How Convincing Is Porters Model of National Competitive Advantage in Essay - 5

How Convincing Is Porters Model of National Competitive Advantage in Explaining the Characteristics and Performance of the Business Systems of Major Economies - Essay Example The paper tells that international competitiveness of countries is an ever-growing concern for firms, governments as well as academic scholars. International competitiveness is one of the most misused and misunderstood terms in the press and academic literature of the modern world. According to Daniels, there is no consensus on how to measure, explain and predict international competitiveness of countries. The true meaning and understanding of the international competitiveness of countries have been the subject of much debate. Porter popularized the implicit assumption underlying the management theories that a firms competitiveness can be extended to a country’s competitiveness using his diamond framework and the world competitiveness reports. There are two schools of thought; the economic school and management school. The economic school ignores the notion of country competitiveness. However, the management school supports the concept of country competitiveness. To properly e xplain the differing views on international competitiveness by economists, a little background on the differing trade theories is required. The review of the trade theories will provide a platform for the analysis of Porter’s Diamond framework. Adams Smith theory of absolute advantage was the first theory that attempted to explain why countries engage freely in international trade. According to this theory; a state can enhance its prosperity if it limits itself into producing goods and services that the country has a higher absolute cost advantage over other countries. The country should also import those goods and services in which it has an absolute cost disadvantage.

Book review of Ethics on the Job by R. Pfeiffer and R. Forsberg Essay

Book review of Ethics on the Job by R. Pfeiffer and R. Forsberg - Essay Example This paper explores the strengths and weaknesses of the book as a reference for business and management students. Based on the book review, this book is best for undergraduate business, management, marketing, and other business-related courses, because it provides a brief overview of business ethics and provides pragmatic solutions to different business cases. Main Arguments The main argument of Pfeiffer and Forsberg (2005) is that when surmounting ethical challenges, employees and the management should use critical thinking in determining all conflicting rights and values, before choosing which ones have to be upheld. The decision for the resolution must consider different oppositions and diverse alternatives. Furthermore, Pfeiffer and Forsberg (2005) wants stakeholders to collaborate together in making long-term solutions. They are teaching business and management students to not have a myopic view of ethical dilemmas. ... They recommended the use of ethical principles, rights, and values in making the right business decisions, so that managers and employees can have the tools for making ethical decisions for different levels (i.e. management or individual levels). Strengths Content The first strength of the book is that it is a book on applied ethics. It does not focus on explaining diverse theoretical and philosophical approaches to ethical decision-making, but instead, it devotes itself to different cases that tackle diverse ethical scenarios. It provides numerous cases that will expose students to different kinds of individual, team, and organization-level ethical dilemmas. This way, Pfeiffer and Forsberg (2005) are training students on how to view and analyze different ethical challenges that they may face in real life. Through different cases, students will also become updated with emerging ethical issues, such as environmental, technological, and multicultural ethical concerns. They will underst and that global, regional, and national events and conditions also impact local business ethical problems. The second strength of the book is that it offers a workable decision-making framework for students. The RESOLVEDD strategy defines stakeholders and their conflicting principles, rights, and values, which is essential in understanding the problem at hand. A complete understanding of the problem can lead to a more comprehensive analysis of the ethical dilemma and will help determine more potential alternative solutions. Win-win solutions can be better viewed, when all conditions and stakeholders are considered. Ferrell and Ferrell (2009) highlighted the

