................................................3
Individual notes 2........................................................................................................................4
Internationalization of Multi National Companies.................................................................4
Individual Report.........................................................................................................................8
MNC- Marks & Spencer entering international market.........................................................8
Individual Reflective Essay.......................................................................................................12
REFRENCES ................................................................................................................................14

ASSIGNMENT 1
Individual notes 1
European Economic Community
The abbreviation EEC stands for the European Economic Community which was created in the
year 1957 with the treaty of Rome. The major aim behind the establishment was to achieve the
economic cooperation between the member countries and also to help them in achieving
common trade barriers so that the market do not suffer from complex policy structures. It also
aims at the abolition of the barriers on the customs. In the year 1993, European Union took the
shape from EEC by the Maastricht Treaty of year 1992. the aim of creating a common market by
transforming the conditions related to trade and manufacturing by all 6 of the members is taken
further with increased membership by EU now (Sellin, 2018.).
Pros
The goal of establishing a common market for whole of Europe was beneficial for the businesses
and commercial organisation there as they could get the uniformity in businesses throughout
Europe and they do not have to get in the complex regulations for conducting the business
activities. It also worked in creating less barricaded business for the union altogether which aided
the working to be uniform throughout. The government policies and regulations were also
affected in line with the goals so as to make them align to the policies of the EEC. When it aimed
at working in separating the political interest from that of economic ones then the growth and
development of the economy was also expected to outshine. The aims were clearly beneficial and
the counting of pros of EEC remains bulky.
Cons
Though EEC was established with the aim of establishing a economic system which is common
to whole Europe, its membership could not exceed 6 as majority of the states wanted to cherish
the freedom and independence in policies for a prolonged era and the people were not willing to
enter any framework where the policies were imposed on them by any external agency. The aim

of establishing a common market thus could not succeed (Romano and Romero, 2021). Thus
when the scenario changed and an organisation specifically devoted to economic interests could
not succeed then the incorporation of the EEC in EU took place. The political interest could not
be segregated away from the economic ones by EEC. The market which led to the formation of
economic unit began working in the social and political aspects as well and the area of working
began intermingled with the things not aimed by the organisation in the beginning.
Individual notes 2
Internationalization of Multi National Companies
Global partnerships (MNC), likewise called transnational company, any organization that is
enrolled and works in more than each country in turn. By and large the enterprise has its base
camp in one nation and works completely or somewhat claimed auxiliaries in different nations.
Its auxiliaries report to the organization's focal base camp (Papanastassiou, Pearce and Zanfei,
2020.).
In financial terms, a company's benefits in laying out a worldwide enterprise incorporate both
vertical and even economies of scale (i.e., decreases in cost that outcome from an extended
degree of result and a union of the board) and an expanded piece of the pie. Albeit social
boundaries can make unusual impediments as organizations lay out workplaces and creation
plants all over the planet, a company's specialized mastery, experienced faculty, and
demonstrated systems as a rule can be moved from one country to another. Pundits of the global
organization ordinarily view it as a financial and, frequently, political method for unfamiliar
control. Non-industrial nations, with a thin scope of products (frequently of essential
merchandise) as their financial base, are especially helpless against monetary double-dealing.
Monopolistic practices, denials of basic freedoms, and disturbance of more-conventional method
for financial development are among the dangers that face have nations.
With regards to financial matters, internationalization can allude to an organization that does
whatever it may take to build its impression or catch more prominent piece of the pie beyond its
nation of home by spreading out into global business sectors. The worldwide corporate pattern
toward internationalization has helped drive the world economy into a condition of globalization,
in which economies all through the world become exceptionally interconnected because of cross-
line business and money. Thusly, they are incredibly influenced by every others' public exercises

and financial prosperity. At the point when an organization looks to sell its products abroad, it
might observe that there are a few road obstructions in the manner. Some might be specialized
boundaries that should be survived; for example, various voltages of family power or different
fitting shapes viewed as around the world. These might be cured by means of innovative
variations (Rodrigues and Dieleman, 2018.). Different obstructions might be social, for example
in India numerous Hindus don't eat hamburger. This intends that to internationalize, McDonald's
should zero in on chicken, fish, and other non-hamburger menu things that better adjust to
neighbourhood custom and culture. Having the option to deftly adjust fits more noteworthy
internationalization.
The international statistics reflect that the MNCs flow towards the FDI has considerably
increased in recent times which also made them significant party in the international global trade
market. The reasons for the Internationalisation of the Multi National Companies can be as
follows:
 Profit motive:
The basic reason why the company internationalize is to enhance the profits as the business in
multiple territories. When the company enter into new markets, they also come in line with the
new technology and production procedures too which aid them to increase the competitive profit
margins too along with the decreasing of their cost as well. Whenever the growth strategies are
exhausted at national level the companies goes on conducting business in international market.
The customers also increase when the international business is opted by the countries. Also, the
revenues increases with higher rates when the solutions offered by the companies are compelling
enough and the loyalties are built up in international markets. The companies may also be willing
to expand the business in international market so as to decrease the cost of production also and in
order to gain the benefits from that reduced cost in getting more and more customers. The
relocation may also be in the area where the other suppliers are readily available and such factor
leads to expansion of customer base for low cost products as well as for the international
expansion of commercial operations.
 The new sales from competition:
The expansion of company to international market is also done with the objective of competing
for new market sales. The company may though be operating in the market nationally but not
yielding the proper revenues from the sales but when the sales are diverted to the international

