1、1,GLOBAL STRATEGIC MANAGEMENT,10 - Multinational Strategies, Structures, and Learning,Copyright 2009 Cengage. All rights reserved.,102,Outline,Multinational strategies and structures A comprehensive model of multinational strategy, structure, and learning Worldwide learning, innovation, and knowledg
2、e management Debates and extensions The savvy strategist,Toyota as (Almost) No. 1,For 30 years Toyota has been widening the gap between itself and rivals Almost the No. 1 by volume 2007 70th anniversary of founding and 50th since starting to import into the US 2007 only 3000 sales away from GM which
3、 has held top spot since 1931,Copyright 2009 Cengage. All rights reserved.,103,Toyota as (Almost) No. 1,May be deliberately holding back to avoid possible protectionism in the US To avoid employees from becoming too arrogant Started with and export strategy Now manufactures a full vehicle range in 2
4、1 countries, including China,Copyright 2009 Cengage. All rights reserved.,104,Toyota as (Almost) No. 1,In US Toyota: 1970 = 2% of sales (GM 40%) 1980 = 3% 1990 = 8% 2000 = 9% 2006 = 13% (GM 26%) 2007 = 16% (GM 24%) 1995 = 26 factories 2007 = 63 factories,Copyright 2009 Cengage. All rights reserved.,
5、105,Toyota as (Almost) No. 1,How to keep Toyota, Toyota? 2007 quality problems Consumer Reports magazine drops Camry V6 sedan, Lexus GS, Tundra pickup from recommended list Would no longer recommend Toyota without reliability data No longer assumption of quality or reliability,Copyright 2009 Cengage
6、. All rights reserved.,106,Toyota as (Almost) No. 1,Toyota steps to address growing pains 1. Documented the Toyota Way previously explicit 2. Increased training 3. More learning and knowledge transfer among overseas subsidiaries, especially from Canada and Kentucky,Copyright 2009 Cengage. All rights
7、 reserved.,107,Copyright 2009 Cengage. All rights reserved.,108,Multinational Strategies and Structures,Pressures for cost reductions and local responsiveness Four strategic choices for MNEs (1) home replication, (2) multidomestic, (3) global, and (4) transnational Home replication strategy emphasiz
8、es the international replication of home country-based competencies Localization (multidomestic) strategy is an extension of the home replication strategy Global standardization strategy is the opposite of the multidomestic strategy Transnational strategy aims to capture “the best of both worlds” by
9、 endeavoring to be both cost efficient and locally responsive,Copyright 2009 Cengage. All rights reserved.,109,Multinational Strategies and Structures: The IntegrationResponsiveness Framework,Figure 10.1,4 Strategic Choice for Multinationals,1010,4 Strategic Choice for Multinationals,1011,4 Strategi
10、c Choice for Multinationals,1012,4 Strategic Choice for Multinationals,1013,Copyright 2009 Cengage. All rights reserved.,1014,Multinational Strategies and Structures: Four Organizational Structures,Four organizational structures that are appropriate for the four strategic choices: International divi
11、sion Geographical area Global product division Global matrix,Copyright 2009 Cengage. All rights reserved.,1015,International Division Structure at Cardinal Health,Figure 10.2,Source: Based on authors interview and (accessed August 10, 2004). Cardinal Health is headquartered in Dublin, Ohio. Also se
12、e Integrative Case 3.1.,Copyright 2009 Cengage. All rights reserved.,1016,Multinational Strategies and Structures: Organizational Structures (contd),International Division Typically set up when firms initially expand abroad, often when engaging in a home replication strategy Problems: Foreign subsid
13、iary managers in the international division are not given sufficient voice relative to the heads of domestic divisions The “silo” effect: International division activities are not coordinated with the rest of the firm, which focuses on domestic activities Firms often phase out this structure after t
14、heir initial overseas expansion,Copyright 2009 Cengage. All rights reserved.,1017,Geographic Area Structure at Ispat,Figure 10.3,Source: Adapted from .Avon is headquartered in New York, Avon Products is the company behind numerous “Avon Ladies”.,Avon Central & Eastern Europe,Avon Western Europe Midd
15、le East Africa,Avon Asia Pacific,Avon Latin America,Avon North America,Copyright 2009 Cengage. All rights reserved.,1018,Multinational Strategies and Structures: Organizational Structures (contd),Geographic Area Structure Organizes the MNE according to different geographic areas (countries and regio
16、ns) Is the most appropriate for a multidomestic strategy Its ability to facilitate local responsiveness is both a strength and a weakness Problems: While being locally responsive can be a virtue, it may also encourage the fragmentation of the MNE into highly autonomous, hard-to-control “fiefdoms”,Co
17、pyright 2009 Cengage. All rights reserved.,1019,Global Product Division Structure at European Aeronautic Defense and Space Company (EADS),Figure 10.4,Source: Adapted from (accessed June 30, 2004). EADS is headquartered in Munich, Germany and Paris, France.,Copyright 2009 Cengage. All rights reserve
