Introduction To Global Economic Changes

International Business
[Type the document subtitle]
4/17/2020
student name

International business 1
Contents
Introduction................................................................................................................................2
Literature Review/Critiques.......................................................................................................3
Ownership..................................................................................................................................5
Location......................................................................................................................................7
Internalization............................................................................................................................9
Conclusion................................................................................................................................12
References................................................................................................................................13

International business 2
Introduction
Global economic changes have majorly reflected imperative contemporary study towards
augmentation in foreign direct investment from various economies and industrialised nations
that are currently being emerging. It has also considered being increasingly authoritative
purpose for multinational corporations, the reason being the requirements by the companies
in such emerging economies that has majorly been evidenced in developed nations. This
research essay will be focusing towards understanding of role of multinational enterprises.
Considering Tata motors case as agent of knowledge transfer and foreign direct investment
management in one of the developed nation that is United Kingdom would be discussed
further (tatamotors, 2020).

International business 3
Literature Review/Critiques
For the literature the background of Tata motors India reflect that it was founded in 1945
where the parent company under Tata group. This is considered to be one of the biggest auto
mobile companies in the nation that is in India.
Literature reflecting Dunning’s eclectic theory, describe that this framework was proposed in
1993 which is also known as OLI paradigm. The three categories from this framework reflect
ownership, location and internalisation. Taking into account the first Category that is
ownership advantage, the research reflected this include the advantages for a company that
could be possessed by the company over international market competition. This represents
the firm specific competitive advantage that could be possessed by the company. These are
generally being measured through factors like patents, resources, economies of scale,
trademarks, financial capital, technology created by the organisation considering international
experience. However these should be sustainable and unique and could not be imitated by the
competitors (Dunning, 2000).
The second category that is location advantages reflect market risk and market potential for
the organisation as this reflect country specific factors which could act as advantage for the
company. The measurement of location advantages are through qualitative as well as
quantitative factors like wages, production, cultural diversity, taxes, cost of transport, market
size, sales demand and economic policy (Robson & Zeriti, 2014).
The third category that is internalisation advantages reflected Ability of the organisation to
exploit and create the core competencies. For instance this may include selection of radical
mode while operating over and external mode that may impact a possible failure in market.