markets the same yields higher profits the business. Thus the new sales in international market
proves to be fruitful for the Multi national companies and counts on being the reason for its
internationalization. In this way the competitive advantage is also ensured by the companies.
 Exploring and tapping new markets:
The expansion of business in the international market aides the companies in exploring new
arenas of business and also helps them in working in untouched fields of functioning by them.
The business when expanded internationally is diversified in numerous ways. The expansion also
helps in slowing down the risk across different countries. When the loss is incurred in one market
of a specific nation, it can be made good from the other market of different nation where the
environment of market may be essentially different requiring the set of products not in demand in
other nation (Clegg, Voss, and Tardios, 2018.).
 Competitive advantage:
The companies go global in order to gain the competitive advantage in the market over The
prevalent businesses in the market as they want to get to the market having the expansion as the
base. They do so to create the movers first advantage in the business. The internationalization as
would allow them to create new customers in the area as well as the new business competitions
so that the market advantages can b gained by it.
 Labour mobilization:
The workforce available in the other market is different from the one the companies have in their
own nations and the efficiency of their business increases with the engagement of labour with
other new cultures as well as talents. Companies also move their divisions in other countries
which increase their values. The pool of talent is also diversified in the global market and it is
larger in comparison to the national one. The labour recruitment is such that the people who are
employed are able to speak multiple languages and are skilled in diverse field so that the
international customers who are of multi-cultural nature are adequately handled by them. The
companies also go for recruiting a team which works internationally in the management of whole
business giving synergy to the business in making international brand. The top level of
individuals are hired to create a international brand that will attract the most skilled people
towards the business which is beneficial for the company.
Challenges that the companies encounter in internationalization

One unconventional face of business chances is the vulnerability variable, and with regards to
worldwide business it is somewhat viewed as the essential dangers components overall. Aside
from vulnerability, there are different things too that appears to be hazardous. Furthermore, the
more predominant dangers components to global or the essential element of it tends to be laid
accentuation to the accompanying:
 Political challenges:
There is no denying the way that global business in any situation is limited by political dangers.
Political dangers can be perceived as the component that makes up the political highlights of a
country. Subsequently, political environment on occasion have a more prominent power to have
an impact in worldwide business. Take for example, political vulnerability itself (Mihov and
Naranjo, 2019.). That implies when political environment is fairly steady, worldwide business
likewise take a similar course. In any case, the majority of the times political dependability is
somewhat an overstated term; offered that there can be no certain chance technique to foresee
country's political cosmetics, or to say the idea of strength hangs in the edge. Actually, with
lesser political strength, the effect it have on business is additionally fundamental, which at the
appropriate time can alter the course and vital cosmetics of business. In this manner, political
dangers are one essential component of worldwide business.
 Technical challenges:
As we know, innovation and its wonder have brought along a heap of advantages, which have
took the cultural formative stage one step over the ground. Add to it, innovation and its headway
is likewise truly expanding, and that implies every day and in the pattern of monetary cycle,
mechanical mastery and its effect in worldwide business is felt with more prominent power.
Worldwide business are hence confronted with the miserable idea that less of mechanical
mindfulness or obsolete mechanical application in global business can hamper the manner in
which things work or are anticipated. Consequently, the hazardous components can be hoped to
deteriorating cost factor that innovation presented or the security to global business.
 Challenges related to finances:
What characterize monetary dangers are the monetary components that may its direction to it. In
straightforward sense, it tends to be widened to the changing essence of global business itself,
which additionally characterizes the speculation variables or countries failure to meet its own
monetary commitments. With the possibility of worldwide business and expanding exchange

