management contracts
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Maria Alejandra Tovar B.
International business I
Group: 02
MANAGEMENT SERVICES CONTRACTS.
MANAGEMENT SERVICES CONTRACTS.
“Practice by which one company supplies another with managerial expertise for a
specific period of time.”
INVOLVED PARTIES
Owner of a business and a third-party management company
Two types of knowledge can be transferred through management contracts.
• The specialized knowledge of technical managers.
• The business-management skill of general managers.
TYPES OF THE MODE.
CONTRACTUAL AGREEMENTS indirect investment.
CONTRACTUAL AGREEMENTS
• Exploit an international business opportunity without having to place a great deal of its own physical assets at risk.
• Government can award companies management contracts to operate and upgrade public utilities.
• Government use management contract to develop the skills of local workers and managers.
ADVANTAGES OF MANAGEMENT SERVICES CONTRACTS.
• International management in countries that are undergoing political or social turmoil can place manager´s lives in significant danger.
• Suppliers of expertise may end up nurturing a formidable new competitor in the local market.
DISADVANTAGES OF MANAGEMENT CONTRACTS.
EXAMPLE.
Heathrow Airport Holdings Limited of Britain, for example, possesses general airport-management skills. In the EEUU, Heathrow operates the Indianapolis Airport under a 10 year
management contract and provides retails management at the Air Mall in the Pittsburgh Airport.
REFERENCES.• Czinkota, M., Ronkainen, I., & Hoffelt, M. (2004). Fundamenta´s of international
business.
• Wild, J., Wild, k., & Han, J. (2003). International business.
• http://www.youtube.com/watch?v=QIVkI7SwvzE.
• Heathrow . (s.f.). Recuperado el 25 de Marzo de 2013, de http://www.heathrowairport.com/about-us/partners-and-suppliers
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