RMIT Vietnam NewsThe global factory

The global factory

Thursday, June 5, 2014 - 15:52
Professor Peter Buckley presenting on The Global Factory

Insight on the dispersed and networked nature of the modern multinational was shared at a public lecture in late May by Professor Peter Buckley, Director of the Business Confucius Institute at the University of Leeds (United Kingdom) and the Cheung Kong Scholar Chair Professor at the University of International Business and Economics (Beijing).

The lecture, which was hosted by RMIT Vietnam, covered the structure of multinationals today and the global strategies used for distribution, marketing, branding, design, and production of goods and services.

Professor Buckley said the way these activities are dispersed by global enterprises gives rise to the reference of a global factory.

"The modern multinational has shifted from operating vertically to a networked approach," he said.

"Strategy is based on two key decisions of determining where each activity is best located and what is the best means of control or organisation of each activity.

"Activities along the value chain are being fine-sliced, meaning multiple locations are used as well as outsourcing and offshoring work using contracts," Professor Buckley said.

"This approach adds value for multinationals through flexibility and resilience."

Professor Buckley spoke of the constraints developing countries can experience as part of their involvement in the global factory.

"Firms in these countries can often be restricted to labour intensive manufacturing or services.

"They can find it difficult to expand their activities and would need to look to a strategy of upgrading activities on offer."

Approximately 80 people attended the lecture by Professor Buckley, which was held at RMIT Vietnam Saigon South.