The Global Production Networks of US, UK, and German Firms

Abstract

This chapter surveys the factors that have given rise to foreign sourcing and analyses the divergent manner in which national institutional environments, as well as international regulatory bodies, have shaped the coordination and governance of global production networks (GPNs). It shows how, in building GPNs, firms' various strategic concerns, particularly cost reduction, flexibility (in terms of capacity variation), and management of the extremely volatile competitive environment, have interacted with both domestic and global institutional opportunities and constraints to result in a complex web of influences. Additionally, the nationally diverse capabilities, resources and strategies of retail customers are shown to exert a strong influence on power relations in the GPN. In outlining different national sourcing strategies, the chapter explores both the mode of sourcing and the locational choices of firms. Finally, it analyses the nature of relationships in the network between western buyer firms and their contractors in low-wage countries.