Porters Diamond in a Mexican Context free essay sample

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact [emailprotected] org. . Springer is collaborating with JSTOR to digitize, preserve and extend access to MIR: Management International Review. http://www. jstor. org This content downloaded from 146. 50. 153. 8 on Thu, 30 May 2013 08:40:14 AM All use subject to JSTOR Terms and Conditions mir SpecialIssue 1993/2, 41-54 pp. mir Illfftl lUllLuU Pftviftlif ll  © Gabler Verlag 1993 Richard M. Hodgetts Porters Diamond Framework in a Mexican Context Abstract used as a basis forexamining  ¦ The Porterdiamondmodelhas been widely This examines waysin which the international competitive strategies. article itself theU. S. economy a doublediamond. to via Mexico is linking cluste rs petrochemicals automobiles  ¦ The strategies Mexicosleading of and the within doublediamondframework. We will write a custom essay sample on Porters Diamond in a Mexican Context or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page re considered Key words to  ¦ A doublediamondmodelis alreadybeingused by Mexicancorporations bothcreateand sustaineconomic progress. Author at of is M. Dr. Richard Hodgetts Professor Strategic University, Management FloridaInternational Boca Raton,FL, U. S. A. March1992,revised received April1992. Manuscript mir vol. 33 †¢ Special Issue †¢ 1993/2 41 This content downloaded from 146. 50. 153. 28 on Thu, 30 May 2013 08:40:14 AM All use subject to JSTOR Terms and Conditions Richard Hodgetts M. Porter Revisited Porters and diamondmodelis well-known bothresearchers practitioners. to In wayofreprise, modelis based on four and determinants the country-specific twoexternal variables. These include: 1. Factorconditions and cost of personnel; suchas: (a) thequantity, skills, (b) rethe abundance,quality,accessibility, cost of the nationsphysical and sources;(c) thenationsstockof knowledge resources; theamountand (d) cost of capitalresources and thatare availableto finance industry: (e) the and usercost of thenationsinfrastructure. type, quality, 2. Demand conditions such as: (a) the composition demandin the home of market: thesize and growth of thehomedemand;and (c) themechrate (b) anismsthrough whichdomestic and demandis internationalized pullsa nationsproducts and services abroad. 3. Relatedand supporting industries as: (a) thepresence internationally such of in indusindustries createadvantages downstream that competitive supplier tries and (b) or efficient, through early, rapidaccessto cost-effective inputs; and can related industries which coordinate share internationally competitive in activities thevaluechainwhencompeting thosewhich involve or products thatare complementary. . Firmstrategy, firms are and suchas: (a) thewaysin which structure, rivalry seekto attain managedand chooseto compete; thegoals thatcompanies (b) as well as the motivations theiremployees and (c) the of and managers; amountof domestic of and and persistence competitive rivalry thecreation in advantage therespective industry. The twooutsideforces, but also affecting competitiveness a nation, not the of direct are determinants, these: 1. The roleofchanceas causedbydevelopments as: (a) newinventions; such (b) in shifts decisions foreign wars;(d) significant political (c) by governments; in worldfinancial markets exchange or discontinuities inputcosts rates;(e) such as oil shocks;(f) surgesin worldor regional demand;and (g) major technological breakthroughs. 2. The variousrolesof government (a) (b) poliincluding: subsidies; education toward of cies;(c) actions markets; theestablishment localproduct capital (d) standards regulations; thepurchase goodsand services; taxlaws; and of (f) (e) and (g) antitrust (Porter, 69-130). egulation pp. an of of Figure1 provides illustration thecomplete system thesedeterminants and external and variables. can be seen,each determinant As affects others the are all, in turn, affected theroleof chanceand government. by 42 mir vol. 33 †¢ Special Issue †¢ 1993/2 This content downloaded from 146. 50. 153. 28 on Thu, 30 May 2013 08:40:14 AM All use subject to JSTOR Terms and Conditio ns the Porters DiamondFramework: MexicanContext DiamondFramework 1. Figure Porters The from MichaelE. Porter, Competitive Source: Adapted Advantage Nations (NewYork:Free of Press,1990),p. 127. Critique and Evaluation of the Porter Model business it to modelto international In applying Porters strategy, is important in is the realize First, governmentofcritical importance influenckey eight facts. it as For example, can use tariffs a advantage. inga homenationscompetitive subsidies an as and to barrier penalizeforeign direct firms, it can employ entry firms. the with for vehicle penalizing indirect However, problem foreign-based and can suchas theseis thatthey backfire end up creating actions government thatis unable to competein the worldwide domestic a sheltered industry market 1990). Rugmanand Verbeke in factor international business chanceis a critical Second,while influencing until For and difficult predict guardagainst. example, to itis extremely strategy, was HusseininvadedKuwait,theUnitedStatesgovernment theday Saddam thattherewould be no invasion. In a similarvein,technological predicting in have resulted rapid electronics in and breakthroughs computers consumer mir vol. 33 †¢ Special Issue †¢ 1993/2 43 This content downloaded from 146. 50. 153. 