BUS 478 Chapter 15: Chapter 15 Global Strategies and the Multinational Corporation

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20 Dec 2011

School

Simon Fraser University

Department

Business Administration

Course

BUS 478

Professor

Pek- Hooi Soh

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Document Summary

Chapter 15 global strategies and the multinational corporation (372-397) Patterns of internationalization y two forces/desires: exploit market opportunities in other countries, exploit resources/capabilities in other countries y two avenues, trade sale of goods/services. Investment building/acquiring productive assets in another country y types of industries (see fig. 15. 1 on p. 372): sheltered served only by indigenous firms, trading internationalization primarily through imports/exports, multidomestic internationalization primarily through investment, global both trade and investment. Implications for competition y usually more competition, lower profits y porter s forces that are influenced: new entrants entry barriers less effective, rivalry increases rivalry, buyers bargaining power increases. Determinations of geographical location y national resource availability y firm-specific competitive advantages (where they are located and how flexible) y tradability of products (transportation, trade restrictions, perishability) Location and the value chain y different countries offer advantages at different stages of value chain y however, also costs to coordinate globally dispersed activities.

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Case Study - 5

Breaking The Bargaining Pattern

Gilson steel is a local fabricating and supply firm. Situated in open country, far from the large steel making centers. The firm has been in business many years. About the third of employees have worked in the organization for more than ten years. Top management would like to get away from the current practice in which negotiations on wage matters and fringes follow the pattern. The firm’s president feels that industry – wide bargaining tends to divorce employees from the firm. He thinks they feel that their employer is a combination of U.S steel and bethlem steel instead of Gilson. He argues that the local firm which has prospered can do better by employees than is possible in national pattern. He says that the local conditions should be considered. His basic objection to current practice, however, is his conviction that it tends to divorce its employees from local employer. The labor relations manager has been urged to try negotiating terms at variance with the national pattern.

Answer the following questions: ·

What theory and policy do you read into the president’s suggestion? ·
How will his ideas fit into the existing pattern of public union policy? ·
Can you suggest a promising innovative approach?

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BUS 478 Chapter 15: Chapter 15 Global Strategies and the Multinational Corporation

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