Question: Classic internationalisation theories are criticized for their validity in the internationalisation of the ‘born global’ firms. Discuss your view.

International Management Questions

Choose ONE of the topics (1.5-spacing, Arial font size 12, inch margin all sides).

Questions:

1. Classic internationalisation theories are criticized for their validity in the internationalisation of the ‘born global’ firms. Discuss your view.
2. Firms from emerging economies have expanded business to international markets in the past decades. Choose an appropriate case to explain why the firm internationalizes and discuss its international strategy which may show unique features compared with that of western-based multinational firms.
3. United Nation’s Sustainable Development Goals are the blueprint to achieve a better and more sustainable future for all. They address the global challenges we face, including poverty, inequality, climate change, environmental degradation, peace and justice. Multinational firms and/or born global firms are considered to be the tools to tackle these challenges. Choose one or two companies and analyse their corporate social responsibility or sustainability strategies in relation to this issue.
4. Given firms’ different resource bases and knowledge sets, it is important to understand how global pandemic, war conflicts or other major societal grand challenges influence the scale and scope of their international activities. Choose an appropriate case to explain how the firm manages its operations in international markets and assess its performance.

DRAFT / STUDY TIPS:

The traditional theories of internationalization, such as the Uppsala model and the eclectic paradigm, have been critiqued for their applicability to "born global" firms. Born global firms are those that internationalize rapidly from their inception, often bypassing the incremental internationalization process outlined in traditional theories. Here, I'll discuss the limitations of classic internationalization theories in explaining the internationalization patterns of born global firms and offer insights into why these firms deviate from the traditional trajectory.

1. Speed of Internationalization: Classic theories like the Uppsala model emphasize gradual internationalization through experiential learning and market knowledge accumulation. However, born global firms defy this by entering multiple foreign markets early in their lifecycle. Their rapid internationalization challenges the notion of sequential market entry and gradual resource commitment proposed by traditional theories.

2. Globalization and Technological Advances: Born global firms often leverage digital technologies and global communication networks to operate across borders from inception. Unlike traditional firms, born globals can leverage digital platforms, e-commerce, and social media to access global markets rapidly. These technological advancements enable them to internationalize without the need for significant physical presence or local market knowledge, which is central to the Uppsala model.

3. Networks and Relationships: Traditional theories highlight the importance of building relationships and networks in foreign markets before expanding further. However, born global firms often rely on networks of partners, suppliers, and customers to facilitate their international expansion. These networks enable them to access resources, market knowledge, and distribution channels quickly, reducing the need for gradual market exploration emphasized in traditional theories.

4. Industry Characteristics: Born global firms are often found in industries characterized by low entry barriers, such as technology, digital services, and creative industries. These industries allow firms to internationalize rapidly due to factors like low marginal costs of production, scalable business models, and the global reach of digital products and services. Traditional theories may not fully account for the unique dynamics of these industries and their impact on internationalization patterns.

5. Managerial Mindset and Vision: The founders and managers of born global firms often have a global mindset and vision from the outset, driving them to pursue international opportunities aggressively. Unlike traditional firms, where internationalization may be driven by reactive responses to domestic market saturation or competitive pressures, born globals are proactive in seeking global opportunities and expanding their market presence rapidly.

In conclusion, while classic internationalization theories provide valuable insights into the international expansion of traditional firms, they have limitations in explaining the unique internationalization patterns of born global firms. Born globals challenge the sequential and incremental approach proposed by traditional theories by leveraging technological advancements, global networks, and proactive managerial mindsets to internationalize rapidly from inception. Understanding the distinct characteristics and strategies of born global firms is essential for advancing our understanding of international business dynamics in an increasingly interconnected world.