28 on Thu, 30 May 2013 08:40:14 AM All use subject to JSTOR Terms and Conditions M. Richard Hodgetts ndustries in manycases,werenotpredicted companies and, by changein these weremarket leaders. that,at thetime, in modelmustbe applied business Porters of Third, thestudy international interms company As and of considerations notnational advantages. he specific in international marso wellnotesin his book, Firms,not nations, compete kets(Porter, 33). p. based on statistical modelwas constructed Fourth,thePorter analysisof data on exportsharesfor ten countries: Denmark,Italy,Japan, aggregate the the SouthKorea,Sweden, Switzerland, UnitedKingdom, United Singapore, wereprovided In historical cases studies States,and WestGermany. ddition, the forfourindustries: Germanprinting the patient pressindustry, American and tile the monitoring equipment industry, Italianceramic industry, theJapaand neseroboti cs about thesecountries examples Whatis important industry. nations. Sincemost is thatthey drawn are industrialized from triad other the or as or affluence countries theworlddo nothave thesameeconomic of strength thosestudiedby Porter, is highly it thathis modelcan be appliedto unlikely them without modification. Porter forth sets our distinct Fifth, developcompetitive stagesofnational and wealth-driven. ment:factor-driven, innovation-driven, investment-driven, In thefactor-driven internationally advandrawtheir successful industries stage resources from basicfactors production the of suchas natural tagealmost solely on and thenationslarge,inexpensive labor pool and they compete primarily efficient In the investment-driven companiesinvestin modern, price. stage theseinvestments facilities technology they and and workto improve through not In modification alteration. heinnovation-driven firms onlypurand stage chase technology and methodsfromothers,but theywork to createthem and from i nnovation their on own partas wellas assistance suppliers through in In firms related industries. thewealth-driven beginto lose their stage,firms to ebbs, and thereis a declinein motivation competitive advantage, rivalry Korea is investIn invest. Porters viewSingapore in thefactor-driven is stage, ment-drive, Germanyand the United States are Japan is innovation-drive, and between innovationand wealth-driven, Great Britainis wealth-driven. he influences countrys Since the stage of development competitive greatly in is So theplacement countries thisschema critical. too is thelogic of response, two or thanspanning rather thatcountries move from one stageto another in or to moreof thesestages, sincethere likely be industries companies all are at majoreconomies operating each of thesestages. investment thatonlyoutward direct Porter contends Sixth, (FDI) is foreign investment is valuablein creating and inboundforeign advantage, competitive subnever solution a nationscompetitive to the Mor eover, foreign problems. idiaries are not sourcesof competitive foreign advantageand widespread in investment thatthe processof competitive upgrading an usuallyindicates 44 mir vol. 33 †¢ Special Issue †¢ 1993/2 This content downloaded from 146. 50. 153. 28 on Thu, 30 May 2013 08:40:14 AM All use subject to JSTOR Terms and Conditions Porters Diamond Framework: the Mexican Context is becausedomestic in firms manyindustries lack economy notentirely healthy their to market thecapabilities defend firms positions againstforeign (Porter, are questionable. For example,Canadianp. 61). These statements highly based scholars (Safarian1968,Rugman1980,and Crookell1990)havedemonand undertaken foreign-owned is not strated research development that firms by different thatof Canadian-owned from companies. significantly Additionally, thatthe20 largest American subsidiaries Canada export in Rugmanhas found rateofexports salesis 25 percent to as muchas they while (the import virtually to tha tof imports sales is 26 percent). reliance natural on resources factor-driven as Seventh, (the stage)is viewed to worldwide stature. nsufficientcreate However, Canada, forone, competitive a of whichhave turned counhas developed number successful the megafirms in natural resources proprietary into comparative advantage firm-specific trys in and and are of processing further refining; these sources advantages resource case studies sustainable of advantage (Rugmanand Mcllveen1985). Moreover, multinationals as Alcan,Noranda,and Nova help such successful thecountrys illustrate methods whichvalue added has beenintroduced themanthe by by resource-based ofthese companies (DCruz and Fleck1987,Rugmanand agers DCruz 1990). odeldoes not adequatelyaddresstherole of MNEs. the Eighth, Porter multinational such as Dunning(1990) have suggested Researchers including as a thirdoutsidevariable(in additionto chance and government). activity MNE activity covered in whether is there good reasonto question is Certainly and some researchers and thefirm determinant; structure, rivalry strategy, determinant both can how have raisedthequestion regarding thesame rivalry for includemultinationality global industries excludeit formultidomestic yet to thatMNEs As industries. Dunningnotes,thereis ampleevidence suggest theconfiguration thediamondin of in are influenced their by competitiveness in and homecountries, thatthis, turnmayimpinge otherthantheir upon the of (Dunning,p. 111). For example,Nestle competitiveness home countries Thus the Swissdiamondof of earns95 percent its sales outsideSwitzerland. in countries shaping thanthatof foreign is lessrelevant advantage competitive of the contribution Nestle to the home economy. This is truenot only for of nations. For example, all but Switzerland for95 percent theworlds virtually of Canadas largemultinationals on sales in theUnitedStatesand other rely is that U. S. diamond morerelevant the it markets. triad Indeed, couldbe argued thanis Canadas own diamond,since multinationals forCanadas industrial takeplacein theUnitedStates. Other of over70 percent their sales,on average, home diamondsincludeAustralia, New nationswithMNEs based on small if as and most, notall, Asian and LatinAmerican countries, Zealand,Finland, in of Even smallnations theEC, wellas a largenumber othersmallcountries. he of havebeenable to overcome problem a smalldomestic suchas Denmark, vol. nth* 33 †¢ Special Issue †¢ 1993/2 45 This content downloaded from 146. 