Order Qualifiers and Order Winners for Toyota Essay Example for Free

Order Qualifiers and Order Winners for Toyota Essay Order Qualifiers can be described as aspects of competitiveness where the operation’s performance has to be above a particular level to be considered by the customer. Order Qualifiers may not be the major competitive determinants of success but are important in another way. (Jones, Robinson 2007) Order Winning Factors are those things which directly and significantly contribute to wining business. They are regarded by customers as key reasons for purchasing the product or service. Raising performance in an order wining factor will either result in more business or improve the chances of gaining more business. For Automotive industry, major order qualifiers could be defined as price, quality and variety. Toyota, Ford and GM are leading companies within that sector, which manufacture correspondent cars with these order qualifying factors mostly. However, due to high level of competitiveness, companies are struggling to keep their sales high. Even little problems within car or company may impact company’s future sales dramatically. Toyota is one of example that experienced reliability and quality problem with its cars lately likely Ford and GM experienced before. As result of upcoming reliability issue, if we look over market share of Toyota within North America, which takes place of its most sales in comparison with other regions around world, has faced with a serious decline in market share within 2008-2009 . Ford and GM also try to improve their market share within North America, while Toyota loses customers during 2008-2009 . On the other hand, Order winners for Toyota are continuous innovation of Toyota and standardized quality. People, who choose Toyota, are mostly satisfied with innovative internal and external features of Toyota’s cars. Since, Toyota always spares huge amounts of money about research and innovation for car manufacturing as explained in deeper within Toyota and Innovation section below. For Example, Prius, first mass production hybrid car in the world, is clear indicator of innovative mindset of Toyota Motor Corp. In terms of quality and flexibility, Toyota Quality Management is one of well known systems in world for car manufacturing quality control, which is still functioning and reason to buy a Toyota.

Benefits and Drawbacks of Foreign Direct Investment (FDI)

