Despite the forces of globalisation, locality and national advantage remain the key determinants of competitiveness’. Does the evidence from transnational corporations and specific industry support this view?
‘Globalisation’ is a term that the business world has become very familiar with over recent decades, the term itself, the causes of it and the effects both predicted and observed on the numerous groups involved have been widely documented since its first emergence. Globalisation whilst defined as many different things over recent decades and argued by many to be an overused and poorly understood however it can be discussed can be discussed on a simple level as organisations operating successfully across the world having a deep penetration across foreign markets. The driving forces behind this globalisation are a number of forces however increasing technology has been the catalyst and enabled firms to communicate, trade and operate on an international basis. The increasing infrastructure in developed countries has increased competition for most industries forcing companies to face fierce competition both in their home country and for MNE’s also overseas in foreign markets. This competition pressure and the developing infrastructure in less developed countries have made entry from foreign multinationals more viable at a cost effective level, and with possibilities of capturing large market share more appealing to MNE’s. With the increasing trend for companies operating on an international basis the world has seen a rise in international collaboration in a number of forms; partnerships, mergers and acquisitions, sub-contracting and trading agreements.
Some of the key evidence against the effects of globalisation on competitiveness of companies is the view that locality and national advantage remain the key determinants of competitiveness. The benefits of locality relate to the concept of Industrial clusters, where firms of a similar industry are...