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Global Business Management

Name
University Name
Course
April 23, 2020

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Type 1 Page per each question.

1.Which societal norms and institutional structures tend to encourage entrepreneurship, and
which tend to discourage it?
Answer
Entrepreneurship refers to an act of individuals conceiving an idea of what product or service to
produce and creating a business to generate income and revenues from it. It involves taking risks,
making decisions, being your own boss, and investing money. Societal norms and institutional
structures encourage entrepreneurs to identify and exploit unexplored opportunities. However,
there are social norms and institutional structures that discourage entrepreneurship. Although
these norms and structures are not created to discourage entrepreneurship. The structures of the
norms and the social structures provide the aspects that discourage entrepreneurship.
The following are societal norms that encourage entrepreneurship.
a)

Values and beliefs of the society that allows any member of society to start and run any

business.
b)

A positive attitude of society towards the acceptance of innovation.

c)

Social norms that support decision-making

d)

Social norms that encourage pooling of resources to start a business

The following are societal norms that discourage entrepreneurship.
a) Discrimination of individual members of society not to make an independent decision. For
instance, some societies do not allow women to make independent decisions.
b) Rejection by society
c) Values and beliefs of the society that discourage starting or expanding a business.
The following are institutional norms that encourage entrepreneurship.
Institutional actors and processes in fostering entrepreneurial behavior allow by conducting the

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following; the institutions we are property rights, business freedom, fiscal freedom, labor
freedom, financial capital, and institutional capital.
The following are institutional norms that discourage entrepreneurship
a)

Rigid labor market that discourages hiring and thus will discourage entrepreneurs from

hiring more staff.
b)

Strict Institutional requirements on business expansion.

c)

Institutional requirements encourage the existence of smaller companies, thus hindering

business expansion.
2. Some suggest that foreign markets are graveyards, where entrepreneurial firms overextend
themselves. Others argue that foreign markets represent the future for SMEs. If you were the
owner of a small, reasonably profitable domestic firm, would you consider expanding overseas?
Why or why not?
Answer
There is a general assumption that the long-term goal for every business is to go global, along
with setting a high bar on a global scale. However, as it has been stated, going global can be a
considerable risk, or it can be an incredible breakthrough. While holding this statement valid, I
would consider extending business oversees if I were the owner of a small and profitable
business. The primary reason being I believe that new opportunities and markets lie in the
international platform. After saturating and exhausting the local/domestic market, it is only
prudent to explore parts of the world that needs the business's products/services. And so I will
consider extending globally. My only caution would be to thoroughly do my market research to
identify areas that are worth the risk. With well-guided market research and strategic market
entry process, I believe it would be an excellent idea for the business to go global.

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Furthermore, the aspect of the graveyard can be assessed in another way. When an organization
goes global, it has to expand all its operations and processes to support the business.
Furthermore, the company needs to induce appropriate changes in its infrastructure. To achieve
efficiency, the global organization also needs to make changes to its administrative structure.
When a company strengthens its administration, it does not anymore rely only upon the
entrepreneurs or the small group of entrepreneurs that started the business. That is where the
entrepreneurship ends, and an enterprise starts. In that context, I would not fear to take small
firm overseas. I would just confirm that I have the infrastructure I need. Also, I would confirm
that my position in the organization does not lose any of its credentials.

3. From institution-based and resource-based views, identify the liability of foreignness
confronting MNEs from emerging economies interested in expanding overseas. How can such
firms overcome them?
Answer
There are six general risks or challenges faced by multinational technology companies that
expand internationally:
a. Overestimating a local market's economic potential
As the organization is expanding to unchartered territory in respect of the business, the company
needs to have acute knowledge about the market's economic potential. Otherwise, if the
organization puts in a lot of money and resources into a market with minimal potential. Then it's
just the company's fault that they did not properly do their homework before getting into the
expansion.

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b. Large and frequent economic swings
All the economies in the world experience economic swing. Now volatile economies face these
economic swings frequently and massively. It is not suitable for any business within the
economy.
c. Currency change fluctuations
Similarly, like economic swings, if any economy is experiencing currency change fluctuations,
no matter if they are random or planned, they are not suitable for any business.
d. Basic infrastructure quality and services issues
Before expanding to a bigger market, any organization must have the structural stability to
uphold the huge amount of business operations and processes. An organization with a lack of
infrastructure will not be able to achieve its full operational capability.
e. Political climate
Any organization must have the political aspects of its potential market country on its positive
side.
f. Cultural sensitivity and assumpti...