University of huddersfield | the behavior of MNEs and supply chain managment |
Discuss the ways in which contemporary economists explain the behaviour of MNEs and of global supply chains
Phil Mccann and Ram Mudamb (2004 ) cited “Multinational enterprises (MNEs) play an essential role in promoting and shaping patterns of economic development, and this role is affected by means of their foreign direct investment (FDI) decisions. In the world of increasing economic integration, factor mobility, and rapid developments in transportation and communications technologies, it is to be expected that the importance of this role will steadily increase. Indeed, overseas investments by MNEs, which amounted to some $16 trillion by 1998, are now the largest single component of worldwide FDI stocks. In addition, the volume of sales of foreign affiliates, which amounted to some $14 trillion by 1999, is nearly twice the global Level of exports for that same year” (UNCTAD 2000)
In this essay I will explain in detail the different behaviour of Multinational Enterprises (MNEs) with support of different theories; how the MNEs makes the money for their shareholders whilst at the same time, what the advantages of MNEs to a local economy are. On the other side I will discuss how the MNEs control their most important supply chain and how to make the maximum advantages to, used in both cases, either they owned the supply chain or not .
According to J H.Dunning “A multinational or transnational enterprise is an enterprise that engages in foreign direct investment (FDI) and owns or controls value-adding activities in more than one country.”
There are two main features of MNEs these are arranged and organized, multiple value adding activities across the nationwide.
The world economists are agreed that FDI plays a key role in the country’s economy. For example, in China the FDI rises to $105.7 billion in 2010, this resulted in China,...