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Some of the world's leading companies are changing the strategic focus of their activities and following a similar path to success. Increasingly, firms compete by selling complex products and services as integrated solutions that address the needs of large business or government-owned customers. This chapter presents empirical findings within a conceptual framework which examines how the firms are changing the strategic focus of their activities, adapting to new positions in the value chain, and developing new sets of capabilities. To provide products and services as integrated solutions, firms are building core ‘systems integration’ capabilities to provide world-class products with equipment sourced from different vendors, and moving into the provision of services to maintain, finance, and operate a product throughout its life cycle.

The dialectical complementarity of liberalism and corporatist governance in provincialized layers has brought forth internationally oriented companies promoting diversified quality production, credit rather than share issue finance, and a stakeholder model of corporate governance rather than shareholder capitalism. Such characteristics have recently been shaken by the impetus of Anglo-American shareholder value orientations in international ‘financialization’. Whereas changes that challenge established practices are indubitable, the pervasive phenomenon of recombination implying reassertion of domestic practices in new forms is also present: credit financing has gone up again; employee representatives have both modified and helped to implement shareholder value orientations; co-determination has, despite shocks, also proved helpful in the fashioning of changes. Financial and strategic-operative internationalization of enterprises are not clearly related to one another. Generally, recombination of opposed tendencies and characteristics again is the rule.

This chapter examines the strategic approaches that firms adopt in competing globally. Competing in global markets requires organizations to consider carefully an array of strategic options ranging from approaches that pursue localization at all costs to tight integration of markets and products across the globe. A fundamental premise is that any strategy seeking to address the global marketplace must leverage country-specific advantages. Organizations crafting global strategies must also make explicit choices about the location of value chain activities in order to leverage location-specific advantages. To examine these issues, the chapter uses the value chain concept to examine MNE strategic choices, and considers the strategies of adapting value chains on a country-by-country basis and aggregating value activities in the home country location. The chapter also examines strategic decisions spanning aspects, such as location choices; coordination mechanisms that help bridge the divide between headquarters and local subsidiaries; and the specific approach to technology and innovation.

Some of the world's leading companies are changing the strategic focus of their activities and following a similar path to success. Increasingly, firms compete by selling complex products and services as integrated solutions that address the needs of large business or government‐owned customers. Presents empirical findings within a conceptual framework that examines how the firms are changing the strategic focus of their activities, adapting to new positions in the value chain, and developing new sets of capabilities. To provide products and services as integrated solutions, firms are building core ‘systems integration’ capabilities to provide world‐class products with equipment sourced from different vendors, and moving into the provision of services to maintain, finance, and operate a product throughout its life cycle.

This chapter extends the analysis of networks explicitly to the international sphere by addressing the whole area of information and communications technology (ICT) and networks and particularly how they are argued to be radically transforming the nature of international relations, organised under the conceptual umbrella term of ‘globalisation’. The internationalisation of ‘production networks’ and how these are also argued to be recasting the nature of global economic relationships are also discussed. Both of these aspects to international networks are critically analysed. The relationship between national and international networking as well as the relationship between networks and other mechanisms of socio-economic coordination and governance is reviewed. The role of the Internet and the World Wide Web in reshaping the whole nature of domestic and international social and economic relationships is discussed, along with the notion of value chains or commodity chains as networks and the role of networks in the governance of the international system.

This chapter continues the discussion of knowledge, shifting the focus to the global allocation of knowledge-based resources. It argues that the current wave of globalization promises to change the way MNEs decide on the preferred location for their value added functions and activities. Recent trends in the management of knowledge resources have important implications for the formulation and execution of global strategy. In particular, the controversial topic of offshoring gives rise to a new set of strategic issues. The chapter proposes that the decision to use offshoring for functions with a large knowledge component should be a function of country-specific considerations. The considerations should center on the ability to leverage the unique location specific characteristics to add superior value to the function and to the firm. The chapter also examines the type of knowledge functions that can be outsourced and the major decisions necessary to execute an outsourcing entry strategy.

