Transcript HSBC - Tistory

Discussion Notes
Teaching Notes: Finntrack
Strategy: Analysis and Practice ©2005 McGraw-Hill Education Europe
Index
• Workshop
• Case Analysis
• Debate
• Case Questions
• How to Use Your Workshop Resources
• Disclaimer
• Learning Objectives
• Introduction to Multinational Corporations
• Introduction to Financial Institution and
HSBC
• Overview
• Corporate Objectives and
Strategies
• Corporate Objective
• Corporate Strategies
• Managing for Value 2000 – 2001
• Guide to Using Case Studies
• Business Drivers
• Business Analysis
• Balanced Scorecard
• Quantitative Methods
• Corporate Strategy
• Business Strategy Overview
Click on
• Business Location
Source:
• Value Based Management
• Value Creation
• Business Value
• Economic Value Added
• Shareholder Value
• Shareholder Value Analysis
• Value Management Models
• Centralization, Decentralization and
Delegation
• Why Delegate?
• An Assessment of HSBC's Corporate
Social Responsibility Report 2004
• HSBC Financial Highlights 2001, 2005
Image
Wikipedia
Index
• Global Strategies
• Globalization
• Economics
• Microeconomics
• Macroeconomics
• Economic Value Added
•Economies of Scale
•Economies of Scale – Integration
•Economies of Scope
•Outsourcing
• Demographic and Business Trends in Asia
• Michael Porter's Diamond
• Opportunities for Growth
• Risk, Uncertainty and Strategy
• Relation between Uncertainty and Risk
• Decision Analysis
• Chapter 9 - Annotated Lecture Outline
• Chapter 11 - Annotated Lecture Outline
• Chapter 14 - Annotated Lecture Outline
Click on Image
Source: Wikipedia
HSBC: Migrating for value
Workshop
This workshop series is designed to compliment Teaching and Learning Strategies
for undergraduate, postgraduate and executive level Strategic Management and
related programmes and courses using the case studies featured in the ‘Strategy
Analysis and Practice’ text shown below.
The overall aim is to support the learning contents offered in the relevant chapters
of the book whilst expanding participants’ knowledge and skills base required to
understand, review and analyse the issues faced by HSBC’s managers in the
progress of in implementing and reviewing the company’s corporate strategy,
‘Managing for Value’.
Strategy Analysis and Practice
John McGee, Warwick Business School
Howard Thomas, Warwick Business School
David Wilson, Warwick Business School
HSBC: Migrating for value
Case Analysis
A case study is a particular method of
qualitative research.
Rather than using large samples and
following a rigid protocol to examine a
limited number of variables, case study
methods involve an in-depth, longitudinal
examination of a single instance or event:
a case.
They provide a systematic way of looking
at events, collecting data, analyzing
information, and reporting the results.
As a result the researcher may gain a
sharpened understanding of why the
instance happened as it did, and what
might become important to look at more
extensively in future research.
Click on Image
Source: © 2002 - 2003
Jian Shuo Wang
HSBC: Migrating for value
Case Analysis
Case studies lend themselves especially to generating (rather than
testing) hypotheses.
• The scope and relevance of case studies
• Types of case study
• Illustrative case studies
• Exploratory case studies
• Critical instance case studies
• Program implementation case studies
• Program effects case studies
• Cumulative case studies
• Business school case studies
• Medical case studies
• History of the case study
• Conclusions
• Notable case studies
• References
• See also
• External links
Click on Image
Source: © 2002 - 2003
Jian Shuo Wang
HSBC: Migrating for value
Workshop Debate
Workshop discussion topics have been divided into four parts according to the
relevant chapters of the book:
1. Introduction
2. Corporate Strategy: Adding Value in Multi-business Firms
3. Global Strategies and International Advantage
4. Risk, Uncertainty and Strategy
You should ensure that you have understood the contents of chapters 9, 11 and 14
prior to attending any of the above debates.
Also see:
How to Use Your Workshop Resources
Learning Objectives
Learning from Case Studies: A Short Guide for Students
HSBC: Migrating for value
Case Questions
Please Note:
At your instructor’s discretion the indicative questions below and elsewhere in this
resource may be varied or deemed unnecessary for teaching and learning
purposes for some courses or modules.
Also see Learning Using Case Studies for further information.
1. Measure the stakeholder value created by the function
migration to Guangzhou?
2. How could the bank learn from its earlier experiences in
Guangzhou to facilitate a smoother function migration to
Shanghai?
3. What alternative approaches could Or/HSBC have employed
in the first round of function migration?
