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QUESTION: CASE NO.

2
Two Senior executives of world’s largest firms with extensive holdings outside the home country
speak.
Company A : “We are a multinational firm. We distribute our products in about 100 countries. We
manufacture in over 17 countries and do research and development in three countries. We look at all
new
investment projects both domestic and overseas using exactly the same criteria”. The execution from
company A continues, “ of course the most of the key ports in our subsidiaries are held by home
country nationals. Whenever replacements for these men are sought, it is the practice, if not the
policy, to look next to you at the lead office and pick some one (usually a home country national) you
know and trust”.
Company B : “ We are multinational firm. Our product division executives have worldwide profit
responsibility. As our organisational chart shows, the united states is just one region on a par with
Europe,
Latin America, Africa etc, in each division”.
The executive from Company B goes on to explain, “the worldwide Product division concept is rather
difficult to implement. The senior executives in charge of this divisions have little overseas experience.
They have been promoted from domestic ports and tend to view foreign consumers needs as really
basically the same as ours. Also, product division executives tend to focus on domestic market,
because it generates more revenue than foreign market. The rewards are for global performance, but
strategy is to focus on domestic. Most of the senior executives simply do not understand what
happens overseas and really do not trust foreign executives, even those in key portions?
Questions :
1 Which company is truly Multinational ? Why?
2 List three differences between Company , Multi National company and Trans Multi National Company
?

CASE – 3 (Strategic R & D by TNCs in Developing Countries)
TNCs have had long units in developing host countries for adopting products and processes to the local
conditions, and in a few cases, to products for local markets. Since the min-1980s, however, they have
also started locating strategic R & D centres in some developing countries, for developing generic
technologies and products for regional or global markets. The main incentives for this are : (a) access
to highly qualified scientists as shortages of research personnel emerge in certain fields in
industrialised countries, (b) Cost differentials in research salaries between developing and
industrialised countries, and (c) rationalisation of operations, assigning particular affiliates the
responsibility for developing, manufacturing, and marketing particular products worldwide. Th new
trends are more visible in industries dealing with new technologies, such as microelectronics,
biotechnology, and new materials. In these technologies, the location of R & D can be geographically
de-linked more easily from the location of manufacturing. It is also possible to separate R & D in core
activities from that in non-core activities. Consequently, countries like India, Israel, Singapore,
Malaysia or Brazil serve TNCs as good locations for strategic R & D. For instance, Sony Corporation of
Japan has around nine R & D units in Asian developing countries. It has three units in Singapore
conducting R & D on core components such as optical data shortage devices, integrated chip design
for audio products and CD-ROM drives, and multimedia and microchip software. It has three units in
Malaysia working on video design, derivative models and circuit blocks for new TV chases, radio
cassettes, discman and hi-fi receiver designs. It has one unit in Republic of Korea focusing on the
design of compact discs, radio cassettes, tape recorders, and car stereos. It has one in Taiwan
designing and developing video tape-recorders, minidisk players, video CDs, and duplicator. Finally, it
has one unit in Indonesia focusing on the design of audio products.

2 Two Senior executives of world’s largest firms with extensive holdings outside the home country speak. Our product division executives have worldwide profit responsibility. “ of course the most of the key ports in our subsidiaries are held by home country nationals. Africa etc. furnishes you the following data relating to the year 2000 -First Half of the year sales rs. if not the policy.43000 Assuming that there is no change are incurred equally in t he two ANSWER: Question: in prices and variable costs and that the fixed expenses half years periods calculate for the year2000. The senior executives in charge of this divisions have little overseas experience. product division executives tend to focus on domestic market. Daimler Benz has established such a unit in Bangalore. Current work includes interface design of avionics landing systems and smart GPS sensors for use by the group’s business worldwide. to look next to you at the lead office and pick some one (usually a home country national) you know and trust”. Also. As our organisational chart shows. The rewards are for global performance. Whenever replacements for these men are sought. in collaboration with the Indian Institute of Science to work on projects related to its vehicles and avionics business. it is the practice. because it generates more revenue than foreign market. Questions: (a) Explain why MNCs have located R & D centres in developing countries? (b) Mention the areas where R & D activities can easily be decentralised.Such units often work in collaboration with science and technology institutes in the host country. “the worldwide Product division concept is rather difficult to implement. For instance. We manufacture in over 17 countries and do research and development in three countries. but strategy is to focus on domestic. Most of the senior executives simply do not understand what happens overseas and really do not trust foreign executives.50000 rs. They have been promoted from domestic ports and tend to view foreign consumers needs as really basically the same as ours. CASE NO. India. Company B : “ We are multinational firm. The execution from company A continues. the united states is just one region on a par with Europe.Latin America. The executive from Company B goes on to explain. We distribute our products in about 100 countries. even those in key portions? Questions : 1 Which company is truly Multinational ? Why? COMPANY A IS--Geocentrism ORIENTATION [GLOBAL MULTI ORIENTED] Integrated global outlook . in each division”. Source: World Investment Report 1999. Company A : “We are a multinational firm.40000 Second Half of the yearSales rs.45000 total cost rs. and \ case 4 VK Ltd a multi-product Company. We look at all new investment projects both domestic and overseas using exactly the same criteria”.

