The electric paradigm (OLI) remains the most dominant theory to explain the activities of Multinational Enterprises (MNEs). Developed by Dunning, the OLI model explains that the choice of market selection depends on three economic advantages known as ownership, location and internalization advantages. Eclectic Paradigm (OLI) The eclectic paradigm or the OLI framework (OLI stands for […]
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Risk Diversification Theory of FDI
Risk diversification theory of FDI suggests that firms undertake FDI activities to diversify the risks by operating in multiple markets. The risks of foreign investments are known as transportation costs, trade barriers (tariffs and quotas), political and economic risks. Given these risks, the theory of diversification through FDI reduces the total risk of international investments. […]
Stakeholder Theory Explained
The stakeholder theory, put forward by Edward Freeman, links to corporate social responsibility but the main difference is that it starts from the world’s perspective rather than starting from a business perspective. It takes into account benefits of stakeholders as well as economical responsibility of the business towards its shareholders. Stakeholder Theory A primary goal […]
International (Global) Trade: Basics
International (Global) Trade Basics. Understand free trade, reasons for protectionism and trade restrictions, role of GATT and WTO in promoting free trade on a global scale, regional economic integration and trade agreements. International trade involves the exchange of goods, and services between countries because there is a need for certain goods or services or perhaps […]
Toilet paper shortage: Lessons in supply chain
Toilet paper shortage was a strange side-effect of the Covid19 pandemic. As lockdown was enforced in the US, people resorted to panic buying of toilet paper rolls resulting in several shortage on toilet rolls in leading retail stores. Here are lessons in supply chain learnt from the shortage. The Product – Toilet Paper While people […]
Logistics Management: Core concepts
Logistics management, a component of supply chain management, is the process of efficiently transporting goods from the starting point to the destination. It involves steps such as acquisition, storage and transportation of inventory. Here we will try to understand the Logistic concept, identify main activities and elements within logistics, recognise various modes of transport in […]