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  • Subject area(s): Marketing
  • Price: Free download
  • Published on: 14th September 2019
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  • Number of pages: 2

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Summary

    Rob van Tulder wrote” Getting all motives right: a holistic approach to internationalization motives of companies” to explain the motivations of companies that intend to open branches in other countries. Rob van Tulder presents a holistic framework that addresses, positions the various business cases for internationalization and delineates internationalization trajectories as the result of changing motivational constellations over time.

Rob van Tulder elucidate the Three clusters of internationalization motives. First, Intrinsic motives. Efficiency approaches; resource-based-view; and learning. Second, Mixed motives. Competitiveness and positioning in the sector; co-evolution. Third, Extrinsic incentives. Bargaining/negotiation and game theoretical approaches; stakeholder approach; institutions-based view; bundled resources.

On the other hand, why some companies leave their home countries to go internationally? Rob van Tulder says in his papers that companies can go their countries of origin for negative reasons; for instance, to evade high taxes, strict environmental regulations or “unfriendly” labor relations. Moreover, companies' strategic decisions and motivations are affected by host-country policies and considerations.  

Rob van Tulder explained that motives for internationalization and the implicit preference for mainly intrinsic motivations had had some consequences for the study of MNEs. The first three values (Single motives prevail, Rational reasons abound and Strategic motives are better understood than tactical purposes) primarily relate to the causes themselves. The last three dimensions (Ownership and agency are poorly addressed, The Most of the international companies thus have global ambitions that include value propositions that go way beyond profit maximization. Rob van Tulder explained, how companies deal with these motivational tensions defines, to a large extent, how they operationalize their internationalization strategies and the kind of coordination and integration degrees they actually would like to achieve.

The business case for both the regional and transnational corporation reveals a mixed motivations game, albeit at different degrees of coordination.

Own sector often requires a considerably greater degree of international coordination. Depending on the global or regional ambitions of the company, the level of focus needed, consequently, becomes greater.

    Branding becomes an important vehicle to create uniform product markets. A company that is intrinsically motivated to sell to international markets or source internationally without foreign investment aims to create a tactical competitive advantage in its sector, which is the best server by trade and exports/imports. For example, the “born global” corporation that profited from the existence of the internet and – without asset internationalization – was potentially able to reap a strategic export advantage in the world markets.

   Regarding motivations, one can suppose that most companies that have created a global competitive advantage only by its domestic resource base would prefer to export their products to other parts of the world. There is no real intrinsic motivation to become a multinational corporation. However, most global markets are neither uniform, the competitive advantage of many companies only based on neutral market mechanisms in its domestic market.

    According to Rob van Tulder, Multinationals from smaller economies, in global niche markets or active in resource-intensive industries, have been triggered into this track with the ambition of global marketing, global sourcing and the like.

    A regional expansion strategy provides a more feasible and realistic internationalization trajectory. Rob van Tulder explained in his paper that, IB studies found that companies tend to favor internationalization to countries with relatively small institutional distances. The explanation of this phenomenon is that companies search for institutional environments that resemble their home base – including comparable regimes on taxation and corruption for instance. Rob van Tulder mentioned that Political interventions by either the home country or host country governments provide heavy triggers.

    According to Rob van Tulder, Companies, in general, seek internal alignment in three distinct directions: continued globalization, retreat and regionalization. After the initial stage of internationalization, management needs to reassess the implemented strategy, consider internal inefficiencies and external conditions for further expansion. If intrinsic motivations to internationalization still prevail and are successful, a company can pursue its globalization strategy without significant alterations. Some companies, like Walmart, actually did not succeed in imposing their business model on some (developed) markets and retreated to sustain their original business model. By doing this, they retreated on their globalization ambitions but kept their business model more or less intact. On the other hand, Consumer-oriented companies, like McDonald\'s, Coca-Cola or IKEA, mostly succeeded in sustaining their business model. They have been more capable of supporting their intrinsic motivations and, thus, figure prominently as best-practice examples of sustained and coherent motivational configurations. Often, in this stage, smaller companies that have strived for a global strategy find out that it is hard to deliver standardized products around the world, as it also requires regulated markets and consumers (that only exist in very limited markets). Lastly, World domination requires a certain degree of acceptance by the world that mostly goes beyond intrinsic motivations. Rob van Tulder says This is the reason why many of the most advanced MNEs tend to either move to a regional or a transnational strategy. The former is a defensive strategy of internal alignment, the latter a more offensive strategy based on external alignment.

    Rob van Tulder says, The third stage of internationalization requires companies to seek structural alignment with non-market actors in three distinct directions: with local players, with international non-governmental organizations, and with international governmental organizations (at the regional or global level). The third stage of internationalization still has to be realized in most sectors. The third stage of internationalization requires companies to seek structural alignment with non-market actors in three distinct directions: with local artists, with international non-governmental organizations and with international governmental organizations (at the regional or global level). The third stage of internationalization still has to be realized in most sectors. The principal motives for this strategy seem to be extrinsic rather than intrinsic, which contains substantial coordination risks, requires sophisticated managerial capacities and corporate value propositions beyond profit and shareholder value maximization. The external alignment strategies with stakeholders are thereby strongly influenced by previous strategies and relationships with these societal actors. Rob van Tulder ending saying, organize this across borders will become one of the greatest strategic and motivational challenges for MNEs in the future.

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