Major Multinational Corporations Research Articles

ICT4D and the Siyakhula Living Lab: an anthropological contribution to digital development

Anthropologists are increasingly interested in the reception and adaptation of Information and Communications Technologies (ICTs) at the local level, especially when these are intended or adapted for social change in the kinds of societies and communities anthropologists study. The process has been increasingly driven by the spread of landline telephones, radio, television, personal computers, the Internet (1.0 and now 2.0), basic cell phones and now internet-enabled or ‘3G’ cell phones. These successive technological innovations, now collectively grouped as ICTs, have had the effect of shrinking distance by increasing the reach of both those who control these technologies and those who can access them. With radio and TV, and even the Internet until recently, communication tended to be one-way: from the centre to the periphery both between and within countries. This was never the case with landline telephones, which offered two-way communication from the outset; but landlines rarely extended into the rural areas of developing countries, and even where there was access, the poor generally could not afford domestic installation. Cellular phones, though even more expensive in terms of call charges, operate beyond the reach of landlines, are portable and no longer as dependent on frequent charging from mains electricity as before. The wireless networks that run them now offer access to the Internet almost everywhere—for those who have 3G handsets and/or wireless-connected computers—and include such useful adaptations to Third World conditions such as ‘pay as you go’ and ‘please call me.’ Moreover, the Internet itself has become more interactive with its 2.0 technologies. If ‘development’ (as opposed to modernisation) is about agency and empowerment for those who currently lack it, then there is development potential in the newest ICTs despite their control by major multinational corporations. Informatics professionals and elements of the ‘development community’ reaching as high as the World Bank and the United Nations (Millennium Development Goals) regard ICT4D (ICTs for development) as a potential redeemer of half a century of mostly failed interventions on behalf of the world's poor. But how feasible is ICT4D? How is it being received and what are its direct and indirect impacts? This paper is the outcome of four years of engagement with an ICT4D research project founded in Dwesa-Cwebe on the Wild Coast of the Eastern Cape in South Africa. It assesses not only the potential and snags of ICT as a development tool, but also, via a baseline research project completed in 2008, provides a sense of the setting, the needs of the community and the potential of the ‘Living Lab’ approach to ICT4D.

Triads in Services Outsourcing: Bridge, Bridge Decay and Bridge Transfer*

Typically, a triad of actors is involved in any outsourcing situation: the buyer, the supplier and the buyer's customer. In manufacturing, the buyer acts as a bridge between its supplier and its customer and maintains this bridge position before, during and after the outsourcing. However, in services, the relationship structures among the three actors change before, during and after the outsourcing. Before outsourcing (i.e., during the contract negotiation stage), the buyer is the “bridge” between its supplier and its customer. During implementation, this bridge position begins to “decay” as its supplier comes in direct contact with the buyer's customer. Post‐implementation, the bridge position is intended to be “transferred” to the supplier. However, if left unmanaged, this state of transferred bridge position has serious performance implications for the buyer. The supplier is now the bridge and thus enjoys the leverage inherent in being a bridge. This point has been missed in many services outsourcing ventures by major multinational corporations. To mitigate this effect, we propose that the buyer should continue to actively interact with its customer and closely monitor the supplier in order to prevent the supplier from solidifying its bridge position.

The Audit Industry: World's Weakest Oligopoly?

