1. Foreign collaboration and joint ventures allow companies from different countries to form partnerships for mutual benefit. They can involve government, private, or mixed partnerships.
2. Developing countries benefit from access to capital and technology from developed countries, while developed countries benefit from access to new markets and resources.
3. However, foreign collaborations can also negatively impact developing countries by allowing developed countries to exploit resources and dump outdated technologies at high costs. Multinational corporations also exert political pressures and outflow of foreign exchange.
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1. Foreign collaboration and joint ventures allow companies from different countries to form partnerships for mutual benefit. They can involve government, private, or mixed partnerships.
2. Developing countries benefit from access to capital and technology from developed countries, while developed countries benefit from access to new markets and resources.
3. However, foreign collaborations can also negatively impact developing countries by allowing developed countries to exploit resources and dump outdated technologies at high costs. Multinational corporations also exert political pressures and outflow of foreign exchange.
1. Foreign collaboration and joint ventures allow companies from different countries to form partnerships for mutual benefit. They can involve government, private, or mixed partnerships.
2. Developing countries benefit from access to capital and technology from developed countries, while developed countries benefit from access to new markets and resources.
3. However, foreign collaborations can also negatively impact developing countries by allowing developed countries to exploit resources and dump outdated technologies at high costs. Multinational corporations also exert political pressures and outflow of foreign exchange.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online from Scribd
1. Foreign collaboration and joint ventures allow companies from different countries to form partnerships for mutual benefit. They can involve government, private, or mixed partnerships.
2. Developing countries benefit from access to capital and technology from developed countries, while developed countries benefit from access to new markets and resources.
3. However, foreign collaborations can also negatively impact developing countries by allowing developed countries to exploit resources and dump outdated technologies at high costs. Multinational corporations also exert political pressures and outflow of foreign exchange.
Copyright:
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Foreign Collaborations and joint Ventures:
Introduction: An agreement between two companies from different counties or two countries for mutual help is Known as foreign collaboration or Joint venture.Foreign Collaboration is an agreement between two Countries or two or more companies from different countries for mutual help and benefit. It is a type of Partnership between countries at international level. Joint means together and venture means project. Collaborations are entered into by enterprises from developing countries to develop countries. Collaboration agreement can be entered into: 1). Government to government level. 2). By a private and public company. 3). By two or more private companies from different countries. 4). By two or more private companies from domestic countries.
Problems of developing countries:
1). Inadequate capital. 2).Lack of Technical know how. 3). Scarcity of resources. Developing countries possess: 1). Human resources. 2). Natural resources. 3). Potential resources. Developed countries possess: 1). Capital 2). Technical know how (Technology)
Forms/Types of Foreign Collaboration:
1). Financial collaboration: (a) investment in equity share market. (b) long terms loan. 2). Technical collaboration: for transfer of technology. 3). Marketing collaboration. 4). Three-way collaboration. Three5). Management consultancy collaboration. 6). Joint venture for marketing and financing. Benefits of Foreign Collaboration: 1). To the developing country and company. 2). To the developed country and company.
Benefits of Foreign Collaboration to the Developing Country and Company:
1). Economic development: employment generation. 2). Bridges resource gap and breaks the vicious circle of poverty. 3). Better and optimum utilisation of resources. 4). Improves quality of the products and thus the marketing efficiency. 5). Spreads the risk of business 6). Better relations between the member countries. 7). Easy transfer of the foreign capital. 8). Easy transfer of the latest technology. 9). Professional way of management. 10).Earns foreign exchange by export promotion and conserves foreign exchange by import substitution. 11). Breaks the monopoly in domestic market.
Benefits of Foreign Collaboration to the Developed Country and Company:
1). Procures raw materials and skilled labour at low rate. 2). Optimum and better use of excess production and technological resources. 3). Expand the coverage of market and risk. 4). Recover the cost of research and development. Demerits of foreign Collaboration: (To the Host/ Developing Country) Collaboration: 1). It benefits the developed countries: Developed countries due to technology supremacy is powerful and the developing countries is weak in terms of bargaining capacity. 2). Destroys the healthy competition between domestic companies. 3). More stress on profit motive rather than welfare of the developing countries followed by the developed countries. 4). Transfer of technology may be outdated 5). Burden on foreign exchange resources-payment of dividend, royalty, fees of resourcesconsultancy ,salaries to employees. Cont..
