Questions Chapter 5 & Chapter 6 Assignment Example | Topics and Well Written Essays - 1500 words

Questions Chapter 5 & Chapter 6 - Assignment Example The companies would adopt globalization strategies when seeking to strengthen their position in the global market by increasing their market share and brand awareness. The process of a firm going global begins with export-import activity, then minimal change in operation or management, then direct overseas investment to be followed by the most involved phase of substantially increasing foreign investment. Therefore, companies globalize so as to benefit from technologies and industries from abroad. These reasons have been categorized as proactive or reactive or both by Pearce and Robinson (2012). Proactive reasons for globalization are the reasons that a company initiates and later on followed by other players in the industry. These reasons include search for additional resources, economies of scale, power and prestige, synergy, attraction by incentives, need for new and expanded markets, protection of home market and to exploit firm-specific advantages. On the other hand, companies c ould be driven by reactive reasons to globalize where a trend set by a competitor would be adopted. The reactive reasons for firms going global include trade barriers, international customer demand, international competition, chance and regulation. In spite of both reasons being practiced in the modern business environment, proactive reasons have been noted to yield more beneficial long-term returns. ... As such, plans to be adopted by the overseas markets would be developed at the home office using procedures and polices similar to those employed in the domestic market. Such firms would therefore have an international division or export department. When the culture of the country where strategy would be implemented dominates the decision making process, a polycentric orientation would be said to have applied. The domineering philosophy would be that the local techniques and personnel would be best suited to deal with the local market. Therefore, each subsidiary established in the overseas markets would operate independently with its own strategies. Thirdly, a regiocentric orientation perceives each region as a different market. It applies where the parent company attempts to blend its predispositions together with those of the region where the strategy would be implemented so as to reach a region-sensitive compromise. Objectives would be negotiated between the headquarters and the r egional headquarters and also between this regional headquarters and its subsidiaries. Finally, a geocentric orientation would adopt an approach of global systems in the process of decision making with the aim of achieving global integration. This perception of the entire world as one market enhances the development of standardized strategies that would project a uniform image for the products of the company and the company itself. 7.) Explain the control problems that are faced by global firms. One of the major problems facing global firms would be the fact that the adopted financial policies aim at furthering the goals and objectives of the