Essay
MNB3701 REPORT 2 ASSIGNMENT 4 (JAC MOTORS ZIMBABWE)
- Institution
- University Of South Africa (Unisa)
MNB3701 REPORT 2 ASSIGNMENT 4 (JAC MOTORS ZIMBABWE)
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
Content preview
BMZ ACADEMYBMZ Academy
CONTACT @ 061 262 1185/068 053 8213/0717513144
BMZ ACADEMY 0612621185/ 0717513144/ 068 053 8213
1|Page
, BMZ ACADEMY
Table of Contents
Executive summary .................................................................................................... 4
Literature search ........................................................................................................ 4
Background ................................................................................................................ 6
Joint Ventures and Exportation as internationalisation strategy by JAC ................. 7
Institutional based view .............................................................................................. 7
Formal institutions ...................................................................................................... 8
Economic system .................................................................................................... 8
Exchange rate regime .......................................................................................... 9
Interest rates ........................................................................................................ 9
Political ideology ................................................................................................... 10
Corruption .......................................................................................................... 10
Implications to management ................................................................................. 11
Informal institutions .................................................................................................. 12
Culture .................................................................................................................. 12
Ethics .................................................................................................................... 13
Relativism in ethical standards .......................................................................... 13
Implications to management ................................................................................. 14
RESOURCE BASED VIEW ...................................................................................... 14
JAC resource identification ................................................................................... 14
Primary resources ................................................................................................. 15
Tangible assets of JAC ......................................................................................... 15
Financial resources............................................................................................ 15
Physical resources............................................................................................. 15
Intangible assets of JAC ....................................................................................... 16
Page 2 of 32
, BMZ ACADEMY
Brand reputation ................................................................................................ 16
Technological assets ......................................................................................... 16
Human resources.................................................................................................. 17
JAC capabilities .................................................................................................... 17
Capabilities in logistics and service ................................................................... 18
Capabilities in corporate coordination ................................................................ 18
Evaluation of JAC resources under VRIO Framework .......................................... 18
Value creation .................................................................................................... 18
Rarity ................................................................................................................. 19
Imitability ............................................................................................................ 19
Organisation ...................................................................................................... 20
JAC motors VRIO FRAMEWORK ......................................................................... 20
Managerial implication ......................................................................................... 21
Challenges faced by JAC trading internationally ................................................... 21
Economic problems .............................................................................................. 21
Exchange rates .................................................................................................. 22
Inflation .............................................................................................................. 22
Low incomes ...................................................................................................... 22
Changes in interest rates ................................................................................... 23
Managerial implications ........................................................................................ 23
Foreign Direct Investment (FDI) ............................................................................ 23
Internalisation advantages (OLI paradigm) ........................................................ 24
Locational advantages ....................................................................................... 24
Internalisation advantages ................................................................................. 25
Conclusion ............................................................................................................ 26
References ............................................................................................................... 28
Page 3 of 32
, BMZ ACADEMY
Executive summary
The primary objective of this report is to investigate the effects, both formal and
informal institutions, on the performance (success or failure) of MNEs. The institutions-
based view is an important framework that has been adopted by the report in order to
understand the success or failure of JAC Motors, a Chinese business operating in
Zimbabwe. This is because the report seeks to understand the success or failure of
JAC Motors. To put it another way, the report selected a business from one of the
BRICS nations that has operations on the African continent. The way in which
multinational corporations (MNEs) conduct their business is governed by formal
institutions that are commonly referred to as the rules of the game. These include
political ideologies and economic philosophies that Zimbabwe is following in its current
state of existence. According to this report, favourable contributions from both politics
and the economic system have been made to the success of JAC Motors. Additionally,
informal institutions such as culture and ethics had an effect on JAC Motors due to the
fact that they are distinct from those of the company's native country. JAC Motors
established a corporate culture that is inclusive to all of its stakeholders, as well as
ethical relativism, which helped to reduce outsidership liability within the organization,
as part of its effort to better align itself. This made a significant contribution to its overall
achievement. Furthermore, the resource-based view shall be utilised by this report in
an attempt to understand and explain the resources of JAC motors. VRIO framework
shall be the basis of argument as different resources such as financial assets, positive
brand reputation, technological assets and skilled labour force. These assets are
important in creating a competitive advantage towards the operations of JAC in an
emerging economy like Zimbabwe. The report also discusses challenges that JAC
faced in its Zimbabwean operations such as low income, inflation and exchange rate
issues. Lastly, the report shall explain different forms of FDI and how best can JAC
tap into opportunities that are brough by the OLI paradigm.
Literature search
Literature drawn from a variety of sources is used to support and clarify the findings of
reports (Lefebvre, Glanville, & Briscoe, 2019). In this report, secondary sources were
utilised in such a way that allowed the report to comprehend how institutions contribute
to the success or failure of an organisation. This was accomplished by using
Page 4 of 32
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through EFT, credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying this summary from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller BMZAcademy. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R180,00. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
52510 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy summaries for 14 years now