Instant Access To 100,000+ Essays!

The Use of O.L.I theory to explain Hewlett Packard’s decision to invest into Singapore John Dunning’s “Eclectic Theory” states (International Business Chapter 5 – theories, no date) that for a multinational enterprise to engage in the prospect of Foreign Direct Investment (FDI), three situations will occur. These are; 1) ownership specific advantages, 2) Location specific advantages and finally internalisation incentive advantages. Also known as the O.L.I theory. Using the O.L.I theory, here were some of the advantages that Hewlett-Packard considered when making the decision to invest in Singapore (FDI) When Hewlett Packard was looking into Singapore, the felt that with the transfer of both their tangible and intangible assets they could effectively exploit the advantages Singapore as a location had to offer. They needed to look at property rights, product innovations, decide if their was a common governance that was exclusive to the firm at least in the short term and favoured and/or exclusive access to product markets. Although Singapore as a location offered a great opportunity for Hewlett Packard, the company itself had plenty of ownership oppo