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Theme 5: New MNEs (Complete Summary)
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Theme V: New MNE’sLecture, Literature & Notes
By AceAcademy ©
, Conventional versus New MNEs
Conventional Multinational Enterprises (MNEs):
In the past, numerous MNEs evolved from well-established, domestic corporations, and they
typically pursued gradual steps in their internationalization efforts.
Emerging Multinational Enterprises (MNEs):
These new types of MNEs deviate from the traditional Uppsala internationalization process
model.
Timing: They engage in swift internationalization.
Speed: The internationalization process occurs rapidly.
Destination: There's no strict adherence to predefined entry order stages.
Method: Joint ventures (JVs), alliances, and acquisitions are more frequently
employed strategies.
International New Ventures & Born Globals
Summary of Oviatt and McDougall (2005) - Toward a Theory of
International New Ventures
This article introduces a novel framework that incorporates Transaction Cost (TC) analysis,
the presence of market imperfections, and the concept of internalization to elucidate the
existence of Multinational Enterprises (MNEs). This framework also delves into how
ventures acquire control over critical resources without outright ownership and how they
cultivate and maintain competitive advantages.
International new Ventures
International New Ventures (INVs) are typically characterized by their small organizational
size. It is a business entity that, right from its inception, aims to gain substantial competitive
advantages by utilizing resources and marketing products or services across various
countries.
Transformations in the Global Business Landscape
Technological Advancements in Information and Communication Technology (ICT):
Decreased Transaction Costs (TC) related to international exchanges, including
transportation and communication.
Homogenization of certain markets due to regionalization and globalization.
Improved efficiency and affordability in logistics.
A broader exposure of business professionals to International Business (IB).
Enhanced mobility of international finance and human capital.
The Resource-Based View (RBV) gaining increased explanatory power for
competitive advantage.
MNE Theory and International New Ventures (INVs):
Stages Theory of MNE Evolution:
Traditional Multinational Enterprises (MNEs) typically emerge after a phase of
domestic maturation.
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