The world's audit oligopoly is composed of four accounting firms: PricewaterhouseCoopers, KPMG, Ernst & Young, and Deloitte Touche Komatsu (the Big 4). These firms are in a strong position in that they audit the financial statements of nearly all the global public companies in the world and, arguably, are the only audit firms able to do so. They are huge, privately-owned, international networks with robust revenues, vast resources, and expertise. Yet they are heavily regulated by governments, and they are subject to massive lawsuits when investors and creditors suffer large losses due to fraud or error; these are their major weaknesses. Since the dual shocks of the collapse of Arthur Andersen (reducing the Big 5 to 4) and the enactment of stringent regulations by the U.S. Congress in 2002 in reaction to corporate accounting scandals, there is great concern in the financial community that another company in the oligopoly could be forced out of business, further reducing the choice of auditors for multinational corporations and causing disruptions in the marketplace. This paper reviews the effects of concentration on competition in the market for audits of major multinational corporations, as well as the effects on audit fees, audit quality, and the regulatory environment. It observes that competition is far less intense than in earlier years and that regulatory authorities are reluctant to take severe disciplinary actions against audit firms, but that the industry remains vulnerable to legal challenge. Global public companies will continue to face limited choice of auditors until smaller competitors or new competitors can build viable networks and reputations for high quality audits. The paper examines barriers to market entry and comments on proposals to promote greater competition, including liability limitations. It also reports on anticompetitive practices of major accounting firms in the past and the need for regulatory authorities to maintain constant vigilance to avoid any recurrence. Finally, responding to the question posed in the title, the paper concludes that considering the industry's market dominance, the relaxation of punitive actions by regulatory authorities and the availability of some forms of liability limitation, the audit industry may not be the ideal candidate for weakest oligopoly in the world.

An Examination of Strategic Drivers Impacting U.S. Multinational Lodging Corporations

ABSTRACT Top executives from four major multinational lodging corporations were interviewed on corporate strategies to identify key strategic drivers for creating value in the global lodging industry. In the face of greater environmental uncertainty, global competition, and technological change, it is imperative that multinational lodging firms develop strategies for protecting their domestic franchises and expanding internationally. The findings reveal shifts in current business models, strategies for changing brand architecture, searches for profitable new markets, commoditization and differentiation of the product, and development of customer-centered functional strategies. Implications of these strategic changes for the lodging industry are discussed.

THE EMERGENT LEGAL REGIME FOR EXPLORATION OF HYDROCARBONS IN THE GULF OF GUINEA: IMPERATIVE CONSIDERATIONS FOR PARTICIPATING STATES AND MULTINATIONALS

AbstractThis paper outlines recent developments in regional cooperation within the Gulf of Guinea region leading to the recent establishment of the Gulf of Guinea Commission. The huge interest generated among the major oil-producing multinational corporations, the newer independent producers and the participating States in the Gulf of Guinea necessitates a critical assessment of the Treaty Establishing the Gulf of Guinea Commission. This paper adopts a comparative analysis with pre-existing regional and institutional bodies having similar aims and objectives. The aim is to ascertain whether and to what extent the emergent regime can facilitate a sustainable and responsive regime for the anticipated explosion of exploitative activities in this resource-rich and strategic littoral zone. This paper, thus, places the existing regime in the context of international best practices for multinationals and governments involved in oil and gas exploration and production. The author identifies certain imperatives for the consideration of both the corporate and sovereign interests in the world's newest resource Eldorado.

The oil industry and climate change: strategies and ethical dilemmas

This paper explores the different climate change strategies chosen by three major multinational oil corporations: ExxonMobil, TotalFinaElf and BP Amoco. They are referred to, as the ‘fight against emission constraints,’ ‘wait and see,’ and ‘proactive’ strategies, respectively. The justifications given to support these strategies are identified. They cover the business, scientific, political, economic, technological and social dimensions. In a business ethics framework, the issue of climate change brings forth an ethical dilemma for the oil industry, in the form of a tension between profits and CO 2 emissions. The strategies are analysed as three attitudes towards this dilemma: (i) placing priority on the business consequences while weakening the perception that anthropogenic greenhouse gas emissions are causing climate change; (ii) avoiding responsibility; and (iii) placing priority on the need for a modification of the business process while limiting the negative effect in terms of business consequences. In conclusion, we propose that beyond the ethical issues proper to climate change itself, additional ethical issues are raised if society at large is instrumentalised by an industry in its search for profit. Publicly gauging and valorising the ethical commitment of a corporation appear as ways of inducing more collaborative and proactive attitudes by business actors.

