Week 1: Articles Flashcards
Article 1 - Rugman & Verbeke: Bartlett and Goshal state that in the future a company’s ability to _____ will be the key factor that separates winners from mere survivors in the international competitive environment.
develop transnational organisational capabilities
Article 1 - Rugman & Verbeke: Transaction Cost theory as a predictive model argues that both ____ and ____ of the international operations of an MNE depend crucially upon the configuration of three elements.
form and competitiveness
Article 1 - Rugman & Verbeke: MNEs international form and competitiveness depends crucially on the configuration of what three elements?
1) FSA/Ownership SA: asset advantages (e.g., proprietary know-how) and transactional advantages (e.g., economising on transaction costs as a result of multinational coordination and control of assets)
2) CSA/Location SA: benefits associated with locating certain activities in particular countries (arise from structural market imperfections and the potential to economise on transaction costs)
3) Internalisation Advantages: benefits associated with different entry modes when serving foreign markets
How do Rugman and Verbeke extend transaction cost theory?
they argue that TCT has not dealt with the ways in which CSAs may actually contribute to the long-run development of new FSA, through their leveraged use in the corporation.
Rugman and Verbeke made the differentiation between NLB-FSA and LB-FSA to clarify how some FSA can be moved within the network and others can’t (but can be used to address local needs) and to clarify how CSA can be used for the development of new FSA
Article 1 - Rugman & Verbeke: The differentiation between NLB-FSA and LB-FSA allows doing what?
this distinction allows two important points to be recognised:
1) NLB-FSA need not necessarily originate within the parent, but also in the subsidiary or by joint efforts of the firms different operations abroad
2) many of the FSA generated within the parent company may be perceived to be NLB-FSA whereas in reality they constitute LB-FSA.
Article 1 - Rugman & Verbeke: A transnational firm builds it competitive advantage upon a mix of _____ and ____. Firms in this view should reap the benefits of both ______ and ______.
NLB-FSA and LB-FSA
national responsiveness and global integration
Article 1 - Rugman & Verbeke: There are three overlapping trends in the operations of an MNE that affect how locally responsive one has to be and whether they can integrate globally. What are they?
1) Foreign subsidiaries are being set up as replicas of the parent. This case is best described by the internalisation version of TCT.
