By Michel Ghertman, Margaret Allen (auth.)

ISBN-10: 0333364511

ISBN-13: 9780333364512

ISBN-10: 1349173819

ISBN-13: 9781349173815

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Extra resources for An Introduction to the Multinationals

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In the multinationals the objectives of survival, profit and growth can be defined at two levels: that of the group and that of the subsidiaries. They may be modified depending on the country in which the subsidiary is located. For example, the management can take an altogether more short-term view for a subsidiary located in a country where the political risks are larger (war, revolution, riots, nationalization ... ) than for the group as a whole. For a developing country, growth objectives can be a function of the state of development of the market: they can be more important than those of the parent company, or the total group.

In fact, they can borrow locally or reinvest their profits. Using the above figures involves the acceptance of the assumption that financing by the parent company's direct investments remains stable in relation to the other sources of financing. In reality, it would seem to be slightly on the decline, which gives credit 56 An Introduction to the Multinationals to the thesis that the multinationals' economic importance in world terms is increasing slightly. The second method of measuring growth consists of measuring the growth of employment due to the multinationals, in comparison with the growth of employment in their home countries and host countries.

It happened mainly because the Europeans simply were not competitive. They were obsessed by the idea that the automobile was a preserve of the rich to replace the~r carriages and drivers. As a result, they manufactured only deluxe cars, which were very costly. The Americans, in contrast, aimed for a broader market with more popular cars, in particular Henry Ford's Model T. Higher output permitted mass production and consequently lower unit cost. American production increased so rapidly that the opening up of factories abroad became a necessity.

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An Introduction to the Multinationals by Michel Ghertman, Margaret Allen (auth.)

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