The oil industry and climate change: strategies and ethical dilemmas

This paper explores the different climate change strategies chosen by three major multinational oil corporations: ExxonMobil, TotalFinaElf and BP Amoco. They are referred to, as the ‘fight against emission constraints,’ ‘wait and see,’ and ‘proactive’ strategies, respectively. The justifications given to support these strategies are identified. They cover the business, scientific, political, economic, technological and social dimensions. In a business ethics framework, the issue of climate change brings forth an ethical dilemma for the oil industry, in the form of a tension between profits and CO2 emissions. The strategies are analysed as three attitudes towards this dilemma: (i) placing priority on the business consequences while weakening the perception that anthropogenic greenhouse gas emissions are causing climate change; (ii) avoiding responsibility; and (iii) placing priority on the need for a modification of the business process while limiting the negative effect in terms of business consequences. In conclusion, we propose that beyond the ethical issues proper to climate change itself, additional ethical issues are raised if society at large is instrumentalised by an industry in its search for profit. Publicly gauging and valorising the ethical commitment of a corporation appear as ways of inducing more collaborative and proactive attitudes by business actors.

The challenges and opportunities of franchising in China’s hotel industry

Franchising develops quickly in the hotel industry with the expansion and globalization of hotel chains, as it brings about advantages and sets up a very good leverage between two parties – franchisor and franchisee. Major multinational hotel corporations have entered China, but franchising is seldom used as a tool of expansion there. The continuous increase in tourism and the structural change in the hotel industry in China afford more opportunities for the growth of franchising operations and also of indigenous hotel chains. When franchising in this specific market, quality control, ownership, connection, business tradition and franchisor‐franchisee relationships should be examined carefully in order to ensure success. A full understanding of China’s peculiar social, cultural, economic and political context is essential for foreign companies, whilst existing and new indigenous companies require greater technical and operating expertise along with the necessary business acumen to operate hotel chains.

Concentrated Economic Power and Silicon Valley

Silicon Valley is the computer and microelectronics capital of America. To analysts from different academic disciplines and ideological persuasions, the economy of Silicon Valley has many faces. In the most romantic characterization, the Valley's astonishing success as home base for a myriad of companies that design, produce, and export computers, workstations, microchips, disk drives, and software is mainly a story about supremely—even belligerently—independent entrepreneurs. According to a second interpretation, the Valley is a full-fledged ‘industrial district’ on the north central Italian model, made up of a dense thicket of mostly small and medium-sized (but also some quite large) ‘flexible specialists’ that alternately cooperate and compete with one another, that are embedded in a local political economy with a shared culture and norms, and that may be well connected to the rest of the world but whose interfirm production relationships are thought to be highly localized. There is also a third perspective. Silicon Valley was created by, and remains profoundly dependent on, major multinational corporations and on the fiscal and regulatory support of the national government—especially in the ‘person’ of the US Department of Defense. The Valley is fundamentally a world headquarters of, or at least an important node within, global networks of big firms and their small firm subcontractors and suppliers, and, as such, is subject to the same contradictory tendencies toward concentration of power but decentralization of production that are coming to characterize the entire global market-based economic system. The three aspects of Silicon Valley's political economy—rampant entrepreneurship, an unusually high degree of interfirm circulation of engineering labor and other signs that have become associated with district-like behavior, and the visible hand of major corporations and their government—university partners in shaping the region into a base from which to manage operations that are executed beyond the Valley's domain—are in fact not mutually inconsistent. In this paper, however, I argue that the third constitutes the dominant tendency driving the reproduction of this vibrant regional economy, and has done since the years after World War 2.

MANAGING EXPATRIATES

Introduction Expatriate managers are crucial members of all major multinational corporations (MNCs). And they are very expensive. To send a manager abroad can typically cost three times what it would cost to keep him or her at home. The expatriate managers' success is vital to their corporation, and to the country in which they work. Their failure, or their underperformance, can be ruinous.

Foreign Exchange Accounting of Multinational Corporations

The first statement of accounting principles issued by the Financial Accounting Standards Board (FASB) provides analysts with the opportunity to explore in detail the impact on the financial statements of major multinational corporations of income statement and balance sheet translation of their foreign subsidiaries. The combination of floating exchange rates and the importance of multinational corporations earning a significant portion of their income overseas makes necessary an examination of the stability and recurring nature of reported profits from this source. This article analyzes the accounting options available to and used by specific firms with respect to the translation of their foreign income statements and balance sheets.