obstruction or unregulated economy exchange can play a prevailing part to have its impact in
global business cycle and in this way, it comes as a gamble.
 The cultural and social challenges:
Progress is dependably in a transformative phase, and one component that socio-social structures
follow all the way through can be laid accentuation to the idea that no specific country and its
way of life are lethargic. In other words, social contrast is far reaching, and when that component
is accounted to worldwide business, the advertising system additionally is presented with the
vulnerability factors (Cuervo-Cazurra and Li, 2021.). In this manner, hierarchical functional and
key cycle is likewise tested in such climate. Along these lines, advertiser should be far ahead in
understanding society and society itself, which we can organized as socio-social dangers.
Individual Report
MNC- Marks & Spencer entering international market
Introduction
The MNC named Marks & Spencer is a chain of business in multiple countries originated from
England in 1884. Now after successfully working for 150 years, it is facing multiple business
issues and should think of even more internationalising its business. The report here will cover
the analyses of its market at domestic level as well as the possible strategies that it may opt for
the internationalization of its business. Also the issues it is facing right no in conducting its
functions along with the possible solutions by it are dealt under. This also provides an insight
into the desired leadership skills for the business (Pavlák, 2018.).
Domestic Market Analysis
The functioning of the company has now been facing multiple issues in the domestic market
which is to be adequately handled by the management. The department it deals with are food,
homeware and other food items of luxury nature. The analysis performed on firm shows that the
business loss waves have hit the company hard and the online shopping trend had resulted in the
outlet failures to it. Domestically, the fashion range it had been following is also plagued with the
disabilities of it. The other domestic issues are the change in preferences of customers as well the
availability of international brands in the market. In 2018 the company drastically
underperformed in the food sector as claimed by the management. Multiple competitors in the
domestic business have led to its slow decline and also to the closures of its different stores.

The Plans for internationalisation
Strategies for the internationalising of the business here deals with the two approaches to be
followed that are the approach of Incremental Stage and the global born strategy. Under the first
approach here the company first follow the step by step development process where the first
development and growth it has to focus on is the national level one (Sinkovics, Kurt and
Sinkovics, 2018.). Then when the business is well flourished on the lower level it proceeds on
the international expansion gradually. The other concerned strategy here focuses on the born
global approach which emphasises on the the working at international level right from its
inception. The organisation is made to enter the international market since the beginning an thus
work at diversified territorial bases at the same time. In this sense these businesses are termed as
the Born Global. Here the concerned business shall fulfil the factors like satisfying the demands
of the customers, the advancement of technologies and coping with the issues on time. The
advancement to be taken as a means of expanding the business primarily focused on the growth.
The utmost flexibility in their nature is expected.
Challenges and Solutions
The pandemic hit the company in the same way as it hit other retailers but not only the pandemic
but also the following are challenges faced by the company:
Not keeping up with the trends
The name of the company comes under the biggest brands in UK but the needs of the customers
remained unfulfilled by it in the recent times which is paving ways for its biggest rivals like
Zara , Hush, etc. the adequate price and proper fashion formula has not be found by the brand
and this is leading to its mass failure.
Miserable Clothing Online
The company failed in meeting the online demands of the customers. The first outsourcing of it
with the Amazon failed after which it switched onto setting up its own site that was treated as
unacceptable by the customers owing to its boring interface and less variety of products. The tech
it worked on was also very expensive leading to losses for it.
The company offers no food online
Though the food is offered online by the company but the area remains very confined. The
customers again are not satisfied with these online services and are willingly switching over
other alternatives for the supplies. Not only does it is ignoring the online needs but the customers

are upset with its store and cafe policies. It had stopped offering the free biscuits with the tea and
coffee in cafes leading to its losses.
Bygone stores
The stores which are located at various locations are now outdated with the arrangement which is
no more trendy and impressive for the customers. No schemed infrastructure is followed by the
store management and the large sized stores with scattered categories of clothes sometimes even
frustrates them (Mendy and Rahman, 2019.). The stores are not the ones which are expected of a
business having global reputation.
Solutions
the solutions which can be opted by the company in new market can be recyclable packing of the
products it supplies along with the use of sustainable resources aiding the work of the business
and environment at the same time. The community investment shall be focused on in order to
have the risk associated with the finances to be managed properly. Also keeping in mind the
recent health trend and after pandemic situation the company shall focus on having the healthy
choices of food to be served which have minimum calories and they shall be kept in as much
variety as possible.
Leadership Traits
The leadership of the company essentially will aid its success on internationalization. The
qualities necessary for the entry in international market are as follows:
Cognizance of Culture: the leader when looking forward for the internationalization of business
shall be more oriented towards culture cognizance as the areas it works in the environment which
is different in culture it has been following. The choosing of new employees and other authorities
should be based on several techniques owing to the needs of the new environment and culture.
The competent leader who works globally shall very well recognise the cognizant cultures. If the
above is not done, the leader may find himself ineffective and misunderstood by various beings
associated with the company.
Flexible Approach: the leaders while working are expected to be flexible enough in the sense that
they get the communication with others simple and clear in the manner which is understood to
everybody leading to the successful working of the business. The flexibility shall also be
reflective in the approach the leader puts forward when any conflict or issue arises during or after
the business enters the new market. The unforeseen events shall also be tackled with flexibility in

