global corporate strategy 跨国公司战略讲义(wit and meyer (3rd ed))

Global Corporate Strategy,Session 1 The Nature of Strategy,Structure,Module IntroductionHow to pass this module!Key Module ConceptsDefinitions of StrategyLevels of StrategyParadox of Logic & Creativity,Global Corporate Strategy,Holistic approachStudent success / failureStudent Feedbackgroup commitmentattendance / success relationshipFlow and connection between sessions,Books,De Wit and Meyer (3rd Ed)Lynch (3rd Ed)Ferguson and FergusonMintzberg, Ahlstrand and Lampel - Strategy SafariImages of Strategy - Ed. Cummings & WilsonOther key texts as per module guide,Web CT,Important aspect of this module because.Lots of information will be posted there.module guidelecture overheadsseminar informationfurther readingsupporting articlesAlso, there will be self test questions to support in your reading (NOT assessed) and completely optional,How to pass this module,Individual and Group Assessments Key PointsPreparation you need to be able to identify the key relevant conceptsModule ConceptsThe module is based on a series of paradoxes and is not linear in approachTheoretical Frameworkthere are many theories relevant to Global Corporate Strategy,Definition of Strategy,“Art of War” (Collins English Dictionary)“Overall Plan” (Collins English Dictionary)“Corporate strategy is the pattern of minor objectives, purposes or goals and essential policies or plans for achieving those goals, stated in such a way as to define what Business the company is in or is to be in andThe kind of company it is or is to be” (Andrews, 1971),Definition of Strategy,“Strategy is the direction and scope of anOrganisation over the long term: whichAchieves advantage for the organisation Through its configuration of its resources Within a changing environment, to meet theNeeds of markets and fulfil stakeholdersexpectations”(Johnson & Scholes),3 Elements of the Strategic Decision,Strategy,Context,Content,Process,Levels of Strategy,Network Level StrategyLinkages with other Corporate entitiesCorporate StrategyThe overall purpose and scope of the organisation to meet the expectations of major stakeholders and add value to the different parts of the organisationBusiness Unit StrategyHow to compete in a particular marketOperations StrategyHow the component parts of the organisation (in terms of resources, processes, people and their skills) effectively deliver the corporate and business unit level strategy,Importance of Corporate Strategy,Involves the entire organisationIs likely to be concerned with either;survival as a minimum objectivecreation of value added as a maximum objectiveCovers the range and depth of activitiesDirects the changing and evolving relationship with the business environmentCentral to the development of competitive advantageStrategy development is crucial to adding value,Characteristics of Strategic Decisions,Concerned with long-term directionTrying to achieve some advantage for the organisationConcerned with the scope of an organisations activitiesMatching of the activities of an organisation to the environment in which it operatesBuilding on or stretching an organisations resources and competencies to create opportunities or to capitalise on them,Characteristics of Strategic Decisions Cont,May require major resource changes for an organisationAffect operational decisionsValues and expectations of those who have powerA consequence is that they are likely to be complex in nature,Key Elements of Strategic Decisions,SustainableDevelop processes to deliver the strategyOffer competitive advantageExploit linkages between the organisation and its environmentVision,StrategicAnalysis,StrategicChoice,StrategyImplementation,Paradox of Deliberateness & Emergence,Planned,Emergent,Companies may be argued to be lying at some point on the continuum - the development of your argument is key,Paradox of Deliberateness & Emergence,Theory of strategic planning as opposed to incrementalismMintzberg argues that; Strategic planning spoils strategic thinking Planners should work around strategy Strategic thinking is about creativity Reduces management power over strategyThe Fallacies of Strategic Planning Prediction Detachment Formalisation,Mintzberg,“.strategy is an immensely complex process, which involves the most sophisticated, subtle & at times subconscious elements of human thinking”“A strategy can be deliberate. It can realise the specific intentions of senior management, for example, to attack and conquer a new market. But a strategy can also be emergent, meaning that a convergent pattern has formed among different actions taken by the organisation at one time”Henry Mintzberg,Strategic FitEnvironment ledMarket opportunities & organisations resourcesCompetitive advantage through Correct PositioningRisk reduced through a portfolio of products & businessesCorporate centre invests in strategies of divisions / subsidiaries,Strategic StretchResource ledLeverage of resources to improve VFMCompetitive advantage through competences based on market needRisk reduced through portfolio of competencesCorporate centre invests in core competences,10 Schools of Thought,The Design SchoolThe Planning SchoolThe Positioning SchoolThe Entrepreneurial SchoolThe Cognitive SchoolThe Learning SchoolThe Power SchoolThe Cultural SchoolThe Environmental SchoolThe Configuration School,Modernism and Strategy,Functionalist paradigm of strategyPlanning and controlStrategist as a detached observerPrediction and forecastingExternal and independent environmentMeta strategy,Postmodernism and Strategy,Efficiency vs diversityWeb of interdependencyOrganisational environmentExternal trendsEmergent strategy,Paradox of Logic & Creativity,LogicRational thinkingAnalytical SkillsBounded RationalityScientificSimple problem,CreativeGenerative