Murray (1989) discovers that the more diversity in competencies of TMTs, the higher innovations and quality thinking. For that reason, Shell could encounter a difficult time attempting to explore, for example, new sources of energy, which could affect the firm’s market opportunities and reduce the profitability in the long run. Nonetheless, Watson et al. (1998) would argue that the imbalance of members’ anticipation, for example, paying too much attention to each individual perspective, could
State Power Before the 1990s, governments held the power of authority and, in collaboration with unions and international private organizations, could enforce human rights regulations in manufacturing. Rapid growth brought by globalization, however, “has led to an institutional mismatch” (Wettstein and Waddock, 2005, p.305) between MNCs and the State, resulting in MNCs possessing increased power, thus representing the decline of the regulating state hypothesis. As MNCs expanded and dispersed their authority, governments lost their “ability to enforce regulations upon private sectors”, leading to “a weakening or transformation of the State” (Crouch, 2011). As a result, debates have arisen over the extent to which States still possess authority
In international trade, the term “Dumping” is used to name a phenomenon consisting substantially in a predatory pricing practice. In fact, Dumping occurs when a country or a company export a product at a price which is lower in the foreign market with respect to the domestic one. Basically this represents a way through which exporting companies/countries strive to gain foreign market share in order to be more competitive in the international context. However, since Dumping often involves substantial volumes when exporting a product, it is said to be dangerous to the financial viability of the producers/manufacturers of that same product in the importing country. This happens because it could be that domestically produced goods may result to be more expensive with respect to the imported and dumped ones.
Whilst this meant that that medicine prices were lower, for blah blah states “Increased competition is proven to result in lower prices, which in turn contribute to improved access to medicines”, it was the Developed Nations which benefited from the profit gained from using the resources of the developing nations. Prohibitive drug prices are often the result of strong intellectual property protection. It is therefore unsurprising that places like the United Nations, Japan, China and a few in Western Europe, have fought for stronger control and higher levels of property rights laws. These nations argue for strong global protection, as they have
Therefore, multinational companies with high labor costs are more likely to enter countries with totally different economic conditions. For instance, companies in developed countries usually enter China or Southeast Asia countries for much lower labor costs. Barney (1991) and Ghemawat (2001) propose that rich countries, participated in more cross border deals. On the other side, companies which rely on economies of scale, scope and standardization tend to enter countries that are similar to their home countries, because they need to replicate the operations and business model to gain competitive advantage. Based on Transaction Cost Theory, a greater economic distance between the home country and the target country may result in higher transaction costs.
Japan's environmental politics were criticised for being “symbolic” and reactive to international pressure. Revell argues a number of factors are hindering the environmental reform in Japan, including the "dense webs of vested interest" , the "limited civil society counter-powers", and the lack of "political modernisation". The author concludes that in order to truly become an ecological frontrunner nation, Japan would need a more participatory and transparent government, an empowered NGO and small firm sector, and a more proactive
Anderson (2008) and Weiss and Anderson (1992) also applied TCT when exploring selection of integrated versus independent sales forces by manufacturing firms. One major problem that can be identified in franchising in the context of TCT is the potential of quasi-rent appropriation. A quasi-rent represents the difference between the value of an asset and its salvage value (Klein et al., 1990). Quasi-rent appropriation is especially risky when initial fees are high. Franchisees will consequently ask for higher rates of return that allow them to depreciate the value of their investment in order to balance out this type of inefficient risk-bearing.
Besides, if the foreign partner has the control of the company, they may further internalization the core technology and take in charge of the production. In this way, it will restrict the technology transferring from the foreign partner to the domestic company. Therefore, as exploited in the graph below, the technology transfer will increase with the increase proportion of foreign equity in the IJVs. While, when the proportion exceeds the centerline, the degree of technology transfer will decrease. The centerline normally placed around
Globalisation involves specific impacts on different societies, this mainly refers to the way globalisation restrains the choices which can be made by governments, corporations, households or individuals. For example a government might resist to increase the minimum wage if it faced with the relocation of jobs in places where the labour costs are cheaper such as places like India where the minimum wage is 93.75 Indian rupee which is equivilent to €1.27 a
• Loss of motivation to innovate or achieve competitiveness by the protected companies: In the long run, protected industries may invest into retaining their protected status instead of investing in R&D. Hence, this may lead to inefficient resource allocation in the economy. 3. What is Fair Trade? Why is it important and how does it impact the economy?