50. 153. 28 on Thu, 30 May 2013 08:40:14 AM All use subject to JSTOR Terms and Conditions Richard Hodgetts M. market gaining access to one of thetriadmarkets. in applying Porters So by framework international to businessat large,one conclusionis irrefutable: diamonds needto be constructed analyzed different and countries, Different for and thesediamonds and linkagewith diamonds the often integration of require other countries creating double thus a diamond stronger economically paradigm. Mexico and the Double Diamond Paradigm Porters diamond the nations advanhelpsexplain nontriad develop competitive their diamondintothatof triadcountries. Mexicoprovides an tageby linking excellent example. Background Mexicocurrently thestrongest has in The has economy LatinAmerica. country also vigorously to theUnitedStateswhichnow promoted exports, especially counts Mexicofor25 percent all imported on of fruit vegetables and (Bakerand Walker1991a). The maquiladoraindustry another is sourceof ecogrowing nomicstrength thecountry. thesametimeMexicois a majormarket for At for multinational investment. MNE Investment Theclimate foreign for direct investment increasing(FDI) inMexicohasgrown the favorable recent in on Whilethere werestrict controls FDI during ly years. in As introduced 1989reversed 1970s,regulations manyof theserestrictions. a For example, an number MNEs are now investing of there. esult, increasing Ford Motor has beguna $ 700 million plantin expansionin an automotive in to produce cars Nissanis putting 1 billion a newassembly $ Chihuahua; plant forexport boththeUnitedStatesand Japan;Volkswagen investing 950 to is $ million expanditsplant;McDonalds has earmarked 500 million open to to $ 250 new restaurants theyear2000; Sears Roebuckis putting 150 million $ by intonew storesand malls throughout country, additionto renovating in the a older units;and PepsiCo has expandedits snack businessby purchasing stakein Gamesa, Me xicos largest cookie maker(Bakerand Walker majority 1991b). amin One of themajorreasonsforthisincrease FDI is theprivatization thatbeganin 1982and whichhas pickedup speedsincethen. Whilethe paign continues playa majorrolein theeconomy, to through primarily government has the there beensignificant state-owned entities suchas Pemex, giantoil firm, reduction itsownership. in Thesesales havebeenmadeto bothforeign companiesand Mexicaninvestors (Baker 1991). 46 nth* 33 †¢ Special Issue †¢ 1993/2 vol. This content downloaded from 146. 50. 153. 28 on Thu, 30 May 2013 08:40:14 AM All use subject to JSTOR Terms and Conditions Porters Diamond Framework: the Mexican Context Another reasonfornewFDI has beenthechangesin investment that laws to hold major equitypositions. In the past, foreign now permit foreigners in had to of but companies beenlimited 40 percent equity, ownership auto-parts the reduces number firms of thatare subject this a newdecreenow sharply to based on percentages exportsales and sales to of law by creating exemptions river lake individuals. and mining, Exceptin someareassuchas petrochemicals, investment permitted to is and telecommunications, foreign up transportation, in and 100 percent (although somecases suchas agriculture, publishing, conis It struction, approval required). as also becomeeasierto acquire government withMexicanfirms. or realestateand to purchase merge Todayapproximately is of 75 percent theeconomy open to fullforeign ownership (Perry 1992). has been theLaw for thePromotion Protection and Another majorchange in a which was enacted 1991and provides muchbroader Property ofIndustrial This also thanpreviously. newlegis lation placestighter ofpatent coverage scope that on Still controls tradesecrets. another changehas beenlegislation endsthe for conneed forofficial requirements technology approvaland registration the thatMNEs willintroduce increase likelihood These developments tracts. nto theirMexican operations. There have also been more hightechnology newprotection software for in copyright thatprovide laws producers changes These changesare designedto attackpiracy,a and the recording industry. in serious inadequate copyright proproblem Mexicobecauseofitspreviously tection. FDI is thelow wage rates. In 1992 minimum factor Another encouraging in MexicoCityand majortownswas around$ 4 perday,whileit was $ wage Thiswage 3. 60 in manyother largecitiesand $ 3. 25 in therestof thecountry. cardin attracting investment. as Thus structure beena strong foreign drawing in over theeconomicenvironment Mexico has improved dramatically thelast decade. Double Diamond Analysis Mexico mustcontinue develop to its I n orderto maintain economicgrowth, Thisis currently done bylinking into international being strength. competitive in and this not theUnitedStatesmarket, particular, viewing market just as a source for exportbut also as part of the home market(see Figure2). In this particular, requires: 1. developing innovative new products and services thatsimultaneously meet theneedsof American and Mexicancustomers, that recognizing close relawithdemanding S. customers U. houldset thepace and styleof tionships product development; ink vol. 33 †¢ Special Issue †¢ 1993/2 47 This content downloaded from 146. 50. 153. 