thinkingCreative interpretation of a problemLateral thinking (De Bono)Out of the boxWicked problem,Intuition - not necessarily irrational - can be logical,Global Corporate Strategy,Session 2 - Strategic CapabilityAnglique du Toit,Learning Objectives,Assess the importance of core competencies to an organisationAnalyse the influence synergy can have on an organisationJudge the role divestment has on organisational performanceAppreciate the importance of Performance MeasurementApply a contemporary methodology of strategic control,Planning Strategies and Styles - Influences,Reasons for the variation in the styles of strategic planning include:Environment: context within which organisation operatesProduct range: levels of service, types of product, product profitability will all influence planning styleLeadership and management style: both the choice of those leading the organisation and the organisational culture will influence planning style,Planning strategies and styles - Methods,Campbell and Gould identified three main styles as being most common:Strategic planning (Core Competence): the centre is involved in formulating the plans of the various businesses.Possible example: Canon, IkeaFinancial control (Portfolio): the centre exercises short-term financial control but otherwise the businesses are highly decentralised and able to operate as they wishPossible example: Hanson, VirginStrategic control (Between the two above): Some involvement in planning and some monitoring of operationsPossible example: Nestle,Strategic Capability,Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts. - Porter (1987)Paradox of Responsiveness (portfolio) and Synergy (core competence),Hanson,Nestle,Canon,The Portfolio Perspective,Metaphor - “An investors portfolio”,$,$,The Portfolio Perspective,Corporate centre acts as an active investor with financial stakes in stand-alone business unitsMain philosophy is to leverage financial resourcesEach SBU has its own unique characteristics and demands Portfolio grids based on growth potential of individual business units measured along two dimensionsattractiveness of businesscompetitive strength of the business,The Portfolio Perspective, Cont,Boston Consulting Group Matrix - stars, cash cows, dogs, question marksWell suited to diversification through acquisitionVery little co-ordination needed and fuzzy co-operation,The Core Competence Perspective,Metaphor - “A Large Tree”,Role of Corporate centre is to nourish the tree,Major limbs are core products,Smaller branches are SBUs,Leaves are products,The Core Competence Perspective,Corporations to have a set of shared competences used in all of the firms business unitsThe creation and leveraging of core competences require the BUs remain close team playersCompetitiveness dependant on continual upgrading of unique resources vs occupying specific market positionBuilding core competences is strategic, engaging in specific markets is tacticalImportance of tight co-ordination and control by corporate centre,Synergy,Synergy is a sharing of resources among two or more businesses (economies of scope)Resource Leveraging Tangible resource gains, e.g. production facilities, buildings, equipment, land, moneyIntangible resource gains, e.g bargaining power with suppliers, reputation with customers, competencesStrategy alignment, e.g. market strategies of vertically & horizontally related SBUs,Synergy,Potential for synergy is connected with relatednessTwo areas for potential relatedness (Nayyar, 1992)Opportunities for resource leveragingOpportunities for strategy alignment,Resources, competences and competitive advantage,Same as competitorsor easy to imitate,Better than competitorsand difficult to imitate*,RESOURCES,COMPETENCES,Necessaryresources,Threshold Competences,*Provides the basis to outperform competitors or demonstratably providebetter value for money,Uniqueresources,Core Competences,Analysing competences and core competences,OrganisationalCompetences,Identifying Competences,Value Chain Analysis,Bases of competences,Costefficiency,Valueadded,Managing linkages,Robustness,MarketingManager,OperationsManager,DesignManager,Creation of Competencies,C,ASSETS Held in the control of the organisationTangible and IntangibleLargely Independent of the organisations membersUnaffected by culture & governance structure,HUMAN CAPITAL (skills, competences and capabilities)Affects the organisations ability to do thingsIntangibleInherently attributable to the Organisations membersInfluenced by culture and governance structure,Classification of Resources - Human Capital,Skills, Competences, Capabilitiesterms frequently misusedimprecise definitions and used interchangeably,Skills,Competences,Capabilities,Individual,Team,Organisation,* in combination, influenced by synergies, culture and governance structure,The Strategic Core,Core SkillCore Competence Distinctive Capability,These are elements of the Strategic Core and should be heavily exploited, extended and protected,Enables the organisation to perform more effectively than others May confer a unique advantage Not readily replicable Likely to be persistent,Composition and Coordination,Key questions of corporate strategy: What business to be in and how it should be managedCorporate CompositionDiversification - internal growth or acquisitionTwo types of diversification - vertical and horizontalAccording to Porter (1987) entering another business only lead to increased shareholder value if following tests are passed:Attractive test - potentially profitabilityCost-of-entry test - possibility to recoup investment madeBetter-off test - possible to create synergy,Directions of Diversification,SupplierBusinesses,CurrentBusiness,BuyerBusinesses,OtherBusinesses,(BackwardVertical Integration),(ForwardVertical