Also see A Model for Case Analysis and Problem Solving
HSBC: Migrating for Value
How to Use Your Workshop Resources
Viewing
You will need either MS PowerPoint program or PowerPoint Viewer installed on your
computer. The latter may be downloaded free from Microsoft website here.
Navigation
The Learning Contents (Literature Reviews) are linked to a relevant public domain on
the Internet.
Most, if not all pictures/images are ‘clickable’, i.e. linked to its source which provides
further information on the topic or the copyright holder.
If your version of PowerPoint does not show the navigation buttons on the slide, right
click on the screen and select your destination from the dialogue box. Alternatively
use the small arrowheads,
indicating ‘previous’ and ‘next’ respectively.
HSBC: Migrating for Value
Disclaimer
This information is provided with the understanding that the authors
and publishers do not assume any legal responsibility for the
completeness or accuracy of the contents or any opinions or views
expressed on these pages or linked destination sources.
It is the nature of the media (Internet) that some of the pages may not
always be available due to broken or dead links, withdrawals, etc.
Whilst the publishers will be pleased to take any appropriate corrective
action, for example, by replacing or removing the sources when
possible, they unable to assume any legal responsibility for
unavailability of any third party material for whatever reason beyond
their direct control.
HSBC: Migrating for Value
Learning Objectives
The main objective of the workshop is to evaluate the strategic
implementation of HSBC’s partial migration (outsourcing) of their Hong
Kong based backroom operations to Guangzhou in mainland PRC.
Participants will have an opportunity of developing and enhancing their
• strategic thinking skills
• appreciations of the complex decision making process involved in
economic strategies such as migration and outsourcing
• understanding of the economic and social impact of operational
migration and/or outsourcing to firm’s business environment
• analytical and critical thinking skills by reviewing the factors that
influenced corporate centre's decisions on the businesses in their
portfolios
HSBC: Migrating for Value
Learning Objectives
• understanding of distinction between scale and scope and implications
that these concepts have for adding value in multi-business firms
• evaluation of the different ways in which the corporate centre can add
value in multi-business firms
• appreciation of the ways in which firms can gain competitive advantage
through globalization
• decision analysis and risk assessment skills with a range of techniques
and frameworks that can be used for the purpose
• transferable skills, particularly in areas such as web search and
research.
Adapted from the Learning Objectives, Chapters 9, 11 and 14.
HSBC: Migrating for Value
Multinational Corporations
A multinational corporation (MNC) or multinational enterprise (MNE) or
transnational corporation (TNC) is a corporation/enterprise that manages
production establishments or delivers services in at least two countries.
•
•
•
•
Critiques
Examples
In fiction
See also
• Fostering Growth and
Promoting a Responsible
Market Economy - A G8
Declaration
Annual Report on
the Guidelines for
Multinational
Enterprises The
2005 edition
includes a special
focus on corporate
responsibility in the
developing world
HSBC: Migrating for Value
Multinational Corporations
Multinational corporations (MNC) are often divided into three broad groups:
• Horizontally integrated multinational
corporations manage production
establishments located in different countries
to produce same or similar products.
• Vertically integrated multinational
corporations manage production
establishment in certain country/countries to
produce products that serve as input to its
production establishments in other
country/countries.
• Diversified multinational corporations
manage production establishments located in
different countries that are neither horizontally
or vertically integrated.
HSBC: Migrating for Value
Multinational Corporations
Multinationals have played an
important role in globalization. Given
their international reach and mobility,
prospective countries, and sometimes
regions within countries, must compete
with each other to have MNCs locate
their facilities (and subsequent tax
revenue, employment, and economic
activity) within. To compete, countries
and regional political districts offer
incentives to MNCs such as tax
breaks, pledges of governmental
assistance or improved infrastructure,
or lax environmental and labour
standards. This process of becoming
more attractive to foreign investment
can be characterized as a race to the
bottom.
Click on Image
Source:
HSBC: Migrating for Value
Introduction
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•
•
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Financial Institution
HSBC Overview
The Nature of the Large Corporation
Corporate Objectives and Strategies
• Managing for Value 2000 – 2001
• An assessment of HSBC's Corporate
Social Responsibility Report 2004
• HSBC Financial Highlights 2001, 2005
• Guide to Using Case Studies
Larger Image
Source: Ten3
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Financial Institutions
Introduction
In Financial economics, a financial institution acts as an
agent that provides financial services for its clients.
Financial institutions generally fall under financial
regulation from a government authority. Common types of
financial institutions include banks, building societies,
credit unions, stock brokerages, and similar businesses.
Financial institutions provide a service of moving funds
from investors, those with excess funds, to companies,
those in need of funds. These financial institutions make it
easy and affordable for small investors to invest.
