Professor Albert Wöcke | Faculty Lead | GIBS MPhil in International Business | mail me |
African managers and executives often set their sights on multinational contexts. Others expand their companies beyond their home markets. However, they operate in environments where success is not determined by market dynamics alone.
International business sits at the intersection of state policy, foreign direct investment, political economy and corporate control. Moreover, international markets are shaped as much by governments and power structures as they are by competition. Understanding these dynamics is critical. It helps leaders engage with the realities of international business and implement multinational strategies grounded in how markets actually function.
Unpacking the OLI paradigm
The Ownership, Location and Internalisation (OLI) framework developed by John Dunning is widely used by leaders to analyse and describe their organisations’ multinational potential.
Does the business have ‘ownership’ of attractive assets that can cross borders? Here we are talking about technologies, patents, brand reputation or economies of scale.
Then there is ‘location’. How do you choose which country to move to? This depends on what you are seeking. For example, you may seek markets, resources or strategic assets. You must assess the advantages of that location. These may include market size, lower taxes or the type of labour you require.
The third aspect is ‘internalisation’. Here, you make strategic decisions about how to structure the multinational. You may pursue foreign direct investment as a wholly owned subsidiary. Alternatively, you may consider licensing or franchising. In some cases, exporting may be more appropriate than becoming a multinational.
International business in emerging markets
Operating in emerging markets requires a different set of assumptions. These environments are not simply less developed versions of advanced economies. Instead, they are shaped by distinct institutional frameworks, regulatory conditions and political realities. Consequently, applying strategies designed for developed markets without adaptation can expose organisations to significant risk. This reinforces the realities of international business in these contexts.
African managers and executives operating in international business contexts must build their capability to ‘act local and think global’. They must build a stable multinational. At the same time, they must embrace volatility. This requires the ability to think globally and act locally.
A strong value system is critical. Leaders are often exposed to ethical challenges. In some cases, this may mean walking away from opportunities where others are willing to cross ethical or legal lines. Relationships also play a central role in managing the multinational.
Leaders must develop these capabilities themselves. Alternatively, they must recognise and build them within their organisations. For leaders operating across borders, this reinforces the need to understand both formal and informal market dynamics. Furthermore, it requires organisations to respond strategically with contextual sensitivity. In practice, this means engaging directly with the realities of international business rather than relying on abstract models alone.
Capabilities for spanning boundaries
As de-globalisation and regionalisation trends accelerate, international business continues to evolve. It is increasingly shaped by the interplay between states, markets and shifting geopolitical dynamics. Therefore, African leaders operating across borders must develop a more integrated understanding of the global economy.
Operating effectively in this environment depends on the ability to span boundaries. These include boundaries between countries, institutions and stakeholders. Leaders must build strong relationships within host markets. In addition, they must understand how government priorities, regulatory environments and political considerations influence business outcomes.
Leaders often act as conduits between their organisations and broader operating contexts. They also connect different parts of the organisation. This includes bridging multiple cultures, linking the head office with subsidiaries and aligning strategic intent across regions.
This reinforces a critical point. Success in international business is not only about competitive positioning. Instead, it requires navigating the intersections of power, policy, and market dynamics with clarity and discipline. Ultimately, this reflects the realities of international business in a globalised yet fragmented world.
In conclusion
International business remains a very exciting and opportunity-rich space for African organisations expanding beyond their home markets. Leaders who develop a deep understanding of the global environment are better positioned to navigate its challenges.
These include the increasing focus on sustainability and the role of multinationals in meeting Sustainable Development Goals (SDG) expectations. Success also depends on the ability to ‘indigenise’ subsidiaries. This ensures they are locally embedded while still aligned to the global multinational strategy.
