Social-cultural learning can be illustrated through the examination of businesses operating out of both developed and emerging economies. A close examination of their similarities and differences provides distinctions with their beliefs toward business operations and ethics. This type of examination can lend insight into how companies within emerging economies are able to leverage their resources and capabilities in the development and growth of successful operations.
The pervasive thought is emerging economies represents untapped potential (Chiou, 2013). However many companies such as Walmart have undertaken operations within these markets only to come up unsuccessful (Peng, 2014). So why would a US giant such as Walmart face problems within these emerging economies? Contrast this with (once) small startups Lenovo, Acer and Tata, these companies have found tremendous success conducting operations within such markets.
This analysis will evaluate and compare the core resources and capabilities (R&C) of successful firms from both emerging multinational economies versus those within developed countries. This analysis will conclude with a role play of the potential ethical dilemmas leaders face, running a multinational firm within an emerging market. This role play will assume a new leader is faced with taking over a copycat firm who is in clear violation of intellectual property rights of a rival firm. The analysis will address the author’s perspective on how such a situation can be handled.
Copycat firms within emerging markets (such as Lenovo, Acer and Tata) can be considered learning firms. Copycats essentially learned how to conduct business from an already successful business model. Their ability to transform learning into a viable business has jettisoned them into positions of power within the world’s economies. Lenovo is currently the leader in PC sales worldwide. Although PC sales in the US continue to decline Lenovo’s ability to capture emerging markets such as China, allows them to continue their profitable growth (Gupta, 2012).
Core Resources and Capabilities of Multinationals in Emerging Economies
The one constant capability with companies from emerging markets is their willingness and capability to learn. Transforming this learning and the abundance of low cost resources allows these companies to execute a low cost strategy. This low cost strategy has provided the inlets into both emerging and developed markets. Using a strict resource based analysis consisting of value, rarity, imitability and organization (VRIO), suggest such an imitation strategy will lead to parity and average returns. An example of this would be Lenovo’s ability to imitate other successful PC manufactures capabilities. Lenovo model adds value but their resources are not rare which means it can be imitated and exploited by another firm. If this is the case why can Lenovo continue to grow?
Institutional factors such as...