Vodafone's Global City Headquarters: An Institutional Analysis

This essay examines Vodafone, a multinational telecommunications organization headquartered in London, and its strategic choice of a global city. It explores the concept of multinational organizations, defining their characteristics and types, and discusses the advantages of operating in multi...Read More

Essay

Table of Contents
INTRODUCTION ..........................................................................................................................1
Main body........................................................................................................................................1
What is Multinational organisation?......................................................................................2
What is global cities?..............................................................................................................2
Several reason behind selection of global city for opening the regional headquarter of
multinational organisation......................................................................................................3
What is institutional theory to analyse why multinational firms prefer global......................5
cities as their regional headquarters......................................................................................5
Advantages that are associated with locating in the global cities..........................................6
CSR activities done by Vodafone in India and London :-......................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
There are different multinational organisation which are doing huge investment on their
host countries to open their headquarters so that they can serve advanced producer services such
as marketing, accounting, human resource, finance etc. They are doing this activity because they
want proper inter-connections with the international countries. Different multinational
organisation chose metropolitan cities to open their headquarters. This will help them to acquire
different resources such as human resource, fund availability, large number of customers, easy
access to the company's products and services etc. the firm examine the ways in which city and
firm heterogeneity drive Multinational organisation location choices for new regional
headquarters (RHQ) establishments. The venture follows the principle of global city connectivity
to argue that certain types of Multinational organisations are more likely to locate their RHQs in
those global cities that are more connected and that this relationship is more pronounced in
knowledge, intensive industries as well as for RHQs that have an entrepreneurial mandate. It has
been analysed that global cities have become very important for the different organisation to
expand their business.
There are several changes that have been taking place in the global cities such as removal
or trade barriers, privatisation, improvement in infrastructure and transportation. These changes
have motivated different organisation to be a multinational organisation and open their
headquarters in the metropolitan cities. Globalisation have reduced the different trade barriers
such as tariff and non-tariff, thus this activity have increase in cross-border economic process
such as exchange of capital, labor, goods, raw materials and tourists. For this essay Vodafone
have been selected, which is multinational organisation and have headquartered in London. It is
telecommunication organisation which generate revenue about £47.631 billion in the year 2017.
Vodafone ranked fifth by revenue and second (behind China Mobile) in the number of
connections (469.7 million) as of 2016. The venture operates in more than 26 countries and
being partnered about more than 50 additional countries. The organisation sere
telecommunication and Information technology services to their worldwide customers. With that
they strength of around 111,556 employees.
Main body
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What is Multinational organisation?
Multinational organisation are the venture which have location in more than one
countries so that they can serve their products and services to the customers of different
countries. Other than that these organisations have all the departments of different countries such
as production, marketing, human resource, research and development, purchase, sales, finance,
operation etc. most of the venture want to expand their business and this is the reason they select
this strategy to become multinational organisation. In simple words it can be said that
multinational organisation are business which operates their different operation in more than one
or two countries and they manage their all the operation from one country and that country is
called as headquarter of the venture. There are four types of multinational organisations, that are
multinational decentralised corporation, global centralised corporation, international company
and transnational enterprise (Amoako, 2017). Multinational decentralised corporation is the
venture which have strong presence in their home country whereas global centralised
corporation is the organisation which have the advantage of cost, they try to produce goods in
those countries where cost of raw material is less. International company is the venture which try
to build themselves on the basis of parent organisation whereas transnational enterprise is the
mix of other three types of multinational organisation.
There are several advantages when the venture is trying to become the multinational
organisation such as cost control, Taxation, Consumer Benefits, Benefits to Countries. When the
venture is going to expand their business in different countries, their cost reduces such as labour
and transportation. They do not need to flow good and services to other countries as they have
started manufacturing in several countries, other than that they select those locations where
labour are cheaper thus their labour cost decreases. With that it increase the target market of the
organisation (Turan, and Hoxhaj, 2017). When the venture is going to expand their business in
different countries, they will target large customers and this will enhance their customer base.
Other than that when it is being discussed about the country, it serves benefits to citizen of other
countries. It will enhance living standard, infrastructure and income level of the country.
What is global cities?
There are several names of the global cities such as world city, alpha city or world centre.
Global city is city generally considered to be an important node in the global economic system.
The city serve the huge competition to the different sector of the business. Other than that it can
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be said that global city serves as a hub within a globalization economic system. In the year 1980,
there are several characteristics that have been identified at which important cities can be
identified. Global cities are being linked with the globalisation, it is being said that the country
which have less trade barriers such as tariff and non tariff are being called as global cities. It has
been analysed that the cities which is key loci within global networks of marketing, production,
sales, human resources, raw material, natural resources, telecommunication etc. There are
several characteristics of global cities, that are as follows:
 The country which have large international financial services such as finance, insurance,
real estate, banking, accountancy, and marketing (Sharma and Sinha, 2017).
 The country have headquarters of several multinational organisation.
 Major production centres with port and container facilities
 The city is the centre of innovation and technology
 Centre of telecommunication and global network.
