Emergence of Mncs the Rise of Fordism

Name Ginu Abraham Registration Number H00124734 Course INTERNATIONAL breeze of products Coursework type ESSAY Course Tutor Dr. UmmeSalma HOW CAN THE EMERGENCE OF MNCs BE BEST EXPLAINED? Multi-National wads are plentys which chip in their head office in one democracy which is called the host country or the business firm country from where it man mounts their trading operations all over the world. Normally any corporation or group which derives the quarter of their income from their operations out perspective the host country is considered a multinational corporation.There are mainly four categories of Multi-National cans (1) a multinational, decentralise corporation with strong home country presence, (2) a global, centralised corporation that acquires cost advantages through centralized issue wherever cheaper resources are lendable (3) an international caller-up that builds on the parent corporations technology or RampD (4) a transitional enterprise that combines the pre vious three approaches . As jibe to the UN data intimately 35000 companies consent direct investment in foreign countries, and the largest 100 of them control about 40 percent of world trade. Anon. , 2012) The birth of MNCs started from the early days of transitional trade started by Mesopotamian, Phoenician and Greek merchants. As the result of fall of Roman Empire the trade among various nations became difficult. The feudalism in Middle East and Europe resulted in wars among feudal lords and church prohibited the trade with the Muslim nations. After course of studys the trade was established by traders of Italy who are considered as the predecessors of present day Multi-National Corporations.In the mid(prenominal) of seventeenth and eighteenth century Multinational corporations in the form of trading companies started. The East India Company, the French abscond Company, the Hudson Bay Company, was the main multinational companies established in those days. Standard Oil, Brit ish Petroleum, International Nickel and Ana Conda crap were the main MNCs investing mainly in petroleum and mining industries in the early twentieth century. The MNCs went through three main phases in their growth process. The eldest phase came to an end nearly at the rootage of the 1st World War.The European Companies such as Imperial Tobacco, Dunlop, Siemens, Philips, etc. captured the field. Due to the recessionary emplacement prevailing world over during the post-war period amidst of 1930-1950 the growth of Multinational corporations came to a take hold. During the first phase, decades of 1950s and mid-sixties witnessed the emergence of American MNCs such as IBM, General Motors, and interbreeding Motors. The 1970s witnessed the third phase of MNCs. The new age belonged to the German, Europeans and Japanese MNCs.The recent socio-economic classs witnessed the emergence of MNCS from developing countries such as Indonesia, India etc. (Nirav, 2012) Let us consider the case of carrefour Motor Corporation over the familys. The life cycle of this company depart help us better understand the emergence of the MNCs crossbreeding Motors is an American automotive corporation order by Henry interbreeding and a number of associates, who were C. H Bennett, Alexander Malcomson, James Couzens, ass W. Anderson, John F. Dodge, Charles J. Woodall, Horace H. Rackham, Horace E. Dodge, Vernon C.Fry, John S. Gray and Albert Strelow started on June 1903. The company have produced automotive parts and heavy vehicles in the past. The hybridisation Motor company today produces luxury and commercial cars. (Anon. , www. britannica. com) interbreeding introduced various methods which were later on called as coverism. These were the methods the likes of assembly lines and management of high scale industrial work-force and methods for higher level of production of cars. Henry Ford was one most familiar symbol of transformation of agricultural to industrial mass producti on, mass custom economy.Ford was the creative or most resourceful force which resulted in the growth to superiority of the automobile perseverance to the worlds prime manufacturing activity. The foremost of the transformations it made was from the craft production to the mass production which helped in the creation of markets as it is mainly based on the economies of scale and scope which resulted in the rise to giant organizations which were built upon chip divisions of labour and functional specialisation. These were the main factors which resulted in the creation of a wider market.The company grew on the concept that to lying it by mass and to standardize a product in end would mean to price it so low so that even the lay man would afford to buy it. Ford manufactured almost everything he required for his cars right from the basic raw materials. Ford mastered the mass production techniques to obtain significant economies by taking the task of doing everything by him. Ford wa s cautious about finance, accounting and broad super vision short and straight for the efficient coordination of the free flow of the raw materials and the components through the production procedure.These were the two reasons why Ford vertically integrated the corporation. Though for the complete vertical integration it inevitable a huge amount work force including middle managers and specialists which were to be employed and assigned tally to the hierarchical scheme. Thus in the end it all helped in the vertical integration of the corporation. By 1950s, the emergence in mass production made them the largest single group within every developed country. (Thompson, n. d. The interest chain of events will help to shed some clean-living on the three stages of evolution of the company to an MNC. These stages will be further explained following the key moments in history. Ford Motor Corporation sell their first car which was assembled in their Mack road plant in Detroit. The first car that they sell was a two cylinder model A on July 23rd. The Model T was made available to the public in 1908 and in which model production continued until 1927. Ford Motor Corporation of Canada interconnected near Winsor in Ontario.In the equivalent year Ford Motor corporation starts the production at the Piquette Avenue Plant in Detroit In 1910 The Manufacturing operations of Ford Motor Corporation was transferred to highland(prenominal) Park, Michigan Plant. The corporation established their first overseas plant in Trafford Park, Manchester, England in 1911. The experiments with the assembly line began at the Highland Park Plant. The early trials with the transmissions and magnetos were followed by the advancement of chassis assembly line by the mid of the 1913 and by the end of the 1915 the one millionth car was produced by the Ford Motor Corporation.Two years later first Ford truck was introduced which was supported by the Model T engine and in the same year the producti on of Fordson tractor begins which until Feb 1928 was produced unless in North America. It was in the beginning of the 1922 the Ford Motor company