IBUS90003 The Multinational

How IBUS90003 is assessed

What IBUS90003 covers

Eleven chapters follow the seminars from Week 1 to Week 8, moving from why firms become multinational to how they enter, organise and learn across borders. Each chapter links to its free guide.

Running an MNE means handling research and development, human resources, supply chains, production, servicing and marketing in several regions at once, and the subject asks why firms take on that complexity and how the successful ones manage it. It is taught through real-world cases, with seminar discussion each week and group presentations from Week 7.

The seminars build a toolkit in sequence.

They start with distance and the definition of an MNE, move through internalisation theory and Dunning's OLI paradigm, the effects of FDI on home and host economies, entry modes, FDI motives and MNE archetypes, location choice and entry timing, then turn to organising: Ghemawat's AAA logics, the Uppsala model, the integration against responsiveness grid, Hofstede's cultural dimensions, headquarters-subsidiary control and the global factory.

Later weeks take up MNEs from emerging economies, born globals and the digital economy, and ethics.

Assessment combines a 20-minute group case presentation (20%), a 4,500-word group case analysis report (30%), participation and preparation (10%) and a 2-hour on-campus digital exam (40%).

The exam has two parts: general questions on concepts, theories and frameworks, then a full-length case released on the LMS a week beforehand, in which you identify problems, analyse causes and consequences, present options and justify a choice. This guide is organised around exactly those moves.

Worked example · free

Decide between licensing and a subsidiary with the OLI test

Key terms

Multinational Enterprise

A firm that owns or controls assets producing income in two or more countries, rather than one that simply sells abroad.

Foreign Direct Investment

Investment that gives a foreign investor management and control of a business undertaking, set in practice at a holding of 10% or more of the voting power or ordinary shares.

Firm-Specific Advantage

A resource or capability unique to the firm, such as technology, a brand or know-how, that lets it compete against local firms abroad.

Liability of Foreignness

The extra costs a firm bears as an outsider in a host market, made up of unfamiliarity, discrimination and relational hazards.

OLI Paradigm

Dunning's framework stating that FDI occurs when a firm has ownership advantages, a host location is preferable and internalising the advantage beats contracting it out.

Psychic Distance

The factors, such as language, education, business practice, politics and culture, that make a foreign environment difficult to understand.

Transnational Strategy

An operating strategy that pursues global integration, worldwide learning and local responsiveness at the same time.

Performance Ambiguity

Difficulty in attributing results to one subunit, which rises with interdependence and makes control more costly.

Global Factory

Buckley's term for an MNE structure that integrates innovation, distribution and production by fine slicing activities and choosing the best location and control for each.

IBUS90003 FAQ

Questions students ask in each IBUS90003 chapter

What counts as a multinational enterprise?

A firm is multinational when it owns or controls income-generating assets in at least two countries. Exporting alone does not qualify; it is ownership and control of operations abroad that matters. Chapter 01 · Multinationals, FDI and Cross-Country Distance

What is the difference between internalisation theory and the OLI paradigm?

Internalisation theory explains why some cross-border transactions move inside a single firm. Dunning's paradigm keeps that idea as its I condition and adds ownership advantages and location advantages as two further requirements for FDI. Chapter 02 · Internalisation Theory and the OLI Paradigm

Can foreign direct investment harm a host country?

It can. A dominant foreign firm may monopolise the market, the economy may become dependent on outside firms, and repatriated profits and imported inputs can weaken the balance of payments. Chapter 03 · FDI Costs and Benefits for Home and Host Countries

Why do firms still form joint ventures when full ownership is allowed?

A partner can provide finance, raw materials, distribution, market knowledge, preferential treatment in government tenders or shared risk, which the firm may not be able to obtain quickly on its own. Chapter 04 · Entry Modes and International Joint Ventures

Can one firm pursue several FDI motives at the same time?

Yes. Larger MNEs commonly combine market, resource and strategic asset seeking, and their motives shift over time as competitors move, governments change policy and the business matures into new markets. Chapter 05 · FDI Motives, FDI Types and MNE Archetypes

Why is GDP per capita not enough to judge a market?

Average income hides inequality, so a poor country can still hold a large affluent segment, and countries with similar incomes may want very different products because of culture and taste. Chapter 06 · Location Strategy: Opportunities, Costs and Risks

Is it always better to enter a market first?

No. Pioneers can lock in resources and customers, but they pay to create demand, may choose the wrong design and carry larger pioneering costs, while late movers can learn from their mistakes. Chapter 07 · Entry Timing, Licensing, Franchising and Acquisitions

Can a firm use adaptation, aggregation and arbitrage together?

Rarely all three at full strength at the same time. Firms tend to emphasise different logics at different points in their history, as IBM moved from adaptation to aggregation and then arbitrage. Chapter 08 · AAA Logics, the Uppsala Model and Operating Strategies

What are Hofstede's cultural dimensions?

They are scales used to compare national cultures on power distance, individualism, masculinity, uncertainty avoidance and long-term orientation, so that countries can be compared rather than simply called different. Chapter 09 · Managing Across Cultures

Why do headquarters send expatriate managers to subsidiaries?

They may lack knowledge of competent local managers or distrust those available, and staff from the parent already know the systems, reporting lines and corporate culture, which cuts training cost and miscommunication. Chapter 10 · Headquarters-Subsidiary Relationships and Control

What is Buckley's global factory?

It is Buckley's name for the way an MNE ties its global strategy together by joining innovation, distribution and production, deciding for each fine-sliced activity where it is best located and how it should be controlled. Chapter 11 · The Global Factory, Value Chains and Innovation

How to study for the exam

Revise in two layers, because the exam has two parts. For Part 1, build a one-page sheet per seminar with each framework stated in two sentences and one company example beside it: distance and CAGE with Uber or Tesco, OLI with Starbucks in Japan, archetypes with Boeing and Philips, AAA with IBM and P&G, culture with the Hofstede scores, control with Google in China.

Test yourself without notes until each definition comes out cleanly. For Part 2, practise the four case moves on short cases you already know from the seminars, writing one paragraph per move and timing yourself.

When the exam case is released a week before the exam, read it twice, list every problem it describes, and decide which chapter's framework explains each one, so that on the day you are applying rather than discovering. Keep every recommendation tied to a cause you have named, and always say why the option you rejected is weaker.

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