Critically discuss how language differences between home and host Essay

Critically discuss how language differences between home and host country can influence MNCs entry mode strategy - Essay Example However, these language barriers can have different effects on different entry modes. The extent of MNCs exposure to language barrier will therefore depend on their entry mode. Moreover, there are various literature examining the effect of formal institutions and informal institutions (mainly language) on entry mode choice. Although the effect of language on entry mode choice is relatively understudied, there exist studies that examine the impact of language on some of the entry modes separately. The rising level of globalization has become of immense importance currently. More and more firms commence to look to foreign lands to increase their businesses as the globe becomes more and more interwoven. To manage such operations across foreign boundaries has become of the biggest issues for international firms today (Egger, 2012). The international economy has formulated a business framework which needs firms to look past the traditional reasoning of the home market, and commence instead observing at businesses from a foreign global view. The technique a firm venture from their market to new foreign markets geographically is of immense importance for how best the firm attains its goals with their various businesses. Small and average sized companies, which have taken their choice to internationalize, need to grow into foreign markets face the setback of deciding on the best structural framework. There are numerous factors, which encourage firms to commence their operations in foreign markets (Feely, 2003). The most common include the hope for economies of scale, the experience curve effects outcome from an expanded level of outputs, and the reality of the existence of markets which are beneficial in the international markets which is not present at home. It can be believed that the developing in dissemination of information, progress in travel conditions, decrease in tariff issues and others have