28 on Thu, 30 May 2013 08:40:14 AM All use subject to JSTOR Terms and Conditions M. Richard Hodgetts 2. Figure U. S. -MexicoDouble Diamond Source: Adapted fromAlan M. Rugmanand JosephR. DCruz, Fast Forward:Improving Kodak Canada 1991). CanadasInternational (Toronto: Competitiveness 2. drawing thesupport of on industries infrastructureboththeU. S. and and to Mexicandiamonds, that theU. S. diamondis morelikely possess realizing and and moreefficient markets suchindustries; for deeper in 3. aking free and fulluse of thephysical and humanresources bothcountries (DCruz and Rugman1992). Strategic Clusters In Mexicos Double Diamond business The primary advantageof usingthedoublediamondis thatit forces and publicpolicy and government leadersto think aboutmanagement strategy as in a different No longer thedomestic diamondtheunitof analysis, is way. now becomes in Porters The singlediamondframework. properperspective of clusters indusviablestrategic thatofidentifying successful potentially and acrossthe and performance within nation and to examine their tries the linkages doublediamond. ocatactivities and A strategic is of cluster a network businesses supporting and firms ed in a specific competeglobally regionwheretheleadingflagship 48 mk vol. 33 †¢ Special Issue †¢ 1993/2 This content downloaded from 146. 50. 153. 28 on Thu, 30 May 2013 08:40:14 AM All us e subject to JSTOR Terms and Conditions Porters DiamondFramework: MexicanContext the In somemaybe foreign-owned. are activities home-based, although supporting business inutsand skillsmaycome from outside someof thecritical addition, and determined themembership relevance usefulnes withtheir thecountry by cluster. f thestrategic will have one or more large multinational cluster A successful strategic is these homeor foreign-ownedirrelevant, are Whether at enterprises itscenter. on a globalbasis are so longas they globally Ideally, they operate competitive. within framework globalcompetithe of and plan their strategies competitive is with related supporting and ofthecluster companies tion. A vitalcomponent In and publicsectororganizations. addition, bothprivate activities, including and institutions research there tanks, supportgroups, educational maybe think theseefforts. ing Mexicos Strategic Clusters The clusters. sixmajorones,in orderof are In Mexicothere a hostof strategic maand arepetroleum/chemicals, automotive, housing household, importance, The and and foodand beverage, semiconductors computers. and terials metals, to the and two thatare mostinternationally competitive provide bestinsights and the cluster how the Mexicandouble diamondis used are the petroleum It Crudeoil is Mexicos largest cluster. automotive industry. accountsfor4. 3 is of and of theworldscrudeexports, 57 percent thisproduction sold percent due beenexpanding has cluster in theUnitedStates. The automotive rapidly to has Since1986carand truck inthis production been globalrestructuring sector. thesetwo clusters, In at an annual rate of 24 percent. examining increasing of determinants competitiveness; four on is attention focused Porters principal and relatedand supporting demandconditions, factor industries, conditions, and firm strategy rivalry. Petroleum Cluster of and 15 accountedfor28 percent all exports Mexicos petroleum industry in the is of GDP in 1991. Of all firms thiscluster, largest state-owned percent is fifth Mexicanos Petroleos largest currentlytheworlds (Pemex). Thecompany firm. Pemexhas a workforce of and crudeoil producer theworlds57thlargest and assets of $45 billion,including refineries, 168,000employees pipelines, and aircraft, railcars. tankers, at reserves theendof1989 base is huge. Proven resource Mexicospetroleum in to barrels the for at werecalculated 66. 4 billion barrels, contrast 26. 3 billion of Mexicois a netexporter energy, UnitedStates. As a result, oil, principally, nuclearand geothermal and coal. naturalgas, hydraulic power, power, mk vol. 33 †¢ Special Issue †¢ 1993/2 49 This content downloaded from 146. 50. 153. 8 on Thu, 30 May 2013 08:40:14 AM All use subject to JSTOR Terms and Conditions M. Richard Hodgetts Thereare also strong industries infrastructure. and Over petroleum-related thepast50 years under statecontrol oil exploration, of and processing refining, ofbasicand secondary and a majorindustry infrastrucstrategy petrochemicals, turehas emerged refining for use bothcrudeoil fordomestic and export and ot her refined there suchas gasolines and petrochemicals. present, At products are 1975 companiesoperating basic and secondary 490 plants petrochemical the and 130,000 throughout country employing pproximately people. Foreign in sector with Mexcompanies participate thesecondary petrochemical usually icanjointventure partners. in Domesticdemandof oil-related products Mexico has been increasing in more Pemexto becomeconsiderably sharply recent years. This has forced As in over the productive. a result, 1991 crudeoil outputwas up 7 percent at market thisoil is expected remain current for to previous year. The export levelsforthe foreseeable future. withcapitalexpenditures However, planned overthenextfiveyearscoupledwithrising demandforpetroleum products, crudeoil outputis forecasted riseto around3. million barrels day in to per 1995,comparedto 2. 68 millionbarrels dailyin 1990. The UnitedStateswill from continue be Mexicoslargest to and customer, whiledemandhas declined its1976-1980peak,U . S. conservation willconmeasures depressed and prices NAFTA discussions tinueto createdemandforoil imports. recent Moreover, and through have centered U. S. access to Mexican oil through on imports in theenergy sector. increased forAmerican Major opportunities technologies off are American suchas Arco,Chevron, and Phillips selling some companies outof their domestic and for opportunities properties are looking exploration thatthe sidetheU. S. Mexicois likely provea very to attractive location, except of alter refuses substantially itsownership hydrocarto government currently bon resources. are contracts now beingused to However, turnkey exploration and Mexicandrilling American and efficiency effecintegrate expertise improve Table1. MexicanPetroleum/Chemical Cluster FirmName Petroleos Mexicanos CelaneseMexicanaSA DupontSA CV Industrias Resistol SA Petrocel SA Ciba GeigyMexicanaSA CV FibrasQuimicasSA Tereftalatos MexicanosSA SA GrupoPrimex CV PoliolesSA QuimicaDe. Rey SA CV Source:Expansion, 21, August 1991. 