The current research has been realized by merging of the theoretical knowledge through the revision of the literature relevant for the lifestyle, operations ad expansion of multinational companies and different spillover effects they create, as well as sensible research understood in the field on five multinational companies operating in Serbia.
The first area of the literature review concentrated on various theoretical solutions focusing on the existence, development and business activities of multinational companies, among which the target remains on the Dunning`s eclectic paradigm and its relevance to the multinational operations.
At this aspect, the author would like to recall the eclectic paradigm formulated by Dunning. Dunning (1977, 1981, 1988, 1993a, 1995a, 1995b) and his eclectic paradigm attempt to explain the power and willingness of companies to serve markets across nationwide borders. The eclectic paradigm will make clear why companies choose to exploit any available advantages through foreign production instead of using domestic development, exports or collection resource moves. Furthermore, Dunning hypothesized a company is going for international development or take part in foreign immediate investment in the case it owns net possession advantages (mainly by means of intangible possessions) vis- -vis firms of other nationalities in providing particular marketplaces, and these ownership advantages, accompanied by internalization and location alternatives, will enable a corporation to benefit when using or "internalizing" a specific international market itself, rather than selling, letting or leasing them to foreign companies (OLI advantages).
Location probability in the framework of Dunning`s paradigm means finding a multinational firm's creation activity in a international country that possesses competitive advantages in conditions of factor endowments. Regarding to Dunning, if these three conditions (possession, location and internalization) aren't present, the company can instead provide its local market through home production and develop it to provide foreign marketplaces through international trade. The larger the ownership advantages of multinational companies, a lot more incentive they need to use these themselves. The more the economics of production and marketing favor a overseas location, the more they are likely to engage in overseas immediate investment. The propensity of a specific country to activate in international creation is then dependent of the magnitude to which its enterprises possess these advantages and the location destinations of its endowments weighed against those provided by other countries (Dunning 1981:79).
Dunning identifies his paradigm as "the prominent paradigm of international production". The eclectic paradigm presumes possession specific advantages as endogenous variables, i. e. to be always a determinant of foreign production. This means that the paradigm isn't only involved with answering the question of why firms go for FDI, instead of other modes of cross-border ventures. It is also concerned with why these businesses possess unique resources and competencies - relative to their competition or other nationalities - and just why they opt for at least some of these advantages as well as stock portfolio of foreign-based immobile investments. This helps it be not the same as the internalization model, which regards ownership advantages as exogenous factors (Dunning, 1993a:252).
As identified by Dunning, the eclectic paradigm is meant to capture all approaches to the study of international production. In his judgment the model represents a good starting place to discover the global justification of MNE`s existence and expansion since it synthesizes the explanations of the existence and nature of international creation. Modern monetary explanations of cross-border creation activities of multinational businesses are mostly shown in the configuration of ownership, internalization and location advantages. Dunning has incorporated those three fractions under the wing of his eclectic paradigm, but his most important objective in doing so continues to be to find eclectic explanations to the happening of international creation.
Furthermore, Dunning expresses that his eclectic paradigm can provide an sufficient analytical framework which gives comprehension for all types of foreign development in services. Stressing the interdependence between services and goods market sectors, he asserts that "it creates no sense to try to develop a new paradigm to describe the "transnationality" of the service sector" (Dunning 1993a:248-284). In his scholarly research, Dunning was assertive to find all possible explanations of the presence of multinational enterprise in his eclectic paradigm. As the years went by, he attempted to grow knowledge in the framework of his eclectic paradigm by attempting to provide possible additional explanations to multinational creation activity that come to his knowledge.
As an example, for example, he points out that the advent of collaborative alliances among multinational firms does not lead to the development of a new multinational theory. Therefore, he has designed alliance capitalism in his eclectic model. In his renewed version of the eclectic paradigm in the light of alliance capitalism, Dunning(1995a) says that inter-firm alliances (with clear reference to North american multinational companies!) in innovation-led creation systems, are appearing as dominant varieties of market-based capitalism, and are overtaking the global affect over hierarchical capitalism. At this point, the author would like to point out that Dunning has centered on the small view of the value-adding activity of innovation-led capitalism, and has considered other joint ventures as insignificant. However, other authors point out to the fact that forms of existing alliance capitalism, not wholly possessed production operations, dominate the multinational business involvement in less developed countries (Vaupel and Curhan 1973).
