1. The Myth of Globalization. Douglas, S. P.& Wind, Y. (1987). Columbia Journal of World Business, Winter87, 22(4), p.19-29 Abstract: This paper argued that a strategy of global products and brands is the key to success in international markets. Also it examines the key assumptions underlying this philosophy, and the conditions under which it is likely to be effective. Barriers to its implementation are raised. According to this analysis, it is proposed that global standardization is merely one of a number of strategies which can be successful in international markets. Three key underlying assumptions: Customer needs and interests are becoming increasingly homogeneous worldwide; people all over the world are willing to sacrifice preferences in product features, functions, design, etc. for lower prices at high quality; substantial economies of scale in production and marketing can be achieved through supplying global markets. There are 3 major categories in external constraints to effective standardization are namely: (a) governmental and trade restrictions, (b) differences in the marketing infrastructure, (c) the character of resource markets, and differences in the availability and costs of resources, and (4) differences in competition from one country to another. In addition, the internal constraints to effective standardization and local management motivation and attitudes are also described. Try to carefully find the forces driving towards globalization and the obstacles to this approach, and to assess, based on the company’s strengths and weaknesses, in order to exploit the advantage and help to succeed will be the purpose of this paper. It is well written and makes believable. 2. The Limits of Explanation: Testing the Internalization Theory o the Multinational Enterprise By: Buckley, P. J. (1988). Journal of International Business Studies, Summer88, 19(2), p181-193 Abstract. This paper explores the difficulties of testing the internalization approach in the modern theory of the MNEs. The structure of the theory is elaborated and the conclusion stated that testing cannot occur at the most general theoretical level but that the theory requires careful restricting assumptions to be placed on it to allow testing. Several empirical circumstances would constitute refutation if they could be shown to hold. In addition, the use of unconventional cases or outliers does not constitute disproof. The current verdict on the theory must be "not disproved" but the theory needs more rigors in formulating and testing. The approaches to predict the form and direction of cost charges over time and the introduction of a theory of the generation and direction of entrepreneurship will be promised. And the author emphases tests of the theory of the MNEs need to be more precise, and key importance is the measurement of the incidence of transaction costs under alternative transactional configurations. The Nature of the Firm By R. H. Coase, 1937 This paper talks about Firms and the market are two relative governances; the reason for taking different forms of governance depends on that which has relatively low transaction costs. In a professional division of labor and exchange of the economic system, the price of the operation will cause pro-cost (such as searching for information, consultations and the signing of the lease cost), and after the costs (the cost of monitoring the implementation of the lease), collectively referred to as transaction costs. When the adaptation, performance evaluation and defense cost are non-existent or very low cost, the economic behavior would be inclined to (preferred) market governance. If these costs are higher than the market cost of production profits, the internal organization of firms will be preferred by the firms. The reason for the existence of firms are market failures, caused by transaction function, such as uncertainty, the property assets, trading frequency) and behavioral assumptions (limited rational, speculative, and risk-neutral). Relative Literature: In law and economics, the Coase theorem, attributed to Ronald Coase, describes the economic efficiency of an economic allocation or outcome in the presence of externalities. The theorem states that when trade in an externality is possible and there are no transaction costs, bargaining will lead to an efficient outcome regardless of the initial allocation of property rights. In practice, obstacles to bargaining or poorly defined property rights can prevent Coasian bargaining. This theorem, along with his 1937 paper on the nature of the firm which also emphasizes the role of transaction costs, is an important basis for most modern economic analyses of government regulation, especially in the case of externalities. 4. The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions By: Dunning, John H. To my surprise, the hjima Hypthe, originally propounded, Professor Kojima’s theory of foreign direct investment is an extension of the neoclassical theory of trade to embrace cross-border transactions of intermediate products. It is primarily a normative theory, and views the MNE as an instrument by which the comparative trading advantage of nation states may be better advanced analysis. The neoclassical theory of factor endowments, and the theory of market failure were used to explained the location of some kinds of economic activity across national boundaries and the division of that activity between multinational and other firms. How this varies between fm, industries, countries, over time, six possible directions on the paradigm were illustrated and further developed. The paper also emphasizes the eclectic paradigm should embrace the economics of entrepreneurship and technological innovation and change. Economic and business historians, too, are making a useful contribution to the understanding of the growth of international production, using especially a transaction cost approach. The modern theory of international production derives its analytical framework from the theories of the fm and industrial organization and, tradeable activities are assumed to be conducted between independent buyers and sellers; as to the other’s theory takes as its unit of interest the nation state, the focus of interest of students of the MNE is the fm or groups of firms which are different forms. This paper offers a useful conceptual framework concerns the geographical in the locus of decision-taking within the MNE. Why and under what conditions are decisions on the way in which resources are allocated by foreign affiliates of MNEs controlled or influenced by manager located in the parent company? The "where" and "who" aspects of decision-taking guides the answer: one is the issue of locational economics, and concerns the price and efficiency of decisiontaking resources in different countries, and the costs of transborder inter- and intra-firm transactions, and we will see the factor endowment model may be the appropriate tool of analysis. The eclectic paradigm has been a useful and general framework for explaining and analyzing not only the economic rationale of international production but many organizational and impact issues relating to MNE activity etc. The newest theorizing takes a different form to that of before more systematic general theories of international economic involvement and the impacts on the strategy of firm by means of techniques as theoretic analysis are all created. Also we should take advantage of the determinants and effects of collaborative ventures now being formed between MNEs from advanced countries. Especially, the ownershipspecific advantages of firms, with particular focus on entrepreneurship, the ability of management to identify and coordinate a range of core skills and assets through a variety of organizational routes will be used to promote operational flexibility in the world environment; global marketing networks; furthermore, the computer-related information and communications technology, and a variety of crosscultural management-related issues will be aided. Then theorizing and empirical work will become both more technically sophisticated and more policy oriented. In spite of what Dunning tried to present the motive for FDI, he had not found the statement through his research for the management behavior of MNS.
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