Geography Reference
In-Depth Information
Besides new working practices, networks build up different kinds of labour
skills. They do not encourage the proliferation of unskilled or semi-skilled
workers characteristic of the mass production system. Nor is there development
of craftworking skills linked to specific materials or tools. Instead, new skills in
team working, in joint problem-solving, and in group management to maximize
the use of varying abilities within the group, are developed. Such skills are
transferable outside the specific industry where they are developed.
In the case of Ireland, the international firms have come in partly because of
the existence of public-private partnerships, the area-based partnerships, formed
in 1991, which include three types of member group. First there are government
agencies or departments; secondly, the firms and business organizations; and
thirdly, the community sector, representing various welfare concerns. These
partnerships have been important in directing the activities of the transnationals
into linkage with the locals. This is not to say, however, that the industries would
not have sought linkage without the partnerships aid. What is true is that these
partnerships have helped Ireland become a site of successful examples of the
development of the embedded firm.
There are other ways of achieving local embeddedness for the large firm.
Earlier the use of the Japanese-inspired “just in time” system, with an aureole of
small subcontractor firms surrounding the central one, was described, but this is
a model more suitable to industrial regions within one country. A more common
feature in the 1990s expansion of large multinationals is for growth to occur by
the acquisition of overseas firms. Firm growth can be organic (i.e. due to
expansion of the original firm itself) or through acquisitions, and the potential
for rapid expansion through acquisitions has been prominent recently, partly
because it allows very rapid expansion, but partly also because the acquired
firms and factories are already embedded in their local economies and adjusted
to local conditions. A company such as Tomkins, classified as a conglomerate in
the UK Stock Exchange, has a variety of industrial products, including fluid
controls, leisure and garden products, vehicle components such as transmission
belts, disc brakes and flexible couplings, bakeries and food products. This wide
variety means a number of very separate skill areas best handled by separate
managements, and it has acquired subsidiaries in the USA, Canada and South
Africa, as well as most West European countries. To expand its reach it
acquired, in 1995, the Gates Corporation of Denver, a firm with 42
manufacturing plants (mostly of components such as transmission belts and
hoses) in 14 countries, including Korea, Japan and China as well as Latin
America: all areas unrepresented by Tomkins. Each of the subsidiaries has a
somewhat different structure and relation to the local economy of the country
where it operates. While exerting strong administrative control from the centre,
Tomkins is able to provide a differentiated management appropriate to each
locality, combining global with local.
