Salient factors in executive managements' FDI decisions: a study of South African multinational enterprises
Date
2016
Authors
Joosub, Tasneem Suliman
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Abstract
Pursuit of an international strategy has been a recognised tenet of multinational businesses for centuries. It is an absolute requirement for companies to investigate new and potential markets in order to expand their operations internationally and, in certain circumstances, to secure key supplies, especially minerals, energy and scarce raw material resources. Evaluating new markets remains a daunting task, because companies have to evaluate risk and opportunities in the potential markets.
Internationally, enterprises have entered new global markets after following a strategic decisionmaking process, taking into account factors such as the country’s environment, psychic distance, market-based factors such as taxation and competition. However, the exact process followed by MNEs has never been sufficiently elaborated upon by research; in the degree to which it has, the focus has been almost entirely on European and North American MNEs, leaving a gap in the knowledge base.
The purpose of this study is to identify key strategic variables that impact the decision-making processes of South African MNEs, when deciding which country to enter. The study attempts to better understand how the enterprise formulates its decision, and looks at elements influencing the decision on whether or not to enter a particular new market, such as perceptions (business risk perception or opportunities), as well as heuristics regarding the factors considered.
The research was conducted using a survey instrument directed at South African MNEs executive management (in order to determine trends in their strategic decision making processes), as well as personal interviews with senior management of selected MNEs. The study adopts a mixed methods approach which utilises qualitative and quantitative data and incorporates triangulation analysis to determine the most salient factors considered by SA MNEs.
Description
Submitted in fulfillment of the requirements for the degree Doctor of Philosophy at the school of economic and business sciences the University of the Witwatersrand
October 2016
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Citation
Joosub, Tasneem Suliman, (2016) Salient factor in executive managements' FDI decision :a study of South African multinational enterprises, University of the Witwatersrand, Johannesburg, https://hdl.handle.net/10539/25770