1990sales(U. S. $m) 16,996 757 277 207 189 187 165 139 129 127 84 50 mlr vol. 33 †¢ Special Issue †¢ 1993/2 This content downloaded from 146. 50. 153. 28 on Thu, 30 May 2013 08:40:14 AM All use subject to JSTOR Terms and Conditions Porters Diamond Framework: the Mexican Context reduce costofbringing to themarket. the oil Thistrend makeMexico will tively in one of thelowestcost producers theworldnextto Saudi Arabia. in firms theMexicanpetroleum cluster reported Table 2. n The leading are As can be seen,Pemexis thedominant firm. company vertically The is flagship in and and stageofthevaluechainin bringing integrated involved every energy to UndertheSalinasgovernment, recent in petrochemicals themarket. changes for of investment theproduction basic and secondary foreign petrochemicals will increasethe role of international firms such as Celanese,DuPont, Ciba haveannounced and other firms suchas Exxonwhich the plansto enter Geigy, Th esecompanies looking growth are for Mexicanmarket. utside opportunities are theUnitedStates. In particular, they seeking cheaperoil and they relyon and The rivalry oil imports their for and refining petrochemical production. has alreadyestablished in the American market thesevertically competition and firms worldleadersin exploration, as transportation, refining, integrated of products. marketing energy-related little nature theenergy of business for The commodity provides opportunity the of bothpricing demand and itself from cyclical Mexicoto insulate changes for to in this cluster. The real opportunities Mexico lie in trying improve efficiencies (a) exploration programs allowingmore by through: liberalizing contractors carry turnkey to out efficient operations; work(b) drilling foreign to withtheunionsto rationalize jobs thatare not required reducethecost ing in Mexicanexpertise lacking; is base; (c) usingforeign technologies areaswhere in of foreign firms producing participation petrochemicals (d) allowing greater of to domesand to expandcapacity competitivenesscommodity products meet MNEs to bringin technology to tic and exportdemand;(e) using foreign to and (f) market; produceadvancedpetrochemicals be used in theAmerican fuels, alternative, cleaner-burning suchas natural and unleaded gas developing and to complywithinternational fuelsto reducerelianceon U. S. imports standards. nvironmental in of looks promising even though recent The potential thiscluster years and have fallen benchmark Mexicanprovenreserves slightly theinternational priceforcrudehas droppe dto the $ 15-20 per barrelrange. The vast unexto a opportunities continue strong ploredareas of Mexico providelong-term cluster. the of Additionally, proximity the UnitedStates, hydrocarbon-based and increased on will withits declining provenreserves dependence imports, economiesof scale and provideMexico withan exportbase forimproving in and exploration fundsforreinvestment drilling activities. Thus generating willbe closelylinkedto theAmerican Mexicoseconomic diamond. progress AutomotiveCluster s The globalauto industry currently a In undergoing worldwide restructuring. as thisprocessMexicois emerging a majorcar and truck Since1986 producer. mlr vol. 33 †¢ Special Issue †¢ 1993/2 51 This content downloaded from 146. 50. 153. 28 on Thu, 30 May 2013 08:40:14 AM All use subject to JSTOR Terms and Conditions Richard Hodgetts M. theindustry grown has In with was rapidly. 1990totalunitproduction 820,000 of and unofficial over1 million for exports 276,800 figures 1991puttotalou tput units. If a NAFTA is negotiated, units to is production expected top 3 million theyear2000. OverthelastdecadetheBigThreeU. S. automakers havebeen by their in expanding capacities Mexico,whileclosingplantsin theUnitedStates in and Canada. At thesame time, firms investing are Europeanand Japanese to as Mexico,in an effort tap such benefits low cost labor,low capitalcost, in to of auto market theworld, demand, proximity thelargest growth domestic and accessibility relatedsupportindustries. close look at Portersfour A to that occurring is determinants national of the advantage helpsillustrate linkage between Mexicanand U. S. diamonds. the 2. ) (Again,see Figure cluster. Mexico has a strong, its richresource base supporting automotive is Morethanhalfthepopulation under age of20,and there an abundance is the thatthese of young,skilled, are adaptablelabor. Foreignauto firms finding in workers particularly are effective after have been giventraining total they In and quality concepts. ddition, management, just-in-time inventory, related than their unionsin Mexico are much more cooperative withmanagement some to thenorth. a result, resource As this base is nowproducing counterparts of thehighest in and the Hermosillo cars and trucks NorthAmerica, quality on as one plantis widely regarded thenumber auto factory thecontinent. Thereare also strong industries a well-developed and infrastrucsupporting in ture theautomotive cluster. auto parts The consists approximateof industry that workers supply and around51 percent the of ly400 firms employ125,000 auto partsmarket. Thesecompanies forboththedomestic countrys produce and exportmarkets, and manyare a resultof foreign directinvestment by U. S. -based auto part firms. For example,General Motors has component as in a plantsin thecountry, wellas financial participation Aralmex, Mexican auto partcompanythatexportssnobbers, and the Condumexgroup,which Table2. MexicanAutomotive Cluster FirmName GeneralMotorsof MexicoSA CV de Chrysler MexicoSA de Volkswagen MexicoSA CV Ford MotorCo. SA RenaultIndustrias MexicanasSA CV Kenworth MexicanaSA CV Cifunsa CV SA Cummins CV SA MetalsaSA CV Y SUBS Central Industrias CV de SA NemakSA Source:Expansion, 21, August 1991. 