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What Does History Add to International Business - Research Proposal Example

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The paper "What Does History Add to International Business" is a great example of a research proposal on business. Randfontein Estates Gold Mining Company Limited is a South African mining company that conducts its gold mining operations within Gauteng, Roodepoort, and Westonaria. It was well-known in South Africa as the biggest gold producer in the 1930s…
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Student Name: Tutor: Title: International Business History (Research Project) Institution: Due Date: Introduction Randfontein Estates Gold Mining Company Limited is a South African mining company that conducts its gold mining operations within Gauteng, Roodepoort and Westonaria. It was well-known in South Africa as the biggest gold producer in 1930s. Randfontein was formed in 1889 and has for many years had a distinction of annual tonnage ore crushing of all the Witwatersrand mines. Randfontein Company like the town acquired its name from Randfontein farm number 3 from which the farm gold was initially established in the area. The late Herman Eckstein and Sir Joseph Robinson were the founders of this company. Randfontein Company pioneered through the utilization of trackless mining, and thus emerged as the founder of gold mines to apply the technique. This was made possible through the unique use of the wide reef nature of ore belt. Randfontein was later on taken over by another company known as Harmony Gold Mining in the early 2000. Based on out of the past theory, it has been discovered that curving downwards, around and up towards the north-west seemed to mark "finis" to the development of mining once the maximum values of the large Randfontein Company’s property were achieved. For several years, exploratory work of mining was focused more on the Far East where its expansion was rapid since the opening of mine after the mine was until made, with a move back and forth to the south and the richest gold mine in the world was finally revealed in Sub Nigel (Randfontein Estates Limited 2011). The purpose of this study is to come up with an overall assessment of the nature and businesses of free-standing company. In order to achieve this, an evaluation is made on what Randfontein Estate Gold Mining company is, its existence, who formed it, whether it is linked to the businesses of free standing companies and if so, whether it was short-lived to be indicative of the firms in the type of multinational businesses associated with direct foreign investment, or operating in a specific location. Literature review In this section of the study, assessment is made on whether Mira Walkins view on free standing companies are robust in Randfontein Estate Gold Mining Company as the case of study. The concept of free standing company in understanding international business is potentially illustrated. Free standing company is defined as foreign investor with headquarters in another country coupled with business activity in a different country that can not expand based on headquarters’ activity either in horizontal or vertical way. However, a high level of control must be exerted from the parent for a given firm to be considered as free standing company (Jones 2000). The Classic Economic History Literature Review of Wilkins (1988) set off both definition and the inquiry on the value of free standing companies in history and today’s international business management. Walkin argued that free standing companies were the main conduit for British direct investment within overseas in the period 1870-1914. Furthermore, such companies operated both inside and outside the empire based on various economic endeavors. This calls for the need to understand the formation, operation as well as the performance of such firms. It has been discovered that a number of free standing firms were short-lived due to their lean system or structure of governance at origin (Wilkins 1988). Today, importance of the literature on intercompany alliances is greatly supported. For instance, Wilkins and Schroter (1998) discovered that free standing international firms were enmeshed within clusters that comprised of related firms. Such firms conducted businesses such as engineering support, technical support, economic development and product distribution. This feature shows that although typical multinationals’ attributes of marketing, technical as well as managerial skills were not so commonly applied in free standing companies, their application of inter-firm alliances so as to achieve such skills was more advanced in the earlier times. Kynoch (2006) argued that management policies accountable for the higher level of labor unrest within the South African gold mines. In addition to the economic, management and political considerations, the migrant culture as well as resulted in labor violence of gold mines. Thus, gold mines became means for provoking any violence due to management traditions as well as the ups and downs of political evolution in South Africa. This means that mining industry was largely affected by migrant cultures that shaped the mine violence. Therefore, Randfontein Estate Gold mining company holds the attributes Walkins argued that free standing companies are identified by their application of inter-firm alliances so as to achieving skills such as managerial