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.

VIDEO

http://www.youtube.com/watch?v=QIVkI7SwvzE.

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