Asia Pacific Journal of Management

, Volume 6, Issue 1, pp 15–38 | Cite as

Changing multinational corporation — nation state relationship: The case of IBM in India

  • Anant R. Negandhi
  • Aspy P. Palia


During 1977, IBM was asked to withdraw from India due to its unwillingnesss to comply with the Foreign Exchange Regulation Act (FERA) of 1973. However, with (1) the signing of Memorandum of Understanding between the U.S. and India, (2) the easing of trade restrictions by the Government of India against foreign firms, (3) the declining value of the U.S. dollar, (4) the slump in the U.S. computer market, (5) the rapid growth in the Indian computer market, and (6) changes in other environmental factors, IBM again began actively seeking and securing new business. By the mid-1980s, IBM had secured a number of large contracts and was on the verge of re-entry into the burgeoning Indian computer market.

The purpose of this study is to examine the underlying factors that influence both the divorce and reunification between host country government and the multinational corporation. The study, conducted through personal interviews with chief executives of IBM, government officials, and other knowledgeable persons, examines the social-political aspects of the FERA and its implications for multinationals in India and elsewhere in developing countries.


India Environmental Factor Nation State Exchange Regulation Rapid Growth 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© School of Management National University of Singapore 1988

Authors and Affiliations

  • Anant R. Negandhi
    • 1
  • Aspy P. Palia
    • 2
  1. 1.University of Illinois at Urbana-ChampaignUSA
  2. 2.University of Hawaii at ManoaUSA

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