A framework for enabling aspiring multinational corporations in South Africa

PhD (Business Administration), North-West University, Potchefstroom CampusAspiring multinational companies have very few guidelines for how to expand their businesses beyond South Africa, unlike established multinational companies. The plight of aspiring multinational companies finding business opportunities outside the South African borders highlights the importance of properly understanding the multinational business environment and managing the requirements associated with going multinational as a business, hence the purpose of this study is to create a framework for enabling aspiring multinational corporations in South Africa. This study expands on the existing frameworks for corporations to specifically address challenges faced by South African aspiring multinational corporations. The choice of research approach was the mixed-methods approach and the chosen design was explanatory sequential design. The approach was informed by the nature of the research questions as well as the overall objectives of the study. The explanatory sequential design was ideal because it is trusted to explore phenomena where little or no research or theory exists. Similarly, there’s minimal research on aspiring multinational companies. The first two objectives of this study, which are to identify the extent of the availability of information and the success factors of multinational companies cannot be answered very satisfactorily when using only one method, hence some phenomena were researched using qualitative and some used quantitative method. The study uses a sequential explanatory mixed method whereby questionnaires were used to collect quantitative data initially followed by the collection of qualitative data, the data from the different methods were analysed separately and finally the two were brought together at the interpretation phase. The population and sample for the study quantitative and qualitative data collection was the same group of managers of multinational companies in South Africa. The population consist of 196 managers of aspiring multinational companies who are Linkedin contacts of the researcher with a sampling size of 152. One questionnaire was issued to participants containing both quantitative and qualitative questions, the first part of the questionnaire contained six quantitative questions regarding the regulatory environment, economic environment, public environment, international laws, foreign companies’ assistance and local spending, which were further divided into 18 attributes. The second part of the questionnaire contained 10 qualitative questions about sources of multinational business information. For the quantitative analysis, gap and factor analysis was used while thematic analysis was use for the qualitative analysis to analyse the colleted data. The results of the study revealed the following; the quantitative analysis indicated that companies that have been in operation for less than three years and are engaged in direct exporting, expressed that they have a challenge accessing the information on successfully penetrating multinational business markets. The supporting data from qualitative analysis further revealed that these challenges experienced by the newer aspiring multinational companies emanate from the fact that they do not have any guideline on what needs to be in place and from where they can get the information, this has therefore proven the assertion that there’s a need for a framework for aspiring multinational companies. The overall results from the study indicated that the participants enjoy access to information on running a multinational business in South Africa, especially the information on the regulatory and economic environment. Information on international laws, local spend and the public environment was revealed by the gap analysis, factor analysis, and thematic analysis to be lacking. It was also discovered that the companies are not following multinational frameworks in their plans to do business multi-nationally, hence the recommended Aspiring Multinational Companies Framework. The proposed Aspiring Multinational Companies’ Framework recommends the following: • Aspiring multinational companies need to understand the regulatory universe for the companies’ environment, whereby legal and political forces act to change regulations that affect the company’s business efforts. • The companies need to explore external economic factors presented by the multinational economic environment outside the companies’ control which is influencing the purchasing habits of other businesses and consumers; these are likely to have an impact on the effectiveness of a company achieving its goal. • Aspiring multinational companies need to gain insights into what basic information about local spend to look for, so as to establish which categories of customers are in the foreign country and what products and services, they spend their money on. Confidential • The companies need to know that there are various aspects of public environment spending which one has to know before doing business with foreign public departments; and • Aspiring multinational companies need to understand the multinational law concerning international commercial transactions, licensing procedures, tariffs and taxes, and other particulars, which are used to regulate international transactions of multinational enterprises.Doctora