International Comparative Perspectives

MN330: Business in International Comparative Perspectives

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Why have some nations succeeded economically, while others have not? Why do the world’s living standards vary so considerably?
·    To what extent are these variations in national wealth and human opportunity explained by differences in national business systems and managerial organization?
·    Have the causes of economic and managerial change been unique and national or general and global in their origin?
·    How do we find the means to explain such large-scale, highly complex events and trends?

1. Porter and National Competitive Advantage
Introduction. Suggest answer to the question and outline how to validate your suggested answer by clarifying the analytical structure
Key Questions. Simply: this is usually not just a question about Porter. If you are thinking of outlining Porter and little else, please think again. Very briefly state what the concepts of national competitiveness and the diamond entail, which is naturally connected to the work of Porter. But the question may be asking you to focus on critique. Therefore, what are the key issues, debates and problems with the ideas about the Competitive Advantage of Nations and the national diamond? The question may hint that you employ other ideas and a lot of evidence within an analytical structure.
National competitiveness is not a theory but a check list that is a tautology. I.e. if you do certain economic activities well, you will do well economically. Or German chemical companies succeed because of Germany’s R&D base. But where did this base come from? The operations of the chemicals companies? Do national factors just appear in the diamond or do we have a theory of how differing factor and demand conditions arise?
Is there a lack of the historical dimension, supplied in part by Late Development Theory? How might this add to missing dimensions in Porter?

MN330: Business in International Comparative Perspectives

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Why does Porter downplay the role of the state, given the historical importance of the developmental state in industrialisation and improving national competitiveness?
Are factor and demand conditions purely national in their creation? Note Canada or Hong Kong, plus the role of the international economy and global webs (see Reich). How do we account for ideas about globalisation? The increasing role and success of MNEs operating in various markets suggest that it is their ability to operate across borders and their scale and their resources that bring success, not the fact that they may be based in one country or region. MNEs are arguably more foot-loose and can choose between locations. Why else would governments now have policies to attract inward FDI?
Conclusion

2. Transnational Corporations and Globalization
i. Introduction. Suggest answer to the question and outline how to validate your suggested answer by clarifying the analytical structure
ii. Key Questions. The notion of national clusters and the geographical locality of business fits uneasily with the ideas of globalization and footloose international capital. Review the literature on Porter, Reich, Ohmae etc. What are the current arguments about globalisation and its implications? You don’t have to argue that all industries and firms have global rather than national loyalties, or vice versa, as there will be variations. So, you can use real evidence to test the concepts and the breadth of their applicability.
iii. How truly international or global are multinationals? How much do they still trade in their home base? How much are they regional to Europe or Asia rather than truly global? Note here the recent work of Rugman.
iii. Why do TNCs have a greater control of cross-border commerce, and why does FDI stock as a ration of world output continue to grow? Why are the activities of TNC subsidiaries or their global value chains replacing exports from the home country? Why is inter-trade becoming increasingly important?
iv. How footloose is international business, or to what extent can they be controlled by the actions of nation states? The death of the nation state (Ohmae) is surely exaggerated. How powerful are TNCs by comparison? How is this related to ideas about the International Division of Labour?
v. To what extent do the advantages of operating in specific nations or clusters continue to influence the operations and strategies of international industries and TNCs? Growing importance of cross-border capabilities? Role of WTO and other IGOs, and role of international chambers of commerce and standards agencies and other NGOs?
vi. Is the paradox of clusters versus internationalisation a false one? Trade and FDI occurs because national systems and clusters do have varying strengths and specialisations that raise productivity but require exchange (as in traditional trade theory or ideas of comparative advantage).
Conclusion