 High-quality educational institutions, including international student attendance
renowned universities and research facilities
 Proper infrastructure such as entertainment, legal, medical, transportation etc.
Several reason behind selection of global city for opening the regional headquarter of
multinational organisation
As it is being known that global city is the city or place which serve different benefits to
the organisation when they open their headquarter in that area (Agyei, 2016). It has been
identified that number of factors that drive Multinational organisations to move their corporate
and business Headquarter to foreign locations., the factors are as follows:
Metropolitan cities or global cities are the financial centre for the different organisation.
They venture select global city because they can easy access to the capital market, with that they
can create their visibility in those markets. With that they can find more investors as they
become renown organisation, thus they can issue large number of shares and raise fund.
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In metropolitan cities there are large number of market share and stakeholders. So the venture
can easy access to the different stakeholders such as suppliers, customers, shareholders,
government.
Other than that venture need to have strategic advantage from the country where they are
opening their headquarter. Metropolitan and global cities are the country which different
strategic advantage to the country. He benefits may includes governmental laws and regulations
that are in favour of the organisation, taxation rules, commitment with the multinational
organisation, high quality raw material, liberty of import and export etc. When the venture is
opening their headquarter in a country of city, then they try to evaluate these factors. And in a
metropolitan city, they find this benefits and this is the reason they select the global city for their
headquarter (Elden and Bakir, 2016).
With that proximity to the other services also plays very significant role for the
multinational organisation when they are selecting metropolitan city for their headquarter. The
proximity may consist availability of consultant, lawyer, accountant, employees etc. Every
organisation think for these so that they can access to these services easily. In order to solve
different problems they will be required consultant, other than that if any action taken against the
organisation but the government, they will be required lawyer. Thus, metropolitan city serve
these services to the multinational organisation (Siraj and Abdullah, 2016).
Other than that when the venture is expanding their business in different countries, they
will be required adequate amount of fund so that they can conduct different activities such as
investment of infrastructure, human resource, inventory etc. metropolitan and global cities are
the country which have adequate number of financial institute which can serve proper fund the
multinational organisation.
When the multinational organisation is relocating their headquarter, at that time they find
that the country is capable enough to serve different services such as transportation,
infrastructure, availability of employees, suppliers, skilled and innovative professional,
innovative technology etc. Headquarter is the place which is directly liked with the different
location of the organisation in the various countries. Thus, proper communication should be
done so that they can link with their other location. Transportation is the other factor which are
being consider by the venture when they selecting headquarter. Transportation is requires so that
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raw material and finished goods can be delivered from one place to another. With that
infrastructure is also required so that organisation can create innovative interior of their
headquarter (Goyal and Chanda, 2017). Availability of employees is the key factor which is
being considered by the organisation when they are relocating their headquarter in the other
country. Venture needs skilled able employees so that organisation gaol and objective can be
achieved. Other than that they also need innovative professional which male innovative
strategies for the organisation to have grater profitability and productivity.
Other than that customer base is one of the key reason for selecting the metropolitan city
or global city to open or relocate headquarter of the multinational organisation. In metropolitan
city, there are large number of customer base as well as target market like to purchase products
and services frequently. In metropolitan cities, people have high income, thus, they do not think
more for money when they are buying products and services. This behaviour of the customers
attract multinational organisation to open and relocate their headquarter.
What is institutional theory to analyse why multinational firms prefer global
cities as their regional headquarters
Institutional theory states that the institutional environment can strongly influence the
development of formal structures in an organization. It can be said that institutional theory is
deeper about the social structure of the organisation. Structure of the venture is dependent on the
schemes, rules, norms, and routines, responsibilities of the firm. There are several factors that are
included in the institutional theory such as old institutionalism and new institutionalism. Old
institutionalism is called as when the organisation adopt old methods for continuing their
business. Other than that new institutionalism is the way by which venture implement new
techniques and technologies so that they can continue their activities and operation in effectively
and efficient way (Amoako, 2017). New institutionalism helps the organisation do conduct their
all the activities in faster way. There are several tools are techniques which have been introduced
in current time which helps the organisation to collect the information from different sources.
Other than that helps the company to analyse them in proper way so that they can find the proper
result. In pastime, different organisation were limited to their home country but now they are
trying to move in international countries. There are several factors which they include when they
select the country. This have changed the institutional scenario in the different countries.
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In the current time there are several legitimate factors which organisation are
implementing in their business. This have created foundation on the efficiency and effectiveness
of the employees. They are not able to implement and think different innovative ideas by
fulfilling their responsibilities and authority. The venture should not use various legitimate
factors so that workers can work freely. When the company is relocating or opening their
headquarters in the metropolitan cities, then they open up their thinking according to the new
trend, thus they keep their employees free and give them a right to take their own decision.
Metropolitan cities again have given new change in the institutional theory. Other than that it can
be said that all the employees of the venture are totally dependent on the institutional
environment (Sharma and Sinha, 2017).
Advantages that are associated with locating in the global cities
There are several advantages that are associated with the organisation when they select
the global city for relocating and opening their location. There are several factors that are
considered when the venture is opening their business or headquarter in new country or city.