Both theoretically or in practice, internalizing a overseas market and going for a jv alliance with a overseas partner are just two possible options a multinational company can make in international business activities. Therefore, alliance as a strategy can be the dependent variable, just like international production, that needs further explanations. Explanations to joint ventures overseas may possibly also include possession, location and internalization concerns. Border lines between your three degrees of economic evaluation - microeconomic, mesoeconomic and macroeconomic - have to be neglected to be able to synthesize the various economic methods to the research of multinationals.
This current research revealed that multinational theories and paradigms which were described in the literature review chapter and which include extensive person and group researches are, at best, still in the developing phase. It could be concluded that not just one of these theories, including the Dunning`s eclectic paradigm of international creation, has captured the true mother nature of multinational companies, as well as their lifestyle, growth and functions. Contemporary ideas on multinational companies, elaborated at length by a number of scholars, are generally meaningful for the business enterprise operations of multinational companies in American Europe, North America and some other areas of the world. Furthermore, as talked about in the literature review, the features of proper alliance capitalism have been recognized in the books on international business recently. On the other hand, it is obvious that some scholars take it for awarded and support the positioning that it does not require the development of the new multinational theory. For example, Dunning (1993, 1995a) has tried out to add alliance capitalism into his eclectic paradigm of international production. He has attempted to integrate all major multinational ideas and he has insisted on making international production as the based mostly variable. In fact, Dunning has understood that the happening of alliance capitalism is currently overtaking the global impact over hierarchical capitalism. However, he has reduced the opportunity of alliance capitalism and then North american - sponsored inter - company strategic alliances in invention - led production systems. His tendency to understand other varieties of joint - endeavors as less significant, contradicts the type and range of international operations in the producing countries. How can then one explain the growing craze of and dominance of multinational joint endeavors in developing countries?
Asides from the joint venture, international trade represents another segment which is not clearly captured by modern-day theories on multinational companies. Based on the theoretical body, companies decide for international development following the conditions of possession - specific advantages, location - specific advantages and internalization incentives, followed by imperfections of the market segments. Maybe it's noticed that a common position of the majority of international business scholars are present that market defects, for example tariffs and obstacles, prevent efficient procedures of international trade, and therefore the functions of multinational companies. To become more exact, internalization theory presumes that multinational companies seem because of the market failures which present an obstacle for successful activities of international trade. However, when a company becomes multinational by having, for example, several stages of creation processes located in at least two countries, this will not mean that international trade and other methods of business activities have vanished. Furthermore, once a company internalizes a market by setting up, for example, a wholly managed subsidiary in a foreign country, transactional imperfections still stay present, although at a lower level than prior to the internalization. There is no dilemma that external transaction imperfections are present for so long as the internal market must interact with the external wide open market system, having at heart the links of its resource chain to the client ends. Therefore, so long as multinational companies connect to external markets, because of the need to supply markets with their products and services, international trade will are present and grow. In addition, it is not a delight that multinational companies stand for a significant talk about of international trade volume and growth, according to the information of the US. Even in extreme situation of the completely integrated vertical companies, these companies have to connect to regular, external marketplaces not limited to the goal of marketing their products, but also for the marketing their excess of recycleables and intermediates.
It should be outlined that when a firm has intension of increasing its business activities to other international countries, a number of concerns will be taken into account, asides from possession - specific advantages, location - specific advantages and internalization bonuses. For instance, a question which occurs is whether the federal government of the targeted host country helps the establishing of making branches without the national equity. In the case of Serbia, foreign investors are shown significant support if there is an active local participation. Furthermore, multinational companies may not decide to setup a wholly managed manufacturing subsidiary, regardless of the support of the government. It might happen that investment conditions, polices and conditions are discouraging for multinational companies. When market imperfections represent an obstacle for the efficient setting of export (anticipated to trade barriers or tariffs), multinational company can pick another form of available modality which is in accordance with its strategic targets and interests. Subsequently, an MNE can decide to set up a completely owned subsidiary in the event its aim is to obtain complete ownership, independency and decision - making. In situations this isn't allowed by the coordinator country, another option for a multinational company is to enter into a jv agreement with an area company, which would also mean a divided ownership structure, as well as control. However, both of these options represent a part of cross - boundary devices and form and added value to a multinational system. In most cases, all other possibilities should be explored by way of a multinational company before foreign investor makes the decision about the modality of entrance to the market of the foreign country. The chosen modality is meant to maximize the multinational value string. The basic difference between wholly owned or operated subsidiaries and joint ventures is in the ownership, control and decision making process.
