Operational challenges in the establishment of a subsidiary in a foreign country:Case of Davis and Shirtliff in South Sudan

Abstract

Increased competition due to globalization and internationalization of firms has made world economies increasingly borderless and interlinked allowing companies to expand their business beyond their domestic boundaries. Therefore the need to carry out this research to study the operational challenges in the establishment of a subsidiary in a foreign country. The objectives of the study were to determine the operational challenges encountered by Multinational Companies in the establishment of South Sudan Subsidiary and to determine the effects of the challenges on the performance of the parent company. The study adopted a case study descriptive research design; data was collected using questionnaires and analyzed using descriptive statistics. The study established that the company encountered human resource challenges such as lack of local expertise to support the establishment of the subsidiary and limited skills among expatriates on the local market dynamics, cultural differences such as enmity against expatriates among residents and limited understanding of purchase bahaviour of local residents was also a challenge to the company. High political instability and high political influence on the residents was also a major challenge to the company