Integration),(Horizontal Integration),Corporate Co-ordination,Co-ordination is about attaining potential synergiesDistinction is between co-operation and control Control mechanismsCo-operation mechanisms,Strategic Control,Methods of improving strategic controls:Concentrate on the key performance indicators and key factors for successDistinguish between corporate, business and operating levels of information: monitor only what is relevantAvoid over-reliance on quantitative dataAs controls become established, consider relaxing themCreate realistic expectations of what the control system can do as it is being introduced,Balanced Scorecard,Feedback and LearningArticulate the shared visionSupplying strategic visionFacilitating strategy review and learning,Business PlanningSetting TargetsAligning strategic initiativesAllocating resourcesEstablishing milestones,Communicating and LinkingCommunicating and educatingSetting goalsLinking rewards to performance measures,Translating the VisionClarification the visionGaining concensus,Managing Strategy - 4 Processes,Vision andStrategy,Balanced Scorecard - Summary of Strategic Perspectives,Strategic PerspectiveFinancial PerspectiveCustomer PerspectiveInternal PerspectiveLearning & Growth Perspective,ExampleShareholders Views ofPerformanceCustomer SatisfactionAssess Quality of Peopleand ProcessesThe Future - Examine How an Organisation Learns andGrows,Example of Scorecard MeasuresReturn on CapitalEconomic Value AddedSales GrowthCost ReductionCustomer SatisfactionCustomer RetentionAcquisition of New CustomersTraining and DevelopmentJob TurnoverProduct QualityStock TurnoverEmployee SatisfactionEmployee RetentionEmployee Profitability,A Strategic Management System?.,Companies are using Balanced Scorecard toClarify and update strategyCommunicate strategy throughout the companyAlign unit and individual goals with the strategyLink strategic objectives to long term targets & budgetsIdentify and align strategic initiativesConduct periodic performance reviews to learn about and improve strategy,Conclusion,PortfolioCore CompetencesCo-ordination & Co-operationDiversificationSynergyPerformance MeasurementBalanced Scorecard,Global Corporate Strategy,Session 3 GlobalisationAnglique du Toit,Learning Outcomes,Evaluate the impact drivers for change have on organisationsAssess the implications of globalisation for businessPropose solutions for managers working in a global environment,Opposing Views of Globalisation,Global ConvergenceGrowing similarity/integrationIncreases in;FDIInternational TradeThe Global VillageChanging Rules of the gameStrategic Thinking needs to be guided by global perspectivesPAST - pressure for local responsivenessNOW - opportunity for leveraging resources across borders,International DiversityWorld wide similarity exists anywayCultural norms & values remain diverseLimits to extent of Global VillageResponsiveness to local conditions still a premiumDifferent challenges, different competences and innovationsCompetitive advantage achieved thro locally leveraged competences,A Balancing Act,Between Local Responsiveness and International Co-ordination,Global Convergence,International Diversity,GLOBALISATION FORCES,LOCALISATION FORCES,HIGH,HIGH,LOW,LOW,Global Integration / Local Responsiveness Grid,MICRO CHIPS,PHARMACEUTICALS,MILITARY AIRCRAFT,AUTOMOBILE,CIVIL AIRCRAFT,FOOD RETAILING,RETAIL BANKING,TELECOMMUNICATION SERVICES,BULK CHEMICALS,Benefits of Globalisation,Cost BenefitsTiming BenefitsLearning BenefitsArbitrage Benefits,Technical Factors,Cultural Factors,Commercial Factors,Legal Factors,Localisation,Localisation Push Factors,Elements of Globalisation - What is Global?,International scopeSpatial dimensionBroadest possible international scopeProcess of international expansion on a world-wide scaleInternational similarityVariance dimensionRefers to homogeneity around the worldProcess of declining international varietyInternational integrationLinkages dimensionThe world seen as one tightly linked systemProcess of increasing international interconnectedness,Globalisation of Companies,Level of analysis: Micro levelMain IssuesThe extent to which firms have a global strategy, structure, culture, workforce, management team and resource baseGlobalisation of specific products and value-adding activitiesThe globalisation of one product or activity does not necessarily entail the globalisation of others,Globalisation of Businesses,Level of analysis: Meso levelMain Issues - markets and industriesMarkets - The growing similarity of customer demandMarkets - Growing ease of world-wide product flows, e.g. crude oil and foreign currency marketsIndustries - Emergence of a set of producers competing on a world-wide scale, e.g. automobile and consumer electronics industries,Globalisation of economies,Level of analysis: Macro levelDebate whether worlds economies are experiencing a convergence trendConsequences of international integration in terms of growth, employment, inflation, productivity, trade and foreign direct investmentPolitical realities constraining and encouraging globalisationDynamics of technological, institutional and organisational convergence,Types of International Expansion,InternationalMultinationalGlobal,Globalisation Drivers,Market DriversCost DriversGovernmental DriversCompetitive DriversChanges over Time,Porters Diamond,Porter, Michael E. (1990),Factor ConditionsFactor endowmentHierarchies among factorsFactor creationSelective factor disadvantages,Firm strategy, structureand rivalryStrategy and structure of domestic firmsGoalsDomestic rivalry,Demand conditionsHost demand compositionDemand size and pattern of growthInternationalization of domestic demandInterplay of demand conditions,Related and supportingindustriesCompetitive advantage in supplier industriesCompetitive