General areas of finance
• Financial economics
• Macroeconomics
• Financial markets
• Financial services companies
• Economics and finance stubs
HSBC Tower by
flore-leval.9online.fr
Financial Institutions
China
• Opinion: Spent: The
End of the American
Empire
• The provisions of WTO
membership threaten
China's antiquated
banking system
Source: Yale Economic Review
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HSBC: Migrating for Value
Overview
• Introduction
• Customer groups
• Personal Financial Services
• Commercial Banking
• Corporate, Investment
Banking and Markets
• Private Banking
• Strategy
• Managing for Value 19982003
• Managing for Growth 20032008
• Local Operations
• Americas
• Asia Pacific
• Europe
• Middle East and Africa
• Global product lines and
programmes
• Global Service Centres
• HSBC Premier
• HSBC Bank International
• HSBCnet
• Brand and Advertising
• Hexagon symbol
• Sponsorship
• Slogan
• History of HSBC Holdings plc
• Awards and rankings
• 2005
• See also
• External links
• Articles
HSBC: Migrating for Value
Overview
HSBC Holdings PLC (LSE: HSBA, SEHK:
005, NYSE: HBC, Euronext: HSBC, BSX:
1077223879) is one of the largest
banking groups in the world, the fifthlargest company and second-largest
banking company in the world by the
Forbes Global 2000. Its head office is
located at the HSBC Tower in the London
Docklands.
The group is named after its founding
member, the Hongkong and Shanghai
Banking Corporation Limited - a bank
established by Scot Thomas Sutherland
to finance British trade in the Far East in
1865.
Click on Image
Source: Wikipedia
HSBC: Migrating for Value
Overview
The bank is the second largest
corporation in the world in terms of
assets ([2]). It reports its results in
US dollars since 80% of its
earnings come from outside the
UK. Nearly 22% of its earnings
comes from operations in Hong
Kong. Before moving the
headquarters to London in 1991, it
was headquartered in Hong Kong.
It is the largest bank in Hong Kong,
and at the end of 2004 it was the
third largest banking group in the
world by Tier 1 capital [3].
Click on Image
Source: Wikipedia
HSBC: Migrating for Value
Overview
The HSBC logo, known as the Hexagon, is derived from the Hongkong and
Shanghai Banking Corporation's 19th Century house flag, itself derived from the
Scottish flag which is the angular cross that St. Andrew (the patron saint of
Scotland) was crucified upon.
The 2004 Jaguar car, being driven by Mark Webber.
Click on Image
Source: Wikipedia
HSBC: Migrating for Value
Corporate Objectives and Strategies
Managing for Value 2000 - 2001
Introduction
• Corporate Objectives 1998
• Corporate Strategies
Larger Image
Source: Ten3
Click on Image
HSBC: Migrating for Value
Corporate Objective
On their website HSBC emphasised the priorities of
the Managing for Value into the 21st Century:
As a commercial organisation, our governing
objective is to provide a satisfactory return on
our shareholder’s capital.
The MfV strategy aimed to double shareholder value
in the five-year period 1999 – 2003 and again every
five years thereafter.
HSBC: Migrating for Value
Corporate Strategies
The Implementation of the final initiative became
most disruptive in Hong Kong. As such it required
careful planning and management whilst raising
myriad issues and concerns across the company.
This poses another, obvious, question:
To what extent were the principle objectives of
‘Managing for Value: HSBC into the 21st Century’
programme met?
HSBC: Migrating for Value
Corporate Strategies
A series of initiatives were introduced across the
HSBC group in a bid to align the organisation with
this primary objective, including:
• Transforming traditional branches to financial service centres
• Strengthening the sales force by recruiting dedicated Financial
Services Executives (FSE) and re-deploying back-office staff to
frontline operations.
• Streamlining the business processes and procedures.
• Migrating back-office operations, currently centralized in the
Networking Services Centre (NSC) in Hong Kong, to the
Guangzhou Data Centre (GZC) in mainland China.
HSBC: Migrating for Value
Managing for Value 2000 - 2001
Literature Review
• Managing for Value 1998-2003
• Managing for Growth 20032008
• Global Leadership - White Paper
Larger Image
Source: .webpronews.com
Click on Image
HSBC: Migrating for Value
Guide to Using Case Studies
“In using cases you should be aware that before going onto the main
theme of the case you will need to carry out a strategy analysis such as
that shown in Chapters 5, 6 and 7” (see Literature Review of Chapters
7.5.1 and 7.5.2 here).
Thus, the question posed in this case might be:
‘Was HSBC’s 1998 response to global developments in the banking
industry - Managing for Value: HSBC into the 21st Century (MfV) still appropriate in 2001?’
