ith obvious consequences for domestic manufacturers. The process is not just one way. For example, Japanese, Korean and American firms have established factories in the UK making cars, televisions, computers and domestic appliances in order to secure an entry into the lucrative European market. This inward investment has several advantages for the UK. Firstly there are the direct employment and financial effects of the new factories. In addition there are indirect but arguably more important benefits arising from the introduction of more efficient management practices, and higher quality and productivity standards which permeate through to domestic manufacturers. Foreign investment by multi-nationals (i.e. firms which own and control production and I or service facilities outside their home countries) takes place according to a worldwide corporate strategy, which considers; markets, relative costs and revenues, taxation, and political factors. Multi-nationals operate process specialization whenever possible. This means that processes are specialized within particular factories spread throughout the world. For example, a car manufacturer may locate labor-intensive processes in lower wage countries with the final stages of manufacture located nearer the intended market. Ford Motors are following this policy and have announced that production will be planned globally based on just five centers. The Drive for Productivity and Quality Increased competition and more discerning consumers has meant that all types of organization are striving for greater productivity, whilst maintaining or enhancing quality. This applies to both service and manufacturing organizations. In manufacturing the greatest stimulus has been from the Japanese. The Japanese have developed a total quality approach with the target of zero defects. This has been accompanied by lean production methods that have dramatically increased productivity. A key feature of lean produc...