Benefits and Drawbacks of Foreign Direct Investment (FDI) Foreign Direct Investment (FDI) is the single most important mechanism for the globalization of the international economy. FDI is the investment of real assets in a foreign country, it is acquiring assets such as land and equipment in another host country, but operating the facility from the home country. FDI is viewed by many as necessary to stimulate the economies of both developed and underdeveloped countries. The global economy experienced a decrease in foreign investment flows. Developing countries have been hit the hardest by the decline in FDI as foreign investment is being redirected to more developed countries. It is expected that FDI will continue to be the most significant tool for globalization. It is widely accepted that FDI inflows provide economic benefits such as increased competition, technological spillovers and innovations, and increased employment. The impact of foreign investment extends far beyond economic growth. FDI can be a catalyst for change to society as a whole, therefore one must think in terms of economic, political, social, technological, cultural, and environmental factors and examine all the effects of FDI in order to interpret the true long-term impact. Foreign investment and globalization continues to increase, developing countries desperately seeking to attract foreign investment can have undesirable outcomes. FDI can have numerous negative effects, such as job loss, human rights abuses, political unrest, financial volatility, environmental degradation, and increased cultural tensions. The results of FDI on the global economy are complex and unpredictable, yet they can vary from country to country. This is due in part to the practices that are in place prior to receiving FDI inflows, such as deep-rooted social customs, political practices, laws and regulations. In more developed countries foreign direct investment resulted in rapid economic growth and social development and in unstable economies, underdeveloped countries, the results can be quite different. Types of Foreign Direct Investment According to Ali Guo (2005) states the main types of FDI in world are Equity Joint Ventures, Contractual Joint Ventures and the establishment of Wholly Foreign Owned Enterprises. Contractual joint ventures were initially the most important in the world. Equity joint ventures and wholly foreign owned enterprises became predominant and recent years have seen a proliferation of wholly foreign owned enterprises. Equity joint ventures have been a popular entry mode for two reasons. Ali Guo (2005) stated that most governments believes that equity joint ventures best serve the objective of foreign capital, technology, and management experiences. Secondly, foreign investors hope through engaging in joint ventures to get local partners assistance in the domestic markets. Foreign investors have chosen wholly foreign owned enterprises as the preferred entry mode in recent years so as to avoid problems associated with equity joint ventures. Motives for foreign direct investment Kokko (2006) identifies Foreign Direct Investment literature three as the most common investment motivations: resource-seeking, market-seeking and efficiency-seeking. Kokko (2006) suggests that although most MNCs engage in FDI that combines the characteristics of each of these categories, the gravity of each motive on the formulation of the MNCs strategy may also change, as a firm becomes an established and experienced foreign investor. The availability of natural resources, cheap unskilled or semi-skilled labor, creative assets and physical infrastructure promotes resource-seeking activities. According to Kokko (2006) the most important host country determinant of FDI has been the availability of natural resources, e.g. minerals, raw materials and agricultural products. Labor-seeking investment is usually undertaken by manufacturing and service MNEs from countries with high real labor costs, which set up or acquire subsidiaries in countries with lower real labor costs to supply labo r intensive intermediate or final products. To attract such production, host countries have set up free trade or exportprocessing zones (Kokko 2006). Market-seeking investment is attracted by factors like the host countrys market size, per capita income and market growth. For firms, new markets provide a chance to stay competitive and grow within the industry as well as achieve scale and scope economies. Apart from market size and trade restrictions, MNCs might be prompted to engage in market-seeking investment, when their main suppliers or customers have set up foreign producing facilities and in order to retain their business they need to follow them overseas Market-seeking also includes the search for strategic assets that enable the MNC to sustain and advance its international competitive advantages (Kokko 2006). The motivation of efficiency-seeking FDI is to rationalize the structure of established resource based or market-seeking investment in such a way that the investing com pany can gain from the common governance of geographically dispersed activities. The intention of the efficiency-seeking MNC is to take advantage of different factor endowments, cultures, institutional arrangements, economic systems and policies, and market structures by concentrating production in a limited number of locations to supply multiple markets (Kokko 2006). Ownership, location, and internalization are the three potential sources of advantage that may underlie a firms decision to become a MNC. A key feature of this approach is that it focuses on the incentives facing individual firms. Foreign Direct Investment (FDI) is determined by three sets of advantages which direct investment should have over the other institutional mechanisms available for a firm in satisfying the needs of its customers at home and abroad. The first of the advantages is the ownership specific one which includes the advantage that the firm has over its rivals in terms of its brand name, patent or knowledge of technology and marketing. This allows firms to compete with the other firms in the markets it serves regardless of the disadvantages of being foreign. The second is the internationalisation advantage, that is why a bundled FDI approach is preferred to unbundled product licensing, capital lending or technical assistance (Wheeler and Mody, 1992). The location-specific advantages relate to the importance for the firm to operate and invest in the host country and are those advantages that make the chosen foreign country a more attractive site for FDI than the others. For instance firms may invest in production facilities in foreign markets because transportation costs are too high to serve these markets through exports. This could either be directly related to the actual nature of the good, either being a high bulk item or a service that needs to be provided on site, or due to policy factors such as tariff rates, import restrictions, or issues of market access that makes physical investment advantageous over serving the market through exports. Location advantage also embodies other characteristic (economic, institutional and political) such as large domestic markets, availability of natural resources, an educated labor force, low labor cost, good institutions (the clarity of countrys law, efficiency of bureaucracy and the absen ce of corruption), political stability, corporate and other tax rates among others. Negative effects of foreign investment on the economies of the Host: Al Saffar (2010) states the criticisms directed against the common practices of foreign firms invested in host countries is that its main focus in the recruitment of its investments in industries quarrying for the purpose of re-use in the country of origin of the capital without making any effort to engage in manufacturing activity and development commensurate with the goals and aspirations of these countries, which do growth and development. This type of investment is characterized by extension of the parent organization that harms the host country and adds nothing. Al Saffar (2010) states some foreign-owned supplier to the supply of technology investment in the form of packages, the staff is unable to host countries for investment, dismantled and identified vocabulary to adapt and acquire scientific and technological expertise required for the manufacture of its terms, commensurate with the circumstances and their scientific and economic and social development. That this is clearly going to affect negatively on the possibility of acquiring technical staff Local technological skills and diverse as these companies by another would not be attributable to their employees from the landlords, the National, but routine job sites that do not require sophisticated technical expertise. It thus does not allow creating a new class of professionals or the business of skilled scientific and technological and organizational and administrative, marketing and shielded from the possibility of opening prospects for new national projects and sophisticated and thus the host country has to invest in a spiral of underdevelopment. Al Saffar (2010) argues that rejecting the foreign investor is often the transfer of advanced technology in his possession the grounds that the host country is unable to digest and absorb these advanced Technology and modern. So he would prefer to import from abroad with