Modern Business in Comparative Perspective Essay

Modern Business in Comparative Perspective - Essay Example The factor condition represents the factor that contributes towards the country and provides a clear distinction between the basic and the advanced factors. The basic factors mainly signify the physical and natural resources, capital resources as well as unskilled labors. The advanced factors are represented by the â€Å"digital data communication infrastructure† (Dogl, Holtbrugge and Schuster, 2012, p. 194) and educated personnel. The demand conditions symbolize the demand for various types of domestic product and services within a country in a certain industry. In this case the attributes like the composition, amount and pattern of expansion along with internationalization of domestic claims are quite significant. Supporting industries signify those industries with which the company can share their activities intersectorally in the value chain like for instance marketing, suppliers, delivery channels and technology advancement. Firm strategy describes the conditions of the c ountry and the ways in which a firm can be operated. This factor is also determined by the domestic rivalry, goal of the firm as well as individual and formation of new business of the firm. The competitive advantage of the firm is also determined by the external factors such as government and chance. ... According to Stone and Ranchhod (2006), Porter’s focus on the magnitude of rivalry and competition, this is an absolute diversion from the traditional concepts of economic thinking. Porter’s Diamond framework is found in most of the books in management academics, which suggests that like firms, countries are also competing with one another. Peng (2009) refers that the Diamond model is one of the modern theories, which provides a perfect realistic amalgamation of country, industry and firm in order to explain international competitiveness of the countries whereas other theories have previously provide explanation about one or two aspects. Hill (2009) claims that the theory proposed by Porter appears to be true but has never undergone through rigorous testing. However Porter’s Diamond Model is subjected to criticism from both management and economics school. The critics from the management school suggests the Diamond Model of Porter does not focuses on the attribut es of the trading partners present in the home country (Rugman, 1990), and at the same time it also ignores the influence of the multinational companies on the competitive success of the country (Dunning 1992, 1993). The Model does not work for the smaller nations (Bellak & Weiss 1993; Cartwright 1993). Rugman (1990) suggests to include the features of the largest trading partners of the home nation, which would be an extension of the of Porter’s Diamond Model. This â€Å"double diamond† approach should address the competitiveness that depends on both foreign and domestic diamond and the management of the domestic firms will be able to exploit both the diamonds in order to sustain in global competition (Rugman 1990; Rugman & D’Cruz 1993). On the other hand the critics from the