International business theories term paper

Usually, private companies undertake such transactions for profit; governments undertake them for profit and for political reasons.

International business theories term paper

It is believed that such firms, due to specific characteristics of their product offering and industry, exhibit an idiosyncratic internationalization process overemphasis dynamism and managerial entrepreneurship.

Hence, they seem a suitable context to apply a process lens through which the Pascal model can be extended allowing for managerial intentionality.

A process is conceptualized as a chain or cycle of related elements leading to an outcome, and as such it is a relevant perspective for understanding the evolution of Macs and of their foreign operation modes.

A process perspective can introduce dynamism in the existing views of internationalization and help scholars look for new patterns running through different firms Headhunters et al, The Pascal model develops a process concept of the internationalization, allowing for cycles and interactions between phases.

However, it advocates path- dependency and details little about the role management teams play in internationalization. It is argued here that the Pascal model can be enhanced through envisioning the internationalization process as the Joint outcome of managerial intentionality, path-dependency of knowledge, firm experience and the influence of the environment.

This paper will proceed as follows. First, the Pascal model and the initialization perspectives of internationalization will be examined in brief, centering on potential ways of seeing them through a process lens.

Then, managerial intentionality views will be explored. Third, I will briefly outline the specificities of internet-based companies and what seem to be the major tensions they experience during their internationalization. Finally, I will present the framework f my research and how it will be informed by the theoretical insights reviewed.

However, the form of investment could not be explained: The excessive reliance on market power has insisted as perfect competition has lost its appeal as an unrealistic, and therefore impractical, benchmark and henceforth interest has grown in how the firm advantages are generated.

The move towards perceiving firm-specific advantages as perspectives focusing on skill and knowledge as intangible assets. Since Penrose seminal work, strategic management studies have been developing in the same direction, shifting the focus from industry to the firm.

Looking inside the firm has resulted in several perspectives, of which the initialization theory and the internationalization process theory will be examined in continuance. Both these theories set the grounds for exploration of the internationalization paths of Macs.

It assumes efficiency is the driver of internationalization of firms and managers base their decisions on transaction cost analysis to chose between distinct forms of FED and may move awards a different form in time again based on the considerations of ETC.

Firms in this view are chains of activities striving for efficiency and having an optimal way of coordination.

International business theories term paper

Seeing firms in this way allows for knowledge to be perceived as a crucial firm asset. Knowledge pervades firm know-how and products at the same time, it is firm-specific and it has implications on firm costs.

Knowledge aspects also exacerbate the effect of uncertainty as the more intangible the knowledge is upon which the new product is based, the more difficult to assess its value and market potential.

The feasibility of this view in the exploration of the internationalization of firms requires that scholars understand the nature of knowledge assets and the process of their transfer from one country to another. The focus on knowledge and on the firm as a repository of knowledge, defines the behavior of the firm in the light of the need to create, preserve and extend value and hence competitive advantage through knowledge and capabilities.

Next, the Pascal model will be examined as the paradigm for understanding firms internationalization in the context of knowledge and capability development — or organizational learning.

Pascal model and its key elements The Pascal internationalization process model suggests lack of knowledge about the foreign market is the main obstacle to international operations.

To overcome this active presence in the foreign market rather than by collecting and analyzing data about it Masons and Value The process is dynamic, cyclical and path-dependent leading to the progression from gradual and tepee-wise investment in neighboring countries initially only a small number.

The later refurbishment of the Pascal model focuses it specifically on the effect of business networks and the liability of outsiders as crucial elements in the internationalization process.

International business theories term paper

The Pascal model conceptualizes internationalization as the result of opportunity-seeking efforts of the firm aimed at improving its position in its network in the host country Cheerier at al, Market commitment is fundamental for this model and has to do with the extent to which an investment in a market activity has alternative uses.

In other words, if a resource is difficult to transfer to a new market, the commitment associated with the FED is also higher.


In the model, commitment is defined in terms of business network relationships. Another important element is the country influences — institutional and cultural barriers, which in the model are less dependent on the country borders and more related to the local business networks specificities.

The main difference between the initialization theory and the Pascal model is the dynamism of knowledge incorporated from the dynamic capabilities and knowledge- eased perspectives. Knowledge is a dynamic element — affected by the foreign investments and in turn influencing successive investments.

Market knowledge and experience building is the main driver of internationalization. It is therefore necessary to drill deeper into the concepts of knowledge and learning as seen from the Pascal perspective.

The learning-by-doing is at the core of the internationalization process mechanism — incremental steps are taken when the perceived risk is lower Han the acceptable level of risk.

Additionally, the tackiness of knowledge makes it difficult to transfer individual-dependenthence the process is driven where learning happens, e. At the border of the firm. As decision-makers are characterized by bounded rationality Cherty and March,however, alternatives are considered one at a time.Business Research Paper Topics International Business - Topic suggestions on globalization and international business.

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International Business Theories Term Paper BY Attendants The internationalization of internet-based companies: a process perspective on managerial intentionality This paper intends to outline a potential approach to investigating the path of internationalization of firms whose business models are based on digital technology - International.

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