Oedzge Atzema, Utrecht University, Utrecht, The Netherlands, Egbert Wever, Nijmegen School of Management, Radboud University Nijmegen, Nijmegen, The Netherlands
Philips - A global electronics firm restructuring its home base (assigned to theme
For firms like Philips the world in which they are functioning is changing constantly. It means that they have to adapt constantly to this changing business environment. This a process of adaptation is a central element in the strategy of all global firms. They are for example constantly evaluating their product portfolio. Even more well-known, newspapers are reporting about it almost everyday, are spatial changes. Until 1950 most of Philips manufacturing plants and almost all controlling functions were concentrated in the Netherlands, although even at that time it sold by far most of its products abroad. But that changed dramatically when the process of globalisation proceeded. Since that time Dutch newspapers regularly reported about decisions taken by Philips to close plants or to reallocate specific activities to other countries. Most of these reports had a negative tenor, stressing the loss of jobs in the Netherlands. This loss of jobs was seen as problematic since it occurred often in economically weak areas, where Philips, in the fifties and sixties when the Dutch economy was booming, had established many plants when it could not find enough workers in the Eindhoven region. Other reports with a more negative tenor stressed the shrinking number of Dutch Philips employees, suggesting that the company was gradually withdrawing from the Netherlands. Of course, sometimes in line with popular thinking about the international division of labour, it was stressed that not all jobs run the risk of being lost. Highly educated Philips employees, working in R&D or all kinds of controlling functions in the company’s head office, would not have to fear about their job. Of course, although popular the newspaper reports may not tell the whole story. At least the story can be considered to simple. The changes in the spatial pattern of Philips activities are dependent on much more factors than only the international division of labour on the basis of wage costs. For example, there are other changes as well in Philips’ business environment, like the process of European integration, the coming up of new emergent markets in Eastern Europe and Asia and changing preferences of potential consumers. But changes in the strategy of the company occurred as well. They too had an effect on the company’s portfolio. They too could result in the decision to terminate some activities. Here we can refer to the back to basics strategy Philips followed as well, the closely with that strategy connected change from a strongly vertically integrated to a vertically disintegrated company, and Philips traditional ‘local for local’ policy. In this paper we will deal with the changing position of the national home base within the activities of Philips. We will deal mainly with the changes and the explanations for these changes in the spatial pattern of Philips jobs in The Netherlands. Since Philips was founded already in 1891, it is not an easy task to deal with the whole period until now. Of course, that could be done in quite general terms. We will use such a general description and explanation for the period until 1994. However, we will look much more in detail to the changes in the spatial pattern of Philips jobs in the Netherlands since then. Starting with the spatial pattern of Philips activities in the Netherlands in 1994 we will (a) describe the changes that took place in the period until 2005: where did activities disappear, where can we find new activities, where did the number of jobs increase, where decrease (b) find out the reasons behind each of these change components, and (c) link the reasons we found to the general literature in this field.
submitted 2005-06-20 09:00:29.700
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(copyright Gunther Maier) |