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Group 8

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Course of DiscussionOrigin and Evolution

Diversification

StructuresCompetencies

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Origins and evolutionBritish companies evolved in the late 19th

century so did the Japanese

Mainly took case of distribution and exportimport

Thrived on local knowledge

Japanese had extensive Government support

but British lackedLater British hegemony die away, Japanese

gained strength

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DiversificationTendency to diversify hardwired into trading

companies

Insurance, finance, transportation, naturalresources and manufacturing were keyinterest areas.

Example companies include

1.Borneo company limited2.Harmisons and Cros field

3.James finlay

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Borneo Company LimitedFounded in 1956

Diversified geographically and product wise

Operated in Singapore, Thailand and MalaysiaActed as distributor for Austin (UK) and

GM(US)

Diversified into Canadian brickworks,

Australian timber.

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Harrisons and CrosfieldFounded in 1844 engaged in tea trading

Geographically diversified in Asia, US, Canada

and Australia.Product diversification Rubber (South Asia),Timber(Borneo), Palm oil, ChemicalManufacture and distribution.

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James FinlayEstablished in 18th as Scottish merchant

Started cotton business Scotland then moved to US and India

Then moved to Tea trading in India & distributed in US, Canada

and Russia in 19

th

century.Then diversified into jute and sugar manufacturing

The company also had unsuccessful diversification into merchantbanking, insurance, properties & oil and gas exploration.

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Structure Type-I

Center of power remained in the Capital city of thehome country

Fully owned host country branches

Structure Type-IISecond organization form was of affiliates

Had less stakes

Used to float after development, provided financeDirectorial level links, senior managers from

parent companyThey provide business to British trading

companies

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CompetenciesCo-ordination competencies

Control by the center

Development of procedure

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Co-ordination

competenciesAbility to coordinate crucial external and

internal activity

Coordination with affiliate company.Overdraft from bank

Good relationship with principals, shippingand insurance company.

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Control by the CentreExecutives with regular operating

responsibilities

Long term working members, bigwigs of bank

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Development of

ProcedureDecentralization of decision making

Japanese followed accounting system to

preemptIndividual profit performance, the root cause.

British resorted bureaucratic rules.

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Thank

You!