Documente Academic
Documente Profesional
Documente Cultură
Global Strategy
Strategy:
attain goals
Support
infrastructure (general and administrative) human resources research and development
Earn greater return from distinctive skills, core competences Inimitable or difficult to imitate skills in value chain Realize location economies Choice of FDI location Create multinational network of activities (global web) Realize greater experience curve economies, which reduce the cost of value creation Learning effects, economies of scale
Unit costs
B A
Experience curve
Accumulated output
Strategic Choice
High Cost Reduction (Global Integration) Pressures International Strategy Low Low Multidomestic Strategy Global Strategy Transnational Strategy
High
Multidomestic MNC
HK UK USA Japan Mexico Decentralized Federation - Many key assets, responsibilities and decisions localized Personal Control - Informal HQ-Sub relationship, simple financial controls Multidomestic Mentality - Management sees overseas operations as portfolio of independent businesses India Chile
International MNC
HK UK USA Japan Mexico Coordinated Federation - Key assets, responsibilities decisions localized Administrative Control - Centralized HQ control, formal planning and control, tight HQ-Sub linkage International Mentality - Management sees overseas operations as appendages to a domestic operation India Chile
Global MNC
HK
UK
USA Japan Mexico
Chile
India
Centralized Hub - Most strategic assets, resources, responsibilities and decisions centralized Operational Control - Tight HQ control of decisions, resources, information Global Mentality - Management sees overseas operations as delivery pipelines to a unified global market
Transnational MNC
HK UK USA Chile
Japan
Mexico
India
Networked Organization - Distributed, specialized resources and capabilities Interdependent Units - large flows of components, products, resources, people, and information Transnational Mentality - Complex process of coordination and cooperation in an environment of shared decision making
Facilitate entry into a foreign country Allow fixed costs of new products and processes to be shared Bring together complementary skills and assets Help establish industry standards in technology Allow reduction of operating costs,e.g., shared training, purchasing Give competitors a low cost route to new technology / markets Disproportional benefit accrual to partners
Disadvantages
A suitable partner
Helps achieve strategic goals
Adds needed, valuable capabilities Shares the firms vision for purpose of the alliance Is not likely to exploit the alliance to its own ends
experience with likely partner(s) A lot of face-to-face time with likely partner(s) in their environment
technology/know-how that is not intended to be transferred a solid contract with safeguards against opportunism equitable gain through agreed swaps of technology the other wants creditable, clearly articulated commitment to partner behavior a-priori
Achieve Seek
Show sensitivity to cultural differences that explain different managerial styles Build trust
Set up framework for formal and informal face-
organization
Brief your employees on partner strengths