18、d.,1020,Multinational Strategies and Structures: Organizational Structures,Global Product Division Structure Supports a global strategy in treating each product division as a stand-alone entity with full worldwideas opposed to domesticresponsibilities for its activities Facilitates attention to pres
19、sures for cost efficiencies in allowing for consolidation on a worldwide (or regional) basis and reduction of inefficient duplication in multiple countries Problems: It is the opposite of the geographic area structure: Little local responsiveness,Copyright 2009 Cengage. All rights reserved.,1021,A H
20、ypothetical Global Matrix Structure,Figure 10.5,Copyright 2009 Cengage. All rights reserved.,1022,Multinational Strategies and Structures: Organizational Structures,Global Matrix Is often used to alleviate the disadvantages associated with both geographic area and global product division structures
21、Is intended to support the goals of the transnational strategyin practice, it is often difficult to deliver Problems May add layers of management, slow down decision speed, and increase costs while not showing significant performance improvement,A Comprehensive Model of Multinational Structure, Lear
22、ning, and Innovation,1023,MULTINATIONAL STRATEGY, STRUCTURE & LEARNING,INDUSTRY-BASED -Nature of Industry -Interfirm rivalry on integration, responsiveness and learning -Entry barriers -Power of suppliers and buyers -Threat of substitutes,RESOURCE-BASED -Value -Rarity -Imitability -Organization,INST
23、ITUTION-BASED -Formal/informal external institutions governing MNEs and home/host country environments -Formal/informal institutions on MNE governance,Copyright 2009 Cengage. All rights reserved.,1024,Industry-based Considerations,Industry characteristics Industrial products firms: Favor global prod
24、uct divisions Consumer goods firms: Favor geographic areas Porters forces Interfirm rivalry increasingly focuses on innovation Need to heighten entry barriers: Behind some recent moves to phase out multidomestic strategy and to erect world-scale facilities to deter entrants Bargaining power of suppl
25、iers and buyers: They also have to internationalize if the focal MNE goes overseas MNE R&D often generates competing substitute products,Copyright 2009 Cengage. All rights reserved.,1025,Resource-based Considerations,Value Does any new structure (such as matrix) really add value? Does innovation rea
26、lly add value? Not always! Rarity When all rivals adopt a “global strategy,” it is not rare Imitability It is easier to imitate formal structure. But how to imitate an elusive, informal matrix which is a “philosophy”? Organization Some MNEs are better able to take advantage of complex organizational
27、 structures such as matrix than others,Copyright 2009 Cengage. All rights reserved.,1026,External Institutions,Formal government requirements to generate technology spillovers,Informal norms governing relationships with home and host governments,Numerous informal rules (e.g., those governing the nat
28、ionality of subsidiary and top managers),Formal rules, regulations, and power structures captured by organizational charts,Internal Institutions,Institution-based Considerations,Copyright 2009 Cengage. All rights reserved.,1027,Institution-based Considerations,Formal and informal external institutio
29、ns Formal Institutions Externally, MNEs, are subject to the formal institutional frameworks erected by various home- and host-country governments Host-country governments often encourage, or coerce MNEs into undertaking certain activities Informal Institutions Strategists weigh the informal backlash
30、 against activities which result in domestic job losses,Copyright 2009 Cengage. All rights reserved.,1028,Institution-based Considerations,Formal and informal internal institutions Formal organizational charts do not necessarily reveal the informal rules of the game Three choices: (1) a home-country
31、 national as the head of a subsidiary, (2) a host-country national, or (3) a third country national,Copyright 2009 Cengage. All rights reserved.,1029,Worldwide Learning, Innovation and Knowledge Management: Knowledge Management in MNEs,Knowledge management can be defined as the structures, processes
32、, and systems that actively develop, leverage, and transfer knowledge. Some argue that knowledge management is the defining feature of MNEs Knowledge management is considered by some writers the defining feature of MNEs Explicit knowledge (e.g., a driving manual): Captured by IT Tacit knowledge (e.g
33、., knowledge about how to drive) Its acquisition and transfer require hands-on experience,KM in 4 Types of MNEs,Copyright 2009 Cengage. All rights reserved.,1030,KM in 4 Types of MNEs,Copyright 2009 Cengage. All rights reserved.,1031,KM in 4 Types of MNEs,Copyright 2009 Cengage. All rights reserved.