Significant area of the current research has been focused on the spillover results which multinational companies produce, and their verification through the analyzed circumstance studies. Based on the revised literature, the local companies take advantage of the transfer of knowledge from MNEs, only in the event when they have adequately trained human being capital. This discussion has been discussed by the theoretical concept of absorptive capacity - referring to the fact a local firm has the capacity to recognize new knowledge, understand it, incorporate it in to the firm and utilize it productively (Cohen and Levinthal 1990, Zahra and George, 2002). The amount of spillover effects, very much relies of the number country, to begin with of the local companies and their absorption ability. It is essential that the difference between foreign direct investors and local companies is not too big, otherwise, spillover results can be neglected. Workforce of the country is the problem which is essential for the absorption power. As the labor market becomes more versatile and workforce more educated the propensity towards greater absorption power increases. Data elaborated in Section 4 of the thesis show that Serbia gets the highest British speaking skills in Eastern European countries. Furthermore, 42% of the full total population has basic knowledge in British, followed by German and French dialect. Serbia offers a wide availability of highly qualified staff. The amount of engineers and professionals is sufficient to meet up with the growing demand of international companies in the country. Labor supply is made up of about 1. 9 million used and 750, 000 unemployed, while increasing by app. 27, 000 university and 2-season college or university graduates and 75, 000 high school graduates yearly. Also, the conducted research on the four multinational companies demonstrated that, for example in the case of Hypo Group that 78% of the employees participate in the age category of 20 - 39 years of age, which 47% of all employees have university education. Additionally, the existing research driven that the Serbian employees is quite faithful to the company and shifting jobs is a lot less recurrent than in some Eastern Europe. Therefore, today's research is in compliance with the aforementioned stated claim revised in the literature, since it was identified that labor force in Serbia is not a cheap resource. The thing that was crucial for the penetration of FDI to Serbia is the versatility of its work force and its own ability to learn quickly. As a result, the absorption capacity elaborated in the literature exists regarding Serbia and for that reason, spillover effects cannot be neglected.
When it involves the problem on the vertical spillovers, the modified literature expresses that they don't rely on externalities but are an integral part of consumer and maker surplus by market transactions. International companies often purchase intermediate goods from domestic suppliers, which can create spillovers through several mechanisms (Lall 1978, Smarzynska, 2002): MNEs can improve indigenous local companies by preparing higher business standards for them, predicated on their supply romance, for example they create just with time deliveries, plus they provide incentives to boost productivity operations and the quality of products. At the same time, FDI can favorably affect the demand for intermediate goods, which helps local companies achieve economy of range. The results of the analyzed case studies in this research adhere to the above explained having in mind that this examination determined that all of the analyzed multinational companies have quite strong vertical downward associations with the local enterprises. For example, Telenor realizes construction works through local suppliers in a modern way to which these enterprises are not used to. Also, the business expenses software from the local computer software suppliers, and therefore local corporations are hired to create the software components, which are specific for the Serbian market. In the case of the Hypo Bank, long-term relations with local software suppliers have been developed for the creation of specific bank software. When it comes to vertical upward relationships, Holcim and Kraft Foods have engaged local trucking companies for move and distribution of their products. The procedure of loading products is completely regulated based on the standards of the companies and every transporter is required to purchase GPS system which enables Holcim and Kraft to have an insight to where in fact the products are positioned in every moment in time. Also, for the syndication and retail sale of Telenor`s products, the company hired local companies. These local companies have been trained by the Telenor staff in neuro-scientific procedures that are standardized on the organization level. In this manner, new corporate and business standard improved the effect of local vendors.
