Opportunities and Challenges of MNE (Essay Sample)

Research proposal: Opportunities and challenges facing advanced MNEs entering the emerging markets
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Table of Contents
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INTRODUCTION  PAGEREF _Toc414060802 \h
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Background of the study  PAGEREF _Toc414060803 \h
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RESEARCH HYPOTHESIS  PAGEREF _Toc414060804 \h
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RESEARCH QUESTION  PAGEREF _Toc414060805 \h
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RESEARCH RATIONALE  PAGEREF _Toc414060806 \h
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THEORY  PAGEREF _Toc414060807 \h
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OBJECTIVES  PAGEREF _Toc414060808 \h
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LITERATURE REVIEW  PAGEREF _Toc414060809 \h
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RESEARCH PROCESS  PAGEREF _Toc414060810 \h
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RESEARCH METHODOLOGY  PAGEREF _Toc414060811 \h
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Positivistic philosophy  PAGEREF _Toc414060812 \h
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Deductive Research Approach  PAGEREF _Toc414060813 \h
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METHODS OF DATA COLLECTION  PAGEREF _Toc414060814 \h
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Case studies  PAGEREF _Toc414060815 \h
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Observation  PAGEREF _Toc414060816 \h
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Interviews  PAGEREF _Toc414060817 \h
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TYPES OF DATA  PAGEREF _Toc414060818 \h
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DATA INTERPRETATION  PAGEREF _Toc414060819 \h
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DATA ANALYSIS  PAGEREF _Toc414060820 \h
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Validity  PAGEREF _Toc414060821 \h
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Reliability  PAGEREF _Toc414060822 \h
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Generalizability  PAGEREF _Toc414060823 \h
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POTENTIAL DIFFICULTIES AND SOLUTIONS  PAGEREF _Toc414060824 \h
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References  PAGEREF _Toc414060825 \h
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INTRODUCTION
Over long time, flows of foreign direct investments (FDIs) focused around the Western allies. Desires to be near natural resources and foreign markets encouraged the Western-allied companies to start operations in other countries. This move has since worked to encourage reforms of economic policies, education curricular to focus on elements of globalization, and reviews of foreign relations. Countries like Mexico, Russia, India, Indonesia, Egypt, South Africa, Vietnam, China, Brazil and other East Asian and Latin American countries moved steadfastly to align their business environments to attract foreign direct investments. Ever since, the countries have managed to receive many investors from the Western allies who have managed to transform the economic conditions of the hosts. Among the notable transformations have been high tech education, advanced technology, increased employment rates, increased products and generally increased GDP and GNP. Currently, the listed countries enjoy classification as emerging markets that are responsible a significant proportion of global production and FDI flows. The countries are emerging or transiting because they depict characteristics of developed economies but have not met the standards fully. Advanced multinational corporation (MNCs) otherwise called multinational enterprises (MNEs) of the Western origin and scrambling for business spaces in the emerging economies. As the movement continues, there are opportunities and challenges awaiting the advanced MNEs entering the emerging markets.
Background of the study
In the recent years, discussions about as well as focus on multinational and transnational corporations have intensified. The reason has been the spread of desire for economic advancement among many countries. Globalization that has facilitated movement and interaction of people alongside promoting trade has been the main stimulant for the growing desires among countries to grow their economies. In the early years, focus about industrialization concentrated on America and European Union, and their close allies like Japan and South Korea. Big technological companies concerned with manufacturing of high tech equipment and products narrowed their operations in the mentioned countries, and could only export finished goods to other countries (Cheng, Maitland & Nicholas, 2009).
The aspect of globalization encouraged and improved education in the other countries of Africa, Asia, and South America, and triggered the need for economic dependence. Eventually, countries that initially acted as sources of raw materials used by the advanced countries to produce global goods started reviewing international and economic policies (Hurwitz & Budhwar, 2015). Most of the policies discouraged exportation of local natural resources to the foreign countries. Further reforms in economic policies would encourage training of local citizens to compete with standards of the advanced countries. Additional reforms advocated for promotion of foreign direct investment (FDI) that saw many companies and businesses in the high-end economies flow to conduct their operations in the opening countries.
Countries currently called emerging markets moved quick to make attractive economic policies that the companies in the first world countries could not resist. Lower taxes, cheap resources, cheaper labor, low cost of land and relaxed business environment were among the important economic policies established to attract foreign investment (Cheng, Maitland & Nicholas, 2009). In definition, emerging markets are countries whose economic statuses near but not equal to those of the first world countries, Characteristics of emerging markets are rapidly growing middle class, rapid industrialization, high quality education, higher per capita income and lower unemployment rates. Many countries qualify to be emerging markets but BRICS members are the most cognized.
The advanced multinational enterprises moving to the emerging markets have exposure to opportunities and challenges that need careful consideration. The opportunities for the advanced multinational corporations in the emerging markets include cheap and quality labor, low tax rates, reduced cost of energy, relaxed investment laws, favorable exchange rates, competitive currencies and easy access to resource among others (HENDRIKS-GUŚĆ, 2007). Challenges faced by advanced MNCs when entering the emerging markets include but not limited to political changes, rapidly changing global economic environments and environmental pollution.
RESEARCH HYPOTHESIS
The advanced multinational enterprises (MNEs) entering the emerging markets faces both opportunities and challenges that can enhance growth or decline.
RESEARCH QUESTION
The question for this research is:
What opportunities and challenges that advanced MNEs entering the emerging markets are likely to face?
RESEARCH RATIONALE
Globalization is generally a concern for every person in the world. As it spreads, the phenomenon presents opportunities for general growth and challenges that shake certain spheres of human life. MNEs are among the agents of globalization as they pursue trade and business opportunities. Their arrivals in the destination economies present opportunities and challenges. In just the same ways, the MNEs encounter opportunities for growth and expansion as well as challenges that often shake their operations.
Emerging markets have gained great international focus owing to their rapid economic growth and their seemingly dominance in the global economy. The shifting of global economic wheel to the emerging markets is something that attracts concern from people in various global sectors. Since it is the first time that such transition is happening in the world, there is great interest to observe and understand the dynamics. Understanding of the dynamics is important considering the wide spread struggles in the developing economies to reform institutional policies to open up for economic prosperity similar to the transitional economies. It is noteworthy that much of the growths witnessed in the emerging markets have been due to the advanced MNEs that have offered employment opportunities and revenues required by the governments to develop infrastructures and improve institutional efficiencies. Due to the vitality of the MNEs, it becomes important to understand the opportunities and challenges that these agents of globalization face in the emerging markets. Such understandings are crucial in helping the developing nations that are ready to enter the transition path in shaping their forces and institutions correctly to support actual growth and development. Students, politicians, economists, sociologists, non-governmental organizations, technocrats, and the wider field of academia cherish and understand the value of such a research.
THEORY
The research will apply globalization theory and the PESTEL theory in reviewing the literature. PESTEL is a business analysis tool that investigates the impacts of politics (P), society (S), technology (T), environment (E) and laws (L) on a business. The PESTLE theory is important in this research considering that it investigates external and internal issues that affect business. This theory will help in clear understanding of opportunities and challenges that the different elements of PESTEL present to the MNEs entering the emerging markets.
OBJECTIVES
The research has three main objectives that include:
1) Guide into the understanding of concepts of emerging markets and multinational enterprises (MNEs) also known as multi...