1. Compare & contrast International Mentality with Transnational Mentality.
International to transnational is like a process for evolving. MNEs will face different operate method. International Mentality means management sees overseas operations as appendages to a domestic operation. The operation method and the technologies overseas company use are normally same to the parent company. The administration system is also related to the parent company.
Transnational Mentality means complex process of coordination and cooperation in an environment of shared decision making. The overseas company just likes a new company which is a little different from the parent company. They follow the parent company’s administrate but do the local-to-local business. It makes overseas operation more localize and flexible.
The mentality the company uses relate to the industry. Different companies have their own business strategy position. A company might reasonably operate with any one of these strategic mentalities (International, Multinational, Global and Transnational).
2. Define both scale and scope economies and discuss their impact on a company’s attempts at global integration and coordination.
Scale economies refer to the cost advantages that an enterprise obtains due to expansion. There are factors that cause a producer’s average cost per unit to fall as the scale of output is increased. It is a long run concept and refers to reductions in unit cost as the size of a facility and the usage levels of other inputs increase.
Scope economies refer to reductions in average cost associated with increasing the scale of production for a single product type. It makes product diversification efficient if they are based on the common and recurrent use of proprietary know-how or on an indivisible physical asset.
Economies of scale offered by the new technologies, the intermediate processes into single plants and the developing...
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