During today's research close attention was focused on entry strategies of the analyzed multinational companies and their tactical objectives which stimulate them in Serbia. Subsidiaries play a number of jobs within MNEs and differ in their relationships with the neighborhood environment and the spillovers they create. On the other hand, the literature on MNEs impact to the web host country has paid little focus on the diversity of business strategies that influence the sort and magnitude of spillovers. Therefore, international business books on access strategies (Anderson and Gatignon, 1986; Hennart and Playground, 1993; Estrin and Meyer, 2004) and subsidiary functions (Galunic and Eisenhardt, 1996; Birkinshaw, 2000) provided the theoretical knowledge and the opportunity to assess links between FDI strategies and their potential impact in Serbia. Furthermore, the books on the countries in transition (Djankov, and Murrel, 2002, Estrin, 2002), offered a thorough approach of the privatization strategy in Serbia, confirming that in the case of Serbia, as well as in the countries of Central and Eastern European countries foreign ownership has improved productivity and profitability of these countries in the first years after the privatization. Authors and only the process claim that investors foreign investors are often well placed to help and restructure a firm in crisis, which can, for a while, mean the increased loss of work places for several employees, but alternative may be even more extreme, meaning that foreign investors are in reality saving jobs by giving crucial resources and with this, guaranteeing the survival of the company. This point has been established through the research study on Holcim Srbija a. d. cement factory, which at the time of the take over got 2500 employees. By using a carefully deigned privatization program, including attractive redundancy deals for employees who volunteered to leave willingly, this number was therefore reduced 470 employees. In this manner, a competitive market oriented company, with an authentic volume of work places was created and extended to perform its business activities with success.
According to the analyzed books, policymakers often favor export-orientated FDI jobs, which are anticipated to copy knowledge on working production and to enhance the trade balance by offering to the overseas markets. But some export processing operations in enclaves with few linkages to the neighborhood market (Meyer, 2004). Other FDI provide local market segments with new product and services, with or without local control. This sort of FDI transfer operational and marketing knowledge and donate to the local current economic climate by providing better quality products. This also influences local competition, while export orientated does not. Both types of FDI probably copy resources that may lead to spillovers but their characteristics differs significantly. It's been acknowledged through the analyzed case studies that Serbia has more market focused FDI than efficiency oriented FDI, with only 1 efficiency oriented FDI (Ball Packaging). Majority of the FDI in Serbia are market focused and fall under the non - exchangeable goods sector. However, these assets are incredibly important for the purpose of improving the entire business climate in Serbia: the telecommunications sector (Telenor, VIP), purchases in bank, insurance and retail. They not only increase competitiveness, but they also develop a surrounding which may then become attractive for other efficiency oriented FDI, which is crucial for the economical stability of the united states.
One of the major concerns in the modified books on multinational companies is the labor standards in MNEs affiliates and subcontractors in emerging economies. The books treats this issue from two factors: on one hand, nervous about global standardization and the firm's reputation induces many MNE affiliate marketers to pay higher wages and also to apply high labor requirements with respect to working hours, ill leave, child labor, unionization etc. (Caves, 1996:228, Moran, 2002). Generally speaking, MNEs wish to keep their experienced staff and for that reason they offer bonuses to keep them satisfied, unless when they are employing unskilled labor with few outdoors job opportunities. Alternatively, lower pay and lower labor benchmarks stand for opportunities to reduce production costs. This sort of concern is present in certain establishments like textile, sneakers and assemblage of gadgets. (Cerny, 1994; Scherer and Smid, 2000). Aside from firms' proposal in activities related to the wellbeing of the workforce, a rather new sensation is corporate sociable engagement via companies' contribution in private and/or public-private governance plans at the nationwide and transnational levels (Falkner 2003; Mattli 2003; Gulbrandsen 2004). Corporate and business Codes of Do (CoCs), represent a couple of guidelines many MNEs have followed in areas ranging from labor techniques to environmental requirements. Some CoCs have been produced by individual MNEs that try to apply them not only across their global network of subsidiaries but also along their string of suppliers. Regarding today's research, the analyzed case studies exhibited that multinational companies in Serbia have implemented higher labor criteria concerning working time and conditions, together with the implementation of their codes of do. Telenor, Holcim, Hypo Group and Kraft Foods have applied their codes of do not only independently companies in Serbia, but also have passed these group of rules with their suppliers and subcontractors.
It also needs to be pointed out that foreign investors affect institutional development, but at the same time they modify to local organizations. The books analyses these issues individually. Authors who belong to the group of strategy scholars like Peng, Henisz and Meyer evaluate how FDI strategies are changed to the neighborhood contexts and corporations specifically, whereas development scholars check out how FDI effect local context. It really is clear that FDI strategies and the neighborhood environment are interdependent in rising economies. Government authorities changing regulations to be able to get FDI can affect both casual and formal corporations. However, institutional construction influences the decision of MNE`s accessibility strategy to host region.
