Managing Internationally across Business Systems - Assignment Example

In this context, ACR engages a sort of a specific as well as a discrete financial transaction. It is regarded as a contract that is related to expected capabilities of mankind that enhances the trading activities between the involved parties at every possible occasion. The contract possesses certain vital rules that are quite normative in nature as well as settlements amid the involved parties that assist them to make a particular economic transaction successful. On the other hand, OCR signifies the engagement of contracts economically on the basis of trading of services and goods.

In OCR, the transactions of activities between two parties take place without any initial settlements of conditions in order to perform trade. It has been apparently observed that transactional dependence is quite lower in the case of ACR owing to the reason that both buyer and sellers are competing with one another in trading activities by taking into concern certain major aspects that include economies of scale and cost of transaction among others. The terms as well as the conditions of the contracts within the circumstance of ACR are written and substantive in nature and takes place with varieties of procedures such as bidding and negotiation (Sako, 1992).

In case of OCR, the buyers are observed to provide securities to limited suppliers. Moreover, the bidding process might not take place in OCR due to higher transactional dependence between the buyers and the sellers. The suppliers within the background of OCR tend to begin necessary activities based on oral communication with the parties prior to the attainment of the written orders (Sako, 1992). 1. Advantages and Disadvantages With regard to determine the advantages as well as the disadvantages of the particular sub-contracting system relating to the case of Tombow, it can be stated that the pencil company typically follows the sub-contracting system of ACR (Harvard Business School, 1993).

Advantages The advantages of the particular sub-contracting system i.e. ACR relating to the case of Tombow can be identified in the form of outsourcing of products that can be considered as a chief determinant for the company. One of the significant advantages of ACR that can be recognized in the case is that it facilitated the company towards reducing manufacturing costs and made the company to pay much more emphasize upon minimizing the expenditures related to marketing as well as sales promotion and product development among others.

These facets ultimately made Tombow to sell quality products in the business markets at a cheaper rate. Moreover, development in various products of the company and avoiding delays in delivery periods can also be considered the other decisive advantages of the sub-contracting system i.e. ACR in the case of Tombow. In relation to outsourcing of products, the risk of competition also gets reduced as the suppliers depend largely upon the business as well as the export markets of a company such as Tombow due to the effect of the