Such as infrastructure, employees, fund etc. the advantages are as follows:
Proper availability of infrastructure: it is being known that metropolitan cities have good
infrastructure which included proper transportation, warehouse etc. if the venture is producing in
a country then they have procured raw material form the different place. Thus, they will need
proper transportation in order to procure raw material. Other than that they need warehouse to
keep their finished good in proper way so that they reduce the risk of spoilage (Amoako, 2016).
Large customer base: It is one of the key reason that helps the venture to select the city and
country to relocate their business or headquarter. All the activities and operation are undertaken
for customers. The key objective of the venture is to cater the needs and wants of the customers,
for that they need large customer base. When the venture is moving towards to metropolitan
cities, they find large customers. Thus, they have huge scope to sell their products and services
and make profits.
Proper fund availability: This the major factor which is being analysed by the multinational
organisation is fund availability. There are several activities which is being undertaken by the
venture when they are shifting or relocating their business or headquarter, in order to complete
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that activities, they need proper fund. Metropolitan city is the city where large number of
financial institutes available. Thus, it is very easy for the multinational organisation to raise fund.
CSR activities done by Vodafone in India and London :-
Vodafone started CSR activities in the world. The most important targets are children, women,
men, and other weak people and poor society who can not afford the house, food , daily need and
can not able to survive in the planet. Vodafone providing following help to the people. First of
fall they started doing activities in education. They support to the people who can not able to
study. They started some projects, program for the people who needs the most. They promote
access and gives quality of education and foster research and development through creating
infrastructure, promote scholarship among others in school, colleges and universities (Turan, and
Hoxhaj, 2017).
Environment support by Vodafone. In this activity they are helping in reducing the carbon
footprint and preserve the balance of ecology.
They giving relief to the disaster people, who can not be able in any kind of work and can not
able to earn money and can not survive in the world. Engage with not for profits to deliver
programmes or project that organise relief work in times of natural calamities. Support use of
mobile technology for reaching out to the communities with news, updates and warnings about
the calamities (Sharma and Sinha, 2017).
Empowerment is the very important thing which is done by Vodafone. Facilitate financial
support and provide educational materials, informations and tools such as books, computers,
mobile with a view to make them more educated and thus socially and economically strong.
They providing the healthcare to the people who can not afford the medical and treatment in the
hospitals. By healthcare so many people going to be healthy in the past and it is done by
Vodafone. Programmes and projects that help in reducing child morality, improving maternal
health, combat and prevent diseases, facilitate hygiene sanitation and treatment of cancer and
helping them to be healthy. Utilize mobile technology solutions to promote healthcare education,
raise awareness about road safety and well being. so many people are using the all services
which given by Vodafone and they are thankful for the Vodafone (Agyei, 2016).
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By eradication of poverty, programme and initiatives to impart financial literacy to facilitate
financial inclusion and programme that help income generation, skill trainings and information
dissemination programs related to farming, agricultural practices and animal husbandry to
support farmers with an aim to encourage rural development and reduce poverty and hunger.
They help to farmers and hungry people who can not be able in earn money and visiting on road,
baggers and many more (Elden and Bakir, 2016).
Vodafone giving technological knowledge and services to the people. Support a technology
incubator with an objective of institutionalizing employment generation activities as well as
encourage development of innovative technologies, products, services and application in the
digital and telecommunication space. These innovations will help in extending the CSR agenda
of the company. For CSR activities Vodafone manages a team who only work on CSR.
Wherever need their team reach and help the people and roles and responsibilities given by
Vodafone for the CSR activities (Siraj and Abdullah, 2016).
CONCLUSION
It can be concluded that this is the ea of globalisation, where different countries have
reduced their trade barriers such as tariff and non-tariff. This activity have leads to increase in
multinational organisation. It can be said from the report that there are several advantages when
the organisation are moving towards the metropolitan cities. The advantages may consist
increase in customer base, profitability, employee standard etc. the report state that there are
several factors which helps the multinational organisation to select the city when they are
relocating their headquarter. The factors may includes availability of natural resources,
infrastructure, employees, professional, lawyer, suppliers etc. for this report Vodafone have been
selected which multinational telecommunication organisation. The venture have headquartered
in London. They are doing several corporation social responsibilities so that they can maintain
sustainability in the country.
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REFERENCES
Books and Journal
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Sub-Saharan Africa. Springer International Publishing.
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Cohen, E., 2017. CSR for HR: A necessary partnership for advancing responsible business
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responsibility and business strategy.
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Digital Age: The Case of Vodafone “Red Light Application/Between Us”. In Conference on e-
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Innovation. 4(1). pp.54-66.
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Goyal, P. and Chanda, U., 2017. A Bayesian Network Model on the association between CSR,
perceived service quality and customer loyalty in Indian Banking Industry. Sustainable
Production and Consumption. 10. pp.50-65.
Molnár, B., 2017. Organization, Discourse Ethics and the Interpretation of “Political CSR”.
KOME: An International Journal of Pure Communication Inquiry. 5(1). pp.1-23.
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