Labor market institutions moderate the freedom of men and women between local and FDI businesses, and so the diffusion of knowledge, but also local organizations' lack of employees to international competitors. Labor laws and regulations and their enforcement regulate minimal income and working conditions.
Capital market corporations moderate the simple local sourcing of capital, but also the possible crowding out of local investment.
Environmental regulation and enforcement impact the potential negative effects on the local environment.
Competition and industry legislation influence foreign traders' ability to extract
monopoly rents or elsewhere benefit from market vitality.
Education systems enhance the availability of skilled labour and the absorptive capacity
Special economic zones may entice more FDI, but at the same time they limit the discussion with indigenous industry and thus spillovers.
Furthermore, a good understanding of the role of MNEs in a particular country is crucial for discussing insurance plan in relation to MNEs. If estimation is accessible that the impact of MNEs is positive, an argument could be produced for policy involvement to encourage FDI (Blomstrom and Kokko, 2003). However, today's research found out an important finding of the regarding the host country: it isn't possible to accurately measure the spillover results and then share them in the money amount, because methodological obstructions are simply too big. Therefore, it ought to be recommended that countries shouldn't subsidize FDI. Some will see justification for such subsidizations in the fact that investors cannot appropriate the spillover effects that create, and for that reason compensation should be made to them. Such reimbursement in not possible without precise measurement, not forgetting the potential damage it might cause, once private pursuits master the united states. These dangers are quite important discussing the state procedures associated with the greenfield FDI in Serbia.
One of the conclusions that was drawn from this research is that multinational companies may have various settings of their cross - border activities apart from international production. Therefore, determining multinational companies with international creation, as observed in the literature, is not important for the environment of their procedures in Serbia. As it has been seen in the situation studies, multinational companies in Serbia operate through different modalities of international development, strategic alliances, licensing and so many more.
This research, as its contribution to knowledge, has identified central and auxiliary tasks of multinational companies. Furthermore, their auxiliary roles have been analyzed in detail in this research, which refers to their copy of the managerial, technological and marketing skills, research and development activities, job, industrial and monetary growth, human source development, consumer welfare, environment protection, ethnical understanding and preservation. Furthermore, it is expected that multinational companies which have got understanding of the Serbian culture are expected to truly have a competitive benefit in the Serbian market compared to companies that don't.
Majority of research on FDI in the past decade which have analyzed the web evaluation "of the impact of FDI in some 30 countries over the past 15 years, implemented the "apparent positive affect on the financial welfare the coordinator country". In the same way, the macroeconomic research of the countries has generally acknowledged the existence of the positive impact of FDI. The task which remains for the variety country to attain is to build the surroundings competitive enough to draw in the best buyers, thus increasing the financial growth, career, and export likelihood of the country to the utmost.
Another useful summary of the research is the fact that peaceful and stabile environment is crucial for the functions of multinational companies, to allow them to achieve and maintain their business goals. Therefore, political and financial reforms which have been conducted in Serbia after 2000 and are still happening have been scored positively, as perceived by the multinational managers.
The findings of the doctoral research indicate the high responsiveness of the interviewed multinational professionals for the cultural aspect of the Serbian populace. Namely, this belief is very much indeed relative to the analyzed literature, which emphasizes the need of multinational companies to comprehend the culture of the encompassing where they perform their business procedures, in order to accomplish and maintain competitive advantage. In addition, the respondents generally looked at Serbian vocabulary as very important for the business activities of multinational companies in Serbia. Therefore, multinational companies working in Serbia are expected to hire enough amount of Serbian employees and Serbian speaking personnel, in order to perform their daily business activities without the problems.
Additionally, conclusion that could be drawn out of this research is that analyzed multinational companies, asides of their understanding for cultural issues of their staff, also include them in the process of tactical planning and long - term decision - making. Multinational companies which want to use successfully on the market need to respect the local commercial restrictions, along with ethnical and ethical concerns, to avoid problems with the government and citizens of the variety country. This research revealed that all of the analyzed companies operate effectively and this simple truth is positively related to their local responsiveness and cultural awareness. That is very very important to the long - term success of multinational companies in Serbia.
7. 2. Bias and restrictions of the case study approach
Having at heart that the strategy of the doctoral research lays upon the case studz strategy, some limitations of this method should be described. For example, the creators who deal with this kind of research, such as Yin (1984), Tellis, Stake and Simons discovered three different types of arguments from the case study research.