Business Analysis
Business Drivers
Larger Image
Source: Metapraxis
Business Analysis
Overview
Introduction
1. Benefits of business analysis
2. Roles of business analysts
3. Business process
improvement
4. Goal of business analysts
5. External links
Also see
• Balanced Scorecard
• Quantitative Methods
• Quantitative Method From
Wikipedia, the free
encyclopedia
Larger Image
Source: BizEd
Click on Image
Business Analysis
Balanced Scorecard
Literature Reviews
• Balanced Scorecard
• A comprehensive view of business
performance
• Public sector Balanced Scorecard
• Purpose of the Balanced
Scorecard
• Evolution of the Balanced
Scorecard
• See also
• References
• Balanced Scorecard
Click on Image by PA Consulting Group
Business Analysis
Quantitative Methods
Quants Handbook
Lecture
Lecture
Lecture
Lecture
Lecture
Lecture
Lecture
Lecture
Lecture
1:
2:
3:
4:
5:
6:
7:
8:
9:
Functions & Economic Relationships
Economic Models/Linear Models
Basic Differential Calculus
Optimisation
Functions of Several Variables
Unconstrained Optimisation
Constrained Optimisation
Growth & Dynamics
Introduction to Difference Equations
Source: Bob Beachill
Leeds Metropolitan University
[email protected]
Source: Brian C. McCarthy
Ohio University
Click on Image
HSBC: Migrating for Value
Corporate Strategy
Literature Reviews
Synergy
• Business Strategy Map
Click on image for further
information
• Business Location
• Value Based Management
• Value Creation
• Value Management Models
• Centralization, Decentralization and
Delegation
• Strategy Modelling Technique for
Financial Services
Also see Annotated Lecture Outline
Image by The Knowledge
Management Advantage
HSBC: Migrating for Value
Global Strategies 1
Global Strategies and International Advantage
Literature Reviews
• Globalization
Globalization
Click on image for
further information
• Economics
• Global Economy
• World Economy
• Economies of Scale
• Economies of Scale – Integration
• Economies of Scope
• Outsourcing
• Demographic and Business Trends in Asia
Also see Annotated Lecture Outline
Image by IRCC
HSBC: Migrating for Value
•
Global Strategies 2
• Five emerging trends will reshape global
banking in next decade: IBM study
• Competitiveness of Nations: The
Fundamentals
• The Competition of Countries
• The Competitive Advantage of Global
Finance
• Economist Country Briefings
• Financial Constraints and Growth:
Multinational and Local Firm Responses
to Currency Depreciations (Abstract)
• A Multinational Perspective on Capital
Structure Choice and Internal Capital
Markets (Abstract)
Click on Image
Source: Agrium Inc. 2004
HSBC: Migrating for Value
Global Strategies 3
Global Strategies and International Advantage
Literature Reviews
• Michael Porter’s Diamond
• Opportunities for Growth
Also see Annotated
Lecture Outline
Larger Map
Image by BizEd
Click on image for further
information
HSBC: Migrating for Value
Risk, Uncertainty and Strategy
Risk, Uncertainty and Strategy
Literature Review
• Relation between Uncertainty,
Probability and Risk
Prospect Theory
Click on image for further
information
• Decision Analysis
Also see Annotated Lecture Outline
Image by Wikipedia
Literature Review
Business Strategy Overview
Larger Map
Source: BizEd, University
of Bristol
Click on image for further
information
Literature Review
Business Location
Operations Research
OR-Notes are a series of
introductory notes on topics
that fall under the broad
heading of the field of
operations research (OR):
• Facility location
Source: J E Beasley
Larger Image
Source: BizEd
Click on Image
Literature Review
Value Based Management
Source: Dresden International
University
Source: FDC
Click on Images for further information
Literature Review
Value Creation
• Business Value
• Michael Goold, Andrew Campbell and
Marcus Alexander, Corporate Strategy
and Parenting Theory, Long Range
Planning, Vol.31, No.2, pp.308-314,
1998.
• Parenting Advantage (Goold &
Campbell)
• Parenting Styles (Goold & Campbell)
• Core Competence (Hamel & Prahalad)
• Distinctive Capabilities (Kay)
• Financial Institutions Re-evaluate
Offshore Operations
Copyright © 2000, Community
Intelligence Labs. Click on Image
Also see Economic Value Added
Literature Review
Value Creation - Business Value
In management, business value is an informal term that includes all
forms of value that determine the health and well-being of the firm in the
long-run. Business value expands concept of value of the firm beyond
economic value (also known as economic profit, