Dragon Multinationals Management - Case Study Example

Dragon Multinationals Name Instructor’s Name Course Date Introduction Different accounts seem to provide different approaches to the understanding of the issue of globalization. In essence, globalization has been greatly influenced by the contribution of Multinational Companies (MNC). New comers as well as latecomers have played a unique role in the emergence of globalization. The underlying truth remains that giant companies are the key drivers to globalization. The term Dragon Multinational has been used to portray a new perspective of what has been regarded as key drivers of globalization (Mathews 2008, p. 163). In the recent past, it was considered that the companies driving the world’s economy as well as globalization were from Europe, North America and Japan. There has been a complete paradigm shift in the past few years. There are four multinational companies that have been used to illustrate a new perspective of growth of globalization. The four MNCs include Acer (an IT firm from Taiwan), Hong Leong Group of Hotels (Singapore), Ispat International (specializing in steel) and Li & Fung (Ramamurti2008, p. 75). These companies are mainly from Asia Pacific. These companies indeed are newcomers in the industries. They come from regions that were previously considered peripherals in terms of contribution to world economic growth. They have adopted key and unique strategic goals that have challenged the incumbents in various sectors and industries (Lall 1983, p. 93-94). Some of the incumbents have been operating for quite some time and therefore being challenged requires a lot of work. This is exactly what the Dragon Multinationals have done. They have revolutionized various approaches to entrepreneurship. Such companies have had to overcome a series of weaknesses and deficiencies in order to attain the level of performance they have attained. As of now, most of these firms are established as market leaders in different industries. These companies are defined by a number of characteristics that seem to cut across. Some of these identical characteristics include accelerated internationalization, strategic and organizational innovation, etc. Distinctive Features Accelerated Internationalization One of the most common identifiable features with the Dragon Multinational is explained in relation to how fast these companies gain international market. Such companies take a very short period to cover a wide international market. These companies make surprise entry in many countries at the same time or within a very short range of time (Buckley & Casson 1976, p. 212). Such companies have a lot of determination of attracting customers as soon as possible wherever they are. Such entrance indeed can be challenging to many companies. Even the incumbent players find this strategy very challenging. It can be a bit surprising to realize that most of the established MNCs have very weak international markets (Rugman & Verbeke 2004, p. 15). This is based on their entrance strategy. Most of them opt for progressive entrance where the companies dominate the market step-by-step. In such a case, they begin with their own country and then progresses to the nearby regions. In contrary, the Dragon Multinational defy that approach. For the incumbent MNCs, they take a very long time before having real dominance in the foreign market. The incumbent MNCs have strategies that may not triumph easily in the current economic world. They have been limited to a large extent in relation to how they can effectively venture into a wide international market (Thite & Dasgupta 2011, p. 258). Therefore, the internationalization strategies that have been used by the Dragon Multinational have been very fruitful in nature. These companies have managed to venture into some of the most feared markets in the international arena. This is probably because of the unfavorable trade barriers. Currently, the Dragon Multinational companies that have been identified in this paper have been able to create a global presence in very many countries. Indeed the global perspective adopted by these companies has been taunted unbeatable. Organizational Innovation Another distinguishing feature of these companies is the organizational innovation strategies that have been used. These companies have managed to establish a series of semi-autonomous businesses which easily blends with other entities to form a strong brand. Such entities have a unique linkage and interaction with the customers, suppliers and other stakeholders (Lall 1983, p. 98). This healthy interaction forms a good foundation upon which profitable business deals are brokered. The autonomy that has been created has enabled these companies to overcome many challenges that other companies in the industries could be facing. For instance, many MNCs suffer from subsidiary-headquarter heist. The common problems originate from some bureaucratic relations between the head office and subsidiary (Clark & Knowles 2003, p. 365). For instance, the issue of appointment of employees, channeling of revenue to head office, etc. are some of the activities that generate difficulties between the head office and the branch. In relation with the same, companies like Acer have managed to overcome such challenges because of their unique organizational innovation. This is most cases has been manifested as an advantage especially by acting as a morale-booster to expatriates. Such companies have managed to maintain coherence and integration in the foreign market (Vernon, 1971, p. 159). Their organizational innovation in the foreign arena has enabled the company to lay clear channels of decision-making. Regardless of these organizational strategies in the international market, such companies have managed to maintain their brand. The strong brand names that have been created are symbolic of the organizational innovation that the companies are thriving on. When the growth of these companies is analyzed keenly, that is when one realizes that the organizational innovation has been crucial for Dragon Multinational’s achievements in the global markets. This is still seen as a progressive process and this further sets these companies from other MNCs. Strategic Innovation One thing that is to be appreciated is the fact that few markets enjoy monopolies in the global market. The level of competition is indeed still fierce and this calls for competitive strategies to be able to penetrate such markets. It is evident that the Dragon Multinationals have unique innovations that have enabled them to venture into already dominated market successfully (Mathews 2006, p. 79). These companies have managed to edge out most of the incumbents because they have reinvented most of the strategies used by incumbents to come up with models that can stand competition. This could be through new technologies as well as the manner in which contractual services are undertaken. Other strategies could include formation of business amalgamations and other business combination strategies that focus upon creating profitable strategic alliances. The internationalization strategies that the Dragon Multinationals have adopted have given them upper hand in relation to resource base. The high degree of innovation has given these firms networks that are critical in the carrying out of business in the global market (Mathews 2006, p.88). The innovative strategies have indeed created opportunities that have given the newcomers in the global market an opportunity to make an impact. Innovation means these firms have studied the capabilities of other MNCs and derived strategies that are above such. The management attitudes of such firms have been reflected as ethnocentric and polycentric in nature (Madsen & Servais 1997, p. 568). Indeed most of the Dragon Multinationals are considered to be much globalized. For instance, when one analyzes the proportionality of sales from international and local market, it is clear that these companies have globalized. A good example is the performance of the mentioned companies. Most of them, their global sales are more than their domestic sales. This indicates that these companies are gaining ground in the global market more that they are in the domestic market. This is indicative of the departure from the older approaches to globalization. Most of the incumbent MNCs usually started by gaining ground and acceptance in the domestic market before shifting to the international market where they would develop closely related strategies (Madsen & Servais 1997, p. 572). It is evident that these companies have been well furnished with global outlook in their approach. They are very outgoing in the manner in which they try out new strategic innovations with the aim of gaining a competitive advantage. It is amazing how these Dragon Multinationals have turned to be leaders in the industry reflecting the possible future trends. This is a great shift in the way of approaching international business. The trends seem to portray an emergence of movers and shakers in the international businesses that are ready to try out new markets all the time. The changes in relation to bilateral relations seem to have been such a great boost to the Dragon Multinationals (Caves 1996, p. 62). In the recent years, most countries were operating closed economies. Currently, things are changing rapidly in favor of globalization. Many economies are opening up to globalization because of the need to avoid lagging behind in the new world economic dispensation. Conclusion The four Dragon Multinationals have been used to illustrate some of the 21st players in the global market. They have rediscovered the new approaches that have been pivotal in their success in the global market. This is the reason they are referred to as Dragon Multinationals. The progress exhibited by the Dragon Multinationals has been in line with the global economy which has become a bit interlinked in the recent past. With the growth in technology, the world is yet to experience the best of such innovations that have catapulted the Dragon Multinationals. All MNCs are expected to be very innovative in order to stand the competitive wave that is going to hit the international market with the growth in innovation. Bibliography Barney, J. 1991. Firm resources and sustained competitive advantage. Journal of Management, 17: 99–120. Buckley, P. J., & Casson, M. C. 1976. The future of the multinational enterprise. London: Holmes & Meier. Caves, R. E. 1996. Multinational enterprise and economic analysis (Second Edition). Cambridge: CambridgeUniversity Press. Clark, T., & Knowles, L. L. 2003. Global myopia: Globalization theory in International Business. Journal of International Management, 9: 361–372. Lall, S. 1983. The new multinationals: The spread of third world enterprises. Chichester: Wiley. Madsen, T. K., & Servais, P. 1997. The internationalization of born globals: An evolutionary process? International Business Review, 6(6): 561–583. 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