SYLLABUS

Unit-I
Introduction
Objective
Scope
Perlmutter’s EPRG Model
Unit-2
Country Analysis
PESTEL analysis
The Atlas of Economic Complexity
Porters Diamond
Country Risk analysis
Unit 3-Cross Cultural Management 
Hofstede’s Cultural Dimension  CAGE
Framework Pankaj Ghemawat  Culture and
Leader Effectiveness: The GLOBE Study
Unit 4-Mode of Entry  Market/Country
Entry Strategic Alliances/- JV / M&A
Unit 5-Investment Decisions  Drivers of
FDI – Special emphasis on emerging markets
 Offshore Banking  Forex Management –
ADR-GDR’s- EU bonds
Unit 6-WTO Regional Trade Agreements 
Building Blocks of WTO  Major agreements of
WTO
Unit 7-Managing of Multinationals 
Organization Structure -Matrix -Geographic
-Product  International HRM -Expatriate
Management -Staffing of Subsidiaries 
Integration Response Models -Types of
subsidiaries -Control of subsidiaries  Global
manufacturing and supply chain - Optimizing of
Supply chain - Offshoring V/S Outsourcing
International Business (IB) deals with the
nature, strategy and management of
international business enterprises and their
effects on business and national performance
(e.g., efficiency, growth, profitability,
employment).
IB is interdisciplinary. It draws, among
others, on economics, politics, sociology,
marketing, management (human resources,
strategic).
International
The operations of such companies lie in one single home
country as the base center.
These companies only export or import products from
the home country.
The offices, hence, only exist in the home country and
there is no foreign direct investment in other countries.
The functioning and strategies are derived mostly from
the primary market which is the domestic home country
market.
They have to continuously adjust to trading norms of the
home country.
Spencers is an example in the Indian context.
Multinational
As the name suggests, these companies have direct
operations in more than a single country, however,
it is usually not a very large number.
However, MNC’s have a centralized structure,
with the head office in the home country calling all
the shots.
In this case, products are decided and developed
by the head office and subsidiary offices do have
options to adapt to local markets if needed.
Adidas is an amazing example to explain
multinational companies.
Transnational Companies

These companies are operating in multiple countries, having

foreign direct investment in all of them.
Such companies follow a flexible approach, understanding and
adapting to the local culture and demand of each country.
Hence, offices in each country work in a decentralized manner
with decision-making powers.
Infact, subsidiary offices can launch and make products which
might not be manufactured in the original home country, if there is
a chance of demand.
Nokia, BMW are of the examples.
Transnational companies are much more complex organizations.
They have invested in foreign operations, have a central corporate
facility but give decision-making, R&D and marketing powers to
each individual foreign market.
Global Companies

These companies work to have a foothold in a large

number of countries, usually larger than a Multinational
Corporation.
They, however, do not follow the system of having an
official head office.
Various subsidiaries are set but standard products are sold,
without any flexibility in terms of adapting to local
consumers.
There is no change in branding or information about a
global company, even if the country of operations changes.
Lenovo, Coco-Cola, microsoft –are examples of this
kind of companies.
Perlmutter’s EPRG Model
.
EPRG Framework helps the company to
decide the way in which strategic
decisions are being made and how the
company manages operations between
headquarter and its subsidiaries. The
concept of EPRG was introduced by
Howard V. Perlmutter within the journal
article “The Tortuous Evolution of
Multinational Enterprises” in 1969.
Ethnocentric(Home country orientation)

In this approach, A firm employs home market

strategies to the international market. Plans for
overseas market are developed in the home office
of the company. Personnel is hired from home
country. Also, promotion and distribution
strategies are similar to that employed in the
home country.
The word ethnocentrism derives from the Greek
word "ethnos", meaning "nation" or "people," and
the English word center or centrism. A common
phrase set for ethnocentrism is "tunnel vision." 
Costs and benefits of ethnocentrism

Costs Benefits
Ineffective planning due to poor
Simple organization
feedback
Subsidiary 'valuable' executive Greater communication and
flight control
Fewer innovations
Inability to build a high caliber
local org.
Lack of flexibility and
responsiveness
Polycentric

In this approach, marketing strategies are

framed out as per the situation of the host
country ( the country where subsidiary is
situated). Decisions can be altered as per
the economic, political and cultural
disparities in the country. This provides a
firm to manage its operations
independently, without much interference
from its headquartered.
Costs and benefits of polycentrism
Costs
Waste due to duplication
Localization costs of "universal"
products
Inefficient use of home-country
experience
Excessive regard for local traditions at
expense of global growth
Benefits
Intense exploitation of local markets
Better sales due to better-informed
local management
More initiative for local products
More host government support
Good local managers with high
morale
Geocentric

This approach maintains a balance

between home and host market.
Marketing strategies are not influenced by
the home or host country preferences. A
firm tries to adopt globalised marketing,
formulates an integrated marketing
strategy for across the globe, this enables
a firm to enjoy economies of scale
Costs and benefits of geocentrism
Costs
High communication and travel costs
Educational costs at all levels
Time spent in consensus decision-
making
International headquarters
bureaucracy
"Too wide" distribution of power
Personnel problems, especially those
of international executive reentry
Benefits
Integrated global outlook
More powerful total company
throughout
Better quality of products and services
Worldwide use of best resources
Improved local country management
Greater commitment to global
objectives
Higher global profits
Regiocentric

In this approach, firm treats a group of

countries with similar characteristics as a
single market and accordingly designs a
marketing strategy. Countries like India,
Pakistan and Bangladesh possess similar
characteristic and can be served well with
a single marketing strategy.
Orientation of an MNC