the full line of production and assembly and thus ignore the important one the main objectives of the host countries is that companies he training of technical staffing group to have and given an opportunity to digest and absorb these technology and benefit from the adaptation and manufacture of the spectrum and its uses in locations other economic, commensurate with their economic circumstances. According to Al Saffar (2010) often foreign companies to import production inputs from abroad, such as materials preliminary and intermediate products as well as the import of spare parts for maintenance the project when you need after the run from their home countries is usually compared to less dependence on local inputs, leading to serious injury to the interests of the host country to the economic and trade deficits, including impair its ability to take advantage of natural resources and increase savings, which is desperately needed. We must give foreign investors a degree of administrative control by virtue of its contribution to the top money on investment projects, will limit or impair the effectiveness of policies sometimes economic development in the host country and restricts the varying degrees of independence of decision-makers local address balance of payments or to take any action, a suitable economic the impact and effectiveness of positive economic activities. (Al Saf far 2010) The foreign investment of foreign companies, making the host country loses some capacity to make some economic and political decisions on the management of its affairs which increases the economic dependency of these countries to developed countries. Besides, these foreign companies is strong negotiating and bargaining power on the selection and sitting investment and size and type of production through a selective approach in the selection of sites investments, creating a sort of incompatibility between the objectives and interests of these foreign companies Invested with what is planned in the path of economic and social development or the desired prepared for those countries. (Al Saffar 2010). The foreign invested companies operating in the area of services, media nd cultural services are often negatively affect the social systems and cultural and traditional values in the host countries .. As they are able to deploy Culture Western and especially American by selling programs on culture and magazines and music and films and books at low prices exceeding the cost price only slightly so as not to be able to become local companies to compete with these low prices. Accordingly, these companies impose its values and culture and traditions of other societies and lead to a breach of and disorder and social systems, social values and traditions rooted and established who was raised by these communities generations long. (Al Saffar 2010) According to Al Saffar (2010) depriving the host country for foreign investment from income tax imposed on capital funds or foreign companies on profits transferred abroad or at imports from foreign inputs as imposed by the Convention as well as imposed by the WTO members from the requirement of national treatment when the imposition of laws and taxes and fees on investment activity as is the case with the local foreign It shall be a great loss for the developing countries that depends to a large extent in the financing of development on the tax revenue. Al Saffar (2010) states a key part of foreign investment consists of the profits realized locally and from here highlight the problem for local decision makers As for allowing foreign companies to transfer most of their profits to their mother countries, which means allowing them absorb the riches that have been newly generated by the activity within the host country, or a requirement that these companies this re-invest profits locally. This really means to allow it to expand and increase the control of the national economy and thereby expanding its market dominance in local raise the rates of prices of goods and services, leading eventually to increase their profits back Other. According to Al Saffar (2010) Giving a lot of freedom for foreign companies to engage in unchecked activity will enhance their ability to evade compliance with laws and regulations issued by the Government of the country, the host and the virtue of its invoking a variety of pretexts, which requires follow-up its affairs professionally and prevent it from Overcome any form of abuse. Al Saffar (2010) states Some economists believe that foreign investment leads to the creation of dependency and development underdevelopment are to be based primarily on the shameless exploitation of cheap labor and exploitation of natural resources of the host country, thus leading to a loss of economic independence and political and greater dependency. VARIABLES DETERMINING FDI INFLOWS Gross Capital Formation, in a transition economy, improvements in the investment climate help to attract higher FDI inflows. It translates into higher Gross capital formation which in turn leads to greater economic growth. Sridharan Perumal et al (2010) find little evidence of FDI having an impact on capital formation in developed countries and observe that the most important aspect of FDI in the selected sample of countries is related to ownership change. The relationship between FDI and Capital Formation is not simple (Sridharan Perumal et al 2010). In the case of certain privatization, it may not lead to increase at all or even result in reduction. Thus, the unclear relation between FDI and capital formation may also hold in a transition economy. However, a positive or negative and significant relationship between FDI and Capital Formation is expected. (Sridharan Perumal et al 2010). Currency valuation The strength of a currency (Exchange rate) is used as proxy for level of inflation and the purchasing power of the investing firm. Devaluation of a currency would result in reduced exchange rate risk. As a currency depreciates, the purchasing power of the investors in foreign currency terms is enhanced, thus we expect a positive and significant relationship between the currency value and FDI inflows. The currency value can be proxied by the Real Exchange Rate, Real Effective Exchange Rate (REER) and Nominal Effective Exchange Rate (NEER). (Sridharan Perumal et al 2010). Trade openness, Trade openness is considered to be a key determinant of FDI as represented in the previous literature; much of FDI is export oriented and may also require the import of complementary, intermediate and capital goods. In either case, volume of trade is enhanced and thus trade openness is generally expected to be a positive and significant determinant of FDI. (Sridharan Perumal et al 2010). Infrastructure facilities, The well established and quality infrastructure is an important determinant of FDI flows. On the other hand, a country which has opportunity to attract FDI flows will stimulate a country to equip with good Infrastructure facilities. Therefore, we expect positively significant relationship between FDI and Infrastructure. (Sridharan Perumal et al 2010). Labour cost, Higher labour cost would result in higher cost of production and is expected to limit the FDI inflows; therefore, we expect the negative and significant relationship between labour cost and FDI. (Sridharan Perumal et al 2010). Economic stability and growth prospects, A country which has a stable macroeconomic condition with high and sustained growth rates will receive more FDI inflows than a more volatile economy. The proxies measuring growth rate are: GDP growth rates, Industrial production index, Interest rates and Inflation rates. (Sridharan Perumal et al 2010). Market size, Larger market size should receive more inflows than that of smaller countries having lesser market size. Market size is generally measured by Gross Domestic Product (GDP), GDP per capita income and size of the middle class population. (Sridharan Perumal et al 2010). Currency valuation, The strength of a currency is used as proxy for level of inflation and the purchasing power of the investing firm. Devaluation of a currency would result in reduced exchange rate risk. As a currency depreciates, the purchasing power of the investors in foreign currency terms is enhanced, thus we expect a positive and significant relationship between the currency value and FDI inflows. The currency value can be proxy by the Real Exchange Rate, Real Effective Exchange Rate (REER) and Nominal Effective Exchange Rate (NEER). (Sridharan Perumal et al 2010). Gross Capital Formation, In a transition economy, improvements in the investment climate help to attract higher FDI inflows. It translates into higher Gross capital formation which in turn leads to greater economic growth. Sridharan Perumal et al (2010) find little evidence of FDI having an impact on capital formation in developed countries and observe that the most important aspect of FDI in the selected sample of countries is related to ownership change. The relationship between FDI and Capital Formation is not simple (Sridharan Perumal et al 2010). In the case of certain privatization, it may not lead to increase at all or even result in reduction. Thus, the unclear relation between FDI and capital formation may also hold in a transition economy. Though, a positive or negative and significant relationship between FDI and Capital Formation is expected. (Sridharan Perumal et al 2010).

