Multilevel Analysis of Corporations Networks: A Comparison Between Agro-Food and Automobile Strategies for Urban Development - Methods for Multilevel Analysis and Visualisation of Geographical Networks - page 150

of cities ( Camagni , 1996 ; Rozenblat , 2004 , 2010 ). The relationship between the
networks of firms and the system of cities seems relevant for understanding this
global/local articulation and the developments, which result from the interaction of
intra-urban and inter-urban processes.
At the global scale, we distinguish two major types of organization strategies:
a market-oriented organization (horizontal strategy) and a production-oriented
organization (vertical strategy) ( Porter , 1986 ). The market-oriented organization
is based on a network of subsidiaries that are established within large areas of
mass consumption and production and that adapt to the specific assets of local
markets and of labor markets. This strategy is often planned on a continental scale
and is observed in free trade areas. A production-oriented strategy exploits the
specializations of various geographical areas in order to establish a different stage
of its production in each area, based on its comparative advantages ( Veltz , 2000 ).
Such a strategy is responsible for the international division of labor. However, firms
do not rigorously apply these two organization patterns, and a majority of large
firms combine these two aspects, mixing strategies of production and geographical
organization ( Michalet , 1999 ; Rozenblat , 2004 ; Veltz , 1998 ).
Their strategies are organized in a three-dimensional system that is formed by
the economic system to which each firm belongs, its governance or system by
which the company is governed, and the territories in which it is embedded. The
economic system corresponds to the external environment of the firm ( Francfort,
Osty, Sainsaulieu, & Uhalde , 1995 ). “This environment is based on more or less
monopolistic competition, the technological projections and cycles of the products,
imbalances between supply and demand (gone, price), of the fluctuations of the
products value” ( Rozenblat , 2004 , p. 29). Within the economic system, the position
of the invested firms and territories are constantly redefined. The governance of
the firm is “the whole of the strategies and objectives of the companies that make
it up, the human means and materials, which it implements, its organizational
architecture, and its own managerial culture” ( Rozenblat , 2004 , p. 13). Taking an
international perspective, the governance of the firm determines the relationships
among its various establishments: it introduces hierarchical and functional rela-
tionships between territories. Within this system, the territory becomes a dynamic
object, and it is therefore important to articulate the global and local dimensions in
which each territory and each firm fits.
The economic literature on the agro-food and automobile sectors reveals that
multinational companies in the agro-food sector rely more on market-oriented
strategies, while multinational firms in the automotive industry primarily seek
locations that minimize their production costs. The networks of multinational firms
of the agro-food industry should therefore reinforce the existing urban hierarchies.
Conversely, according to cost minimization strategies, the firms of the automobile
sector develop their strategies on a worldwide scale. Such strategies should therefore
be based on urban specializations that allow them to achieve important economies
of networks by complementarities between locations. Thus, they play a larger role
in the international division of labor.