The Management of International Enterprises: A Socio-Political View

By Monir H. Tayeb | Go to book overview

2
Nations as Launch Pads for Internationalisation

INTRODUCTION

It has been argued by some commentators (see for instance Lehmann, 1998) that in all industrialised countries, irrespective of their ‘capitalist system’, there has in the recent past been an increasing divergence between companies and countries. This line of argument means that the fortunes of a country's firms, especially those with international interests and activities, are independent of their country of origins. For example, in the late 1990s the deep travails in which the Japanese economy found itself did not mean that the demise of leading Japanese corporations was nigh. The global dynamism and success of Canon, Hoya, Honda, Toyota, TDK, Rohm and Sony, known as the ‘seven samurai’, contrasted with the quagmire of the Japanese economy. Similarly, the future prospects of the Charoen Pokphand Group, the Salim Group and Sime Darby are not exclusively dependent on the future prospects of their countries of origin, respectively Thailand, Indonesia and Malaysia.

The present author argues, however, that while the above examples might indeed indicate a degree of decoupling of national and company fortunes, this is not the whole picture. It is, for instance, inconceivable that domestic companies in the countries which are still in the early stages of industrialisation and which are encumbered with serious infrastructural inadequacies become international competitors, despite a few rare exceptions. A vast majority of companies need a home-base helping hand to get to a stage where they can decouple themselves from that aid. Japanese, German, American and British competitive companies may now be independent of their home country, but they could not have got where they are without a solid launching platform in the first place.

Many nations are both homes and hosts to international firms. As hosts, they can adopt certain policies, based on their overall political-economic priorities, which aim to attract foreign firms. The appeal of lucrative returns due to market size, growth prospects, cost of labour and other factors could bring in foreign direct investment which in turn could have implications for the host nations’ level of employment, technological advancement, increased competition in the domestic

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