9/11 In remembrance: Terrorism and International Business

TERRORISM AND INTERNATIONAL BUSINESS:

Michael R. Czinkota, Gary Knight, Gabriele Suder.

The airplanes of 9/11 forced countless multinational corporations (MNCs) to update their strategic planning.  Our work with executives at more than 150 MNCs shows that more than ten years later, companies are still grappling with how best to manage the terrorist threat.

In the two decades before 2001, the rate at which firms launched international ventures was growing rapidly. After 9/11, foreign direct investment fell dramatically as firms withdrew to their home markets. The popularity of international-sounding company and brand names decreased appreciably as managers now emphasize domestic and local affiliations.

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International Logistics, Part 4 : Management of International Logistics

The purpose of multinational firm is to benefit from system synergism. Therefore the coordination of international logistics at corporate headquarters is important. Without coordination, subsidiaries tend to optimize their individual efficiency but jeopardize the overall performance of the firm.

Centralized logistics Management

If headquarters exerts control, it must also take the primary responsibility for its decision. To avoid internal problems, both headquarters staff and local logistics management should report to one person. This person can then become the final arbiter to decide the firm’s priorities. Of course, this individual should also be in charge of determining appropriate rewards for manager, both at headquarters and abroad, so that corporate decisions that alter a manager’s performance level will not affect the manager’s appraisal and evaluation. Further, this individual can contribute an objective view when inevitable conflicts arise in international logistics coordination.

Decentralized Logistics Management

If a firm serves many international markets that are diverse in nature, total centralization would leave the firm unresponsive to local adaption need. If each subsidiary is made a profit center in itself, each one carries the full responsibility for its performance, which can lead to greater local management satisfaction and to better adaption to local market conditions. Yet often such decentralization deprives the logistics function of the benefits of coordination.

Contract Logistics

A growing preference among international firms is to outsource, often referred to as contract or third-party logistics (3PL) Most companies have outsourced at least one major logistics function such as customs clearance, transportation management, freight payment, warehouse management, shipment tracking, or other transportation-related functions. The main thrust behind the idea is that individual firms are experts in their industry and should therefore concentrate only on their operations. 3PL providers are experts at logistics, with the knowledge and means to perform efficient and innovative services for those companies in need. The goal is improved service at equal or lower cost.

Logistics providers’ service at equal or lower cost. Logistics providers’ services vary in scope. Some may use their own assets in physical transportation, while others subcontract out portions of the job. Certain other providers are not involved as much with the actual transportation as they are with developing systems and database or consulting on administrative management services. In many instances, the partnership consists of working closely with established transport providers such as the FedEx or UPS.

One of the greatest benefits of contracting out the logistics function in a foreign market is the ability to take advantage of an existing network complete with resources and experience. One of the main arguments leveled against contract logistics does not and should not require the handing over of control. Rather, it offers concentration on one’s specialization – a division of labor.

 

International Logistics, Part 1: Supply Chain Management

Supply chain management encompasses the planning and mangement of all activities involved in sourcing and procurement, conversion, and logistics. It also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party serivice providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies.

Advances in information technology have been crucial to progress in supply chain management. Consider the example of Gestamp (Spain’s leading supplier of metal components for car manufacturers), which used electronic data interchange technology to many reports increased manufacturing productivity, reduced investment needs, increased efficiency of the billing process, and led to a lower rate of logistic errors across the supply process after implementing a supply chain system. Globalization has opened up supplier’s ability to provide satisfying goods and services will play the most critical role in securing long-term contracts. In addition, the physical delivery of goods often can be old-fashioned and slow. Nevertheless, the use of such strategic tools will be crucial for international managers to develop and maintain key competitive advantages. An overview of the international supply chain is shown below:

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9/11 In remembrance: Terrorism and International Business

TERRORISM AND INTERNATIONAL BUSINESS:

Michael R. Czinkota, Gary Knight, Gabriele Suder.

The airplanes of 9/11 forced countless multinational corporations (MNCs) to update their strategic planning.  Our work with executives at more than 150 MNCs shows that more than ten years later, companies are still grappling with how best to manage the terrorist threat.

In the two decades before 2001, the rate at which firms launched international ventures was growing rapidly. After 9/11, foreign direct investment fell dramatically as firms withdrew to their home markets. The popularity of international-sounding company and brand names decreased appreciably as managers now emphasize domestic and local affiliations.

Continue reading