Running Head: FDI 1

Foreign Direct Investment

[Name of the writer]

[Name of the institution]

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1. Introduction

In foreign direct investment, companies used their funds to purchase machines and

factories in other countries. The multinational companies in the United Kingdom used FDI

strategies to enhance their businesses in other countries. In the year 2000, the total amount of

foreign direct investment was $3.1 trillion. Vodafone invests Rs 47,700 foreign direct investment

in the market of India because the market is best for the underlying company to provide its

services. In India, Vodafone is the second largest company that provides telecommunication

services to the individuals. The UK based Vodafone Company is the parent company of

Vodafone India and the FDI of Vodafone in India is the first largest foreign direct investment.

The total customers of the underlying telecommunication service are 200 million. Vodafone

Company in India provides 2G, 3G, 4G and internet of things (IOT) (CHRONICLE, 2016).

2. Preliminary Literature Review

2.1 Reasons Why Firms Engage In FDI

According to Xia et.al, (2014), the multinational companies in the United Kingdom are

involved in FDI strategies because these strategies help to increase the profitability of companies

and they can expand their businesses in several countries. The main reason to involve in FDI

strategies is that it also provides several benefits to the companies. Vodafone Company in the

United Kingdom provides a deep focus on FDI strategies to increase the business of a company

and the availability of telecommunication services in other countries. Some of the most

important benefits achieved by Vodafone by using the FDI strategies are as follows:

 Companies in the United Kingdom have faced a lower cost of labor in other countries.

For instance, in India, the labor cost is too low and Vodafone Company focuses on FDI

strategy in the underlying country.

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 Vodafone Company does not need to transport the raw material from the UK to other

countries because the raw material is already available in other countries.

 FDI also reduces the non-tariff and tariff barriers to trade.

 FDI strategy also reduces the transportation cost of the company. For instance, when

Vodafone Company establishes its business in the market of India, it can easily provide

the telecommunication services and do not need to import anything from the UK.

 FDI strategy will also increase the local knowledge of Vodafone Company and it can

easily enter into domestic markets (Wang 2015).

2.2 FDI of Vodafone

According to the study conducted by Singh (2016), the foreign direct investment strategy

of Vodafone in other countries creates several jobs and also increases the output of the company.

If the company invests the money from abroad, it can easily provide higher wages to the

individuals and can also improve the working conditions. In developing countries, Vodafone

Company is more conscious to increase its image by providing best services to the customers.

Vodafone will provide long-term capital inflow to the other countries that are why it cannot

withdraw the amount of investment. When Vodafone Company uses FDI strategy in other

countries those countries can take the benefit of expertise and improved knowledge (Gelb et.al,

2017).

The foreign direct investment of Vodafone has increased from the past several years due

to several reasons. The main reason is the lower cost of transportation which provides help to the

company in expanding its business. The technology has increased and every company used the

latest technology to improve its performance. The improved technology also reduces the cost of

capital and lowers down the tariff cost (Mahajan 2014).

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Research Questions

The existing research provides the information about the FDI strategies used by the

Vodafone Company. The investment of the underlying company also helps to increase the

economy of the developed and developing countries. It is necessary for the company to invest its

money in the countries that have the largest economy. FDI also help in increasing the economic

growth of the United Kingdom. The dissertation will provide the answers to the two most

important research questions which are given below:

1. Which countries are directly affected by the Foreign Direct Investment strategy of

Vodafone Company in the United Kingdom?

2. Is Foreign Direct Investment strategy will provide a positive contribution to the economy

of the United Kingdom?

Proposed Research Method

The research will be divided into two different parts. In the first part, the researcher will

gather the information by using different resources such as books, internet, newspaper, television

etc. with the help of these sources, the researcher can get the accurate information and will

provide the answers in detail that what are the foreign direct investment strategies used by the

companies in the united kingdom to expand their businesses. The foreign direct investment

strategies of the multinational companies in the United Kingdom will increase the economy of

the underlying country and also plays an important role in the success of the country. In the

second part, the researcher gathers the comments of participants and conducting different

interviews to analyze the opinions of individuals. Every person has different thinking pattern.

The accurate data will be gathered by using the books and internet sources. Every participant will

provide his own experiences but the data from the internet sources will be more accurate. There
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are also several specialist websites that can gather all the relevant data from the research of the

individuals (Sekaran et.al, 2016).

