• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

A changing nature of international business.

Extracts from this document...

Introduction

Since the 1980's, there is a changing nature of international business. MNC's needed a transformation to follow this change, that is why international business networks appeared. According to Casson and Cox (1997), network can be defined as : " A set of linkages which either directly or indirectly connect every member of a group". This essay will first deal about the network concept (as a "high trust co-ordination mechanism linking independent owners"), then the classification and the components of a network will be analysed, and finally the network concept seen as an explanation of international business. In network, there is the implication of close but non exclusive relationship. Autonomy and choice are emphasised. So, what do we mean by network? Network is a solution (J. Child & D. Faulkner, 1998) to reduce uncertainty (with good relationship and solidarity), to provide : flexibility, capacity (with links inside the networks between firms), speed (to take rapidly advantage of opportunities), access to resources and skills not owned by the company itself (a company can finish a project using abilities and skills of other in the network), information. ...read more.

Middle

In addition, what are the different components of a network? First, the geography of the TNC's is composed by , for example : the headquarters (corporate or regional), the Research and Development and the production process (Dicken, Global Shift). Besides, network is the centre of different relationships. Some of the most important are the one which appear firstly in subcontracting (industrial or commercial one). It enables the principal firm to avoid new investment, to externalise risks and costs for example. For the subcontractor the advantage is to get access to certain unattainable market. Secondly, the international strategic alliances, which are not mergers, are divided in three types: the research oriented, the technology oriented and the market oriented. These alliances enable firms to get an easier access to the markets, to technologies and to share cost. Another interesting point is the connection between the organisational dimension of TNC networks and the geographical dimension. First there is the Hymer model (Appendix 2) ...read more.

Conclusion

Moreover, some external factors favour networks. Indeed, governments are favouring networks by creating free trade areas or making agreements (firms are involved in networks by making alliances, sub-contracting...).There is also the implication of some international institutions like the WTO. This latter has for purpose to make the world as a single market, so firms and countries would be connected each other in the area of international business. To conclude, with the above definition of the networks, their core elements and their different ways to be successful, we can understand better why the network concept can be seen as an explanation of international business. Nowadays, it will be very difficult for a firm (which wants to be an international one) to survive without integrating a network. Indeed, it is very hard to trade internationally if you stay in your own sphere. Networks are part of the international business which tend to lead to the inter-dependence idea. Indeed, countries' and firms' networks are present and they form the today's world. (1029 words) 1/4 ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree Political & International Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree Political & International Economics essays

  1. the electronic business system of Amazon.com, Inc

    Amazon uses this data and information at hand about its registered customers to regularly apprise them of various exciting offers on the portal. This would generate higher traffic to the website, rising up the sales graph. Principle #5: Minimize effort absorbed by technology; Amazon is a company which uses technology

  2. Theories of International Development

    However the challenge for Chang and other the critics of the Washington Consensus according to Rodrik9 is on providing an alternative set of policy guidelines for promoting development, without falling into the trap of having to promote yet another impractical blueprint that is supposed to be right for all countries at all times.

  1. The World Trade Organisation ("WTO").

    Some of which would impose burdensome environmental and other standards on developing countries. Clearly it is trying to raise the standards in developing countries to a level attained by the developed countries, but this may come at a price. It could be that it disables developing countries to export at

  2. MNC and TNC: Does the distinction make a difference?

    These two attributes distinguish MNCs from other firms. MNCs and Trade: International trade theory and the theory of multinational enterprise have historically been developed and researched quite separately. Trade theory has taken a general equilibrium path based on the twin assumptions of constant returns to scale and perfect competition.

  1. Free essay

    International Business

    And if we talk about on this issue furthermore, then it is clear that both parties are giving huge amounts of benefits to their respective governments. But as American government realized that if the airbus getting the same amount of help from EU government then this cause a great amount of competition and create difficulties for Boeing.

  2. Doing business in emerging economics

    In the Bandung Conference in 1955, leaders of China and African countries for the first time shook hands; China provided workers and technical support in building the Tanzania-Zambia Railway; China and African countries jointly established the Forum on China-Africa Cooperation in 2000 and developed a new type of strategic partnership.

  1. Political Implication of Globalization.

    The more worrying feature of the new global corporate structures is their capacity to devastate national labor markets by transferring their operations to cheaper locations overseas. The huge expansion of finance capital markets has been a spectacular feature of the new economic landscape.

  2. The establishment of the World Trade Organisation has led to a significant reduction in ...

    Among the examples, the report says the EU steel sector is paying more for vital raw materials because Russia has raised export duties on copper and nickel, meaning Russian exporters have to pay higher duties to the Russian government, which means higher prices for EU buyers.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work