QUESTION A. TO BE ANSWERED BY ALL STUDENTS
One very widespread recent debate in the world of international business is whether the decades-long expansion in cross-border volumes – largely driven by most MNEs’ willing insertion into global value chains (especially involving the outsourcing of upstream operations) is destined to slow down or even reverse over the next few years. Reasons often given for this projected scenario include the resurgence of economic patriotism and/or protectionism; the Covid pandemic; supply chain bottlenecks; an overwhelmed logistical infrastructure; technology; and ecological concerns.
Based on the kind of IB attitudes and paradigms that have come to characterise your chosen MNE, to what extent do you imagine that its decision-makers’ response to these various factors will cause them to reconfigure their company’s value chains (and above all, its supply chains) to position it for the year 2030? How do you predict these responses will impact the decisions they make about fundamental IB arbitrages such as offshoring vs. outsourcing; value chain coverage (whether or not to integrate vertically); modes of outsourcing (possibility of multisourcing, nearsourcing, reshoring or even insourcing); and partnership relationships? Why do you imagine they are thinking the way you predict?
QUESTIONS B AND C – STUDENTS TO ANSWER ONE OF THESE TWO QUESTIONS
QUESTION B.
Many countries have witnessed in recent months a return to levels of inflation that were last seen several decades ago. This may herald, at least temporarily, a sharp rise in interest rates that could affect your MNE in different ways, first and foremost being a rise in the cost of the capital that it needs to fund international expansion.
Given the relationship between access to cheap capital and IB risk appetite, how do you predict your MNE might alter its internationalisation strategies if borrowing costs were to rise? What would be the impact on the way in which it internationalises (choice of market entry modes, commitment to internationalisation); the speed at which this happens; and its willingness to embrace change, starting with the transition towards greener business practices. Make sure to ground your answers in the kinds of financialisation paradigms and above all the risk attitudes that your MNE has demonstrated up until now.
QUESTION C.
In its early years, the economic emergence of the Global South – a great revolution in the world of international business – often involved Global North MNEs outsourcing certain labour-intensive upstream operations to low wage countries, while continuing to themselves perform some of their products’ higher value added activities. It is an international division of labour that continues to typify many (although not all) MNEs.
Today, however, certain specific Global South countries are becoming more expensive in relative terms while manifesting greater technical capabilities, reducing the gap with their Global North counterparts. In addition, robotisation and artificial intelligence are giving MNE decision-makers cause to reconsider which activities they undertake in which locations, i.e. how they configure their global value chains. Based on your company’s track record in embracing change and adapting its paradigms and structures, how do you predict that technological progress will affect which value chain activities it allocates to both its Global North and its Global South entities in the year 2030?
