The Concept of Global factory-Free-Samples-Myassignmenthelp.com

Questions: 1.Discuss about the Concept of Global Factory? 2.What are the Implications of the concept for International Business? 3.If you were to establish a firm of your own, how would you leverage the global factory to develop your firm into a successful International Business? Answers: 1.Global Factory In todays scenario when the integration of the whole worlds economy is taking place the concept of global economy has enhanced to a greater extent. The economic activities that are conducted globally and the merging of innovation along with production and distribution of commodities and services give rise to new form of institutions known as Global Factory. The countries which are in the phase of emergence or the developing countries are restricted by the influence of the global factories. This concept of global factory was given Peter J. Buckley. The corporations working in the different nations combine their plans and strategies globally. The role of global factory concept is increasing in todays time as it inculcates the governance of both internal activities and contracts with external parties. It is a complex organizational form at the macro level. Globalisation too has its impact on its emergence (Buckley, 2011). Also, the introduction of this concept led to the creation of kno wledge and new ideas for the multi-national enterprises (Brien, Scott, Gibbon, 2011). The emergence of global factory allows the managers to react as co-ordinators across the globe which are connected internally. The success of this system is basically dependent on the cooperation and co-ordination. Control of information plays a significant central role in this regard. Changes in technology especially the introduction and growing electronic media have reduced the cost of transactions taking place at the global level. 2.Implications of Global factory on International business The concept, Global Factory has influenced the international business and also the strategic decision making of the international business. The internationalisation theory considers the location and ownership status for the economic activities that are conducted. The emergence of global factory has provided new horizons in terms of location to enter international business (Buckley Strange, 2016). The global supply chain can be categorised into three parts i.e. original equipment manufacturers, customer for contract manufacturers and the third category is warehousing. With the widening of scope of the business, global factory provides financial strength to the business operating at international level to buy the firm possessing potential nature in the host country. The obstacles that lie in the way are the geographical based i.e. transportation and costs of transactions or the lack of entrepreneurial culture. The conduction of the business at the global level requires the firm to hav e proper control over the business operations. Decision dynamics act as a managerial tool in effectively supporting the business operations and decisions based on location and ownership. The theory of internationalisation focuses on grouping of the resources of the firm at the firm level. 3.Leveraging the global factory to develop the firm into a successful international business If I were to establish a firm of my own at the international level then to develop and making my firm a success, I would have made the head office to critically adopt and analyse the operations of the firms value chain to associate and directly influence the spread economic activities at an international level. According to Hillemann Verbeke (2014), as the impact of externalities and that too influence the working dynamically therefore, analysis of external environmental factors becomes the essence for organisation success at the global level. Social media or improved technological innovations would be my weapon to reach to the farther locations. Nurturing the assets including managerial capabilities and organization flexibility of focal firm also matters in leveraging global factory (Eriksson, Nummela Saarenketo, 2014). The power of global factory is dependent on the combined effects of entrepreneurship, control and selecting the appropriate data and facts; availability and applic ation of finance and capital and new ideas (innovation). The institutions of parent company can be combined with them so that the entrepreneurship practices and business risk taking can be encouraged and fostered in a faster way and the transformation needs to be adjusted. (Buckley, 2011) .Developing a reputation of the brand name can also assist the global factory to spread its production and services in the host country. My focus would be to control of distribution and widespread the operations of the business to ensure its future success. In the present time, when the technological development is at its peak along its merit of cheaper source to spread the business at the international level, its implication can act as a productive means to develop the business. So in order to develop my firm at an international level, by leveraging the global factory the combination of finance, knowledge management, promotional techniques and long term strategy planning would be required for inte rnational business success and to gain competitive advantage for the firm against the new entrants. References Buckley, P. J. (2011). The impact of globalisation and the emergence of the global factory. InThe future of foreign direct investment and the multinational enterprise(pp. 213-249). Emerald Group Publishing Limited. Buckley, P. J. (2011). International integration and coordination in the global factory. Management International Review,51(2), 269. Buckley, P. J., Strange, R. (2015). The governance of the global factory: Location and control of world economic activity.The Academy of Management Perspectives,29(2), 237-249. Eriksson, T., Nummela, N., Saarenketo, S. (2014). Dynamic capability in a small global factory.International Business Review,23(1), 169-180. Jenny Hillemann ,,Alain Verbeke ,(2014), Internalization Theory and the Governance of the Global Factory, inAlain Verbeke,Rob Van Tulder,Sarianna Lundan(ed.)Multinational Enterprises, Markets and Institutional Diversity (Progress in International Business Research, Volume 9)Emerald Group Publishing Limited, pp.27 48 OBrien, D., Sharkey-Scott, P., Gibbons, P. (2011). From Federation to Global FactoriesAssessing the Contribution of the Subsidiary Middle Manager in Todays MNE.Firm-Level Internationalization, Regionalism and Globalization, Basingstoke, New York, Palgrave MacMillan, 48-63.