Firstly, circumstance studies tend to be criticized to really have the lack of rigor. Yin (1984:21) expresses that "too many times, the case study investigator has been sloppy, and has allowed equivocal evidence or biased views to effect the route of the findings and conclusions".
Secondly, since the case studies entail a small range of analyzed subjects, occasionally even only one subject, they offer very little basis for clinical generalization, . The question which is often lifted is "How can you generalize from an individual case?" (Yin, 1984:21).
Thirdly, not hardly ever, circumstance studies are designated as being too much time, difficult to take care of and produce and require a lots of of documents (Yin, 1984). That is particularly the case as it pertains to function studies of ethnographic or longitudinal characteristics, which could extract significant amounts of data over a period. In case the data are not arranged in a proper manner and systematically, it could cause problems for the researcher.
The normal criticism of the research study method is its dependency about the same case exploration which makes it difficult to reach a generalizing finish (Tellis, 1997). Yin (1993) found case methodology "microscopic" as a result of limited sampling cases. To Hamel et al. (1993) and Yin (1994), however, establishing of research guidelines and objectives are more important in the event study method than a major test size.
It could be figured despite the above stated limitations, researchers continue steadily to use this kind of methodology, especially in the study works where real - life situations govern social problems and issues. Also, it ought to be emphasized that circumstance studies are incredibly present in the literature in various disciplines and domains.
The conclusions in the analyzed case studies can only just be employed to the specific industry to that your analyzed company belongs.
The issue of interviewing multinational managers was evident throughout the research. Therefore, the conclusions come to in the case studies cannot be treated as general conclusions on multinational companies` businesses, but only as company specific conclusions. Other multinational companies that have not been one of them research and which operate in different areas of activities can lead to different conclusions.
The limited quantity of managers interviewed by the writer. Regarding today's research, the writer managed to program consultations with the limited variety of managers (staff of the very best management and middle management). This example occurred due to the fact that the official position of the analyzed companies was to permit the interviews with the limited amount of managers, which would not disturb the daily business activities of the company.
Some information requested by the author regarding exact numbers discussing companies` business activities were considered private by the interviewed managers and the author could only review them in the facilities of the business.
7. 3. Referrals related to the role of multinational companies and international investment in Serbia
As the final consequence of this doctoral thesis, several recommendations and suggestions could be given, which are based on the results of the technological - research process that was conducted carefully and professionally, and are relevant for the occurrence, activity and the consequences of multinational companies and ventures in Serbia and its own economy.
Having in mind the potentials of Serbia, such as its geo - strategic position and size of the market, multinational managers should think about establishing regional head office of their companies in Serbia (similarly to the local model which Kraft Foods Beograd carried out because of its East - Adriatic market). In this way, multinational companies could benefit from the strategic advantages of the Serbian market through the trading agreements and privileged access to the markets of Russia (Serbia is the only South Western european and Balkan country having Free Trade Agreement with Russia) and the European union.
The growing globalization of business is slowly heading into the creation of the concept of the global community, in which there will be a minimum of obstacles for trading, mix - border activities, alliance capitalism and the flexibility of production factors. Out of this situation, numerous work at home opportunities look for multinational companies, which can be followed by international troubles. These make reference to the differences in economic, political, social, cultural and spiritual conditions. Therefore, for the multinational company to keep its position and competitive benefits, its professionals and personnel should concentrate on learning specificities of the coordinator country's culture through cross - ethnical trainings from its genuine resources. In Serbia, international buyers can contact SIEPA -Organization for Foreign Assets and Advertising of Export of the Republic of Serbia, Serbian Chamber of Commerce and other local chambers of business, whose services are available at no cost.
It is noticeable that majority of the multinational organizations tend to keep the key management positions for his or her compatriots. If these businesses truly want to overcome mix - border issues, the procedure of recruiting personnel has to be fair in order to provide identical chances for the licensed host country citizens, at all degrees of the business. Including trained Serbian staff in the process of decision-making and strategy - planning of Serbian driven tasks, would be beneficial for all people, including multinationals, as well as Serbian consumers most importantly, having in mind that the key of the successful business is to satisfy the needs of the consumers.
