ABSTRACT
This chapter describes the operations international firms typically perform. It explains the impact and location patterns of global research and development (R&D) activities. The chapter examines how multinational companies (MNCs) locate and manage their global production. It also recognizes the importance of global supply chain management. When entering a foreign market, international businesses need to first secure human and financial resources, and then set up functional operations to deliver products to their customers. The chapter focuses on a few key functions that deal with products—research and development, production, and supply chain. The term offshoring refers to a company's practice of relocating operations to foreign locations. When the company outsources from a foreign supplier, it is called offshore outsourcing. For MNCs, R&D is a key function to develop and sustain firm-specific advantages in international markets. Traditionally, the primary purpose of overseas production is to access low-cost inputs, especially low-cost labor.
