Siew, Samuel
(2006)
Investing and Establishing a High-Technology
Manufacturing Operations in Indonesia.
[Dissertation (University of Nottingham only)]
(Unpublished)
Abstract
For many companies, globalization is an inevitable process - driven by competition, lack of resources in home location, and the need for greater level of profits. The success and survival of many modern companies depend on how well they globalize. Regardless of the motivation to go abroad, the process of internationalization is one of the most difficult strategies to implement operationally. Choices have to be made, risks identified, hurdles cleared, reputation protected, and transition flawlessly executed. Failure in globalizing can be as disastrous as the failure to globalize. While companies are clear on the need to expand abroad, the process by which to successfully do so are, more often that not, less than clear. The problem is even larger when it comes to establishing significant presence such as a large manufacturing operation, and doing it in developing countries.
In this study, using the example of a large multinational company Honeywell, the author will explore the process of setting up a sizeable high-technology production facility in Indonesia - a less common investment site for most firms. Very little have been published on investing in Indonesia, and the Indonesian government does not even operate an investment promotion board. As with most developing countries, investing in Indonesia poses many challenges in issues such as location selection, labor intricacies, corruption, convoluted approval processes, and tax complexities. This study offers insights on these issues and provides practical solutions to overcome them.
The study will also afford a potential transition model to successfully move an existing operation to Indonesia, and explore its financial feasibility. While the proposals are made to suit Honeywell's requirements, they can be generally applicable to most investments.
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