Global Strategy : Creating and Sustaining Advantage Across Borders

by Inkpen, Andrew; Ramaswamy, Kannan

• ISBN13: 9780195167207
• ISBN10: 0195167201
• Format: Hardcover
• Copyright: 2005-11-24
• Publisher: Oxford University Press

Summary

There are few industries, if any untouched by global competitive forces. Firms and countries long accustomed to dominance in their respective international markets must now reckon with aggressive and innovative competitors from all corners of the world. As the cross-border flow of people,knowledge, ideas, products, services and management practices accelerates, the notion of home-based advantage is becoming weaker. Unlike their domestic counterparts, firms competing across borders must deal with differences in political, legal, financial, cultural, governance and macroeconomiccontexts. These contextual differences shape competition in international strategy and make the study of international strategy more than just a simple extension of classic strategic analysis. Global Strategy deals with the question of how firms can compete in a global environment. Andrew Inkpenand Kannan Ramaswamy examine the issues considered central to the study of strategic management in a global context, such as the nature of global advantage, strategic alliances, competing in emerging markets, international corporate governance, global knowledge management and ethical issues ininternational business. Much as been written about the relevance of global, regional and domestic strategies to counter competition from overseas and as a means to enter foreign markets. However, lobal Strategy takes a broader view, organizing itself around a set of strategic management issuesthat arise specifically because a firm is international. While there is obviously some overlap between domestic strategic management and global strategic management, it is Inkpen and Ramaswamy's contention that the differences between domestic and global strategy warrant specific attention. Byintegrating academic research with practical examples and case studies, they inform students and managers of global business about a diverse set of important strategic issues.

