Abstract
The aim of this paper is to explain why government-controlled enterprises (GCEs) do or do not have international activities (essentially in the sense of foreign direct investments) and to explain the international operations of such enterprises—which of their major operating policy decisions are distinctive in any way and why. The paper arises from 304 interviews with leading executives, government officials, union leaders, etc. throughout the nine EEC countries.
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- 1.
Douglas Lamont, Foreign State Enterprises (New York: Basic Books, 1979); Kenneth D. Walters and Joseph Monsen, “State-owned business abroad: new competitive threat,” Harvard Business Review, March–April 1973; Hugh Menzies, “U.S. Companies in Unequal Combat,” Fortune, 9 April 1979.
- 2.
See Renato Mazzolini’s review of Douglas Lamont, Foreign State Enterprises in Political Science Quarterly, Winter 1979–1980.
- 3.
Renato Mazzolini, “Explaining Strategic Behavior: An Organizational Process Approach,” Research Working Paper No. 172A (New York: Columbia University, Graduate School of Business, 1978).
- 4.
Graham Allison, Essence of Decision (Boston: Little, Brown, 1971), p. 33.
- 5.
Direct investment theory suggests that a company pursues the aim of investing in those countries where the marginal productivity of capital is highest [see Stefan Robock and Kenneth Simmonds, International Business and Multinational Enterprises (Homewood, IL: Irwin, 1973) p. 19]. Vernon’s product cycle model implicitly builds on a learning process: production is gradually transferred abroad as the production process matures; it is therefore assumed that the company has a strategy of going abroad with the more standardized of its products [Raymond Vernon, “International Investment and International Trade in the Product Cycle,” Quarterly Journal of Economics, May 1966, pp. 190–207]. And the more comprehensive formulations such as Fayerweather’s also assume a rational decision-making model [John Fayerweather, International Business Management (New York: McGraw-Hill, 1969)].
- 6.
See The British National Oil Corporation, “Report and Accounts” (London, 1977).
- 7.
Andrew Shonfield, Modern Capitalism (London: Oxford University Press, 1965), p. 184.
- 8.
See Charles Albert Michalet, “France” in Raymond Vernon, ed., Big Business and the State (Cambridge: Harvard University Press, 1974).
- 9.
See Milton Hochmuth, “Aerospace,” and Nicolas Jequier, “Computers,” in Raymond Vernon, ed., Big Business and the State (Cambridge: Harvard University Press, 1974).
- 10.
Renato Mazzolini, European Transnational Concentrations (London: McGraw-Hill, 1974).
- 11.
Nicolas Jequier, “Computers,” in Raymond Vernon, ed., Big Business and the State (Cambridge: Harvard University Press, 1974), p. 240.
- 12.
Stuart Holland, The State as Entrepreneur (London: Weidenfeld and Nicolson, 1972), p. 26.
- 13.
“New plant investment” refers to investments in any new production unit while “total investment” includes also investments in existing facilities-for example, equipment in an existing plant.
- 14.
Louis Wells, “Automobiles,” in Raymond Vernon, ed., Big Business and the State (Cambridge: Harvard University Press, 1974), p. 242.
- 15.
See Lloyd Musolf, Mixed Enterprise (Lexington, MA: Lexington Books, 1972); Jean-Pierre Anastassopoulos, “The Strategic Autonomy of Government-Controlled Enterprises Operating in a Competitive Economy,” Ph.D. Diss., Columbia University, 1973.
- 16.
Raymond Vernon, Big Business and the State (Cambridge: Harvard University Press, 1974).
- 17.
Stuart Holland, The State as Entrepreneur (London: Weidenfeld and Nicolson, 1972).
- 18.
Robert Stobaugh, U.S. Multinational Enterprises and the U.S. Economy (Boston: Graduate School of Business, Harvard University, 1972), p. 1.
- 19.
See Jean-Pierre Anastassopoulos, “The Strategic Autonomy of Government-controlled Enterprises Operating in a Competitive Economy,” Ph.D. Diss., Graduate School of Business, Columbia University, 1973.
- 20.
“L’internationalization des Entreprises Publiques,” Economie et Politique (Revue Marxiste d’Economie), October 1975, pp. 105–118.
- 21.
Ibid., p. 116.
- 22.
Ibid.
- 23.
A case in point is the French government’s reluctance to permit C11 to go too far in the UNIDATA union while suddenly allowing it in 1976 to merge with Honeywell-Ball.
- 24.
See Stuart Holland, The State as Entrepreneur (London: Weidenfeld and Nicolson, 1972), pp. 110–112.
- 25.
A case in point is Renault’s Swiss financing subsidiary-Renault Finance.
- 26.
See Herbert Simon, Administrative Behavior (New York: MacMillan, 1975); James March and Herbert Simon, Organizations (New York: Wiley, 1958); Richard Cyert and James March, A Behavioral Theory of the Firm (Englewood Cliffs, NJ: Prentice Hall, 1963); William Guth, “Toward a social system theory of corporate strategy,” The Journal of Business, July 1976; Henry Mintzberg, “Policy as a field of management theory,” The Academy of Management Review, January 1977; Henry Mintzberg, Duru Raisinghani, and Andre Theoret, “The Structure of ‘unstructured’ decision processes,” Administrative Science Quarterly, June 1976.
- 27.
Herbert Simon, Administrative Behavior (New York: MacMillan, 1975).
- 28.
Herbert Simon, Models of Men (New York: Wiley, 1957); Graham Allison, Essence of Decision (Boston: Little, Brown, 1971), p. 88.
- 29.
See Yair Aharoni, The Foreign Investment Decision Process (Boston: Division of Research, Graduate School of Business Administration, Harvard University, 1966).
- 30.
Ibid.
- 31.
Ibid.
- 32.
- 33.
French National Assembly, Finance Committee, “Le contrôle des Entreprises publiques,” June 1972.
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Mazzolini, R. (2018). European Government-Controlled Enterprises: Explaining International Strategic and Policy Decisions. In: Cuervo-Cazurra, A. (eds) State-Owned Multinationals. JIBS Special Collections. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-51715-5_4
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