and marketing skills was more advanced in the earlier times. Mira Wilkins Inter-linkage and management Free standing multinational companies were prevalent and more based in Europe. This implies that the late 19th century, was actively dominated by foreign direct investment that was largely pursued by European firms. Therefore, it is important to note that free standing multinational companies were succeeded by high efficient and powerful multinational enterprises, though few of such companies endured for several decades, including the era of post World War II. Their short-lived nature indicates that free standing companies are associated with many weaknesses to constitute an increasing attribute of international expansion (Christine 1997). Walkins (1988) examined that the managerial strength of the free standing companies were dominated with fragile structure of governance. As a result, such firms could not sustain themselves for a long period of time. This creates opportunities to suggest the best ways through which international activities of multinational companies can be structured in the related firms rather than focusing on arm’s length. As a result, another dimension to examine the fascinating history of international business expansion is given (Wilkins & Schroter 1998). Like the many free-standing companies in Britain which were designed to match the abundant British capital and under the management and control of British through profitable opportunities, the management and control of Randfontein Estates Gold Mining Company extended in other subsidiaries such as Harmony, acquiring the Randgold name. Therefore, majority of the free standing companies proved to be short-lived since international business not only required capital export, but also diffusion of the commonly known products, processes as well as the successful relocation of the management packages. This means that the free-standing companies with their tiny home-based office were required to either find or create that package to avoid doomed dissolutions (Godley 2009). Operations of a company Randfontein Estates Limited that was formerly known as Randfontein Estates Gold Mining Company of the Witwatersrand Ltd is a privately established company that conducts its gold mining operations within Gauteng, Westonaria, and Randfontein and Roodepoort districts. The company was popularly known as the biggest gold producer of South African gold mines in the 1930s. With the mine of about 16 km long ranging from the North to South, Randfontein Estate limited currently has four shafts which are in operation, namely the Cooke 1, 2 and 3 as well as Doornkop. It is reported that Ore recovery at its third shaft, the Cooke 3 is largely targeted at 180,000 tons every month. In addition, the company deals in the treatment of various surfaces dump materials. Established in 1899 and registered in Johannesburg, South Africa, Randfontein Estates Company became a member of a body known as Johannesburg Consolidated Investment (JCI) Company Limited group. Later, it was taken over by another company known as Harmony Gold Mining in the early 2000. Harmony has emerged as the fifth largest gold manufacturer across the world, with its operations and projects concentrated in South Africa, Australia as well as in Papua New Guinea (Randfontein Estates Limited 2011). Based on Walkins’ theoretical view of free standing firms, it is relevant to argue that Randfontein Estates Gold Mining Limited is one of the multinational companies identified as free standing. This is due to the fact that Randfontein Estate was initially operating as parent company, but was later acquired by another company known as Harmony Gold Mining in the early 2000. Today, Harmony Gold is positioned 5th across the globe in gold production. The new company also operates various projects which are functioning in Australia and Papua New Guinea rather than concentrating its functions in South Africa. Randfontein Estate also has its businesses expanded in Gauteng of Randfontein town, Roodepoort and Westonaria. The company produces bullion bars of gold as the subsidiary Harmony Gold mining Limited and it was included on the Stock Exchange of Johannesburg. Later years After it was acquired by Harmony in 2000, Randfontein Estate Gold Mining Company was delisted from the firm mining database. This shift in operation and management from one country to another and from company to company clearly indicates that Walkins’ ideas on free standing company considered as foreign direct investors are relevant in this gold mining company. Acquiring its name from the first gold mine within the South African Free State province, Harmony has been operating as a subsidiary of the Randgold & Exploration becoming an independent firm in 1997. However, shareholders that were discounted initiated certain changes at Randgold in 1994 in regard to a sludge dam burst that damaged the town of Merricspruit as well as killing 17 people. In the same year, a group of British banks took full control of Randgold Company and hired some new management teams who included Peter Flack as chairman of Randgold, while Bernard Swanepoel as the managing director of Harmony. It is relevant in Wilkins’ view to argue when the competence could not rest in the existing businesses of free standing companies, the headquarters functions involved identifying sources of finance, acquiring supplies as well as hiring outside personnel (Dávila & Garry 1999). In