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The Handbook of Service Industries

Edited by John R. Bryson and Peter W. Daniels

Service activities are now acknowledged as key players in economic development, societal change and public policy worldwide. This exciting Handbook not only contributes to ongoing conceptual debates about the nature of service-led economies and societies; it also pushes back the frontiers of current critical thinking about the role of service activities in urban and regional development and the important research agendas that remain to be addressed.
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Chapter 14: Multinational Service Firms and Global Strategy

Peter Enderwick


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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