1990 sales (U. S. $ m) 2,252 2,090 1,600 1,242 208 143 134 93 92 90 53 52 nth vol. 33 †¢ Special Issue †¢ 1993/2 This content downloaded from 146. 50. 153. 28 on Thu, 30 May 2013 08:40:14 AM All use subject to JSTOR Terms and Conditions Porters Diamond Framework: the Mexican Context ith and Ford Motorhas a jointventure Mexicanauto harnesses rings. exports and firms thatmanufacture motorheads, plasticparts. security glasses, parts firms have similar Nissan,and a host of otherforeign arrangeV olkswagen, ments. customers auto outputin Mexico are in thelocal market. for The primary of thatgoes forexport increasing is the However, percentage thisoutput every in and In 1986itwas 17 percent; 1988itwas 32 percent; by 1990,thelast year. The forecast 1995 are for yearforwhichstatistics available,it was 34 percent. if In particular, a free tradeagreement signed is Mexicosaccessiis 50 percent. in Thisaccessiauto market theworldwillincrease to sharply. bility thelargest sinceU. S. rotectionism now is critical the country, to is bility particularly A Mexicanacceptance of barriers. thesame time, to raiseimport threatening in The sameis true American carsmanufactured Mexicois at an all-time high. of the where qualityreputation Mexicanassembly in theUnitedStates, plants at is beingfelt thedealershowroom. cluster in The leadingfirms theMexicanautomotive (see Table 2) all have in investments Mexico. For example,General Motors uses these significant Ford makesthe and to Cavaliers; operati ons produceBuickCentury Chevrolet turns the Ram Charger, out and Escortshere;and Chrysler Tracers Shadow, In thesefirms, wellas others as in and Spirit itsMexicanoperations. ddition, of will billions dollarsoverthenextfiveyearsto in theindustry, be spending is and expand theirlocal capacityin Mexico. The results that the upgrade in thiscountry overthenextdecade will of cars and trucks produced quality of to continue riseand Mexicowillbecomea majorworldclass producer cars market. and theexport forboththedomestic is cluster extremely of The market high. Thereare potential theautomotive is thatwill have to be dealt withif thecountry to some problems, however, Primeamong theseis the need for its continueincreasing competitiveness. One of the major reasonswhy Mexican autos are cost technology. greater and It that trend automation robotics. s unlikely this is efficientthelackofhigh and Canadian auto In can continue. addition,as more and moreAmerican on to is business shifted Mexico,thiswi llput majorpressure any NAFTA to from strategy that this and benefit thatthesetwocountries ensure handsomely and Europeans, not. do suchas theJapanese otherforeign producers, Conclusion future closelylinked thatof theUnitedStates,and if is to Mexicoseconomic of a NAFTA is signed,NorthAmerica. When analyzedin terms the Porter mk vol. 33 †¢ Special Issue †¢ 1993/2 53 This content downloaded from 146. 50. 153. 28 on Thu, 30 May 2013 08:40:14 AM All use subject to JSTOR Terms and Conditions Richard M. Hodgetts iamond someofthecountrys worldclusters havealready strategic developed wide competitive and automotive strength. Duringthe 1990s the petroleum clusters proving be highly the of are to It thatbefore turn competitive. is likely thecentury, into Mexicowillhaveeffectively linked theseindustries theNorth in and American market willbe a majoreconomic and force energy automotive will It thatthecountry beginmaking products. is equallylikely majorinroads in otherareas such as sem iconductors computer. in its automotive and As this as is of success, development lessa result technological prowess itwillbe the defavorable factor relatedand supporting industries, conditions, countrys firms. efore, As Mexico mandconditions, thestructure rivalry the and of and willfindthatitcan linkitsdiamondframework thatof theUnitedStates with in areas(Magnusand in theprocess becomea worldwide other competitor still will son 1992). Once again,Porters diamondframework proveto be a useful paradigm. References Baker, S. (1991) The Friends of Carlos Salinas. Business Week 3223, pp. 40-42. Baker, S. and S. Walker. (1991a) Mexico: The Salad Bowl of North America? Business Week 3201, pp. 70-71. Baker, S. and S. Walker. (1991 b) The American Dream is Alive and Well in Mexico. Business Week 3233, pp. 102-103. Crookell, H. (1990) Canadian-American Trade and InvestmentUnder the Free Trade Agreement. Westport,Conn: Quorum Books. DCruz, J. R. and J. Fleck. (1987) Yankee Canadians in the Global Economy. London, Ontario: National Centre for Management Research and Development. Toronto: DCruz J. R. and Alan M. Rugman. (1992) New Compactsfor Canadian Competitiveness. Kodak Canada Inc. Dunning, J. (1990) Dunning on Porter. Paper presentedat the Annual Meeting of the Academy of InternationalBusiness. Magnusson, P. Building Free Trade Bloc by Bloc. Business Week. No. 3267, pp. 26-27. Perry,N. (1992) Whats Powering Mexicos Success. Fortune125, 3, p. 114. Porter,M. E. (1990) The Competitive Advantageof Nations. New York: Free Press. and Performance, EconomicImpact. Boston: Rugman, A. (1980) Multinationalsin Canada: Theory, Martinus Nijhoff. for Canadas Multinationals. Toronto: Rugman, A. and J. Mcllveen (1985) Megafirms:Strategies Methuen/Nelson. Rugman, A. and A. Verbeke (1990) Global Corporate Strategyand Trade Policy. London: Routledge. for for Rugman, A. M. and J. DCruz. (1990) New Visions Canadian Business: Strategies Competing in the Global Economy. Toronto: Kodak Canada Inc. Canadas International CompetitiveRugman, A. M. and J. DCruz. (1991) Fast Forward: Improving ness. Toronto: Kodak Canada Inc. Toronto: McGraw-Hill. Safarian, A. E. (1968) Foreign Ownershipof Canadian Industry. 54 mir vol. 33 †¢ Special Issue †¢ 1993/2 This content downloaded from 146. 50. 153. 28 on Thu, 30 May 2013 08:40:14 AM All use subject to JSTOR Terms and Conditions