Serbian people who want to enter joint projects with multinational companies need to be cautious and negotiate fair terms when getting into these types of agreements. The most common aspects which should normally be negotiated refer to the mandatory technology, profit and loss distribution, ownership circulation, prices of raw materials and products and other relevant issues. Serbian companies should look for the possession - specific advantages with potential overseas partners. These range from product innovations, product management, financing capacity, technology, global scanning features and so many more. The mentioned multinational advantages should be utilized whenever you can in a jv, to make it profitable and successful in the long run. Also, Serbian companies should tend to require the multinational companies to engage themselves in the study and development activities in a joint venture or within a national company, referring to human learning resource, capital, technology, etc. Finally, the conditions under which this should be done should be fair in the sense of aiding a genuine technology transfer to the host country.
There should be considered a transparent business relationship between Serbian and multinational companies in order to achieve long - term success of their business procedures in a joint - project. Namely, there should be transparency in the info flow within both celebrations and sincerity in satisfying the terms and conditions which have been decided by the joint - endeavor agreement, which will help build a solid and lasting collaboration of the international and Serbian party. In this manner, some areas of concern could be avoided, such as mistrust that can happen from the medial side of the neighborhood partner regarding failure of personnel education from the medial side of the multinational company, which has previously been described by the procedures of the agreement, for example. Therefore, transparency in communication is essential.
Transition countries and Serbia in particular, need to comprehend that multinational companies have played out vital role in the economic development of many developed countries. However, credited to objective circumstances, countries in change are very mach postponed in the sense of research and development compared to developed countries. This situation appeared due to the inability of these in power to prioritize methodical development, research and advanced technology management. If countries in move, including Serbia want to be less-dependant of the research and development programs of multinational companies, they have to engage all of their available resources (individual, financial and physical) and create world - category technology institutes and centers of R & D. Following this concept, Serbian colleges may spouse with the main multinational companies working in Serbia and undertake R&D activities in a few part. This could bring dual positive effect for all celebrations involved: on one side, multinational companies will have access to young and talented individuals whom they could make use of upon the conclusion of their studies to are experts and consultants (highly experienced personnel), and on the other side, the universities involved could optimize the utilization of their researchers, academics, industrialists for research and technology growth and participate in up - to - night out technology assignments and grow their existing knowledge with new global technology movements.
Many non - Serbian individuals and companies, referring also to the multinational companies, have been exposed to the fabricated propaganda and misinformation about Serbia and its people. Direct result of this situation was the bad image about Serbia, developed particularly from the beginning of 1990s, which created a sort of prejudice about Serbia and its own citizens. There is absolutely no dilemma that many Serbians are to blame for this situation. To be able to gain the trust of the international community and buyers also to clear all myths about the country, it is highly necessary for the Serbian overall economy to be integrated in the local, international and global flows and honor its business commitments and deals. Therefore, Serbian embassies in different countries could play a substantial role in this portion, especially in the sense of breaking the stereotype and getting foreign direct investment funds. The role of the so called "economic diplomats" becomes incredibly important as part of the long - term strategy of Serbia to interest multinational companies to purchase Serbia and work with its companies.
Serbian embassies could also intensify their efforts in expanding understanding of Serbia and its own culture through various lectures, seminars, workshops and the circulation of propaganda materials about Serbia to tactical locations where non - Serbians go.
7. 4. Further research issues
One of the future areas could be the further research on the ethnic aspect of this study on a comparative basis, using other local countries in move like Croatia, Macedonia, etc. ). This can help generalize conclusions that multinational companies which own better understanding for the culture are perceived to have a significant competitive advantage in the market.
An interesting part of research would be to study more tightly the signals of success of multinational companies which conduct their business activities in Serbia and other countries in move. One of the significant objectives is to further research into the correlation between different strengths of cultural responsiveness and their influence on the business enterprise of multinational companies.
Corporate social proposal could also be one of the regions of future research. For instance, much of the prevailing literature on corporate cultural activities has been concerned with the potency of such initiatives in dealing with sociable and environmental problems. The conversations mostly concentrate on the question if MNEs should be productive in this area, as the question why MNEs take part in communal programs and which factors determine their selection of strategy could help direct this issue to the question of whether and under what conditions they could bring cultural change.
Finally, future research could be more important if it addresses the wide and diverse string of multinational business procedures, including the obvious expansion of inter - company mergers, acquisitions and mix - border alliances. It might be very challenging to investigate and compare the features of alliance capitalism in the first place (mergers and acquisitions) and hierarchical capitalism (international production). The near future research on multinational companies will become more interesting as the new kinds of cross - boundary activities emerge in the upcoming years.
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