Section TwoLocation of Production Facilities
Decisions regarding the location of production facilities and
related questions of labor cost and labor productivity provide
particularly intriguing strategy-related questions. Although
companies may have achieved production success with their
human resource practices in one country, whether they can
achieve success in other countries with the uniform application
of human resource practices is subject to debate. For example,
a recent study of the multinational corporation, Alcan, exam-
ined its production operations in Canada and Britain. The study
found major differences in the extent to which best practices,
such as flexible work practices and lean staffing, could be
implemented in production facilities. As an example, managers
in Britain had greater flexibility to make changes while fewer
could be introduced in Canada because of the influence of
seniority.^49
Furthermore, there are growing questions about whether
old notions of control and hierarchical structure are appropriate
for international operations. As noted in the discussion of net-
work organizations earlier, production can occur anyplace in the
world. (Network organizations are discussed in greater detail
later in this section.) Interestingly, some of the complications of
inter-national operations may be simplified by greater use of
outsourcing. BP Amoco has contracted to outsource a