MN330: Business in International Comparative Perspectives

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3. The State and Economic Policy
i. Introduction. Suggest answer to the question and outline how to validate your suggested answer by clarifying the analytical structure
ii. Key Questions. Business is influenced by each nation’s most important institution, the state. The state carries out important functions, such as education, macro-economic policy, legislation and regulation, and the building of infrastructure. Governments have also taken on more positive roles, and the concept of the developmental state concerns the means by which governments have sought to improve national competitiveness, including protectionism, and (strategic) industrial policies. How however has the spread of market based policies and globalization constrained the abilities of governments to influence national economies? Or was their role previously exaggerated? Important tip: this is not an essay on comparative government, but on comparative business and the ways in which the state shapes business organization, management, strategy and performance. You can mention areas of government action that are common or non-contentious in order to focus on areas of dispute or difference.
iii. Protectionism and non-market policies. Why have these declined in usage? Were they ever effective? Role of WTO, IGOs and free trade agreements in regulating economic relations between states?
iv. Education and training policies: do they have important outcomes?
v. Technology and R&D policies: have these become more important?
vi. Industrial policy and the developmental state: is this the major cause of difference? Is its usage now in decline and why?
vii. Conclusion

MN330: Business in International Comparative Perspectives

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4. Chandler and Managerial Enterprise
i. Introduction. Suggest answer to the question and outline how to validate your suggested answer by clarifying the analytical structure
ii. Key Questions. You need to describe the theories of Chandler, and how they are applied in modern setting. Keep the description of Chandler to a minimum, and focus on the problems so you can develop arguments and display understanding. What is theory that suggests the relationship between strategy and structure? How do national patterns of managerial enterprise arise? Why is understanding this trend important to most of the 20th Century? Is Chandler’s analysis best suited to the US, and to the decades before the 1980s? What topics show variations from the Chandler model that are important to understanding other nations and more recent management trends? Does Chandler have a one-best way approach that ignores different national contexts?
iii. Personal capitalism. Is this really something especially British? Does family ownership prevent the emergence of complex managerial hierarchies?
iv. Business groups and networks. Chandler focuses on management and internal characteristics of firms. Yet business groups and networks have been important in the development and competitiveness of business in Japan and Germany, although the networks are very different.
v. Chandler is also critical of holding company structures in Britain, but not every industry encourages managerial enterprise as an alternative. Holding companies also give some of the advantages of business groups, and remain important to Europe generally. They are returning in Japan.
vi. Chandler believes that internal managerial characteristics in big business have national patterns, although this is questionable, and ignores the idea that national factors can shape management as well as management shaping national characteristics. Chandler ignores the state, financial systems, and labour. Moreover, the large size of the US economy gave greater returns to scale, and so increased capital intensity and outside shareholding, professionalization, and company size. In Britain, Germany and Japan historically, the size of the national market produced smaller sized enterprises, and therefore smaller teams of professional management.
vii. Manufacturing and market trends reveal changes in strategy and structure. For most of the 20th century, returns to scale and scope encouraged integrated managerial enterprises. Do more flexible technologies and segmented markets since the 1980s require different business structures? Why have Chinese firms been slow to adopt the Chandler model?
vii. Conclusion

MN330: Business in International Comparative Perspectives

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5. Finance and Corporate Governance
1. Introduction and literature review
2. Key Questions. Sources of finance, structure of financial systems, comparative national differences, influence of government and late development effects, and demand side factors. To what extent are finance and governance systems converging and to what extent is the Anglo-US system becoming dominant? Have differences in the system, past and present, been able to explain comparative performance? How would it do this – ie the institutional explanation? How do you explain the success of the Japanese and German systems before 1990, and their comparative failure since? How do you explain trends in the UK and USA? How does the banking system operate in China? What is the relationship between finance and corporate governance, and can we find a link between performance and governance? Think about stock markets, bank systems, ownership, business strategy and objectives, power/authority of management, long termism, investment in technology, machinery and people, or organizational capabilities generally and so on. What do crises such as that of 2008 tell us?
3. Nature of ownership, governance and business strategy, corporate objectives
4. Power/authority of management, nature of strategic decision making, nature of decisions on building corporate capabilities
5. Investment in and management of technology, long versus short termism
6. Investment in plant and machinery, relationship to productivity
7. Investment in and management of people, nature of HR systems
8. Changes from before 1990 to after 1990, degree of relationship between performance and finance systems, forces of convergence and internationalization. Extent to which the crisis of 2008 has transformed the nature of the debate about finance systems and types of capitalism.
9. Conclusion

