Strategy

GetUp! for ‘No Business in Abuse’ Campaign

This video overviews how multinational operate in building support for their objectives in respect of refugee detention.  I noted the ‘ethical’ aspect to disarm critique or inquiries into activities.

GetUp! is an activist organisation in Australia who are getting up and speaking up about the abuses that are going on at the public’s expense.… Continue reading

Charting a New Course of REAL HOPE for the Future of Infinite Possibility

I felt inspired to write about the future from the future looking back.  The wonder of poetry I can time travel in my heart envisaging REAL HOPE

 

Charting a New Course of REAL HOPE for the Future of Infinite Possibility

 

I am in the future looking back,

Full Spectrum Dominance was barely… Continue reading

Tension of Multinational Bargaining Power and Host Government Intervention

Strategically Multinational Companies (MNC) want strategic autonomy and freedom.  I find this amusing as the rest of us want this as well.  However, when MNC gain contractual control of public assets this can mean a reduction of autonomy, freedom of speech not only for the public but for the government as well. When I studied strategic marketing it was evident that there were strategies to buy up the marketing channels to keep costs down and maximise control of product quality.  The idea of sourcing componentry from around the world is a strategy to keep costs down by using cheap labour.  The product is compiled in the one place but MNC’s straddle the world. Given their size they have access to government readily and government given economic imperatives will work with them as employment and economic activity results and this is good for re-election.  So the relationship between business and government is intimate.  We saw clearly in the United States the political/business nexus was a revolving door from industry to politics and politics to industry as government was infiltrated by business interests given government saw its interests as the same. The question of who do governments represent is the key question of our time and how business influences society and the future is demonstrating concerning trends in respect of ICT as a means of data capture, surveillance, marketing, personalisation and information delivery without any real critique.

There is a constant tension around regulation and deregulation as business regards this as a cost.  However, externalities (external pollution, extraneous harms) require regulation to ensure health and safety.  There have been many examples of company pollution, spills, gas releases, fracking, labour conditions, rainforest timbers, GMO’s, chemical compounds, CO’2 emissions and the list goes on, which warrant a balanced and neutral regulation of companies and multinationals.

My rationale does not negate the good companies do, the individual leadership of some amazing CEO’s, the innovation, progress, technological advances that have been made.  Nor do I disagree that there would be fair cases for less regulation (red tape), bureaucracy and less interference but it would be on a case by case basis.  Like any human activity it has to be regulated as morality and values are not centre stage, profitability becomes the carrot that all follow, often at the expense of the people and the environment. It is the nature of capitalism to increase profit.  It is not designed to consider social needs unless that profits in some way e.g. Corporate Social Responsibility as part of a marketing effort.  Psychologically the corporation operates as a psychopathic entity with no social emotional consideration.  It is the nature of business.

So I do perceive two sides but balance and caution is a wise strategy when it comes to multinational control and agreements that restrict wellbeing, justice and fair play in any form.

A notable quote from below:

“In the long run,” commented a top manager of one MNC confronted by just this kind of threat, “we risk becoming a collection of inefficient government–subsidized national companies unable to compete on the world market. Yet, if we rationalize our operations, we lose our preferential access to government contracts and our R&D subsidies. So we try to develop an overall strategic plan that makes some competitive sense, and then we bargain for each part of it with individual governments, trying to sell them on the particular programs that contribute to the plan as a whole. Often, we have to revise, or abandon, parts of our plan for lack of government support…”

Another quote in the conclusion:

“…the kind of counteractive response an MNC can select depends primarily on the company’s bargaining power vis-à-vis the host government as well as on its competitive posture within its own industry. In fact, it may be of use to picture these choices of counteractive response as lying at various points along a spectrum defined by MNC bargaining power…”

This article is written with a specialist focus on the needs of Multinational Companies given the author’s expertise.  My comments are reflections as I utilise this article to gain a sense of the thinking of multinationals and their needs and how this impacts the sovereignty of governments.

