International Business Strategy Management: Determinants and External Variables

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ACKNOWLEDGEMENT

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Table of contents

ACKNOWLEDGEMENTii

DECLARATIONiii

LITERATURE REVIEW1

Multinational Firms and Sustainable Development Strategies1

Process of Change1

Collaboration Approach to Sustainable Development Strategy2

Collaboration Approach to Sustainable Development3

Theories for International Business5

Theories for International Business Strategies8

Institutional Theory9

Process of Change: Implication10

Transaction Cost Economics10

Agency Theory13

Resource Based Theory14

Determinants of International Business in Germany15

Determinants of International Business in India17

REFERENCES20

LITERATURE REVIEW

Multinational Firms and Sustainable Development Strategies

Multinational companies investing in resource industries globally are dealing with unique problems that require changes in their management strategies (Vredenburg and Westley 2002). This change in management strategies requires motivation, encouragement, commitment and desire for improving management practices. It also requires a process of change, a process of moving from traditional approaches of economic development perspective to more integrated approaches of sustainable development perspective. Few empirical studies have described the benefits of this process of change. Vredenburg and Westley (2002) suggest that this process of change may be well understood in terms of organizational changes such as market-driven, regulation-driven, and values-driven processes.

Process of Change

For the purpose of this research, 'process of change' is defined as a set of actions undertaken by the firm oriented to change its management strategy from a single and narrow perspective of economic development strategy towards a sustainable development strategy. The degree of change in the management strategy will depend on the degree of motivation, encouragement, commitment, and desire within the firm. The process of change can be described in terms of market-driven, regulation-driven, and valued-driven, and are defined as (Vredenburg and Westley 2002): Market-Driven Process: in this process of change, firms respond to a perceived market opportunity, strategies are implemented as a result of competition with different firms or industries in order to gain new markets or sources of resources.

Regulation-Driven Process: in this process of change, firms respond to threats of government regulations, public concerns and NGO's pressures. Strategies are implemented as a result of perceived potential risks that may hurt the firm's reputation and/or economic performance. Values-Driven Process: in this process of change, firms respond to internal values of the organisation members, strategies are implemented as a result of the ethics and moral values of the management team. Many authors have described approaches to sustainable development in terms of organisational changes (Sharma and Vredenburg 1998; Moser 2001; Vredenburg and Westley 2002). Moser (2001) has introduced the term Sustainable Business Practice (SBP) to describe firm's behaviour that fulfils the economic, environmental and social objectives of sustainable ...