Table of Contents

Introduction	3	(7)
Does Globalization Matter to Strategy Creation?	4	(1)
Overview of the Book	5	(5)
1 Globalization and Global Strategy	10	(22)
What Does Globalization Mean?	12	(3)
What Is a Global Industry?	15	(2)
Global Industries in Action	17	(6)
Case Study: The Diamond Industry	17	(3)
Case Study: The Sushi Industry	20	(1)
Case Study: The Trash Industry	21	(1)
Insights from the Three Global Industry Cases	22	(1)
Why Do Firms Pursue Global Expansion?	23	(4)
Distance and Global Strategy	26	(1)
Managers and MNEs in a Global World	27	(4)
The Global Environment and the Global Manager	29	(2)
Conclusion	31	(1)
2 Strategic Choices in a Global Marketplace	32	(22)
Global Strategy and Country-Specific Advantage	34	(5)
Factor Conditions	35	(1)
Demand Conditions	36	(1)
Related and Supporting Industries	36	(1)
Firms, Structures, Strategies, and the Intensity of Rivalry	37	(2)
Case Study: Belgium—Location-Specific Advantage in the Global Gourmet Chocolate Industry	37	(2)
Where Should Value-Chain Activities Be Located?	39	(7)
Aggregation Approaches	39	(4)
Case Study: The Watch Industry	41	(2)
Localization or Standardization?	43	(3)
Case Study: Competitive Choices in the Consumer Electronics Industry	45	(1)
Configuration, Coordination, and the Design of Strategy	46	(5)
Factors Influencing Configuration Choices	48	(1)
Coordination	48	(10)
Case Study: Trend Micro—Configuration and Coordination Choices in the Antivirus Industry	50	(1)
The Influence of Culture on Strategy	51	(2)
Conclusion	53	(1)
3 Global Strategy and Organization	54	(26)
MNE Organizational Structures	54	(4)
Case Study: MNE Organizational Options and Sesame Workshop	55	(3)
Patterns in Global Strategy, Organization, and Structure	58	(5)
Multinational Organization	58	(3)
Global Organization	61	(2)
From a Multinational to a Global Organization	63	(5)
Case Study: Warner-Lambert Company and Globalization	65	(3)
The Evolution of MNE Organizations	68	(3)
The Transnational Organization	69	(2)
The Strategy and Role of the MNE Subsidiary	71	(2)
Does Globalization Always Mean Centralization?	73	(4)
Case Study: Honeywell R&D and Globalization	73	(4)
How Will the MNE Organization of the Future Manage Complexity?	77	(2)
Reorganization as a Response to Globalization	78	(1)
Conclusion	79	(1)
4 International Strategic Alliances	80	(27)
What Is a Strategic Alliance?	80	(6)
Elements of Alliances and the Importance of Trust	81	(1)
Types of Strategic Alliances	82	(4)
Case Study: Outsourcing Alliances and Competitive Risk	83	(3)
Why Companies Use Strategic Alliances	86	(2)
Speed of Action	86	(1)
Risk Sharing	86	(1)
Economies of Scale and Critical Mass	87	(1)
Learning New Skills	87	(1)
Exploration	87	(1)
No Choice	88	(1)
Why the Number of International Alliances Continues to Increase	88	(1)
Competitive Risks and Problems with Alliances	89	(3)
Case Study: Alliance Life Cycle—Matra-Ericsson Telecommunications	90	(2)
Unavoidable Issues with Alliances	92	(1)
Avoidable Issues with Alliances	93	(1)
Partner Selection Criteria and Managing the Alliance Relationship	94	(3)
What Is Organizational Fit?	95	(1)
Why Many Companies Overlook Organizational Fit	96	(1)
Alliance Management and Design	97	(5)
Alliances and Stability	98	(1)
Managing Partner Conflict and Adjustment by the Partners	99	(2)
Cross-Cultural Dimensions and Alliance Stability	101	(1)
Alliance Performance Measurement	102	(1)
Alliance Assessment: Creating Successful Alliances	103	(1)
Conclusion	104	(3)
5 Global Knowledge Management	107	(23)
Organizational Knowledge	109	(3)
Tacit and Explicit Knowledge	110	(1)
Knowledge Management	111	(1)
How Is Organizational Knowledge Transferred?	112	(8)
Case Study: China-Singapore Suzhou Industrial Park	113	(3)
Case Study: GM, Toyota, and NUMMI	116	(4)
Insights from the Case Studies	120	(2)
Transferring Knowledge in MNEs	122	(3)
The Sharing of Best Practices	123	(1)
Case Study: Building a Best-Practice Manufacturing Plant	124	(1)
Exploiting Local Knowledge for Product Innovation	124	(1)
Creating a Knowledge-Oriented Culture	125	(3)
Case Study: A Failed Learning Opportunity	126	(1)
Overcoming the Not-Invented-Here Syndrome	127	(1)
Conclusion	128	(2)
6 Leveraging Knowledge Resources Globally	130	(22)
What Are Knowledge-Based Functions and Processes?	132	(1)
Offshore Operations—Old Wine in New Bottles?	133	(5)
Location-Specific Advantage and Access to Manpower	135	(1)
The Key Success Factor for Offshoring	135	(3)
Case Study: Knowledge Outsourcing—The India Advantage	136	(2)
What Knowledge Functions Can Be Outsourced?	138	(3)
Determinants of the Ideal Processes and Functions That May Be Offshored	138	(3)
The Offshore Decision: Location, Structure, and Ownership	141	(6)
Near-Shore versus Far-Shore	141	(1)
Structuring an Offshore Entity	142	(3)
Case Study: General Electric	144	(1)
Case Study: Cisco Systems	145	(1)
A Third Approach for Structuring Offshore Operations	145	(1)
Wholly Owned Subsidiaries versus Contractors	146	(1)
Successfully Managing Offshore Relationships	147	(2)
Best Practices in Leveraging Offshore Locations	149	(1)
Conclusion	150	(2)
7 Global Strategy in Emerging Markets	152	(28)
What Is an Emerging Market?	153	(1)
Physical Infrastructure	153	(3)
Case Study: Hindustan Lever Ltd.—Tackling the Challenge of Distribution in Rural India	156	(1)
Institutional Infrastructure	156	(7)
Capital Markets	156	(3)
Subsidies and Distortions	159	(1)
Legal Infrastructure	159	(2)
Case Study: Enron and the Dabhol Power Company	160	(1)
Politics and Corruption	161	(2)
Competing Successfully in Emerging Markets	163	(2)
The Common Myths of Emerging Market Competition	165	(7)
Myth 1: An Emerging Market Is What a Developed Market Looked Like a Couple of Decades Ago	165	(1)
Myth 2: Emerging Market Consumers Will Prefer Global Brands over Local Brands	166	(4)
Case Study: Coke Wins with a Local Brand	168	(1)
Case Study: China's Beer Wars	169	(1)
Myth 3: Targeting the Wealthy Few in Emerging Markets Is a Prudent Entry Mode Choice	170	(2)
The Poor Have No Economic Wealth?	172	(2)
Case Study: Louis Vuitton—Going East to Cash in on Affluence	173	(1)
The Product Development Challenge	174	(4)
Case Study: Whirlpool Corporation: Strategy in the Global White Goods Market	175	(1)
Pricing Strategy in Emerging Markets	176	(1)
Partnering and Control Issues	177	(1)
Conclusion	178	(2)
8 Corporate Governance Issues in International Business	180	(24)
The Nature of Corporate Governance	181	(6)
The Stakeholder versus Shareholder Debate	182	(2)
Corporate Governance and the Global Firm	184	(3)
National Variations in Corporate Governance Systems	187	(3)
U.S. System	187	(1)
Japanese System	188	(1)
German System	189	(1)
Emerging Markets	190	(6)
Case Study: Thai Petrochemical and the Corporate Houdini	191	(2)
Case Study: BP in Russia	193	(3)
Corporate Governance in China, India, and Brazil	196	(2)
China	196	(1)
India	197	(1)
Brazil	197	(1)
Which Governance System Is Best?	198	(2)
The Role of Institutional Environments, Conglomerates, Family Ownership, and Government Intervention in Corporate Governance	200	(1)
Legal Systems	201	(1)
The Role of Foreign Directors	201	(1)
Strategy and Corporate Governance	202	(1)
Conclusion	203	(1)
9 Ethics and Global Strategy	204	(19)
Why Does Ethics Matter in the Global Arena?	204	(3)
Whose Values and Whose Ethical Standards?	207	(2)
Relativism, Objectivism, and Pluralism	209	(1)
Global Strategy Issues and Ethics	210	(4)
Case Study: Mobil and Aceh, Indonesia	211	(3)
Implications from the Mobil and Aceh Case	214	(2)
MNEs and Intellectual Property	216	(2)
Case Study: CD Piracy	216	(2)
Ethical Guidelines, Laws, and International Accords	218	(2)
Formal Corporate Ethics Programs	220	(1)
Conclusion	221	(2)
Strategy and Globalization: A Final Note	223	(4)
Notes	227	(12)
Additional Reading	239	(4)
Index	243