Analyzing the Reasons for Investing Abroad Essay

Analyzing the Reasons for Investing Abroad - Essay Example This essay critically analyzes and discusses the reasons why a firm chooses to invest abroad. Investing Abroad Firms decide to invest abroad for various reasons. Even so, companies that choose to invest overseas largely strive to strengthen their global competitiveness. Numerous global companies choose to invest abroad to penetrate bigger overseas markets. In order to sustain growth, a company should boost its sales or profits, which could be unattainable in the local market. In general, according to Cohen (2007), local markets are restricted to a specific growth rate and size and are highly exposed to competition from other local markets with comparable production, marketing, and product capacities. In this setting, investing abroad is a rational decision for a firm planning to penetrate a bigger market. Aside from the profitability of an additional, bigger market, foreign markets usually provide further competitive gains to the company (Ajami & Goddard 2006, 221). Such markets, for instance, may not have organizational capabilities that are comparable with or of similar level as those of a company investing abroad and the level foreign market competition may not be as heavy as competition in local markets (p. 221). At times companies should do business abroad to penetrate global markets because government regulations of host countries mandate that the products of the company be produced locally. These regulations are commonly enforced to heighten the growth of the national economy, employment, and overall domestic production (Carbaugh 2010, 12). Hence, the firm that plans to penetrate a foreign market has to spend for foreign facilities that are supervised by local managers, in domestic subsidiaries, or by means of several other mechanisms. A company penetrating a foreign market may prefer to do business there if it realizes that it is more cost-effective to produce products locally, instead of producing them at home and selling them abroad. Production econom ies may take place via other dynamics if the local market is huge and the demand is sustainable to give good reason for investment in the facility and tools required to establish a production system. For instance, the marketing and delivery costs could be cheaper than those of processes at home, the sources of needed raw materials could be nearer to the facility abroad, and the labor costs could be cheaper abroad (Frishberg 2010, 139). Another major aspect is the company’s location. A facility located overseas could also be a lot more productive for a developing market. Generally, companies do business in direct competition with other global and local companies. This form of competition is especially strong in markets where only a small number of major companies dominate. In this setting, the strategies of a particular company are swiftly imitated and rivaled by the others. As a result, if a company invests overseas, its rivals carry out the same tactic (Ajami & Goddard 2006, 222). One apparent reason for investing overseas is to be on a par with the established company in new markets and total sales/profit. Another reason is the necessity of rivaling competitors’ overseas tactic; otherwise, the competition may gain

Organizational Communication Master Essay Example | Topics and Well Written Essays - 3000 words

Organizational Communication Master - Essay Example The former is a process of sharing information and understanding between two people or a small group: the latter makes use of systems to share information and understanding with large number of people. Both type of communication occur at all level within an organization, with people outside the organization, and between organizations. Organization learning focuses on the way people make sense of their experiences at work. The aim of organizing is to enable people to relate other and to work together for a common purpose. The organized group of people in a collective sense is known as organization. (Yvonne 129) "Organization is the process of identifying and grouping work to be performed, defining and delegating responsibility relationships for the purpose of enabling people to work more effectively together in accomplishing objectives." (Yvonne 149) (b) Facilitates Organizing - Communication facilitates organizing function of management by providing information about the duties, responsibilities, authority, relationships, positions and jobs. Delegation and decentralization of authority is accomplished in an organization. (c) Facilitates Directing Function- Communication facilitates directing function by providing proper interaction between and their subordinates and between members of work groups. It improves superior-subordinate relationships by promoting exchange of ideas and information between them continuously. (d) Facilitates Controlling Function - Communication facilitates controlling function by providing feedback of actual performance against planned targets. In an organization, effective communication facilitates in promoting innovation as well as control and coordination. (e) Facilitates Decision-Making- Communication facilitates decision making by providing the required information needed. The quality of decision made in an organization depends largely on the amount and quality of information available to the decision maker. (Kathryn) (f) Facilitates co-ordinating - Communication facilitates coordinating by providing proper upward, downward and horizontal interaction between members of different departments or sections at all levels of authority. (g) Helps the Process of Motivation