ABSTRACT
As explained in the introduction, it is commonly assumed that the strategy of firms is derived from their key objective of profit maximization. But there are many strategies that a firm can pursue in order to achieve such an objective. Being complex actors, MNEs determine their strategies based on a variety of factors that are not only related to the firm’s specific assets but also to structural, institutional, and group dynamics elements. Without a complete understanding of how these elements shape an individual firm strategy, in this case Ford, the bargaining dynamics of MNEs with host country governments could not be fully appreciated. One example is how the structural elements, or the who-gets-what rules of an industry, limit the capacity of firms to make concessions to host country governments for the simple reason that, if they did, they could incur inefficiency costs or would simply not survive.
