Aid in the formulation of the internationalisation strategy of a subsidiary company to a hypothetic CEO

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Cisium is looking for to extent its capabilities in R&D by establishing a subsidiary in EU. This report explores 3 EU countries: France, Germany and UK.

A systematic analysis is conducted using Porter’s diamonds framework with 5 categories and 15 criterions, the result gives to Germany the highest score.

This study stresses the importance of institutional and cultural factors for a successful FDI. It is discussed institutional factors such as political systems, legal systems, property rights, and economical systems. The analysis identifies IP and corruption as critical issues.

Hofstede provides a 6 dimension cultural framework to identify cultural gaps between Philippines and Germany. It is evaluated individualism, masculinity, uncertainty avoidance and indulgence. For biggest cultural gaps, power distance and long term orientation it is provided focused advice to minimize risk.

From the constellation of entry modes for FDIs, it is analysed the most appropriated for the firm: R&D contracts, IJV, green-fields and M&A. After a systematic analysis, it is suggested IJV, however based on company’s strategy might be better green-fields or M&A.

The best organization structure is a matrix organization derived from transnational strategy and the nature of engineering projects operations. This is a challenging organization that brings the maximum flexibility.

Formal control mechanisms are suggested divided in 2 tiers: line organization and project level. These increases the chances of a successful FDI.

Finally, it is provided advice to improve CSR. Especial emphasis is given to code of ethics, training for business ethical, realistic KPIs and monitoring.

The download includes the complete assignment in pdf.