Headquarters Effect for Samsung and Motorola

Headquarters effect for Samsung and Motorola

When an entrepreneur plans to start up a business, one has to decide where to locate the headquarters in order to coordinate the business in the most efficient way. Location is even more important in global firms because countries vary significantly in various aspects. Within the different factors to consider, economy, political policy and factors of production matters the most. I will choose the mobile industry’s two of the leaders, Motorola and Samsung, as an analysis.

Samsung electronics was founded in 1969 and it’s headquarter is in Seoul, South Korea. The headquarter was originally in South Korea obviously because the founder, Lee Byung-chul was a Korean. Moreover, Samsung electronics was originally manufacturing electronic appliances such as TVs, calculators, refrigerators, air conditioners and washers. Business was mainly local with design and manufacture all in South Korea, it was an obvious plan to place the headquarter there.

As Samsung Electronics merged with Samsung Semiconductor & Communications in 1988, their business started to expand to telecommunication network and semiconductor such as storage device and hard disk drive. Since then they started to become a global industry with headquarter in South Korea and sites world wide.

After the World War II and the Cold War, Korea was divided into South Korea and North Korea with South Korea backing up by the United States and the United Kingdom. Being in a capitalistic system, South Korea encourages free trade and investment, and businesses are owned by individuals instead of the government. Hence, under this capitalist political system, together with the moderate corporate tax rate, a lot of businesses are attracted to establish in South Korea. These steadily build up the prosperous side of South Korea, leading them to be one of the wealthiest countries in Asia.

With the capitalist economy, building headquarters in South Korea has an...