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Political Environment of Firms - Essay Example

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Political Environment of Firms Name Instructor Task Date Introduction The strategies for aerospace industries in the three case study economies have both similarities and differences. The developing countries became ambitious in their aerospace by developing and embracing high tech industrialization, due to emerging economic and political factors…
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Political Environment of Firms

Brazil Aerospace It got started when the government gave technological support to private firms through the Centro Tecnico da Aeronautica (CTA) established in 1947 in Sao Paulo, being the most advanced research institution among the industrializing countries. The state allowed private ownership to the production of aerospace but gave the technological support and increased allocation of resources in science and technology. The partnership between the public and the military allowed the advancement of the industry (Goldstein, 2022, pp. 525). For national security, Brazil could not depend on imported military equipment and it could not also allow them to be produced by foreign manufactures, the industry was owned fully by the government but was governed by private law and was managed by a competent autonomous management that created good relations between the management and the Ministry of Aeronautics. The ministry made the local environment complimentary due to financial, fiscal, marketing, regulatory and international responsibilities. The firm also got financing through a state development bank which benefited from tax holidays. Production began in 1970 with the support from foreign partners and negotiated co-production and licensing in order to achieve faster market penetration by assembling other those producing high-tech components. The two best seller planes were national design although most parts were imported. The company also collaborate with many firms to supply final components. The strategy which worked is the partnership between the multinational corporation, local private entrepreneurs, and state owned enterprises that had accumulated huge resources. The company also focussed on the export market and allowed longer production runs and stimulated customers to bring in new ideas for technical change and the demand for exemplary performance standards. The aircrafts were sold to Middle East markets and the foreign exchange was important. This success continued up to 1990s when another model was launched. The worsening economy led to conglomeration and new ownership designed a new organization charts (Lebouc, 1980, pp 43). The Aerospace of Indonesia It was developed by an individual called Habibie after completing a doctorate in engineering who returned in Indonesia in 1974 and was appointed by President Suharto as Research and Technology Minister in 1978. Habibie argued that an aerospace was a strategic national necessity and that technological excellence was necessary for achieving national independence as well as acceleration for economic stimulation. This would lead to cultural and political integrity. Although Indonesia has shallow technological base with underdeveloped capital goods and weak domestic capabilities, to absorb and produce technological goods the minister decided to steer into full assembly. He took control of the procurement of the industry and he has good government finance control (Makka, 1996, pp 123). The international manufacturers saw an attractive Indonesia market and MBB licensed IPTN to assemble a helicopter and other smaller aircrafts. The first assembly was in 1983 and despite the many difficulties certification was secured from the U.S. and many Muslim countries. This gave Indonesia a lot of prestige. The IPTN strove to become an international subcontractor and at sometime, Boeing sent over 50 ... Read More
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