purchased capital of Nebraska Motor Company for 8 million dollars and Edsel Ford the son of Henry Ford was named as the chairwoman of the Lincoln. After five years from the purchase of Lincoln Motor Company, it ceases the model T production which was macrocosm sold to the public since 1908. Ford starts with production of the Model A in the same year which continues boulder clay 1932.By the beginning of 1941 ford started producing the Mercury, the first jeep and first V8 en-block engine-equipped car built. All these car productions came to a halt by the beginning of World War II in 1942 and the production of Ford passenger cars was only resumed by July 3rd 1945. Later in 1956 Ford Motor company transforms into a publicly-held company with the common stock sale in the public and was listed on NYSE in the beginning of 1956. By the same yea r the Ford Motor company subsidiary on Aeronutronics systems, established which specialized in refutal weapons and aerospace technology.As the Ford Motor corporation went on progressing with their production and sales reaching higher charters it finally achieves exceeded lucre than those of the General Motors for the First time in 1986/1987. The same year it earns record profits of 4. 63 million but later on in 1991 Ford Motor Companys largest loss in a year was recorded as 2. 3 billion. As the result the Ford Motor company creates a superior Care system to meet the needs the Ford dealerships and Ford owners. The same year Ford and Volkswagen adventure on a joint venture in Auto Europa, which is an organisation which produce multipurpose vehicles in Portugal.Later next year Fords F series truck known as the best-selling truck for the ordinal consecutive years in United States. Ford also succeeds in producing the first car which has environs friendly air-conditioning system. By the same year, Ford acquires 50% of the Mazda Motor Manufacturing and renames it as Auto Alliance International. In the year 1993, Ford is claims five of the eight top selling vehicles in the United States. The same year the first formal Ford Dealerships were placed inside the mainland China and the Ford China operations later secured the manufacturing and assembly.In 1994 the first ford assembly began in India and acquires the worlds largest car rental company named Hertz. Finally in 1995 the Ford 2000 is initiated which was said to combine the power, resources ultimately to be a world company with the intimacy and agility of a small one. (Anon. , 2010) Later through years till to date the Ford Motor Corporation hard firmly on increasing the consumer base by marketing and developing new products and to achieve their globalization goals.Ford also tried to put more than effort on the research and development to increase their consumer base by commercialising cars powered with na tural gas. The company advanced by developing and introducing new features like side impact airbags to their products. The growth and development of the corporation reached even up to the teaming up with the NASA to develop features for their cars which no some some otherwise corporations in automobile industry have ever provided.Over the years though the ford corporation have already started selling their products, afterward the 90s it came to a broader perspective of growth by extending their fields to various other sections by teaming up with NASA, Oracle Corporation and even a YMCA Childcare, which portrays the in deep goals to become more than a popular automobile manufacturing corporation. At this juncture I would like to shed some light on three stage of evolution that the Ford Corporation had to get through to become a MNC.There are generally three stages of evolution for a corporation to become a Multinational Corporation they are the Export stage, Foreign Production St age and finally the Multinational stage. (BRIMS, n. d. ) The Fords motor Corporation which after its incorporation in 1903 made their first model commercialised for the public after a few years from incorporation. At this first stage of Export, it is the point of time were the Ford Motor Corporation had to all rely on the export agents for exporting the cars outside their home country as they had no other option to increase their export sales.They built plants in Detroit and Michigan to increase the production to satisfy the demand for the cars. The company focuses mainly on achieving higher number of export sales and introduces methods like assembly line to reduce cost and to save time which ultimately increases the production. In the second stage of foreign production, the Ford motor corporations export sales reach the limits of the sales to the foreign countries in means of export sales.Now the Corporation had the option of either to start a plant in a foreign country or to lice nse corporations technology to a new company in a foreign country is a risky choice as it may result in transfer of trade secrets regarding the technology to a new firm thereby sidewalk way for the rise of a rival. In spite of these facts the Ford Motor Corporation established their foremost overseas manufacturing plant in Trafford Park, Manchester. Thus the productivity of the Ford Motor Corporation increases and in 1915 it produces he one millionth ford car and over the decades the Ford Motor Corporation increases their productivity by building more efficient and advanced plants throughout the home country and in foreign countries as well, which means it has already entered the final stage of being a multinational company. In this final stage, Ford Motor Corporation focuses on research and development, financing, and recruiting and co-ordinating production. By believe the world market into a broader and growth intended view which results in the standardisation of products and the services paving way for the emergence of MNCs.From this it is easy for us to understand the different phases involved in an organisations transformation into an MNC. This also helps us to understand the changing market trends and consumer behavioural characteristics thus helping us understand the concept of business as a whole.REFERENCE Anon. , 2010. www. thehenryford. org. Online Available at http//www. thehenryford. org/exhibits/fmc/chrono. asp Accessed 19 09 2012. Anon. , 2012. www. businessdictionary. com. Online Available at http//www. businessdictionary. com/definition/multinational-corporation-MNC. html Anon. , www. britannica. com. www. britannica. com. Online Available at http//www. britannica. com/EBchecked/topic/213265/Ford-Motor-Company Accessed 19 09 2012. BRIMS, D. V. , n. d. A Brief on MNCs inside pages, s. l. s. n. BRIMS, D. V. , n. d. A Brief on MNCs inside pages, s. l. s. n. Nirav, S. , 2012. www. preservearticles. com. Online Available at http//www. preserveart icles. com/2012020122380/emergence-of-mncs-in-a-historical-perspective. html Accessed 20 09 2012. Thompson, G. F. , n. d. Fordism, Post-Fordism and the Flexible System of Production, Virginia s. n. Thompson, G. F. , n. d. Fordism, Post-Fordism and the Flexible Sytem of Production , Virginia s. n.