By Peter J. Buckley, Geral d D. Newbould, Jane Thurwell
One of the most important hazards any corporation can take is the setting-up of an in a foreign country construction subsidiary. The construction subsidiary calls for the best capital with the opportunity of the full funding being misplaced should still the enterprise fall. it truly is to minimize that danger that this publication has been written.
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1 The range of success Needless to say, not all the firms interviewed had met with 16 Going International resounding success in their first manufacturing venture overseas. Indeed, had all met with resounding success, this book would have no value! The only possible advice would have been to invest abroad, anyhow and anywhere. Equally, not all met with total failure, so the simple but opposite advice is also wrong. Happily, the situation usual in most business activity also exists in connection with the first overseas production subsidiary of the firms in this sample: that there was a range of outcomes from wild success to catastrophic failure.
For many of the forty-three firms the involvement extended beyond this formal interview. The experiences, as reported in the interviews, of the forty-three firms which had set up their first overseas production subsidiary in the postwar period constitute Chapters 3 to 8 inclusive. In respect of the thirty firms which expressed interest in the project, but had not in fact set up an overseas production subsidiary, a postal questionnaire was devised about the problems of setting up a first overseas sales subsidiary and sent to these thirty firms.
In our discussions, this 'presence' factor seemed to be strongest in West Germany. As the chief executive of a small company which supplied specialised machinery to a limited range of industries said: 'There is a general opinion that investment overseas means a loss of wealth to the UK; in our experience it is the reverse. We have obtained many more orders from Germany because of our operations being resident in Germany. The German subsidiary means work for the UK and our employees know it. If we had not had the German subsidiary, the UK plant would have had no work at times ...