International strategic management and the dynamics of government policy

Abstract

This paper tackles the issues surrounding interactions among firm, industry, and government policy. It focuses on such concepts as company self-interest, industry interest, competitive advantage, and industrial policy of government. Basing their analysis on a descriptive model of strategy formulation, and stressing the importance of intra-organizational political behavior, the authors conclude that subjectivity and discrepancy of interests are major phenomena inherent in every proclaimed industry interest. A short analysis on the origins and dynamics of competitive advantage illustrates that the dexterity of a government to create sustainable competitive advantages for firms is questionable. Subsequently, the authors examine the various general options available to government, ranging from “shelter” policies to policies emphasizing the comparative advantages of a region or industry. In a final section, some reflections are offered on effective directions of an industrial policy by the government. A small case study on the attractiveness of the Belgian economy for foreign investors concludes the discussion.

Citation

Martens, R. and Vandenbempt, K. (1995), "International strategic management and the dynamics of government policy", Rugman, A.M., Van Den Broec, J. and Verbeke, A. (Ed.) Beyond The Diamond (Research in Global Strategic Management, Vol. 5), Emerald Group Publishing Limited, Leeds, pp. 169-198. https://doi.org/10.1016/S1064-4857(95)05008-6