Do you need this or any other assignment done for you from scratch?
We have qualified writers to help you.
We assure you a quality paper that is 100% free from plagiarism and AI.
You can choose either format of your choice ( Apa, Mla, Havard, Chicago, or any other)
NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.
NB: All your data is kept safe from the public.
This paper is a response to Mihir Desai’s article “The Decentering of the global firm”. In the article, Desai argues that “A firm’s legal home, its financial home and its homes for managerial talent no longer need to be co-located and, consequently, the idea of firms as national actors rooted in their home countries is rapidly becoming outdated” (Desai, 2008, 3). Hence, the implication that firms based in a particular country can alone help the home country is becoming outdated and outmoded.
The author argues that since global markets offer enough opportunities for firms to maximize their revenues from multiple locations, there is no specific need for a firm to be located in say, the United States, to contribute to the American economy. He cites the examples of firms like Warner-Chilcott Plc. that is based in the UK but has a majority of its operations in the US. Similarly, companies can operate from the US but have significant interests worldwide. This is the premise behind Rupert Murdoch’s News Corporation that was essentially based out of Australia but was relocated to the US in 2004 to readily access the American investors there.
Hence, the reasoning is that companies can be located anywhere in the world and take advantage of the lower costs of manufacturing offered in one country and the costs of doing business in another country may be conducive to the firm having its administrative work done there.
The author’s contention is certainly sound and can be viewed as an extension of the globalization-based theme of global corporations. Where Desai scores is his novel thesis that a firm can have multiple national identities and can have homes in several countries and this confluence of manufacturing base, capital attraction base, and marketing base can lead to synergies that augur well for the company as well as for the countries in which it operates.
I tend to agree with the author’s point and based on the experiences of companies like Unilever that operate out of multiple locations and have a base in several countries around the globe, there is a case for the truly global firm to be profitable. With the increasing spread of globalization and the movement of global capital that is blind to geography and culture, it is but natural that global firms would emerge and engage in productive activities.
As pointed above, Unilever is one firm that has successfully leveraged on its presence in multiple countries to capitalize on Ricardo’s “Theory of Comparative advantage” that was originally proposed as an argument for free trade, but, can now be extended to cover the topic of globalization of business activities of the firms like Unilever. For instance, Unilever has a presence in almost all the countries that are members of the WTO (World Trade Organization). And though the headquarters is in the Netherlands, the firm enjoys the benefit of lower cost of resources wherever it can source them cheaply, lower operating costs wherever it can produce competitively and access to global capital wherever capital is available.
In conclusion, the current economic downturn should not affect the emergence of the global firm. Instead, the global firms must use this crisis as an opportunity to provide better goods and services for lesser costs so that the global economy as a whole benefit in the process.
List of References
Desai, M. (2008). The Decentering of the Global Firm. Harvard Business Review. 1-3.
Ricardo, D. (1920). The Theory of Comparative advantage. New York: Free Press.
Do you need this or any other assignment done for you from scratch?
We have qualified writers to help you.
We assure you a quality paper that is 100% free from plagiarism and AI.
You can choose either format of your choice ( Apa, Mla, Havard, Chicago, or any other)
NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.
NB: All your data is kept safe from the public.