and in a few cases. Since the min-1980s. Singapore. and (c) rationalisation of operations. and duplicator. discman and hi-fi receiver designs. It has three units in Singapore conducting R & D on core components such as optical data shortage devices.IS ETHOCENTRIC Ethnocentric Orientation • domestic market extension concept: • Domestic strategies. and personnel are perceived as superior • International customers. minidisk players. Finally. Questions: . integrated chip design for audio products and CD-ROM drives. Israel. derivative models and circuit blocks for new TV chases. and marketing particular products worldwide. and multimedia and microchip software. considered secondary • International markets regarded as o outlets for surplus domestic production • International marketing plans o developed in-house by international division ===================================== 2 List three differences between Company . It is also possible to separate R & D in core activities from that in non-core activities. tape recorders. For instance. Sony Corporation of Japan has around nine R & D units in Asian developing countries. Current work includes interface design of avionics landing systems and smart GPS sensors for use by the group’s business worldwide. video CDs. (b) Cost differentials in research salaries between developing and industrialised countries. In these technologies. however. It has three units in Malaysia working on video design. Such units often work in collaboration with science and technology institutes in the host country. Daimler Benz has established such a unit in Bangalore. and new materials. For instance. the location of R & D can be geographically de-linked more easily from the location of manufacturing. in collaboration with the Indian Institute of Science to work on projects related to its vehicles and avionics business. it has one unit in Indonesia focusing on the design of audio products. Th new trends are more visible in industries dealing with new technologies. countries like India. Multi National company and Trans Multi National Company ? Content of the Four Basic Multinational Strategies ######################### CASE – 3 (Strategic R & D by TNCs in Developing Countries) TNCs have had long units in developing host countries for adopting products and processes to the local conditions. India. biotechnology. The main incentives for this are : (a) access to highly qualified scientists as shortages of research personnel emerge in certain fields in industrialised countries. Source: World Investment Report 1999. It has one unit in Republic of Korea focusing on the design of compact discs. techniques. they have also started locating strategic R & D centres in some developing countries. to products for local markets. radio cassettes. Consequently. assigning particular affiliates the responsibility for developing. manufacturing.More powerful total company throughout Better quality of products and services Worldwide utilization of best reaources Improved local country management Greater commitment to global objectives Higher global profits COMPANY B-. such as microelectronics. Malaysia or Brazil serve TNCs as good locations for strategic R & D. for developing generic technologies and products for regional or global markets. It has one in Taiwan designing and developing video tape-recorders. radio cassettes. and car stereos.