34、,1032,KM in 4 Types of MNEs,Copyright 2009 Cengage. All rights reserved.,1033,Siemans ShareNet,How can Siemans tap into and rejuvenate the knowledge of 475,000 employees in 190 countries? Since 1998 Siemans has been developing a KMS (ShareNet),Copyright 2009 Cengage. All rights reserved.,1034,Sieman
35、s ShareNet,4 Steps of Development Concept definition Global rollout in 39 countries in 1999 Generating momentum Sustaining performance,Copyright 2009 Cengage. All rights reserved.,1035,Siemans ShareNet,Concept definition Handling explicit and tacit knowledge Capable of integrating interactive compon
36、ents Global rollout in 39 countries in 1999 ShareNet managers appointed to local subsidiaries Local Workshops,Copyright 2009 Cengage. All rights reserved.,1036,Siemans ShareNet,Generating momentum Initial resistance But eventual acceptance English based Incentives Sustaining performance 2002 19,000
37、users in more than 80 countries Supported by 53 ShareNet managers Reduced to 10, post 9/11,Copyright 2009 Cengage. All rights reserved.,1037,Copyright 2009 Cengage. All rights reserved.,1038,Worldwide Learning, Innovation and Knowledge Management: Globalizing Research and Development,A crucial arena
38、 for knowledge management Driven by the intensification of competition for innovation Provides a vehicle for access to, or extract benefits from, a foreign countrys local talents and expertise The resource-based view: A fundamental source for competitive advantage is being different (the assumption
39、of heterogeneity) Decentralized R&D work performed by different locations and teams around the world means that there will be persistent heterogeneity (differences) in the solutions generated,Problems in KM,Copyright 2009 Cengage. All rights reserved.,1039,Copyright 2009 Cengage. All rights reserved
40、.,1040,Problems and Solutions in Knowledge Management,For large firms, there are actually diminishing returns for R&D. Consequently, a new model, called “open innovation,” is emerging. This model relies on more collaborative research among various internal units and with external organizations In kn
41、owledge retention, there is the problem of employee turnover which may lead to knowledge leakage Global virtual teams, which do not meet face to face, may have communication and relationship barriers The “not invented here” syndrome causes some managers to resist accepting ideas from other units,Cop
42、yright 2009 Cengage. All rights reserved.,1041,Problems and Solutions in Knowledge Management,As solutions to combat these problems, corporate headquarters can manipulate the formal rules of the game through individual and organizational incentives as well as investing in tacit knowledge MNEs often
43、must rely on a great deal of informal integrating mechanisms Some try to develop informal social capital Overall, the micro, informal interpersonal relationships among managers of various units may create a micro-macro link,Copyright 2009 Cengage. All rights reserved.,1042,Debates and Extensions,Cor
44、porate controls versus subsidiary initiatives Arguments in favor of centralization Capability to facilitate corporate-wide coordination Consistency in decision-making Sufficient power for corporate-level managers to initiate necessary actions Arguments against centralization and in favor of decentra
45、lization Decentralization reduces corporate-level managers overload of responsibilities and improves decision quality Better motivates subsidiary-level managers and employees Permits greater speed, flexibility, and innovation Some subsidiary-level strategies may contribute to entrepreneurship (or em
46、pire building) The ideal relationship is an “integrated network” model or “N-form”,Honeywell Canada,Mid 80s a traditional branch plant producing for the local market Volumes 1/10th of Minneapolis Late 80s NAFTA threatened survival of HC Inefficient plant US made products could enter Canada duty-free
47、 Plant proposed to produce for some products for all NthAm.,Copyright 2009 Cengage. All rights reserved.,1043,Honeywell Canada,Proposal eventually adopted HC became a Centre of Excellence HC now a leading controls company But can self interest of the subsidiary power, prestige, their jobs be the ove
48、r-riding factor HQ role to determine whether opportunistic or good faith,Copyright 2009 Cengage. All rights reserved.,1044,Copyright 2009 Cengage. All rights reserved.,1045,Debates and Extensions,Customer-focused dimensions versus integration, responsiveness, and learning Three primary customer-focu
49、sed dimensions Global account structure to supply customers across various countries An industry sector structure is common for professional service firms Solutions-based structure is often used Customer-focused dimensions cut across all three existing mainstream dimensions, integrating on a global basis, responding to customers in single and multiple markets, and learning how to meet customers needs and wants One recommendation is to simplify both product and geographic scope to add the customer-focused dimensions,
