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Subsidiaries and Connectivity: Int'lBus C10 - YouTube
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(upbeat music)
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- When I prepared for this
segment of this chapter here,
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I went out looking for subsidiaries
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and exactly what does that mean?
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Here's an interesting chart and yes,
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that's a little bit blurry over here.
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I encourage you at this
topic really interesting,
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and it really means interest
to, especially if your company
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is out there and you got paid
attention to your competitors.
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If you look on things like
Volkswagen, BMW, Ford,
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it's incredible as to
how many different ways
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they connect or create
subsidiaries or have connectivity
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as they go through.
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One of the most fascinating
parts about especially today,
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the automotive industry
is the vast scramble
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into the electric vehicle mode
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and the autonomous vehicle
mode as you go through.
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Massive partnerships
and billions of dollars
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measured to umpteen
billions on top of that,
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as you go through new product
markets and everything else,
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you'll see General Motors out
there buying battery planters
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that go through or bring in old plans
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they closed years ago
out of the moth balls
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and converting them into electric vehicle
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maybe inspection as they go through.
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You'll see four partners or
companies as they go through
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that didn't even exist five years ago
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and all of a sudden their trust
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and then a 1.6 ownership
of the company and buying
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a board seat there to make
certain that they can sit down
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and grab the market
share as they go through
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and maybe have a foothold for
times later as you go through.
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I encourage you to go research this,
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especially if you're looking for work.
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Sometimes you can sit down
and end up in one company
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and end up in another
one should go through
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a buyout or a merger.
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I have a friend of mine,
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I needed to have some legal
advice in the area of music
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as he went through.
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So I said, okay, I need to have, you know,
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releases for this over here in a process
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like his daughter actually
works now at Lionsgate Film.
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So by the time it was all done,
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she sat down there as a law student,
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she worked for as an intern
for a law firm for free
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after she passed her bar, they
hired her as a full timer.
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She sat down there, that
company got bought up
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and that company got bought up.
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And by the time it was all
done by the ripe old age
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of 36 years-old, she finds
that she looks around
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and she's a BP over at Lionsgate Films.
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Like an incredible with large,
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but it really happened
because she got connections
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by being an unpaid intern,
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but then all the process
of you buying people out
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and all this kind of
activity in the process
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of the different shareholders
and everything else,
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buying different
companies, all of a sudden,
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she finds herself in a major filmmaker,
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in a major position as they
go through because of the time
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she sat there and paid
attention to this concept here
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of subsidiaries and the kind of activity
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that can have between them.
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Sometimes the size and the age
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of the international
corporation by the time
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you're all done.
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We have different kinds
of experience executives,
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the most served abroad and
have a lot of knowledge
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of the company policies
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and we'll have a lot of confidence
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with international activities.
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Sometimes you put somebody
who has almost no experience,
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they may be in a corporate
office for a couple of decades
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and you put them in
the middle of a country
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they have no experience with
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and they're totally befuddled
because of the fact that
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they know their work,
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but they don't know how their
work fits into the context
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of this totally chaotic
environment or the chaotic country
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where all of a sudden someone,
an old seasoned veteran
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in the same geographical area,
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they walk in and the
matter of a few weeks,
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all of a sudden everything comes down
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and the person that's supposed
to be in charge sits there,
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looks around and say, how did this happen?
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Well, because they didn't know
the context of the company
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in that particular market
or that particular country
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as should go through.
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So you'll see a lot of
the old hands they're used
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to the international work they
come in and it's just that
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whole aspect of experience.
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What they say about
experience, 10,000 hours
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makes you an expert in the field.
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That being said 10,000 hours
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if you sit down there and figure it out,
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a work year is 2,080
hours, that's 52 weeks,
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times 40 hours a week, 2,080 hours.
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And then sit there
divided at 10,000 hours.
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Five years of experience
makes you an expert
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in that particular job
or that particular field.
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If you sat down there and
worked in a different country
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for five years, even if
it was in different jobs,
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that culture will become
second nature to you
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and it'll be much easier
to go through and navigate
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some of the different cultural differences
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and actually get
something done rather than
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somebody coming in who may
have a high power position,
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high powered knowledge,
high power expertise
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and they have no idea how to
sit down there and survive
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in that particular culture,
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because it's so different
from where they were before.
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So, a lot of times your larger
international corporations,
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more decisions are made at headquarters
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because of the seasoning of
your workforce and that process
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you go through.
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A lot of times, if the headquarters,
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if that really is where
the central power of it is,
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they'll bounce production
factors from one country
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to another to gain financial
competitive advantage.
