Bachelor Thesis Proposal
Bachelor Thesis Proposal
The Internationalization of Corporations in
High Risk Environments
Date: 17th of July 2013
Introduction
Multinationals are many times one of the most important drivers of the global economy and therefore the life of Billions of people depend on their performance. This makes the topic of the existence and internationalization process of multinationals very present in literature. This paper analyzes the internationalization drivers and consequences of investments of multinationals into highly uncertain environments. After some research it became clear that much was written on the internationalization process of multinationals, but very little explained how firms tackle down the high risk and exposure in countries with low economic freedom. Empirical evidence shows that most of the Fortune Globe 500 Firms conduct business in countries very exposed to political, cultural, commercial and currency risks. For managers, it is always a matter of balance, hedging and know-how in order to succeed abroad. However, does country risk play such a big role in the decision on a long term basis
(Foreign Direct Investments) of a company? Or is the potential gain and return on investment the driver of internationalization decisions? The paper tries to define these questions and give an answer to them, based on a real case study of the Brazilian company Petrobras.
Problem Definition
The Thesis aims to investigate how big multinationals handle uncertainty and if they tend to stay passive or rather be active when it comes to investments in uncertain environments. The manner in which companies exploit high country risk of barely economic free countries is highly relevant for International Business, especially when it comes to entry modes and organizational structure of multinationals.
Relevance of the Topic
A lot of literature has been written about the internationalization process of Multinationals, however, very few
The Internationalization of Corporations in
High Risk Environments
Date: 17th of July 2013
Introduction
Multinationals are many times one of the most important drivers of the global economy and therefore the life of Billions of people depend on their performance. This makes the topic of the existence and internationalization process of multinationals very present in literature. This paper analyzes the internationalization drivers and consequences of investments of multinationals into highly uncertain environments. After some research it became clear that much was written on the internationalization process of multinationals, but very little explained how firms tackle down the high risk and exposure in countries with low economic freedom. Empirical evidence shows that most of the Fortune Globe 500 Firms conduct business in countries very exposed to political, cultural, commercial and currency risks. For managers, it is always a matter of balance, hedging and know-how in order to succeed abroad. However, does country risk play such a big role in the decision on a long term basis
(Foreign Direct Investments) of a company? Or is the potential gain and return on investment the driver of internationalization decisions? The paper tries to define these questions and give an answer to them, based on a real case study of the Brazilian company Petrobras.
Problem Definition
The Thesis aims to investigate how big multinationals handle uncertainty and if they tend to stay passive or rather be active when it comes to investments in uncertain environments. The manner in which companies exploit high country risk of barely economic free countries is highly relevant for International Business, especially when it comes to entry modes and organizational structure of multinationals.
Relevance of the Topic
A lot of literature has been written about the internationalization process of Multinationals, however, very few
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