Influence of National Origins on the Strategy of Multinational Enterprise - article ; n°4 ; vol.23, pg 547-562

Raymond Vernon

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Revue économique - Année 1972 - Volume 23 - Numéro 4 - Pages 547-562
Les grandes entreprises des pays les plus développés ont tendance à élargir l'envergure de leur multinationalisme. Cette tendance générale est, en partie, une réaction de défense, une réaction contre la diminution du niveau de protec­tion que représentaient, auparavant, les frontières nationales. Cependant la nationalité des grandes entreprises ainsi que leur environnement national influencent énormément la stratégie qu'elles adoptent pour diminuer les facteurs de risque et d'incertitude. Dans certains cas, les conditions d'environnement national ont poussé des entreprises à rechercher la sécurité au moyen d'accords privés res­trictifs et d'appuis gouvernementaux. Dans d'autres conditions, des entreprises ont envisagé une intégration verticale et la diversification des produits et des marchés comme moyen principal de réduire le facteur de risque. Les différences entre les Etats-Unis et l'Europe, à ce point de vue, sont toujours très nettes ainsi que celles qui existent entre les différents pays européens.
Influence of national origins on the strategy of multinational enterprises
The largest enterprises in most advanced countries are becoming more multinational in scope. This common tendency is partly a defensive reaction, a réaction to the decline in the level of protection that national boundaries previously provided. Nevertheless, the strategy of large enterprises in reducing uncertainty and risk is greatly affected by their national origins and home environment. Some home environments have conditioned enterprises to strive for security by means of restrictive private agreements and governmental support. Other environments have obliged enterprises to look to vertical integration and diversification of products and markets as the major means of reducing risk. The differences between the United States and Europe in these respects continue to be pronounced, as are the differences between various European countries. ronments have obliged enterprises to look to vertical integration and diversification of products and markets as the major means of reducing risk. The differences between the United States and Europe in these respects continue to be pronounced, as are the differences between various European countries.
16 pages
Source : Persée ; Ministère de la jeunesse, de l’éducation nationale et de la recherche, Direction de l’enseignement supérieur, Sous-direction des bibliothèques et de la documentation.

Sujets

• Sociologie, société et politique

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• Publié par: REVUE_ECONOMIQUE
• Publié le: 01 janvier 1972
• Nombre de lectures: 84
• Langue: English
• Poids de l'ouvrage: 1 Mo

