Essays on The Challenges Faced by Foreign Subunits of Multinational Enterprises by Zaheer Article

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The paper "The Challenges Faced by Foreign Subunits of Multinational Enterprises by Zaheer" is an outstanding example of a business article. The article focuses on the challenges faced by foreign subunits of multinational enterprises, and then discusses the strategies that might be employed by these establishments to minimize these challenges. Zaheer refers to these challenges as liabilities of foreignness and believes that overcoming these challenges is critical for the success of the enterprises. To determine the most significant liabilities of these foreign enterprises, Zaheer describes a study which she conducted in the banking industry and one which she used to find the most effective strategies that have been proven to be successful for such enterprises.

Before discussing the findings of his study, the author describes two theories that have been proposed for the foreign enterprises to adopt for them to overcome the liability of their foreignness and ensure successful competition against the local firms. One theory proposes that multinational enterprises should adopt the firm-specific advantages approach by importing capabilities that are embodied in the organizational or managerial capabilities of their parent enterprises.

Also proposed is the approach that draws from the institution theory. In this approach, multinational enterprises may attend to the local demands and host country environment and modify their practices so that they are similar to those of the local firms. The author, through the findings of his study, reports that firm-specific advantage, in the form of imported organizational practices, may represent a more effective strategy for the subunits of multinational enterprises as they seek to overcome these liabilities. The author employs rigorous selection processes in the identification of the specific banks to use as she tries as much as possible to represent established international businesses.

This was important for the success of the study and the accuracy of the findings.

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