OLI Framework and its Impact on IBM's Foreign Direct Investment Decisions

International Business

Table of Contents
INTRODUCTION TO OLE AND IBM..........................................................................................3
MAIN BODY...................................................................................................................................3
‘The OLI framework helps IBM to make better Foreign Direct Investment (FDI) locations
decisions.’....................................................................................................................................3
OLI and IBM Discussion............................................................................................................3
Evaluation...................................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION TO OLE AND IBM
International business defined as the trade of commodities, services, capital, technology and
the knowledge among various national boundaries and the global transnational scale. This
basically includes the transactions of products and services between two or more nations(Bala,
2021). Microsoft is the chosen business organisation for this essay. The aim of the essay is to
analyse the OLI framework which helps IBM to have better Foreign Direct Investment(FDI)
locations decisions.
MAIN BODY
‘The OLI framework helps IBM to make better Foreign Direct Investment (FDI) locations
decisions.’
Microsoft is the American technology company which is founded by Bill Gates in 1975. The
core business of Microsoft is to sell computing devices, software, cloud systems and services,
and many other products to consumers & businesses. They are basically operating its business in
five segments such as windows and windows live division, online service division, server and
tool, Microsoft business division & entertainment & devices division. Microsoft is the
technology company which develops and supports a range of software products which was
discussed above(Jha, Dhanaraj and Krishnan, 2018). The vision of the Microsoft is to “to help
people and businesses around the world realize their full potential”. The concept presented in this
vision statement is on how the company is establishing the positive changes to its potential
customers.
OLI and IBM Discussion
Eclectic Paradigm is also called as the ownership, location, OLI model, is a three tiered
evaluation framework that is used by the companies when they are attempting to determine the
benefits to pursue foreign direct investment. It is assumed by the paradigm that institutions will
avoid transactions in open market and when the cost of the completing the same actions or it
carries a lower price. This respective model is based on the internationalization theory & was
introduced in 1979 by Scholar John H. Dunning(Martek, 2022).