THE INTERNATIONALISATION OF PRODUCER SERVICES : CASE STUDY OF ADVERTISING IN SINGAPORE

Abstract

The increase in global demand for services over the last three decades has facilitated the internationalisation of producer services to both developed and developing countries. The general intent of this academic exercise is to understand these internationalisation patterns and processes through an analysis of the case study of transnational advertising. Four issues are specifically examined in this study. Firstly, the patterns and trends in internationalisation are uncovered to provide the contextual background for explanation. Both the structural and agency factors causing internationalisation are then identified. Thirdly, the interaction of these two components is analysed to understand how they affect the locational strategies and choices of organisations. This is done by using John H. Dunning's eclectic paradigm as a framework of reference. Lastly, the economic impact of internationalisation on host countries is examined, using Singapore as a case study. To study these issues, a variety of methods are used. These include structured and unstructured interviews, and direct observation. Published sources are also used. These techniques are used in combination to cross validate all data and opinions. Results indicate that the main agent facilitating internationalisation is the large firm, the transnational corporation-(TNC), which dominate service activities globally. Findings also suggest that a combination of home and host country conditions have motivated these TNCs to internationalise in the absence or lack of intervening barriers. However, investigations revealed that agency factors also affected the firms' ability to internationalise. The interaction between these macro and micro level factors affects the firm's competitiveness over local firms, affecting its propensity to internationalise and the mode of entry chosen. To counter the challenge posed by the movement of TNCs to Singapore, indigenous firms have used a variety of survival and growth strategies such as global networking, niche marketing and discounting to compete. My results highlight the pivotal role that transnational advertising corporations (TNAAs) play in a world that is becoming increasingly interdependent through the process of globalisation and the commodification of cultures. It also demonstrates that both structural and agency considerations are important in the complex process of the internationalisation of advertising. It stresses the need to comprehensively and scientifically analyse the multifaceted nature of real world phenomena such as internationalisation. Finally, it is found that although the entry of foreign advertising agencies has made some positive contributions to the local industry in Singapore, the net effect has been to contribute to the underdevelopment of the industry.