2. Does Porter fail to explain how the factor and demand conditions that mould a nation’s corporate strategies, business structures, and industrial clusters are established? What other theories and evidence might assist such an explanation?
Porter explains what factor and demand conditions are, but he fails to explain how they are established. He defines then, and explains them in detail, but lack the most important aspect, which is how they are established. A theory like this is not of much use without the information about the way one can gain these advantages. Porter is always greatly praised for his great work in the management field and he does deserve some of this praise, but if he doesn’t manage to explain himself fully
…show more content…
Reich states that the national firm is becoming less important due to globalization. “Reich argues that the globalization of industrial competition has led to a global fragmentation of industry, thus making national industries and the national enterprises within them less and less important entities in attaining and sustaining global competitive advantage.” (Lazonick, 1991) Porter had his idea of clusters, Reich had a concept call global webs. This is a “creation of a work force than can find high-paid employment in the ‘global webs’ of enterprise that are currently being spun around the world” (Lazonick, 1991) One of the examples Reich uses is that of the U.S.A. He says that “the standard of living of Americans, as well of the citizens of other nations, is coming to depend less on the success of the nation’s core corporations and industries, or even on something called the ‘national economy’ than it is on the worldwide demand for their skills and insights.” (Reich, 1991) He uses the U.S.A. as an example here but says it is not the only country where this