This chapter charts the timing and geographical spread of Japanese foreign direct investment. It discusses different interpretations of the distinctive characteristics of Japanese manufacturing multinationals and the evolution of their internationalization strategies, focusing on the rapid growth of such investment from the mid-1980s and their goals in establishing overseas subsidiaries. It argues that many earlier analyses were too optimistic in their expectations of upgrading, especially in the light of the ebb, flow, and international repositioning of investment as Japanese companies respond to changing economic conditions at home and the wider international division of labour, with its regional rivalries and new centres of low-cost production. Thus, some subsidiaries will remain routine manufacturing plants, some may move up the value chain and others may face contraction or closure. These different trajectories will help shape the production regimes and employment relations of specific subsidiaries, mediating any process of global localization.

This chapter seeks to expand the domain of management accounting and organizational control research into creative industries, and develop a framework for studying perhaps the best known of these industries — motion pictures. It discusses both traditional and emerging issues in-context that managerial accountants ordinarily address in most organizations across a diversity of industries. These include issues of performance evaluation, incentives, contracting, strategic assessment, value chain analysis, budgetary systems, cost control, cost behaviour, and profit analyses. The framework for achieving this focuses on the US motion picture industry, which has the longest history and is the most developed film industry globally.

The importance of supermarkets in the world food economy has increased radically since the early 1990s. They are now major sellers and buyers of food items not only in developed but also in developing countries. Urbanization and the liberalization of the services sector have been important facilitators of this process. This chapter examines the emerging importance of supermarkets in Latin America, and their impact on both producers and consumers.

This chapter discusses the quality-cost revolution, starting with the role of companies in moving price competition up the value chain. This is followed by a section on the competition for profit, where the chapter notes that the American, Japanese, and European corporations were the ones initially responsible for motivating the quality-cost revolution. It also determines the sustainability of Asia's low-cost model and examines inside-out economic development.

Small and medium-sized enterprises (SMEs) play a critical role in economic development in developing countries by furnishing needed goods and services to consumers, creating most employment opportunities, and driving innovation. Yet, these enterprises face numerous hurdles when seeking credit and debt options in the form of short- and medium-term financing. This problem is particularly acute in developing economies where SMEs represent a disproportionately small percentage of the overall number of private enterprises. Conversely, in many of these economies micro enterprises and large firms face a far less challenging environment for finance access due to structural legacies in the local banking industry and recent innovations in the area of microfinance. Despite the challenges faced by SMEs, a new breed of financial intermediary has begun to demonstrate successful lending relationships with firms once considered unbankable. Deploying a modified version of an existing lending technology known as "value chain lending," these financial players have introduced a new and effective tool whose use highlights new banking opportunities for both local and international firms in a market segment primed for growth.

This chapter introduces the concept of the strategic audit. It begins with the identification of the customers’ needs and characteristics, while, by understanding the value chain, costs, returns, and the opportunity to add value are explored. The chapter undertakes this exercise for four European industries—Italian knitwear, airlines, retail banking, and champagne.

This chapter provides a new perspective on a longstanding debate concerning the development of contemporary capitalism: does globalization erode the influence of territorial institutions on economic organization? While the theory of institutional comparative advantage and the varieties of capitalism (VoC) approach more generally maintain that globalization is compatible with persistent institutional diversity, the global commodity/value chain (GCC/GVC) approach holds that the organization of production increasingly reflects governance logics that are industry specific and global in scope. In order to empirically evaluate these contending claims, This chapter first derives two sets of divergent hypotheses regarding the degree to which a particular dimension of economic organization — spatial fragmentation — varies by either institutional or industry type, and then conducts a longitudinal statistical analysis in which thi chapter compares rates of spatial fragmentation (measured as the ratio of imports to domestic value-added) across industries and varieties of capitalism. The results provide strong (but imperfect) evidence in support of the GCC/GVC approach insofar as relative rates of spatial fragmentation vary across industries in a manner consistent with industry-specific global governance models, while the observed variation between institutional types is not significantly larger than that within them. The chapter interprets these findings as evidence for the claim that, across different institutional contexts, firms in the manufacturing sector are participating in coordinated trade networks of the sort described in the global commodity/value chains literature. The conclusion charts a parallel path forward in calling for future research that draws on both the VoC and GCC/GVC approaches to understand how spatial fragmentation is occurring, especially at the level of inter-firm relations in particular institutional contexts.

