Foreign Ownership In British Business

1) Is foreign ownership of British Business a “good thing”?
2) What evidence is used by participants in the debate?
'The majority ownership or control of a business or resource in a country by individuals who are not citizens of that country or by companies whose headquarters are not in that country is called foreign ownership'.
When multinational corporations infuse long - term investments in a foreign country in the form of foreign direct investment or acquisitions it is referred to as foreign ownership.
UK is an open economy. An open economy is the one which is free from trade barriers and in which exports and imports form a large percentage of the GDP. The degree of openness however varies from country to country depending on the government's

It is seen that after a take- over the productivity and profitability tend to increase but on the flip side plant closures and redundancies are also seen to increase. Most researchers are of the opinion that the overall effect of the foreign ownership is positive especially in terms of improving performance and competitiveness. However the effect is relative for different companies and depends on many factors such as the type of industry sector, the goals of the acquirer and the nature of the acquisition. Through this coursework I have attempted to highlight the impact of foreign ownership on British businesses and on the British economy as a whole.

Impact of Foreign Ownership of British Business

Foreign ownership of British businesses is like a coin and as there are two sides to a coin this too has its positives and negatives.

Positive Impact

The foreign ownership companies or the Multinational companies have great advantages compared to the national companies and therefore they can compete in foreign markets in spite of the additional cost they have to bear to monitor and coordinate the business activities across different nations.
In comparison with their British counterparts the foreign companies have a tendency to invest more consistently and excessively.
The foreign companies bring in expertise that is seldom available in the

Difficult trade unions, poor management and under investment were the main characteristics of Britain's car industry that led to its collapse in 1970s. It was the Japanese who had come to the rescue then. The car industry saw positive changes in the 1980s after Japanese car companies like Nissan started producing vehicles in UK. The foreign owned companies dominated the car manufacturing sector of UK after the collapse of MG Rover in 2005. The Jaguar Land Rover was rescued from shut- down by the Indian owned Tata Motors. Today it is a thriving business thanks to the superior management expertise of Tata. Tata has a global management team and it takes support from British, German and American companies. Today there is a considerable volume of car manufacturing in UK thanks to Ford, Nissan and Honda. The car industry in UK today generates more than £ 10 billion annually and provides jobs to nearly 130,000 people. It is also creating jobs outside London and is producing cars in UK for overseas markets. Thus it is the foreign owned car companies that have turned the tables around for the car industry in UK through their high order management skills and greater level of