The paper "Overcoming the Liability of Foreignness by Zaheer" is a perfect example of a business article. In recent years, globalization has increased significantly as companies cross borders to market and create brand equity about their products. However, not all companies which enter foreign markets succeed as the international markets have numerous challenges. Some of the challenges companies face is the different social, economic and political factors. Some of the social factors include culture, population and attitudes of the consumers in these countries. On the economic trend, companies face challenges like social status and economic fluctuations.
Political factors facing many companies include corruption, favoritism and patronage, and political instability. For that reason, international business experts call on international companies to offer their foreign subunits some company-specific advantage which is on the basis of managerial or organizational capabilities. Therefore, this paper will review Zaheer’ s article “ Overcoming the liability of foreignness” and advise managers on the best practices in an international environment of a business. Journal article review: Overcoming the liability of foreignness The journal article “ Overcoming the liability of foreignness” argues that multinational companies are at inconvenience than local companies in reference to foreign country operations.
It claims that this liability of foreignness is a fundamental assumption that drives theories and operations of multinational companies. In the article, Zaheer (1995, p. 341) categorized the basis for liability in foreignness as the geographical distance between parents country and the host countries, unfamiliarity of cultural aspect of the local environment and host nation business environment. Liability of Foreignness sources Zaheer confirms that LOF normally takes place and takes that opportunity to explain its sources in the host markets. While the past studies depend on the cost strategy to clarify the hurdles to effective foreign market activity faced by foreign enterprises, this article explains that the reasons which cause extra cost.
In so doing, the author uses the argument as the start to determine prospective strategies aspects.
Zaheer, S 1995, Overcoming the liability of foreignness, Academy of Management Journal,
Vol. 38, No.2, pp. 341-363