This chapter studies the third pillar of sustainable intensification by focusing on the development of sustainable socioeconomic intensification. This encompasses the intensification of the relationships between farmers, which results in the development of innovative and sustainable institutions on the farm, in the community, and across regions and nations as a whole. Part of the response of rural people to the isolation they experience is to create associations, such as savings and loans associations and formal cooperatives. The critical question is how these institutions can be taken to scale. This chapter argues that the successful transformation of African agriculture lies in the effective integration of smallholder farmers into modernizing value chains. A food value chain describes the complicated process of transformation involving a sequence of events from the molecular product of one or more genes in crops or livestock, through intermediate stages of husbandry, harvesting, processing, marketing, and consumption, to the final molecular changes in the human who consumes the food product. Each component of the value chain, each structure or process has its distinctive characteristics, especially its own capacity to generate value.

The authors show how different stages in the Global value chain responded to the great trade collapse following the crisis of 2008. Firms over react because of a ‘bull-whip’ effect, related to adjustments of the stock of intermediary inputs.

Recent studies document a decline in the share of labor and a simultaneous increase in the share of residual (“factorless”) income in national GDP. We argue the need for study of factor incomes in cross-border production to complement country studies. We define a GVC production function that tracks the value added in each stage of production in any country-industry. We define a new residual as the difference between the value of the final good and the payments to all tangibles (capital and labor) in any stage. We focus on GVCs of manufactured goods and find the residual to be large. We interpret it as income for intangibles that are (mostly) not covered in current national accounts statistics. We document decreasing labour and increasing capital income shares over the period 2000–14. This is mainly due to increasing income for intangible assets, in particular in GVCs of durable goods. We provide evidence that suggests that the 2000s should be seen as an exceptional period in the global economy during which multinational firms benefited from reduced labor costs through offshoring, while capitalizing on existing firm-specific intangibles, such as brand names, at little marginal cost.

In this chapter, Timothy Sturgeon, John Humphrey, and Gary Gereffi analyze the co-evolutionary character of market making, in which the initial trials with global sourcing in the 1970s and 1980s by a few retailers helped spur the development of an increasingly competent group of contract manufacturers mainly located in East Asia. These contractors acquired the capabilities necessary to produce products to the specifications of leading firms in the West. Some of the early deals were made directly with Asian manufacturers, whereas others relied on Asian intermediaries (for example, trading firms) to organize and coordinate production in Asia. These early moves provided both an example and a ready-made supply base for other retailers and branded marketers not yet engaged in global sourcing. The increasing competence of these contract manufacturers also dovetailed with a trend toward outsourcing by manufacturing firms in the USA, including leading companies in technology-intensive sectors such as electronics, accelerating the creation of a global supply base of contract manufacturers. In the 1990s, as retailers and brand-name merchandisers passed more responsibility on to contract manufacturers for process development, material sourcing, and even some aspects of product design, the global supply base began to be populated by large, “full-package” contractors with a full range of capabilities. Today, the depth and breadth of the global manufacturing supply base, along with new internet-based tools for buyer–supplier matchmaking and operational coordination, may be opening a new stage in the development of global sourcing.

This chapter gives an overview of the state of global production networks in the present age, particularly in the “slicing of the value chain” phenomenon, which refers to the gradual disintegration of production processes across borders. Another important characteristic of global production networks is that they necessarily entail intensive contracting between parties located in different countries and thus subject to distinct legal systems. In a world with perfect (or complete) contracting across borders, this of course would be of little relevance. Unfortunately, this is not the case at present, and from here the chapter examines the issues surrounding the use of contracts in international trade.

The objective of this chapter is to explore the genesis of special economic zones (SEZs) and outline their historical evolution. It also analyses changes in their structural, spatial, functional, and administrative dimensions. It shows how SEZs originated in developed countries, when they were developing, as part of their strategy to support the process of ongoing industrialization. Recognizing their potential, developing countries' governments have increasingly embraced them as part of their development strategy and experimented with particularly innovative features to use them effectively. As a result, SEZs evolved over time towards more comprehensive objectives, high-tech orientation and multi-sectors, multi-preferential policies, flexible locations, larger spatial dimensions, and more economic integration within the host economy, which calls for a better understanding of their role in economic development.