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Implications for Firm-level Catch-Up in Developing Countries

In: The Global Business Revolution and the Cascade Effect

Author

Listed:
  • Peter Nolan
  • Jin Zhang
  • Chunhang Liu

Abstract

The period since the 1970s has seen a large change in the nature of business organization, amounting to nothing less than a ‘business revolution’. As global markets have opened up, multinational companies typically have responded by divesting their ‘non-core’ businesses to focus on a small array of closely related products in which they have global leadership, achieved through the possession of a combination of superior brand and technology, and through economies of scale and scope in both areas. The large size and business focus of leading firms has enabled them to benefit greatly from economies of scale in procurement. Leading global firms have increasingly outsourced manufacturing and ‘non-core’ service functions, to focus on the ‘brain’ functions of design, product development, final assembly, marketing and financing. Alongside the growth of outsourcing, they have also developed skills in systems integration and coordination of their supply chain. Leading global firms have also been able to attract the best employees in the international ‘battle for talent’.

Suggested Citation

  • Peter Nolan & Jin Zhang & Chunhang Liu, 2007. "Implications for Firm-level Catch-Up in Developing Countries," Palgrave Macmillan Books, in: The Global Business Revolution and the Cascade Effect, chapter 6, pages 144-161, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-59744-0_7
    DOI: 10.1057/9780230597440_7
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