The Political and Social Partition of India †History Essay

The Political and Social Partition of India – History Essay Free Online Research Papers The Political and Social Partition of India History Essay The political and social partition of India was several decades in the making. The ‘Hindus’ and ‘Muslims’ in India were of a mindset completely different from that of the British. Prior to British colonialism ‘Hindus’ and ‘Muslims’ did not identify themselves as such. The lines between each religion were blurred. After the British colonized India, they began to identify these similar groups of people purely on the basis of their religious beliefs. The effects were not significant to begin with, but as time went on they began to root themselves within Indian culture. Those people who were once ignorant to religious profiling began to do so in their own right, without coercion from the British. Each generation following the previous one cultivated this prejudice and it infected India like a virus. Politically the two religious factions were rivals. Their ideas and interests clashed in every way possible. There were external factors that contributed a great deal. British colonialism got the ball rolling. The differences between Muslim and Hindu became clearer every day until it tore the country in half. From the day the East India Company introduced itself into the subcontinent until the time Indian won its independence a great deal of change occurred, most of which could be attributed to the birth and rise of the East Indian Company. Although the significant changes were not made until and after Lord George Nathaniel Curzon arrived in India as viceroy in 1899. Curzon was â€Å"convinced that efficient administration by benevolent autocratic rulers best served the country (Metcalf Metcalf 153).† Lord Curzon was an extremely driven and effective viceroy, who was also said to be both overbearing and arrogant. Towards the beginning of his stint as viceroy Curzon did what he could to keep the diverse group of people that inhabited India happy, but his popularity vanished promptly. Curzon was very surprised because he had assumed that such reforms as establishing the department of commerce and industry and the Archeological Survey of India, as well as supporting agricultural rese arch would â€Å"keep the masses content and the politically active chastened (Metcalf Metcalf 154)† It became clear to Curzon that he needed to make a much bolder political move in order to keep the people happy. After all it had been less than forty years since the last revolt, and Curzon knew he would be responsible if it happened again. In 1905 Curzon announced his intentions to split Bengal into separate provinces. The Hindu population was outraged, especially the upper caste bhadraloks, they believed this was an attempt by the British to reduce their power. Bengal was considered the ‘divine Mother’ by the bhadralok, and Curzon’s plan to split Bengal would give the Muslims control of western Bengal. At this point the lower caste ‘Hindus’ did not concern themselves much with politics, but the bhadralok needed their support in order to successfully secure Bengal from what they believed to be Muslim oppression. In order to gain the support they needed, the bhadralok began what they would deem the ‘swadeshi movement.’ The purpose of the swadeshi movement was first to create a national Hindu identity and second to utilize this nationalist identity to oppose both the British and Muslims. The bhadralok took their first steps towards creating the national ‘Hindu’ i dentity by utilizing popular religious symbols to promote nationalistic principles. This tactic was extremely effective; it mesmerized the common Hindu and placed the bhadralok in a very powerful position. The bhadralok began the swadeshi movement, and furthered the nationalist movement, but their power would not last. In a short period of time the nationalist movement became so far reaching that there was no way to control it. â€Å"Nationalists across the country took up Bengal’s cause. Calcutta came alive with rallies, bonfires of foreign goods, petitions, newspapers and posters.† The Hindu nationalist movement had taken root in Bengal and was quickly spreading, gaining more support each day. It was only a matter of time before the bhadralok’s vision of freeing India from Muslim oppression would become a reality (Metcalf Metcalf 155-56). In the meantime, the partition of Bengal and other reforms motivated the Muslims to seek more political autonomy in India. In 1906, lead my Aga Khan, the Muslim population in India, â€Å"urged the viceroy†¦to grant Muslims a representation that would reflect not only their numerical strength, but also their political importance (Metcalf Metcalf 158)† Although this became a popular idea amongst the Muslims, the British, hesitant to give up any of their governmental power, didn’t give it much thought. Although the British didn’t want to give up any governmental power to the Muslims, they needed to keep them happy. In 1911 the king-emperor George V announced three ‘boons’. First the capital of India would be moved from Calcutta to Delhi. This not only moved the capital out of the politically active Calcutta, it also reminded Muslims of a past Mughal glory. Next the partition of Bengal would be nullified and the British would recognize its power b y making it a governor’s province. Now that the partition of Bengal was repealed the Muslims were back to square one, the entire basis of their power was dependant upon their influence over western Bengal. Despite this setback the Muslims were now determined to become more actively involved in Indian government (Metcalf Metcalf In 1913 Mohammad Ali Jinnah joined the Muslim League. Prior to Jinnah joining the Muslim League, it had significantly