and car stereos.40000 rs.45000 rs. tape recorders. and multimedia and microchip software. and (c) rationalisation of operations. assigning particular affiliates the responsibility for developing. in collaboration with the Indian Institute of Science to work on projects related to its vehicles and avionics business. It has three units in Singapore conducting R & D on core components such as optical data shortage devices.FOLLOW-UP ---------QUESTION: case 4 VK Ltd a multi-product Company. (b) Cost differentials in research salaries between developing and industrialised countries. video CDs. Such units often work in collaboration with science and technology institutes in the host country.DESIGNING/DEVELOPING RECORDERS It has one in Taiwan designing and developing video tape-recorders. Finally.INTEGRATED CHIPS/OPTICAL DATA DEVICES For instance. For instance. Current work includes interface design of avionics landing systems and smart GPS sensors for use by the group’s business worldwide. minidisk players. radio cassettes. @@@@@@@@@@@@@@@@@@@ (b) Mention the areas where R & D activities can easily be decentralised. and duplicator. integrated chip design for audio products and CD-ROM drives.50000 total cost rs. 3. ---------. 2. derivative models and circuit blocks for new TV chases. it has one unit in Indonesia focusing on the design of audio products. ###################### case 4 VK Ltd a multi-product Company.43000 Assuming that there is no change in prices and variable costs and that the fixed expenses are incurred equally in t he two half years periods calculate for the year2000.DESIGN UNIT FOR COMPACT DISCS/RADIO CASSETTES ETC It has one unit in Republic of Korea focusing on the design of compact discs. Daimler Benz has established such a unit in Bangalore. and marketing particular products worldwide. furnishes you the following data relating to the year 2000 -First Half of the year Second Half of the yearSales sales rs. manufacturing. India. furnishes you the following data relating to the year 2000 -- . 1.(a) Explain why MNCs have located R & D centres in developing countries? SOME OF THE DEVELOPING COUNTRIES OFFER (a) access to highly qualified scientists as shortages of research personnel emerge in certain fields in industrialised countries. discman and hi-fi receiver designs. VIDEO/ DESIGN/DERIVATIVE MODELS It has three units in Malaysia working on video design. radio cassettes. Sony Corporation of Japan has around nine R & D units in Asian developing countries. 4.

Company B : “ We are multinational firm. to look next to you at the lead office and pick some one (usually a home country national) you know and trust”. because it generates more revenue than foreign market.Latin America. The rewards are for global performance. “the worldwide Product division concept is rather difficult to implement.First Half of the year Second Half of the yearSales sales rs. As our organisational chart shows. 2 Two Senior executives of world’s largest firms with extensive holdings outside the home country speak.43000 Assuming that there is no change in prices and variable costs and that the fixed expenses are incurred equally in t he two half years periods calculate for the year2000. HR Jobs in UAEgulftalent.comCareers in HR and Recruitment with top companies in the UAE Drilling Engineer Jobnaukrigulf. Also. They have been promoted from domestic ports and tend to view foreign consumers needs as really basically the same as ours. but strategy is to focus on domestic. in each division”.comLeader in UI & UX Software Design. Africa etc. “ of course the most of the key ports in our subsidiaries are held by home country nationals. The senior executives in charge of this divisions have little overseas experience. The execution from company A continues. We look at all new investment projects both domestic and overseas using exactly the same criteria”. Our product division executives have worldwide profit responsibility. the united states is just one region on a par with Europe.Search & Apply to Drilling Engineer Jobs. Get the answer below Sponsored Links Enterprise UX Designmomentumdesignlab. even those in key portions? Questions : 1 Which company is truly Multinational ? Why? COMPANY A IS--Geocentrism ORIENTATION [GLOBAL MULTI ORIENTED] Integrated global outlook . We distribute our products in about 100 countries. We manufacture in over 17 countries and do research and development in three countries. The executive from Company B goes on to explain. Answer Question: CASE NO. if not the policy. Focus on End User Experience.40000 rs. Most of the senior executives simply do not understand what happens overseas and really do not trust foreign executives. Whenever replacements for these men are sought.com/JobsRiyadhRegister@Naukrigulf.45000 total cost rs. Company A : “We are a multinational firm.50000 rs. it is the practice. product division executives tend to focus on domestic market.