attitude as it may require major changes in the policies and also the standards which needs to be
evaluated (Mendy, Rahman and Bal, 2020.).
Network Broadened: the leader who work globally shall have very strong network in order to
establish coordination in the work he performs for the business. Not only does he shall have the
vertical coordination that is the equilibrated from superior to subordinate but also that of
horizontal nature. This means that the leader shall be on having the wholesome coordination and
network at hand. The number of persons or individuals he communicates with or can work with
shall be infinite as the global network requires such skills to be effectively maintained.
Conclusion
This report thus concludes that Marks & Spencer shall chose the method of internationalization
and work as per the solutions provided in the report so the all its business needs can be catered
adequately and without any difficulties. It can also be seen that the struggle which began with
Brexit kind of doubled with the pandemic where there exists financial pressures and the spending
of the customers declined towards various outlets of the concerned company. The outward
factors have led to its major losses rather than any internal factors like corruption, corporate
politics, etc. thus the internationalisation of business for it seems to be the best choice.
Individual Reflective Essay
After studying this module I have gained immense knowledge regarding the European
Economic Council, its advantages and disadvantages. The essay will majorly dwell upon the
internationalization of Multi National Companies and the topics associated with it. The business
which do not be restricted to any particular nation and operate under various geographical areas
are the International businesses (Sageder and Feldbauer-Durstmüller, 2019.). They not deal with
the International or big businesses only but also have transaction dealings with the sole
proprietors. The businesses which operate in international areas and associate with the strategies
and regulations governing the global business comes under the category of the companies here. I
also learnt about various strategies which are necessary for the companies entering the markets at
the international level. The strategies which are made for the governance of the business for the
short and longer period objects like the daily working of the companies. I also learnt about the
challenges that the companies face while they work in the domestic market and also the methods
they adopt for the adequate working in the system of commercial operations.

I gained the knowledge regarding factors that led to the international expansion of the businesses.
The drivers for the internationalization be the motive of earning and expanding profits, the zeal
of entering new areas full of new opportunities which cannot be acquired in the domestic
markets, the labour mobilization leading the growth of diversity in cultural base of the company
making it diverse in all the forms (Forcadell and Aracil,2019.). This helps the company to attract
more clients across the globe as the people it employees are also from multiple countries who are
efficient in handling multi cultural clients or customers too.
But I have keenly observed while working for this module that though the international market is
full of opportunities for the Multi National Firms but it is not free from barriers which obstructs
the growth of the companies in one or the other ways. The companies which only operate in
domestic market have single working culture and find it quite difficult to enter the international
market where the culture and people working under the companies are diverse in nature. It also
becomes problematic for these companies to be abide by all the polices which different
governments impose on the businesses being of international type. The socio and economic
barriers also prove to be hindrance in the way of growth for such organisations or companies
aiming to enter such markets.
The only way of effectively handling the procedures of change are the exercises adopted by the
leaders of such companies. Thus I have learnt that he leaders need to be prompt enough to handle
such challenges. The leaders need to have a very flexible attitude towards new people and shall
be understanding enough so that the people from diverse cultures do not find it impossible to
have their identities secured while working in the company and also that they prove to be asset
for the company and not the drivers of failure of it. The leaders are also expected to keep balance
of the original motives of the company and work in coordination with others to make the good of
the company.
It is also learnt by this module that whatever the companies do nowadays in regard to their
business does not remain a private affair but is integrally connected to what goes around in the
global business environment. This is the basic impact of globalisation on the businesses. The
competition among the businesses had essentially increased because of this and also the cost and
price, production, supplies, demands and other economic factors are affected by it. The
globalisation had also led to the technological exchange throughout the world leading to the
increased efficiency of the businesses and enhanced pace of internationalization of industries.

The transfer of the knowledge also is the result of globalisation only (Masovic, 2018). It is now
very well believed that no business in the world can sustain in isolation and unaffected by the
world events. Whatever goes on in the international businesses affects the growth and
development of the businesses and companies in the domestic markets. The rapidly changing
world circumstances have also increased the number of opportunities the businesses have at
hand.
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