August 1950, Harmony was considered and registered as a gold mining public company in South Africa and later named a Randgold-managed company involved in the exploitation of a particular Harmony mine lease. In 1995, Harmony was established as a separate entity due to the winding up of the Randgold. However, its operations have increased significantly since then, shifting from a single and lease-bound mining operation to an independent as well as world-class gold producer. It has reported that the Harmony group received extra mining rights within the Free State, Gauteng, and Mpumalanga as well as in North West province of South Africa after acquiring Lydex in 1997, Evander in 1998, , Randfontein in 2000, ARMgold in 2003, Kalgold in 1999 and Avgold in 2004. The company’s mining operations are conducted through a number of subsidiaries. The main principal subsidiaries of Harmony include Randfontein Estates, Evander Gold Mines, Harmony Freegold JV, Avgold Kalahari Goldridge Mining Company as well as Harmony Gold (Australia) (Pty) Limited. They are entirely wholly-owned, direct subsidiaries which are largely incorporated in South African gold mines. In 2003, Randfontein Estate Gold mining Company, made an agreement with Africa Vanguard Resources Ltd (AVR), regarding how Randfontein sold the 26% of all its mineral rights as per the Doornkop Mining Area to AVR. It was a Randfontein and AVR JV joint agreement to conduct the mining operations at Doornkop. This clearly indicates that Wilkins view that free-standing companies are entrepreneurs’ accumulated capital as well as talent to run business within a foreign land is robust (Randfontein Estates Limited 2011). It is true such companies could not signify the expansion of existing businesses that were located in the capital-exporting nations. Instead they established a new to run business abroad. Although the companies were considered free-standing, Wilkin argued that such companies were not always entirely independent of each other. It is true they can be seen in clusters based on the varied rationales as well as interest groups which consist of various overlapping circles of both individuals and enterprises (Gourvish & Tolliday 1997). In his view, Wilkins examined that the resulting governance structure of free standing companies was sometimes approximated to the multinational enterprises. It is arguably important to say that in most cases the relationships within their clusters were too limited and very weak to be highly designated. However, clusters that were too loose could be united by the founders, directors or suppliers and majority of them were also shareholders, indicating the presence of conflicts of interest (Godley 2009). Conclusion Free standing international firms were enmeshed within clusters that comprised of related firms. majority of the free standing companies proved to be short-lived since international business not only required capital export, but also diffusion of the commonly known products, processes as well as the successful relocation of the management packages. Randfontein Estate Gold mining company holds the attributes for which Wilkins argued that free standing companies are identified by their use of inter-firm alliances so as to achieving skills such as managerial and marketing skills was more advanced in the earlier times. The shift in operation and management of Randfontein Estate from one country to another and from company to company clearly indicates that Wilkins’ ideas on free standing company considered as foreign direct investors are relevant in this gold mining company. Free standing multinational companies were succeeded by high efficient and powerful multinational enterprises. However, few of such companies endured for several decades, and thus their short-lived nature indicates that free standing companies are associated with many weaknesses to constitute an increasing attribute of international expansion. The idea of Wilkins that free-standing companies are entrepreneurs’ accumulated capital as well as talent to do business within a foreign land is robust. Bibliography Christine, D. R., 1997, International Bibliography of Business History, Reference Reviews, 11(5), 21 – 22. Dávila, C, Rory, M & Garry, M., 1999, Business History in Latin America: The Experience of Seven Countries, Liverpool University Press. Godley, A, 2009, What does history add to international business? Henley Business School, University of Reading. Retrieved December 4, 2011 from, Gourvish, T & Tolliday, S, eds., 1997, International bibliography of business history, London, Routledge. Jones, G., 1996, An introduction to the evolution of international business, London, p.34. Jones, G., 2000, Merchants to Multinationals: British Trading Companies in the Nineteenth and Twentieth Centuries, London, Routledge. Kynoch, Gary., 2006. Your petitioners are in mortal terror: the violent world of Chinese mineworkers in South Africa, 1904–1910. Journal of Southern African Studies, 31(3), 531-546. Randfontein Estates Limited, 2011, Mining Company Database. Retrieved December 4, 2011 from, < http://miningcompanydb.com/randfontein-estates-limited/> Wilkins, M., 1988, The free-standing company, 1870-1914: an important type of British foreign direct investment, Economic History Review, 2, 259-282. Wilkins, M & Schroter, H., 1998, The free standing company in the world economy, Oxford University Press. Read More
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