UGF Lecture 8

Management > Global Firm > Motives

Motives

A study of motives is required to understand MNEs setting up foreign subsidiaries.

1. Resource-seeking. Investing in a country to develop resource potentials. Mainly a response to positive LAs. See Case A, lecture 6
2. Market-seeking. Investing to supple he local market of the country. Mainly a response to negative LAs, such as trade constraints. See Case B, lecture 6
3. Efficiency-seeking. Part of the way MNEs have become dynamic differentiated networks, in response to freer trade potentials from the mid-1960s. Subsidies specialise in the production of parts of the product range and export most of it. This is a response to positive LAs.
4. Knowledge-seeking. Dynamic MNEs need to keep learning to develop innovative goods. Some firms decentralise their knowledge-seeking capabilities in order to monitor global market trends. The two forms of this can be in product development innovation and R&D laboratories tapping into the distinctive scientific progress in different countries. Again a response to positive LAs