6. Late Development Thesis
Introduction. Suggest answer to the question and outline how to validate your suggested answer by clarifying the analytical structure
Key Questions. What are the major differences in national business systems and institutions? What are the key issues in Late Development Theory? Outline quickly the main ideas and the mechanisms that lead to differences in national systems over time. What are the links conceptually between key institutional differences and LD Theory? Remember in this question to directly link the features of late industrialization (eg reliance on banks, role of banks, business groups) with specific institutional characteristics (stock markets versus bank financing, industrial policy, market relationships, long and short termism, etc). It’s a difference too between the evolution of different national institutions or business environments that encourage different approaches to strategy, organization and investment opportunities. Also, demonstrate an impact on performance, using statistics and arguments on how institutions favour/do not favour competitiveness. Remember too that the question is comparative, not just on Japan or China: but Germany as well as Japan; the so-called early industrializers like US and UK and the historical influences on them. Then, of course, how relevant are these ideas in a globalised economy, or to mature/developed economies such as Japan and German today, rather than yesterday; or how good an explanation now for China?
Key difference 1: the role of the state
Key difference 2: the role of banks versus shareholding. Impact of 2008 crisis?
Key difference 3: business groups and vertical linkages
All the above concern national institutional differences or the context/environment/external characteristics in which businesses and managers are able to make decisions. How do they affect management, organization, and performance, or the internal characteristics of the firm? How does e.g. the nature of finance affect the planning of R&D, and therefore performance? Or long versus short termism? Impact on employment systems, management skills, education, investment, training, marketing systems, etc, as well as R&D? Does China fit the pattern?
The 1990s watershed. If business systems in the 1960s were effective, why do they fail in the 1990s, or vice versa? Does this mean that other factors are more important than the effects of LD? Or that what is true for the initital stages of economic development are completely irrelevant at a later stage? Why is China still booming as against Japan or Germany? The impact of 2008?
Conclusion.

MN330: Business in International Comparative Perspectives

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7. Production and Operations
i. Introduction. Suggest answer to the question and outline how to validate your suggested answer by clarifying the analytical structure
ii. Key Questions. Emphatically not just about Japan, but comparative. Emphatically not the usual boring text-book exposition of how the Japanese invented JIT thanks to a heroic Toyota. Students must be aware of differences in systems, but ask if the differences were so great, especially between nations. Is one system good for all companies in one country or for all countries? Again, the institutional context of P&O systems is vital information, how they affect performance too, and genuine industry level and corporate examples employed comparatively. Nor can they just rely on the lean production/MIT study/Womack et al argument. (Nor can you just use some previous essay from the P&O course taught here.) Think about the coverage: what are the different approaches to production and operations, and give examples. Or look at corporate level, industry and national differences in production, testing indeed if the differences between nations are significant.
iii. Management techniques, use of machinery and equipment: case examples
iv. Supplier and marketing networks: case examples
v. Human resources and training: case examples
vi. Production and operations as strategy: case examples
vii. Historical and institutional explanation of varying management approaches and investment, changing patterns over time
viii. National and sector variations rather than national patterns of advantage?
ix. Conclusion.

MN330: Business in International Comparative Perspectives

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8. Research and Development
i. Introduction. Suggest answer to the question and outline how to validate your suggested answer by clarifying the analytical structure
ii. Key Arguments. R&D and technology: as the engine of economic growth and the creator of new industries. How important is its role, or are there other institutional factors, such as management, finance, etc? Are there national R&D systems, or are large companies the focus of R&D systems? You need detailed industry level evidence, a notion of how technology becomes commercial innovation, and a sense of comparative differences, including outcomes. Focus on a key list of analytical topics: innovation versus invention, first mover advantages and strategy, government, national innovation systems, role of financial systems and corporate governance, managerial systems and corporate investment and strategies, nature of national industries, FDI and MNEs, but clearly you can’t cover all these topics one by one.
iii. Importance of technological borrowing against invention
iv. R&D and the large corporation (Chandler argument): case evidence
v. R&D and the state: case evidence
vi. Role of MNEs and international transfer
vii. Institutional environment, financial systems, education systems
vii. Variations between sectors and firms more important than between nations?
ix. Conclusion