This is from the Harvard Business Review.

https://hbr.org/1980/03/how-mncs-cope-with-host-government-intervention

 

How MNCs Cope with Host Government Intervention

Since the early 1970s, host governments have intervened more and more in the affairs of multinational corporations. Today they regularly establish rather demanding conditions for MNCs wanting to do business in their countries. What kinds of conditions are these? What type of threat, if any, do they pose to the normal operation of corporate decision making or to the strategic autonomy of corporate managers? Most important, how should the managers of multinationals respond to them? And according to what criteria should they calculate their responses? In this article, the authors—themselves engaged in a long research project on MNCs—seek to provide answers to these questions. First, they show that both host government restrictions and MNC responses can be readily classified. Next, they provide guidance for the necessary but difficult act of matching that managers must attempt between various categories of government demand and corporate reaction. Finally, they suggest some of the implications of achieving a proper balance for the organizational structures of multinationals.
  • The carefully drawn strategic plans of a multinational company (MNC) call for new production facilities to be built in Europe, but the prospective host government establishes unusually strict sales and export volume conditions before giving the necessary permission.
  • National managers of an MNC’s Latin American subsidiary attempt to implement a multinational competitive strategy set by the parent company, but host governments insist that the subsidiary enter into joint venture arrangements with local companies.

Unusual situations? Not any longer. During the 1950s and 1960s, host governments rarely intervened in the affairs of multinational companies. Since 1970, however, those same governments have increasingly begun—for reasons of policy and/or ideology—to limit the considerable strategic autonomy of MNC managers. In developed countries, these limitations tend to cluster in industries of central importance to the government, such as telecommunications equipment. In developing countries, merely being an MNC is often sufficient grounds for attracting host government intervention.

Drawing on intensive research on a number of multinationals in both developed and developing nations, we shall (1) describe the major problems and the trade-offs government intervention poses for MNC managers and (2) discuss the possible lines of MNC response to this encroachment on their traditional strategic autonomy.

Types of Intervention

In recent years, the efforts of host governments to maintain control over their own national economies have increasingly restricted the freedom of MNC managers in deploying economic resources. Of equal importance, host governments have often interfered with the autonomous process of MNC strategy formulation.

Managers who are or who are likely to be faced with such restrictions may find it useful to distinguish between these two different kinds of government intervention. The first, which sets the fiscal and regulatory ground rules for an MNC’s decision to compete in a host country, is best understood as a limitation to strategic freedom. The second, which seeks to influence the internal mechanics of an MNC’s decision-making process, is best understood as a threat to managerial autonomy. Together they constitute a major infringement on the general strategic autonomy of MNC managers. Let us make these various terms clear in the discussion that follows.

Limitations to Strategic Freedom

As foreign trade and investment have made national economies less responsive to such chestnuts of economic policy as the stimulation of demand to increase production, host governments have progressively moved toward the closer regulation of entire industrial sectors. This regulation has primarily affected multinationals in the form of such locally sensitive issues as product/market choice, use of technology, level of employment, and national trade balance.

For example, Spain set explicit sales and export volume conditions before allowing Ford to establish production facilities there. The Spanish government limited Ford’s sales volume to 10% of the previous year’s total automobile market and required that its export volume be equal to at least two-thirds of its entire production in Spain. Further, Ford had to agree not to broaden its range of automobile model lines without government authorization. Continue reading

Parents: Strategies to Protect Children from Violence On TV

 

Here are some tips for responsible parenting to ensure children are not exposed to violence.

 

http://www.umassmed.edu/publicsafety/crimeprevention/bulletins/cpmedvio.cfm

Department of Public Safety

Turning Off Media Violence

Too many people believe violence is an ordinary way to be entertained, settle arguments & blow off steam, and exposure to violence in the media can effect you. According… Continue reading

Mohandas Gandhi

“Nonviolence is a weapon of the strong”

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