How Exxon Mobil would manage its FDI in an emerging market

Investment decisions by firms are subject to rigorous planning and coordination and when they cater to the firms’ interests in expanding its business beyond the borders of its home country, the parameters for analysis change. The company has to think beyond its own domestic construct and towards a more broad-based approach. Multinationals have to consider a completely new array of factors which range across the home country, the foreign country and even the distance in between. In today’s world of interconnectedness, FDI has been facilitated through the use of modern technology and the transferability of technology across boundaries. The global trading environment allows for investment flows across countries. While countries may be wary of imports, FDI is always welcomed as it leads to job creation within an economy and a boost to GDP. The FDI decision would itself be one needing intense planning, strategizing and thorough analysis. The factors which determine investment decisions by large firms vary across countries and it is up to the firms to determine whether the costs incurred by the variances among these parameters would be worth the price of admission. The cost benefit analysis has to be thorough given that the company is exploring new markets which could be considered a whole new world within the context of the company. Stepping out of the bounds of its own industrial and economical context and towards a global context or towards the industrial and economical context of a different country altogether is a decision in need of clear and thorough analytical thought. The decision has to encompass so many levels. There aren’t just physical or monetary barriers to entry in a new market but mental ones as well which are more prevalent in the determination of a firm’s intentions to invest abroad. John