A reason why international diversification increases

outside(a) diversification can be understood as the expansion of a firm Into different countries and geographic regions. This expansion offers firms various advantages like the tryation of opportunities aboard, economies of scale, sharing of core competencies, and accomplishment. Learning is a key federal agent of the efficient development of new capabilities. Learning itself is fostered by diverse experiences. This shows the connection to International diversification, hence operate in diverse environments (countries/geographical regions) Increases the Intensity and frequency f events and Ideas to which a firm is exposed.Anyway, it Is nousable whether schooling through diverse experiences leads ultimately to capabilities that increase profit of a international diversified firm. To assess this question I am going to emphasize a few arguments that support and contradict this statement. On the unity hand, managers and workers who prevail experiences In diverse environments at omic number 18 more productive than employees who dont have such experiences. This is mainly because these employees have a broader regularise of experiences and an spot and solve problems more easily than employees with a narrow view.Furthermore, an organization that operates in several countries has a wide range of subsidiaries from that it can learn. These subsidiaries provide access to a wide range of new ideas and new practices that give rise to innovation and lead to increased technological capabilities. In addition, firms which last out In their domestic country as well as In their mall Industry suit similar threats and opportunities and develop ordinary methods to handle them. Thus, they have relatively narrow experiences and heir methods and capabilities also operate to be narrower because they gift a limited set of challenges.These limitations wont affect the firm in the short status but I believe that it decreases the performance of the firm in the long run. On the other hand, firms that want to enter a foreign market tend to start with cultural close countries at first. As these firms become experienced, they begin to expand in cultural distant markets. Thus, many firms dont face such enormous learning opportunities because they prefer cultural close countries which are similar to their mom country.Furthermore, firms dont have to be internationally diversified to encounter learning opportunities. It is also possible to learn from foreign suppliers or foreign customers. Therefore, peerless crucial aspect Is how learning processes are Implemented and lived In organizations. This depends, among other things, on how the firm and its subsidiaries are organized. A firm that leads its subsidiaries/ geographical regions/product divisions as a strategic holding exploits less learning opportunities because it manages its subsidiaries just by financial indicators.In entrant, if a firm manages its subsidiaries as an operative holding it intervenes in the day-to-day business to seize synergies and learning opportunities. Hence, cross- border learning has to overcome organizational constrains. That international diversified firms face more possibilities to learn and develop new capabilities that increase profitability but this doesnt imply that they always go by non international diversified firms. International diversified firms have to create settings that facilitate and nurture cross-border learning to exploit the diverse opportunities they face in foreign countries.