Global Operations Management of Huawei Technologies Corporation

With Huawei continued investment in cutting edge technology, the firm is set to become one of the major challenges of the more established and Western-based telecommunications corporations. To increase its influence and reach more customers in various parts of the world, Huawei has also entered into partnerships with numerous companies. Theories of Internalisation The term internationalization is descriptive of the methods that are used by business organizations to adapt their numerous operations, in regards to company policies, resources, and organizational structure, to suit foreign environments (Dunning 2006). Before embarking on the process of internationalisation, business organisations have to take into account factors such as the geographic distance of the overseas market being considered, the different company associated operations that the company will engage in the foreign branch, and the level to which the company would like to integrate corporate activities (Mitgwe 2006). Dunning’s Theory in the Internationalisation of Huawei According to Dunning’s OLI model, foreign subsidiaries usually demonstrate higher productivity rates than their local counterparts due to the existence of ownership competitive advantages (Dunning 2006). Dunning’s eclectic (OLI) model stipulates that there are three critical elements that are evident in any firm that invests in a foreign branch or subsidiary. The three factors are location advantages, ownership advantages, and internalization advantages (Dunning 2009). Ownership advantages have to do with the existing conditions that accompany foreign direct investment (Contractor 2007). For example, to be successful in foreign investment, a firm has to have comparative advantages over other foreign corporations before it determines that a branch will be set up in a foreign nation. Location advantages have to do with the extent to which foreign business-related conditions are favorable to the company in question (Sethi, Guisinger, Phelan, and Berg 2003). Internalization factors, on the other hand, have to do with how well the multinational corporation can internalize ownership advantages in order to prevent the escalation of transaction costs which are naturally incurred in the course of international production. The Huawei Technological Corporation is a firm that was launched long after other telecommunications corporations had already been launched in the Western nations (Dunning 2009). Huawei, therefore, focused more on meeting particular objectives in order to realize its internationalization. Huawei has traditionally used low cost as a technique to enter markets in both developing and developed nations. Huawei also invests in developed nations mainly to realize the adoption of new technologies.