Extrait

Monsieur Raymond Vernon
Influence of National Origins on the Strategy of Multinational
Enterprise
In: Revue économique. Volume 23, n°4, 1972. pp. 547-562.
Résumé
Les grandes entreprises des pays les plus développés ont tendance à élargir l'envergure de leur multinationalisme. Cette
tendance générale est, en partie, une réaction de défense, une réaction contre la diminution du niveau de protec-tion que
représentaient, auparavant, les frontières nationales. Cependant la nationalité des grandes entreprises ainsi que leur
environnement national influencent énormément la stratégie qu'elles adoptent pour diminuer les facteurs de risque et
d'incertitude. Dans certains cas, les conditions d'environnement national ont poussé des entreprises à rechercher la sécurité au
moyen d'accords privés res-trictifs et d'appuis gouvernementaux. Dans d'autres conditions, des entreprises ont envisagé une
intégration verticale et la diversification des produits et des marchés comme moyen principal de réduire le facteur de risque. Les
différences entre les Etats-Unis et l'Europe, à ce point de vue, sont toujours très nettes ainsi que celles qui existent entre les
différents pays européens.
Abstract
Influence of national origins on the strategy of multinational enterprises
The largest enterprises in most advanced countries are becoming more multinational in scope. This common tendency is partly a
defensive reaction, a réaction to the decline in the level of protection that national boundaries previously provided. Nevertheless,
the strategy of large enterprises in reducing uncertainty and risk is greatly affected by their national origins and home
environment. Some home environments have conditioned enterprises to strive for security by means of restrictive private
agreements and governmental support. Other environments have obliged enterprises to look to vertical integration and
diversification of products and markets as the major means of reducing risk. The differences between the United States and
Europe in these respects continue to be pronounced, as are the differences between various European countries. ronments have
obliged enterprises to look to vertical integration and diversification of products and markets as the major means of reducing risk.
The differences between the United States and Europe in these respects continue to be pronounced, as are the differences
between various European countries.
Citer ce document / Cite this document :
Vernon Raymond. Influence of National Origins on the Strategy of Multinational Enterprise. In: Revue économique. Volume 23,
n°4, 1972. pp. 547-562.
http://www.persee.fr/web/revues/home/prescript/article/reco_0035-2764_1972_num_23_4_408038>4ï
INFLUENCE OF NATIONAL ORIGINS
ON THE STRATEGY
OF MULTINATIONAL ENTERPRISE *
Xn the last decade or two, the giant enterprises of the United
States, Europe, and Japan have been pushing outward from their
national markets to establish subsidiaries and branches in foreign
countries. Propelled by common factors in the environment, interact
ing as competitors or as collaborators, these enterprises in the eye
of the casual observer seem to be taking on common strategies. How
valid is that superficial impression ?
Of the several hundred giant enterprises that have developed in
the United States, Europe, and Japan, those originating in the United
States have been most carefully studied. For a decade or so, resear
chers peered into these structures in order to satisfy themselves
that some of the provocative generalizations of Alfred D. Chandler
were right 1. In general, they have tended to confirm Chandler's find
ings that the strategies of large U.S. firms were evolving on some
fairly well-defined lines, including a strong trend toward vertical
integration in the raw material industries and a trend toward the
diversification of products and markets in the manufacturing indust
ries.
If one observes the British, German, Japanese, Dutch, or Swiss
firms, is he likely to find the same changes in strategy ? The empir
ical research on European and Japanese firms is rapidly being
brought abreast of the research on U.S. firms. Indications are that
some of the overt manifestations of a change in strategy, such as the
merger and consolidation of leading national firms, as well as an in
crease in the number and diversity of products within such firms, are
* Cette étude, financée par un don de la Fondation Ford à la Harvard Busi
ness School, paraîtra en français dans les Mélanges, à la mémoire de Jacques
Houssiaux. (Note de la Rédaction).
1. A.D. Chandler, Strategy & Structure, Cambridge, MIT Press, 1962 548 REVUE ECONOMIQUE
also taking place abroad2. In a modern world, where contacts be
tween large firms of different nationalities are bound to be frequent,
an hypothesis that postulates the convergence of strategy among those
firms has a certain inherent plausibility. Still, one needs to temper
his sympathy for the generalization with a certain caution.
THE INDUSTRY AS CONDITIONER
The stable oligopolies
There are some industries in which the hypothesis of convergence
seems plausible on its face. Consider the industries in which a relati
vely stable international oligopoly has existed for a long time: oil,
copper, and aluminum are outstanding illustrations. There was a time,
sixty or seventy years ago, when the oligopolistic positions of the
large firms in international markets could be distinguished along natio
nal lines. In oil, the Americans dominated world markets; in alumi
num, a coalition of U.S. and Canadian interests were the leaders;
and so on. Though firms were not the world's leaders in all the
main raw material industries, their preeminent position was evident
even then. The key position of the North Americans was related in
part to their mastery of the technologies of large-scale production and
distribution in their respective industries. That mastery was stimu
lated and strengthened by the opportunity to serve the huge North
American markets, an opportunity which the Europeans and Japanese
were in no position to share at that stage.
By the 1970s, however, the leading position of the North Ameri
cans had waned. The British, French, Italians and others had long
since responded to the threat of North American dominance by creat
ing or supporting their own national champions. In oil, for instance,
the firms that assumed the role of national champions were the pre
decessors of British Petroleum, French E R A P, and Italian E N I.
As world demand grew, these national champions at first captured a
place in their own home markets or in areas where they had preferent
ial access; then they branched out into territories where they would
meet the Americans on neutral ground; and eventually, notably in
2. The early results of a series of doctoral theses at the Harvard Business
School, supervised by Professor B.R. Scott, seem to point in this direction. See
D.F. Channon, « The Strategy and Structure of Business Enterprise », unpu
blished D.B.A. thesis, May 1971, Harvard Business School. He reports a consi
derable increase in product diversification since 1950 by leading British firms. L'ENTREPRISE MULTINATIONALE 549
the 1960s, they even acquired sources of raw materials and markets in
North America. As a result, the early positions of Jersey Standard,
ALCOA, and other such leaders outside of the United States were
matched by the positions of British Petroleum, Pechiney, and others
inside the United States.
As this process has gone on, national distinctions in strategy
have declined. Differences in technological capabilities have dimi
nished; and differences in relative abilities to mobilize organizational
and financial resources have declined as well. As the industry leaders
came to recognize that the durability of the oligopoly depended on
the development of a strong community of interest, transnational part
nerships between the main actors proliferated, marked by joint pro
ducing ventures, joint distributing facilities, long-term purchase con
tracts, and informal agreements in regional markets to swap supplies
and customers 3 If there have been threats to the oligopoly at this
advanced stage, they generally have come from outside the leader
ship group: from mavericks that were trying to enter the industry,
or from the governments whose resources provided the raw materials
of the industry.
The Japanese have been one such group of mavericks. Like the
British and French oil companies in 1910, and like the Italians in
1950, the main focus of the Japanese in the 1960s was still that of
finding the raw materials to serve the home market. Accordingly, as
far as the established suppliers were concerned, the Japanese were a
destabilizing influence, competing for scarce oil in Indonesia and the
Middle East and for bauxite and copper ore wherever they could find
it. As long as the main objective of the Japanese "was to supply a pro
tected home market and as long as they had no serious aspirations to