Case – 1 The Office Equipment Company
Office Equipment Company (OEC) must identify a manager to help set up and run a new manufacturing facility located in the Palestinian-controlled Gaza Strip. The position will have a minimum duration of three years. OEC manufactures office equipment such as photo copying machines, recording machines, mail scales, and paper shredders in eight different countries. OEC’s products are distributed and sold worldwide.
Currently, OEC has no manufacturing facility in the Middle East but has been selling and servicing products in Israel since the early 1 970s. OEC sells its products in Israel through independent importers, but is now convinced that it needs to have a local manufacturing facility in order to take full advantage of the new, more peaceful situation in the region. Despite occasional turmoil that interrupts new moves towards peace, OEC’s sales in Israel have been improving, with increase in profitability. OEC has recently been contacted by distributors in Jordan and Egypt about possible sales of OEC products. Incentives for foreign direct investment in Gaza Strip could help OEC develop extensive operations in the region at considerably reduced cost. OEC hopes to begin constructing a factory in Gaza Strip within the next six months. This factory would import products and assemble them. The construction of the assembly plant would be supervised by an US technical team and a US expatriate would be assigned to direct the production. This expatriate manager would report directly to the headquarters of OEC at US. The option of filling the position of managing director with someone from outside the firm is alien to OEC’s policy. Otherwise the options are fairly open. OEC uses a combination of home-country, host- country, and third-country nationals in top positions in foreign countries. It is not uncommon for managers to rotate among foreign and domestic locations (in the US). In fact, it is increasingly evident that...
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