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Resource management and technological innovation, sheet reading: The Netherlands C., Economics of Innovation (Chapter IV)

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  1. Analysis and presentation of the specific profile of the company and establishment of key strategic objectives of the company for international expansion
    1. The Profile
    2. Main goals for international expansion
  2. Choice of selection criteria for countries that are most appropriate for the profile of our business and our strategic objectives.
    1. The cultural criterion
    2. The economic criterion
    3. The geographical criterion
    4. The legal context
  3. Application of the criteria chosen to compare the terms offered by the three countries, and choosing the best country for your project.
    1. The economy
    2. The geography
    3. The legal context
    4. The cultural criterion
  4. Choosing the best country
  5. Description of the profile chosen market against our strategic objectives
    1. The economy
    2. Legal Factor
    3. The Culture
    4. The geography
  6. Establishing the best market entry strategy
  7. Future Development Strategy
    1. Focused on customers
    2. Looking to the staff
    3. Oriented techniques and energy

For A. A Alchian, under uncertainty, profit maximization cannot be a rule of action for the firm. Success depends on results, not motivations: the decisions and criteria associated with them do not constitute a basis for understanding the behavior of firms.

What is important are the decisions and criteria dictated by the dynamics of the industrial system. Achieving a positive profit is the condition of business survival. The realization of the rule of survival may be the result of intentional behavior as a result of unforeseen or lucky circumstances.

For E. Zuscovitch, this type of analysis should be interpreted as a shift from behavior agents to control system: the choice of systems replace the choice of agents. The rule of survival is to achieve a positive profit for the company.

S. Enke developed a thesis that is in fact a complete reversal of Alchian's positions. He suggests that if a sufficient degree of competition prevails, all strategies built by companies need not pass the survival test, some lead to negative profits and therefore the elimination of firms. Companies with good strategies hold increasingly important market shares. The standard behavior (maximization) becomes the criterion for survival in a competitive environment.

For Friedman, the Alchian thesis is not really inconsistent with the presuppositions of classical rationality, as only firms that have a rational behavior (ex ante) will survive.

Tags : Profit Maximization, E. Zuscovitch, S. Enke, Economy of the Innovation

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