Smithfield :: essays research papers

Strategy   Ã‚  Ã‚  Ã‚  Ã‚  Smithfield Foods is the largest hog producer and pork processor in the world. They produce 5.1 billion pounds of meats yearly. Smithfield products are sold in North America and 25 worldwide markets. These international acquisitions gave the company a strong hold on the market, upgraded manufacturing facilities, and the opportunity for growth. Smithfield began its’ expansion into foreign markets in 1998 when they made their way into Canada, France, Poland, and later on into Mexico.   Ã‚  Ã‚  Ã‚  Ã‚  Smithfield Foods headquarters are located in Smithfield, Virginia. However, most of the company’s operations are found in North Carolina. Their southern location enables them to give lower wages in order to have more competitive prices. The CEO, Joseph W. Luter III goal was to keep driving costs down in order to increase the sales. They want to continue this trend into the future in order to increase profits. Performance In 2002, Smithfield’s sales were 6.6 times where they were in 1993. In addition to this, net income was up 50 times the amount of 1993. The company quickly expanded, and in 2001 they raised 12 million hogs. That was 3.5 times the amount of their closest competitor. Expanding the business abroad was essential in the company’s growth. In 1995 net income was 27. 8 million. In 1999 net income was 94.8 million. That increase was the direct effect of international expansion. After the expansion abroad, Smithfield also expanded domestically which sent sales rocketing. By 2002 the company owned or leased facilities in North Carolina, South Carolina, Virginia, Utah, Colorado, Texas, Oklahoma, South Dakota, Missouri, Illinois, Mexico, Brazil, Poland, and Canada. In 2002 the net income was 197 million and the company secured its place as the top in the industry. External Audit There were many external factors that affected the company’s performance and were something that needed to be dealt with. Most importantly was the issue of waste in the environment due to the hog farming. The residents of eastern North Carolina were unhappy with the situation taking place. The smell of the city was beginning to become unbearable and it was affecting the lives of many people. The problem did not affect sales and income however it had become an issue of morality. Another external factor that needed to be dealt with was the availability of land to dispose of the manure. According to the reading, the hogs in eastern North Carolina generate 9 million tons of manure each year.

