MANAGEMENT SERVICES CONTRACTS. Maria Alejandra Tovar B. International business I Group: 02
MANAGEMENT SERVICES CONTRACTS. “Practice by which one company suppliesanother with managerial expertise for a specific period of time.”
INVOLVED PARTIES Owner of a business and a third-party management companyTwo types of knowledge can be transferred through managementcontracts.• The specialized knowledge of technical managers.• The business-management skill of general managers.
ADVANTAGES OF MANAGEMENT SERVICES CONTRACTS.• 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.
DISADVANTAGES OF MANAGEMENT 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.
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 yearmanagement 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