Benefits of Foreign Collaboration to the Developed Country and Company:
6). Political interference by developed countries in internal politics. 7). Danger to national defence.
Demerits of Foreign Collaboration to the Foreign Collaboration:
1). The rate of taxes are very high in the developing countries. 2). There is a constant fear of nationalization. 3). The developing countries are politically and economically very unstable. 4). The rate of returns on investments is much lower. 5). There is a social and cultural gap between developed and developing countries.
Multinationals and Transnationals:
MNC: The essential nature of the multi-national enterprises lies in the fact that its multimanagerial headquarters are located in one country, while the enterprise carried out operation in number of other countries. -ILO A MNC is a company that engages in FDI in several countries and derives a sizeable portion of its net profit from foreign operations. MNC have one fix head office in one country and business activities spread within the country of origin and other countries. e.g., IBM Computers (USA) Pepsi Cola (USA) Siemens (Germany) Sony/Honda (Japan) Philips (Holand) Ford (USA)
Areas of operations of MNC:
1). Public utility companies like electricity, transport, etc. 2). Petroleum company may start a subsidiary to produce and supply crude oil to parent company. 3). Manufacturing companies invest large capital in foreign countries. 4). Service industries in insurance, hotels, banking, airways, E.g. Hongkong Bank, Standard Chartered Bank, Delta Airlines. 5). Licensing agreement in pharmaceuticals and consumer goods industries. 6). Huge projects involving large capital and longer duration.
Merits: 1. 2.
3.
4.
Industrial Growth: Exploit the untapped resources thereby Growth: ensures industrial growth Technology Gap: Transfer of technology to the host country. Gap: Bridges the technological gap between developed company and developing countries. Economic development: MNC assist developing countries to development: increase efficiency and productivity through transfer of technology and foreign investment. It increase the rate pf production, market expansion and introduces latest economic development Marketing opportunities: Indian companies can enter into a opportunities: Joint Venture agreement with a foreign partner which is beneficial to host company because the risk of selling goods is passed on to MNC and the company can concentrate more on its production activity. Cont..
Merits: 5. Benefits to home country: Foreign exchange, optimum utilization country: of natural resources, goodwill and reputation of the country, bilateral relations between host and home country. 6. Work culture: Product innovation, technology upgradation and Professional Management. 7. Export Promotion and Import substitution industries assists in earning foreign exchange.
Demerits: 1.
2. 3. 4.
5.
6.
7.
MNCs looked at developing countries as a primary source of raw materials and dumping ground of this outdated obsolete technology at high cost. MNC are guided by pure economic gains. MNC exerts political pressures on host countries. MNC buys raw materials at cheaper rates and exports finished product at much higher rates to host countries. MNC doesnt take any personal interest and efforts to promote industries in host countries Outflow of hard earned foreign exchange from host country in the from of dividend, commission, royalty, etc. Extensive use of advertisement and sales promotion techniques.
Challenges faced in the New Policy Environment (due to Liberalisation & Globalisation)
1. Maintaining the growth in the industrial development. 2. Meeting global competition.
3. Achieving International Quality. 4. Improving Efficiency. 5. Creating a Brand Image.
SWOT ANALYSIS OF INDIAN ECONOMY IN THE WAKE OF GLOBALISATION. STRENGTHS
1 Availability of raw materials. 2 Cheap labour availability.
WEAKNESSES 1 Limited availability of finance. 2 Labour intensive technology. 3 Low productivity efficiency. 4 High cost of production. 5 Quality not as per international standards. 6 Lack of Professional skills of Management.
OPPORTUNITIES 1 Opening up of world market for domestic entrepreneurs. 2 Spreading the risk of business. 3 Establishing good bi-lateral relationships. bi-
THREATS 1 Dominance of MNCs and TNCs mainly from developed countries. 2 Competition is stiff. 3 Cheaper foreign goods may kill the domestic competition. 4 Closure of domestic enterprises will lead to unemployment.
