In 1998, Dell opened a new manufacturing facility in Xiamen, China which is directly across the straits from Taiwan, which is known as home of number of Taiwanese computers and component makers. To conclude the above discussion according to Epping (1982) theses factors are subjected to change significantly over a period of time. The Role of Government policies, in process of TNC’s Production chain (Nelson, 2003):- In earlier discussion, the factors behind the selection of location for TNC has been analysed, however, according to Maruca (1994) the effectiveness of Production chain is important not only for TNC’s profit but also for host country’s economic growth (UNCTAD, 1992).Till now we have analysed and understand a Production Chain of Dell from TNC’s (Dell Corporation) point of view. At this stage, we will analyse the role of Government policies in formation of production chain. In order to have a practical perspective on the issue we will analyse successful strategy adopted by Rio Grande Do Sul to attract Dell Corporation in year of 1999.
According to some scholars (Strange 1999; kobrin 1999; Mittleman 1996), globalisation would undermine state autonomy specially in developing nation like Brazil.During 1990s Globalisation was leading its journey to 21st century; almost every government in Latin America was actively seeking foreign direct investment from high technology transnational firm. The reason behind the hunger for FDI amongst government in Latin America was to provide jobs with higher wages, attract high technology “cluster” of firms to make their own state attractive and development sustainable in long run (Porter, 1990).Dell had experienced a long period of astonishing growth in 1998, and it started to begin short listing a sit for manufacturing plant in Brazil in same year. Brazil was strategically placed location for Dell because sale of personal computers were growing faster in Latin America as compare to anywhere in world.
Brazil was the largest Latin American country with population of 170 million was lucrative market for dell. In 1992 Brazilian Government had derelict its “market reserve” policy which was allowing only domestic manufacturers to produce computer in the country. Brazilian government was playing role of “state as competitor”.Brazil was a member of Mercado Comï¿½n do Sul (Mercosul), which includes Argentina, Uruguay and Paraguay with Chile and Bolivia as associate members that means, having a facility in Brazil is trade access to Mecosul countries with zero tariffs. As a part of employee well being, Dell runs Health benefit program to fight fatal disease like cancer, diabetes and HIV. it would be interesting to know that Dell promote and run this program in the regional language of Dell Unit for e.
g. in china Dell provide education on health benefits or physical activity to encourage healthy behaviour.To promote this event the health broacher are printed in local language of china “mandarin”.
On the base of Perlmutter’s (1969) typology model, Dell falls under Geocentric Dimension of organisation where: Identification of organisation is global/international Communication and information flow are two way i.e. headquarter to subsidiary and vice versa. Complexity is part of management which is really complex and interdependent.ConclusionUnder the purview of above defined and explained areas there are list of argument being developed which are as shown follow: Though Dell entered into PC market in 1985 but in very short span of time it has spread its wing in America, Asia and EMEA. The core reason for this outstanding success of dell goes to its outstanding ability to source location of facilities and it’s direct to customer business model.
Dell’s decision of selecting location is not based upon any one factor, but based on multi dimensional factors like character and potential growth of future market, labour and infrastructure requirement, and last but the most important is measuring and analysing of Government incentive to cut down the production cost and increase profit margins. Dell has also played a role of “Ethical TNC” in case of Brazil project where it created win -win situation for state and company. Dell has distinct value based diversified culture which engage employee in positive, productive and fair environment.