less power than it did after he joined. The Muslims were still under the thumb of both the British and even the Hindus, but an important piece of legislation would be passed in 1916 titled the Lucknow Pact. The Indian National Congress and the Muslim league met agreeing to the principle of separate electorates for Muslims in the larger interest of Hindu-Muslim unity against colonial rule. The Lucknow Act could be considered a victory for both the Hindus and the Muslims, after all the Hindus gained a powerful ally in their fight against British rule and the Muslims were finally making progress in their fight for a more active roll in government. Although the short-term effects were positive, this marks a crucial point in the social interaction between the two religious groups (Jalal 415). Muslims were not happy with the fact that they were the minority. The Lucknow Pact may have brought out the best in the two religious groups, but it was just a start. The Muslims and Hindus had to wait thirty more years before they would finally achieve independence from the British and the creation the two new nation-states of India and Pakistan in 1947. Now that the independence of India and Pakistan was reality the religious factions would no longer have an oppressive government to fight together, so they began to fight each other. â€Å"Independence was to be disfigured by the ugly horrors of riot and massacre.† The Hindus were more than anxious to finally separate themselves from the Muslims whom they believed were disgracing their mother land simply by living there. Although there is no way to be completely accurate calculating how many deaths there were during the riots, it is said that over a half million people were killed. Fourteen million people who were not killed became refugees and were forced out of the country. â€Å"What made the moment of independence particularly bitter was that neither of the two new states turned out to be quite what its proponents had hoped for (Pandey 613).† Even though Pakistan was supposed to become a homeland for every Muslim that had inhabited India, nearly ninety-million remained and were dispersed throughout the country. This gave rise to a very hot debate for both new nation states, should they choose to be secular or not? Although no formal political decisions were made Pakistan was doing everything in its power to make Pakistan a homogenous nation. Hindus who inhabited Pakistani lands that were once part of India became refugees, and Muslims who still lived in India were to be removed and there land handed over to the Hindus. Those people who would not migrate to their respective land faced a great deal of opposition. â€Å"†¦killing and counterkilling, massacre and countermassacre could not g o on endlessly without destroying everything and everybody, by the fact that in some areas there was no one left to kill†¦Ã¢â‚¬  ( Pandey 614). Ten percent of India was still Muslim, even after all the terrible things they were subjected to while they were there. The people that stayed in India who were Muslim no longer had an identity outside of being Muslim in the eyes of those Hindus in India. They were not trusted and were treated as second-class citizens who didn’t belong. Relations became so cold between Muslims and Indians at this point that there was even thoughts of war between the two countries. The Congress Chief Minister of Uttar Pradesh, Govind Ballabh Pant had this to say in regards to his feelings toward those Muslims who chose to stay in India. â€Å"Every Muslim in India would be required to shed his blood fighting the Pakistani hordes, and each one should search his heart now, and decide whether he should migrate to Pakistan or not (Pandey 617)† After the British colonized India, they began to identify these similar groups of people purely on the basis of their religious beliefs. The effects were not significant to begin with, but as time went on they began to root themselves within Indian culture. Those people who were once ignorant to religious profiling began to do so in their own right, without further coercion from the British. Each generation following the previous one cultivated this prejudice and it infected India like a virus. Politically the two religious factions were rivals. Their ideas and interests clashed in every way possible. The differences between Muslim and Hindu became clearer every day until it tore the country in half. The creation of the two nation-states India and Pakistan, it turns out, was not even the tip of the iceberg. The Hindus and Muslims held an unfathomable amount of contempt for each other, all of which was based on nothing other then they practiced different religions. The two countries w ere being assembled by religious zealots who refused to seek compromise, and had no tolerance for anything the opposite people believed in. If the British had not colonized India by way of the East India Company in 1600, here is no telling what would have become of India. It is clear that the British are responsible for what nearly could be considered a civil war in India. Hundreds of thousands of innocent people were killed, all of which could have easily been avoided. Of course the British cannot be blamed solely for these atrocities, but if it had not been for the British one wonders what India would be like today if the British had never settled there. Research Papers on The Political and Social Partition of India - History EssayPETSTEL analysis of IndiaAppeasement Policy Towards the Outbreak of World War 2Quebec and CanadaCanaanite Influence on the Early Israelite ReligionAssess the importance of Nationalism 1815-1850 EuropeBringing Democracy to AfricaMarketing of Lifeboy Soap A Unilever ProductRelationship between Media Coverage and Social andGenetic EngineeringWhere Wild and West Meet