In these technologies. and car stereos. Multi National company and Trans Multi National Company ? Content of the Four Basic Multinational Strategies ######################### CASE – 3 (Strategic R & D by TNCs in Developing Countries) TNCs have had long units in developing host countries for adopting products and processes to the local conditions. Israel. It has one unit in Republic of Korea focusing on the design of compact discs. minidisk players. video CDs. (b) Cost differentials in research salaries between developing and industrialised countries. It is also possible to separate R & D in core activities from that in non-core activities. assigning particular affiliates the responsibility for developing. the location of R & D can be geographically de-linked more easily from the location of manufacturing. It has three units in Singapore conducting R & D on core components such as optical data shortage devices.IS ETHOCENTRIC Ethnocentric Orientation • domestic market extension concept: • Domestic strategies. techniques. It has three units in Malaysia working on video design. and marketing particular products worldwide. Since the min-1980s. they have also started locating strategic R & D centres in some developing countries. Sony Corporation of Japan has around nine R & D units in Asian developing countries. and multimedia and microchip software. and (c) rationalisation of operations. derivative models and circuit blocks for new TV chases. Singapore. considered secondary • International markets regarded as o outlets for surplus domestic production • International marketing plans o developed in-house by international division ===================================== 2 List three differences between Company . and in a few cases. to products for local markets. For instance. Th new trends are more visible in industries dealing with new technologies. countries like India. Finally. The main incentives for this are : (a) access to highly qualified scientists as shortages of research personnel emerge in certain fields in industrialised countries. discman and hi-fi receiver designs. . such as microelectronics. radio cassettes. integrated chip design for audio products and CD-ROM drives. Consequently. manufacturing. and new materials. and personnel are perceived as superior • International customers. radio cassettes. however. it has one unit in Indonesia focusing on the design of audio products. Malaysia or Brazil serve TNCs as good locations for strategic R & D. It has one in Taiwan designing and developing video tape-recorders.More powerful total company throughout Better quality of products and services Worldwide utilization of best reaources Improved local country management Greater commitment to global objectives Higher global profits COMPANY B-. for developing generic technologies and products for regional or global markets. biotechnology. and duplicator. tape recorders.

It has three units in Singapore conducting R & D on core components such as optical data shortage devices. it has one unit in Indonesia focusing on the design of audio products. in collaboration with the Indian Institute of Science to work on projects related to its vehicles and avionics business. (b) Cost differentials in research salaries between developing and industrialised countries. Daimler Benz has established such a unit in Bangalore. and car stereos. tape recorders. and duplicator. 3. in collaboration with the Indian Institute of Science to work on projects related to its vehicles and avionics business. and multimedia and microchip software. minidisk players. @@@@@@@@@@@@@@@@@@@ (b) Mention the areas where R & D activities can easily be decentralised. manufacturing. For instance. Source: World Investment Report 1999. India. Current work includes interface design of avionics landing systems and smart GPS sensors for use by the group’s business worldwide. and marketing particular products worldwide.DESIGNING/DEVELOPING RECORDERS It has one in Taiwan designing and developing video tape-recorders. Questions: (a) Explain why MNCs have located R & D centres in developing countries? SOME OF THE DEVELOPING COUNTRIES OFFER (a) access to highly qualified scientists as shortages of research personnel emerge in certain fields in industrialised countries. and (c) rationalisation of operations. 4. ###################### case 4 VK Ltd a multi-product Company. Sony Corporation of Japan has around nine R & D units in Asian developing countries. discman and hi-fi receiver designs.INTEGRATED CHIPS/OPTICAL DATA DEVICES For instance. assigning particular affiliates the responsibility for developing. Daimler Benz has established such a unit in Bangalore. radio cassettes. Such units often work in collaboration with science and technology institutes in the host country. integrated chip design for audio products and CD-ROM drives. VIDEO/ DESIGN/DERIVATIVE MODELS It has three units in Malaysia working on video design. radio cassettes. derivative models and circuit blocks for new TV chases. 1. furnishes you the following data relating to the year 2000 -- . For instance. 2.Such units often work in collaboration with science and technology institutes in the host country. Current work includes interface design of avionics landing systems and smart GPS sensors for use by the group’s business worldwide. video CDs. Finally. India.DESIGN UNIT FOR COMPACT DISCS/RADIO CASSETTES ETC It has one unit in Republic of Korea focusing on the design of compact discs.

First Half of the year Second Half of the yearSales sales rs.50000 total cost rs. FIRST HALF SALES SECOND HALF 45000 50000 95000 TOTAL COST 40000 NO CHANGE IN UNIT PRICES NO CHANGE IN UNIT FIXED TOTAL 43000 83000 VARIABLE COSTS EXPENSES ARE THE SAME IN BOTH HALVES HENCE VARIABEL COST FIXED COST 40000 27000 13000 43000 30000 13000 83000 57000 26000 .45000 rs.43000 Assuming that there is no change in prices and variable costs and that the fixed expenses are incurred equally in t he two half years periods calculate for the year2000.40000 rs.