Essay --

Gilpin observed that the establishment of the World Trade Organization (WTO) on January 1, 1995 as the principal forum for trade liberalization marked the biggest reform of the international trading system since the end of the Second World War. In this paper, I will provide an analysis of the evolution of the international trading system from its inception as the General Agreement on Tariffs and Trade (GATT) to its incarnation as the World Trade Organization (WTO), taking into account the changing international economic environment and political realities. This paper comprises of three parts. The first part outlines the historical context in the creation of GATT; the second part gives a brief synopsis of its structure and functions, with the third covering the paradigm shift in events that brought into existence the WTO intended to regulate an ever increasingly market-oriented global economy. Established in 1944 and taking its name from the New Hampshire town where the agreements were drawn up, the Bretton Woods conference was a gathering of finance ministers from Allied countries following the end of the Second World War. Under American leadership, the group met to discuss the failings of World War I’s Treaty of Versailles and the creation of a new international monetary system which could fund post war reconstruction, economic stability and facilitate international trade. This conference led to the establishment of two of the most important post war economic institutions, the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development, now known as the World Bank (An introduction to the WTO and GATT, pp. 42, 2003). Originally, the architects of the international trade system in the post war ... ...requests from other members and notify the WTO of changes to its trading policies. This clause is provided to help improve predictability and stability to the international trading system and discourage the use of quotas and other measures used to limit the quantity of imports. Today, the WTO membership numbers 146 which comprises of approximately 97 per cent of the worlds’ trade (www.WTO.org). The evolution of GATT to the WTO was a significant step towards liberalising markets and ushered in a new era of free trade. Although the WTO is still a relatively young international institution, its origins are rooted in the Bretton Woods conference following the end of World War II. The WTO has evolved to cover areas such as trade in goods and services as well as Intellectual Property Rights (IPR) and continues to provide the key disciplines affecting international trade.

The Scarlet Letter Symbolism

The Rosebush The rose bush is a discreet yet important symbol in the novel The Scarlet Letter. The rosebush is first mentioned in the chapter, â€Å"The Prison Door. † The narrator is setting the first major scene by describing the scenery. He is comparing the Puritan society to and â€Å"ugly edifice† and contrasting the rose bush to â€Å"the deep heart of Nature. † Later, in â€Å"The Governor’s Hall,† Hester and Governor Bellingham are talking about taking Pearl away from her. Pearl starts throwing a tantrum until she can have a rose from a rosebush. These events show major symbolism in a delicate flower. As the narrator describes the rosebush, he offers a rose to the reader â€Å"to symbolize some sweet moral blossom that may be found along the track, or relieve the darkening close of a tale of human frailty and sorrow,† (Hawthorne 42). This foreshadows the story will be forlorn. The rose is an offer to comfort the reader at the end of a disheartening novel. The rosebush also symbolizes life and beauty surrounded by a dreary world of sorrow. Outside of the prison door, the lively rosebush grows next to many weeds. This shows a truly beautiful flower can arise from a complete barren region. The rosebush is mentioned again later in the novel. At the governor’s house, â€Å"Pearl, seeing the rosebushes, began to cry for a red rose, and would not be pacified,† (Hawthorne 95). This carries over from the symbolism in chapter one. Although Pearl acts like a child of the devil, filled with darkness and mystery, she can be sweet and delicate by holding a single rose. The rosebush is an important symbol to understand the sorrow in The Scarlet Letter. After the symbolism is understood, readers can see the speck of amiability here and there. Throughout the novel the rose pacifies sorrowful and depressing emotions this story can bring.