Exam (elaborations)
MNB3702 Old Memo 2018 May
- Institution
- University Of South Africa (Unisa)
MNB3702 Memo 2018 May
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MNB 3702EXAM PACK MAY/JUNE 2018
SECTION A
1. 4 11. 2
2. 1 12. 2
3. 1 13. 1
4. 1 14. 1
5. 2 15. 1
6. 2 16. 2
7. 2 17. 2
8. 1 18. 1
9. 3 19. 1
10. 3 20. 3
SECTION B
1.1 Elaborate on the various determinant of expansion decision by MNCs in Africa.
Generally, the expansion decision of MNCs in Africa is based on commercial motives and this can
be considered fewer than three main objectives. Namely, market opportunity, resources or
specific-location advantages and efficiency seeking or process efficiency.
In the first place market opportunities, most MNCs ventures into Africa market to seek market
growth because of intense competition in their home country. Others also venture into Africa
market because of excess production capacity in home market. Some also venture because of
promising market growth or potential. Others also simply enter because of the population size.
For instance Africa has good population size that can constitute a strong market. Example South
Africa has about 57million population, Nigeria about 190 million people, DRC about 75 million
people.
Secondly, natural resources and other location specific advantage motive, most MNCs prefer to
locate near natural resources that are considered as critical for the operation. Most MNCs
venturing into Africa is as a result backward vertical integration, which will see them acquire
dominant source of critical input resources.
Another important consideration for this motive is government policy and government type.
Research has shown those investors are very recient to commit resources democratic state
because of change of government which may lead to change of policy. For example, despite the
instability in DRC, most investors are still investing there.
Another critical factor is priced differential in labour cost and operational flexibility. Most MNCs
prefer to locate in market where there is abundance of input of material example labour to offer
low wages. The capital mind-set is to treat labour as a merely production tool.
, Thirdly, efficiency- seeking or process efficiency motive. Most MNCs want location that offers
cheapest specialized labour, couple with strong integration with global political power house,
superior managerial capabilities and other related location specific advantage.
They also seek foreign expansion in area that has process efficiency and expertise. Some also
choose to locate close to one another such as clustering. The purpose of this is that it leads to
idea generation, keeping up with competitors and sharing critical knowledge and expertise. It is
also easy of supply of human capital.
1.2 Explain the concept of operations and supply chain management in the global context.
Generally, operations are responsible for supplying product and services of organisation and
managing the conversion or transformation process that convert input into output. Supply chain
management on the other hand is a process that moves information, materials and resources to
and from the manufacturing and service process of the organisation. Supply chain management,
generally encompasses all the integrated activities that brings product to the market and to
create satisfied customers.
According to the Council of Supply Chain Management Professionals (CSCMP) the process
involves planning and management of all the activities that involves sourcing and procurement,
conversion and logistics management activities.
According to SCM, for organisation to be successful it should be able to co-ordinate and
integrate all it activities in seamless process. All partners with the SCM should embrace and link
through the flow of information, goods, services and resources. More importantly, the process
should be able to reduce cost and improve customer service.
It is important to note that as the organisation go global the number of challenges the
organisation face increase. The organisational normally encounter increase cost, complexity and
risk. To manage such challenges this required operational and supply chain management to
understand the global operation environment, the supply chain process and decision and the
framework of global operation.
The global supply chain process generally consists of three important elements. Namely, supply
chain network structure, supply chain management component and supply chain management
process.
The supply chain network structure encompasses the key supply chain members, who vital to
the supply chain that creates value for customers.
The SCM component refers to the component that support co-operation between participant in
the supply chain and the integration process. It may include the physical and technical
management component, the managerial and behavioural components etc.
The SCM process on the other hand comprises of the eight key processes. Namely,
- Customer relationship management
- Customers service management
- Demand management
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