Essays on Influence of the Business System of the MNCs Home Country in the Foreign Subsidiaries of the Firm Case Study

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The paper "Influence of the Business System of the MNC’ s Home Country in the Foreign Subsidiaries of the Firm" is a great example of a case study on management. The expanding role of Multinational Corporations (MNCs) overseas and international competitiveness have emerged as the two major new and interrelated themes in the global marketplace. Particularly in the post-GATT world, the MNCs have grown in all possible dimensions. Their capital stocks have increased and they are symbolizing ‘ the survival of the fattest’ , there has been a massive growth in the number of affiliates of MNCs.

Simultaneously the area under operations- the number of countries in which firms are active- has also grown rapidly. Further, the products manufactured and the goods and services sold abroad through the affiliates of MNCs too have diversified to a great deal. In several cases, the very survival of MNC firm in the home and the traditional market is on the borrowed strength from its overseas affiliates. The MNC has now become one of the most important players in the movement of tangible and intangible goods across the national boundaries.

Similarly, the MNCs have grown as a major source of foreign direct investment (FDI) in developed and in developing countries. The FDI has been incorporated integrally into most of the MNC's corporate strategies. Besides America and Europe, Japan and a handful of more countries to have emerged as the home ground of the new MNCs. While presently the American and European economies are showing signs of slum and Japanese economy is stagnant, the emerging markets with high growth rates of the national economy, have provided for the pull factor for the expansion of the economy.

Previously it was the ASEAN economies of Indonesia, Thailand, Malaysia, Singapore, and the Philippines, and now it looks like the turn of India and China. There have been a plethora of studies on MNCs and their overseas affiliates in recent decades. For example, Hamel & Prahalad, 1985; Prahalad & Doz, 1987; Gupta & Govindarajan, 1991; Kobrin, 1992; Rosenzweig & Singh, 1994 etc. However, the subject of international human resource management (IHRM) is still in its infancy in academics. There is little consensus in the field, despite some important theoretical and empirical contributions in the past decade.

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