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A lot of times we're looking now at China,
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China really hasn't been
a place where we shift
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a lot of manufacturing to
in the United States too,
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because of the low cost of labor.
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But now China has an
emerging middle class,
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so all of a sudden between that
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and all the different aspects of tariffs,
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they bounced up out of China
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what the Bangladesh,
Cambodia, and Vietnam,
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although they can't handle the capacity
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'cause the population isn't there,
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then also the manufacturing
expertise isn't there as well,
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but they do have a much
lower paying workforce.
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So, hey, let's move out of China,
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Let's go over here, over here, over here.
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And all of a sudden China's
sitting there empty buildings
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and manufacturing moved out
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from the international corporations.
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And then we have a supply
chain issue over here.
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Well, status of they're going
through this port over here
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in Hong Kong, let's shift
everything down to Brazil
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and ship it up for Brazil
because of the fact that Brazil,
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we have a close partnership
between the US Brazil versus
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the US versus China.
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Let's just go through a different pathway.
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Yes, those things happen and
they can happen just like that
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if the headquarters makes that decision,
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as it goes through.
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The headquarters the may not
even care about the chaos
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they cause in that particular
region, geographically,
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or that SBU in the process
because they just made
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the decision we need to
go by cost upon money
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as you go through.
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Sometimes one market's too small
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because of the economies of scale,
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you need to sit down and
get really 17 containers
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of 10,000 shirts on a ship
over here as best you can.
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Let's sit down and think
about the aspect of find them
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rather than ships,
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because there's so many
ships backed up in the ports
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of long beach and Los Angeles.
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So boom, all of a sudden
you make that decision
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and yes, it costs more in the short term,
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but the fact that you have
product on the shelves
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and the long-term means
you grab more market share.
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Sometimes the decisions need to take place
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sometimes quickly and
sometimes you're better off
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being done in the headquarters rather than
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in the region itself as the struggle
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to get by the local red tape.
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Present profit, a lot of
times it's decided that by HQ,
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instead of the subsidiary,
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as they went on the process or the SBU.
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Sometimes they wanna have
the subsidiaries motivated,
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loyal, except for the
fact when the undercut
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their decisions, they become this little,
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it doesn't franchise under presence.
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You have headquarters
should delegate decisions
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as reasonably as possible,
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but then to come in on
the major ones and boom,
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that happens.
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But you'll have that argument
in almost every organization
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as you go through.
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Let's see, we make better decisions
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because we're the ones in
charge at HQ work district
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as you go through, a new
people lot over there,
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you need to listen to
what they have to say.
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But the people here are, wait a minute
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I have an idea, these are my customers,
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I know more about them than you do.
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That's okay because you
don't want to over hear,
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but you need to be loyal,
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but trying to get loyal on my
customers at the same time,
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you have the argument
and it's gonna happen
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no matter what happens.
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It's gonna happen even in a
domestic corporation as well,
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as a constant dialogue that
you have going on in business
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all the time as you go through.
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Here's the thing really,
by the time you're done,
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should a company be allowed to profit
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from international transfer pricing?
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That's another aspect that you can't see
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if you're working in the SBU,
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especially in SBU, that's
a geographically based
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really focusing in on a
specific region rather than
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the big picture as you go through.
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I like to take a look at that on your own.
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So a lot of times the shareholders outside
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of the international corporation
they control the affiliate,
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they can block the international
corporation headquarters
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to move production factors awake.
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And really a true
international corporation
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when you go to country, you
really should have the people
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in that geographical area, hire the people
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in your management in that country,
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and also the fit the definition
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of international corporation
you should be selling
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shares of stock in that subsidiary
out there market as well.
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So you may have people on the board
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in that particular subsidiary
blocking the efforts
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of international corporation
to move productions away
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or fill an order from another affiliate.
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In the process, you may
have the internal politics
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that you go through and have difficulty.
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Sometimes there's very little ownership
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so the ownership issue
really comes down to
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who's in charge, and who has
the most stock in the process.
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So reporting a lot of
pensions for different kinds
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of financial technological
market and political
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as you go through the older ICS,
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rely on headquarters more
where the younger ICS
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can often be more nimble
as they go through.
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Often headquarters make
decisions for subsidiaries,
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but really large-scale internal
competition for resources
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is common in any
international corporation.
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And by the way, it's also common
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anytime you have multiple
different entities
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in a domestic corporation.
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It doesn't matter, the internal
competition for resources
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is common in any
organization it will work.
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That being said, take care.
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