Assignment 2: Individual Report
Student Number: 3319853
Due Date: 19 March, 2011, 8pm
Word Count: 1,667
The aim of this report is to outline the implications that location, first mover advantage, corporate governance and government policies may have for the Colourful Corporation in considering FDI, In doing so to develop a framework to consider the vision, strategy and other managerial issues that may arise from such a venture in the production of a high growth, high tech computer chip, in a developing country.
With regards to location the effect of competition, localization production advantages and the influx of investment capital into a new country were all considered as benefits of the FDI venture. However, it was recognized that a lack of skilled workers may prove challenging for the organization in the early establishment of the venture. Secondly, first movers advantage was considered to leverage competitive advantage and to establish barriers to entry for out competitors. The costs of being the first to establish in a particular country was also given weight.
Corporate governance and in particular responsibility of publically listed companies, directors and reporting requirements were considered. And the effect that FDI would have on the development of a new governance structure for the FDI counterpart of the Colourful Corporation to ensure that business practices are in fact efficient and do not work against the potential benefits of the FDI venture in the first instance. Along side corporate governance, government policy was considered mainly with concern to corruption, trade policies and agreements and intellectual property rights.
The factors from the above were combined into recommendations for management in the development of an effective vision and strategy FDI framework. Further considering the human resource concerns... [continues]
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