Upload
julissa-lutman
View
219
Download
1
Tags:
Embed Size (px)
Citation preview
DEFINING THE GLOBAL FIRM
Chapter 3 Lecture 1
From Local to Global
Domestic– Local firms
Individual Organizational
International Multinational Partially to almost or fully global
Global Business is Important to Economic
DevelopmentAbout 1/3 of world GDP is generated by
business activities.
Growth also is generated by business activities.
Characteristics of the Global Enterprise
1. DRAWS RESOURCES FROM A GLOBAL POOL
capital, labor, materials
2. VIEWS THE WORLD AS ITS HOME
3. ESTABLISHES A WORLDWIDE PRESENCE IN ONE OR MORE BUSINESSES
but may go global by chance or design
4. PURSUES A GLOBAL BUSINESS STRATEGY
5. TRANSCENDS EXTERNAL AND INTERNAL BOUNDARIES
Let’s Look at Some Global
Firms
Web Links to Explore These
Coca-Cola www.coca-cola.com Benetton www.benetton.com Doc Martens www.drmarten.com
Global Enterprise Characteristic 1
– DRAWS RESOURCES FROM A GLOBAL POOLcapital, labor, materials
Global Enterprise Characteristic 2
VIEWS THE WORLD AS HOME– Reduces existing links
Moves its headquarters for all or some functions, e.g., Boeing, Alcatel to be “stateless”
Creates a perception that it is not place bound, e.g., a name that has no meaning or an ad campaign that makes it more “local”
Goes virtual so it has no fixed “place”
– Undertakes activities that make it a world citizen, e.g., Royal Dutch Shell
Global Enterprise Characteristic 3
– ESTABLISHES A WORLDWIDE PRESENCE IN ONE OR MORE BUSINESSESbut may go global by chance or design
Global Enterprise Characteristic 4
– PURSUES A GLOBAL STRATEGY via an INTEGRATIVE APPROACH
Global Enterprise Characteristic 5
– TRANSCENDS EXTERNAL AND INTERNAL BOUNDARIES
VERTICAL/HORIZONTAL– Vertical—customers, suppliers– Horizontal—competitors
TANGIBLE/INTANGIBLE– Tangible—something we can measure– Intangible—how people think or
perceive
Five Levels of Strategy Enterprise Strategy—why do we exist as an
organization? Corporate Strategy—what businesses should we be in
now and in the future? Business Strategy—what is the source of our advantage?
– Dependent on existing competencies– And on the nature of the industry in deciding– How shall we position ourselves in the industries and
businesses where we choose to operate? Operational Strategy—how shall we coordinate among
PPS to meet enterprise, corporate, and business level strategies?
Individual Strategy—what must each individual do daily at work to meet organizational goals consistent with other levels of strategy?
Enterprise Strategy usually is articulated by top management often is vague or abstract; can be described as vision,
mission, values, etc. varies from country to country and from organization
to organization within the same country can change over time, e.g.,
– Boeing 1990 Mission: to be the number one aerospace company in the world and among the premier industrial concerns of quality, profitability, and growth
– Boeing Vision 2016: people working together as one global company for aerospace leadership
informs (or should inform) all other strategy levels
Compare These Statements of Enterprise
Strategy The objective of the enterprise is to make money
and to have fun doing so. WL Gore and Associates Our goal is to provide superior returns to our
shareholders. Profitability is critical to achieving superior returns, building our capital, and attracting and keeping our best people. Goldman Sachs
It is our mission to improve the lives of customers and communities where we all live, work and play. Honda
Corporate Strategy Defines What’s in the Corporate
Portfolio: Businesses to be in Now and Into the Future
Corporate strategy is reflected by portfolio decisions– Expansion, bottled water for Pepsi– Contraction or exchange, sell off a unit, e.g., Corus sold
its aluminum holdings– Exchange, Boeing exchanges for Internet services.
Corporate strategy is a view of the overall corporate portfolio of businesses
Business Strategies are (Almost Always) Industry Specific and
Answer Two Questions: What are sources of distinctive advantage?
– This can be based on many attributes or a combination of physical, human or capital advantages financial, physical, legal, human, organizational, information,
or relational – Usually concentrate on 3–5 core competencies
Examples are price advantage, product advantage, innovation, quality, ease of access
How shall we position in the industry?– Competition on a head-to-head basis– Collaboration– Coopetition
May be articulated for the business or for a single subunit, e.g., commercial airlines
Operational Strategy Decisions
which people, processes, and structures are needed to satisfy enterprise, corporate, and business strategies
Decisions About Enterprise, Corporate, Business and
Operational Strategies Define individual objectives, job assignments,
employee activities And they are interconnected with
organizational culture, efficiency, and other activities
So we return to this point: Organizations are interconnected internally, so action begins with enterprise strategy: why do we exist as an organization?
Ford’s Global Strategy
Video: Making Globalization Succeed
be looking for vision/statement of values and how these values are embedded in
people, processes, and structures for Levi, Motorola, and Sony
Argus Computers--India
As you watch this, be looking for these points:
what is the founder’s purpose?
how are people developed?
how is the organization structured?