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Edited by John R. Bryson and Peter W. Daniels
Chapter 14: Multinational Service Firms and Global Strategy
14 Multinational service ﬁrms and global strategy Peter Enderwick Introduction While other chapters in this volume have highlighted the signiﬁcance of services in national output and employment, the continuing internationalisation of services in recent years means that they now play a signiﬁcant role in the global economy. A number of measures highlight this growing signiﬁcance. Trade in services were worth US$1.4 trillion, about 20 per cent of total world exports at the turn of the millennium (WTO, 2001), service ﬁrms were involved in 60 per cent of cross-border mergers and acquisitions in 1999 (UNCTAD, 2000), while the overseas sales of US aﬃliates in services increased by 383 per cent in the years 1990–99, compared with an increase of 198 per cent for all US multinational enterprises (MNEs). Services represented around half of the total stock of FDI in the mid-1990s (Mallampally and Zimny, 2000). The growing internationalisation of service activity, and the ways in which these operations are managed, is the subject of this chapter. In doing this we bring together two major areas of research – those of international business and strategic management – which provide insights into the key questions of why ﬁrms internationalise (the domain of international business theory), and how operations are managed (addressed in strategic management). While these two disciplines have developed somewhat independently, there is considerable overlap which has become increasingly evident with the globalisation of business activity. In applying these concepts to international service ﬁrms we highlight the growing...
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