The collected data includes the written and visual representation. The most important

second part of the research is semi-structured interviews. The main purpose to collect the data

from several sources is that the researcher tries to gather the more information because each

source provides the different opinions to the researcher. It is necessary for a researcher that he

must identify the experience of the participant. It is also necessary for the researcher to separate

the data of females and males because the opinions of both are different from each other. There

is no restriction for the researcher to gather the information from different sources. The

interviews are conducted by the participants which include two men and four women. The

opinions of participants are different from the others. The participants focus on the Vodafone

Company that makes a large investment in a country. After the detailed research, it is assumed

that Vodafone Company in the United Kingdom invests a large amount of money in India. India

is suitable company according to the population and its economy is the fastest growing economy.

It is the best option for Vodafone Company in the United Kingdom that it must invest in the

economy of India because the economy of the underlying country is the fastest growing economy

and it will provide several benefits to the Vodafone Company (Thomas et.al, 2015).

Ethical issues

There are several ethical issues arise in the underlying research which includes:

Participants Consent

The participation of individuals is required in research but it is necessary that all the

participants must be voluntarily involved in the research. There must be no coercion to the

individuals to enter in the research. The individuals will be involved in research when the topic
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becomes attractive and related to their interest. It is crucial to provide authority to the individuals

to enter in the research so they will participate voluntarily. All the participants must be informed

about all the risks of research and they must know all the procedures and policy of research.

There can be some risks involved in research and the participants must exhibit their consent. All

participants should be informed before the interview and they must agree to provide their

opinions about the research questions. Researchers focus on the ethical standards and do not

involve the participants in a situation in which they can feel the risk of any harm due to their

participation. It means that participation of individuals must be free from all types of risks and

harms.

Personal Safety

The personal safety of researcher is also necessary. The researchers can find out the

participants with the help of their personal connections. They must have more personal

connections so that they can gather a large amount of data. The harm can be psychological or

physical and the safety from harm must be the first priority. Ethics is necessary for social

research because every person has a different idea and thinking and also the participant can

provide harm to the researchers. All the research proposals must follow the ethical standards

however these standards are diverse in different countries. The researchers focus on ethical

standards which will provide the safety to them and they become aware of the rights of

participants.

Data Protection

The participants provide the personal data for the research; the researcher must provide

protection to data which will gather from the participation of individuals. The researcher focuses

on different steps to ensure the privacy of participant’s data. All researchers provide a guarantee
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to the participants that their data will be confidential and no one has the right to use that data.

The individuals that are directly related to the research are liable to access the data. The

individuals that are not the part of a research cannot overview the data which is provided by the

participants. Research must focus on the principle of anonymity which means that all the

participants in research must be unknown in the whole research and researcher does not have a

right to express the details of the participants.

Every participant wants his anonymity and the standard of anonymity clearly identifies

that researchers will focus on the privacy of the participant. It is difficult to hide the participant

especially in that research which includes the comments of participants multiple times.

Researchers should focus on all the ethical issues. The recording of interviews and different

notes must be safe and researcher give full protection to the data of the participants. All the data

should separate on the basis of age and gender which will provide the identity of the participants.

Researcher Interest

There is a restriction that the researcher must not be the employee of Vodafone Company

in the United Kingdom, however; it is also restricted that any relative of researcher must not be

the employee of the underlying company. The researcher cannot use the personal contacts to

gather the information about the research. It is also necessary for the researchers that they should

perform accurate research. There is also a need for the procedure that all the researchers must

focus on the ethical issues when they make research plans. Different organizations and

institutions have prepared Institutional Review Board which indicated that the researchers must

focus on all the ethical issues. Institutional review board provides the ethical suggestions to the

researchers and also describes all the steps that are necessary to provide safety to the right of all

the participants. The institutional review board also provides protection to all the companies and
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researchers from all the legal implications. Researchers do not neglect the ethical issues and must

resolve the most important ethical issues of the participants.

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References

CHRONICLE, D. (2016). Vodafone invests highest FDI of Rs 47,700 crore in India. Deccan

Chronicle.

Gelb, S., Calabrese, L., & Tang, X. (2017). Foreign direct investment and economic

transformation in Myanmar.

Mahajan, D. (2014). Telecommunication Sector and Foreign Direct Investment: An Indian

Perspective. Journal of Commerce and Trade, 9(2), 77-87.

Sekaran, U., & Bougie, R. (2016). Research methods for business: A skill building approach.

John Wiley & Sons.

Singh, R. R. (2016). Improving Taxation Environment: Attracting Foreign Direct Investment.

Thomas, J. R., Silverman, S., & Nelson, J. (2015). Research methods in physical activity, 7E.

Human Kinetics.

Wang, J., & Wang, X. (2015). Benefits of foreign ownership: Evidence from foreign direct

investment in China. Journal of International Economics, 97(2), 325-338.

Xia, J., Ma, X., Lu, J. W., & Yiu, D. W. (2014). Outward foreign direct investment by emerging

market firms: A resource dependence logic. Strategic Management Journal, 35(9), 1343-

1363.