Thoughexporting andjoint venture and arrangements may

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Thoughexporting andjoint venture and arrangements may be more appropriate for low potential markets from a risk reduction perspective, theymay not allow the strategic control, change, and flexibility that are needed to secure long-term global competitiveness. The presence of joint venture partners, in particular, cancreate an impediare ment to strategic coordination. Their motivations often incongruent with that of the investingfirm, which can lead to significant difficulties [Prahalad and Doz 19871. On the other hand, firms can gain competitive advantage by exploitation of the strategic options provided by integrated operations [Kogut 19891. They can spot opportunities and threats that may be beyond f the horizon of individual operations; they can bring theull weight of their resouTces to bear on selected competitors or markets; they can shift resources acrossnationalboundariesvery easily; and theycan use the experience gained in one country in another where it may be relevant. In addition to the above strategic advantages,globallyintegrated firms prefer complete control of their foreign operations because overall profit maximization requires thattheir foreign ventures be tightly subordinated to the parents....
View Full Document

Ask a homework question - tutors are online