MN330: Business in International Comparative Perspectives

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9. Culture
i. Introduction. Suggest answer to the question and outline how to validate your suggested answer by clarifying the analytical structure
ii. Key Arguments. The point is to understand various cultures and the literature on Protestantism and Confucianism, but to deal with it quickly, and focus on attributes with specific business implications (work ethic, education/training, thrift and finance systems/investment, emphasis long termism etc). Use real case examples to prove your points of differences. This is never a question just about Japan, or Confucianism, but must be comparative. Students must also be aware of criticisms of culture as an explanation of economic success. This is question with difficult concepts and a clear analytical structure and precision in argument are vital. The point is to show very quickly how vaguer ideas about national culture shape specific national business cultures and how these are linked to particular business systems and management, and the last should be the focus of your discussion.
iii. Work ethic. HR systems, hours of work, entrepreneurship and rewards. In this section, always give specific case/management examples. Don’t talk vaguely about culture or work ethic. The same applies to the following sections.
iv. Education/training systems – by state and firms.
v. Thrift. Saving ratios, finance systems, investment patterns, attitudes to waste.
vi. Long Termism. Are some systems of capitalism more long termist than others? Is this due to culture?
vii. Counterargument. Does economic growth and technological/organizational needs, as well as factory/office work and urbanization, change national/business cultures, and not vice versa?
Conclusion.

10. Human Resources, Education and Training
i. Introduction. Suggest answer to the question and outline how to validate your suggested answer by clarifying the analytical structure
ii. Key Arguments. Human resources – investment or cost? Have HRs been a weakness in some countries? To what extent are systems converging? To what extent embedded, and what lessons are there from the transfer of systems? How do they explain competitive differences? Are there functional equivalents? The question demands case/company examples. What represents best practice, if there is such a thing. Are there national differences in HRM and training systems, or are differences more complex? Focus on key topics, such as industrial relations versus employment relations versus training/education, and, within them, topics such as collective bargaining/unions (IR) and life time employment (ER). Reforms in US and UK since 1980s? In Germany since 2000? Japan since mid 1990s? Reforms and recent employment laws in China, and increasing use of markets and migrant labour in China?
iii. Employment relations – management structures, job security, welfare/bonus schemes. Size of firms, and managerial enterprise. Internal labour markets. Life time employment systems.
iv. Industrial relations – trades unions, labour markets, works councils, company/enterprise unions, employer associations, and representation rights.
v. Work relations. Production and operations management. Line management and organization.
vi. Skills, training, education, productivity.
vii. HR as strategy by firms. HRs as investment. Institutional environment.
vii. How easy to relate HR and training systems to national economic success?
viii. Conclusion

MN330: Business in International Comparative Perspectives

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The question is:
To what extent do Human Resource Management practices and skill levels determine the long-term competitiveness of major economies?
·    Answer the question by providing comparison from 5 countries: China, Germany, Japan, US, UK
·    But you do not need to mention 5 nations in every point, or that all 5 nations get equal treatment.

Suggested Analysis or Structure for Assignment 2
·    Core issue: Human Resource Management
·    A- Introduction: your answer to the question and structure of your assignment
·    B- Compare and contrast education and training system in major economies
·    C- Compare and contrast employment relations, e.g. job security, welfare/ bonus schemes, Life time employment systems in major economies
·    D- Compare and contrast industrial relations, e.g. labour markets, company/enterprise unions, employer associations in major economies
·    E- Converging? Reforms in US and UK since 1980s? In Germany since 2000? In Japan since mid 1990s? Reforms in China since 1979? Difference between western and eastern style HRM
·    F- Conclusion: why HR or changes to HR can improve performance?

MN330: Business in International Comparative Perspectives

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By admin in Essays on January 3, 2017