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Midterm
MBA 6320 – Strategic Management
Midterm Examination
1) It is widely recognized that changes in technology and competition have diminished many of the traditional roles of location. Resources, capital, technology, and other inputs can be efficiently sourced in global markets. Firms can access immobile inputs via corporate networks. It is no longer necessary to locate near large markets to serve them. Governments are widely seen as losing their influence over competition to global forces. It is easy to conclude, then, that location is diminishing in importance. Do you agree or disagree with the statement that location is diminishing in importance in the global economy? Support your conclusions.
In times of increasing globalization, transnational companies and flexible production systems, we would expect the importance of firm location to be diminishing. Multinational companies have their subsidiaries all over the world. This trend is ascending, since cost of shipping goods is getting ever cheaper. If anything, the tendency has been to see location as diminishing in importance. Globalization allows companies to source capital, goods and technology from anywhere and to locate operations wherever it is most cost effective. Governments are widely seen as losing their influence over competition to global forces. (Porter 1998, p. 197).
2B) Can a firm achieve competitive advantage and thereby strategic competitiveness without acting ethically? Explain your answer.
Business ethics should be a prerequisite for conducting any type of business, particularly in the global marketplace. Traditionally, there have been two views on the role of ethics in business. The first perspective is that the corporate executives’ sole responsibility is to maximize the shareholder’s value. The second view is that “ethics pays,” which implies that acting in a socially responsible way towards shareholder will automatically enhance shareholder wealth (Verhezen, 2005).
Business ethics should

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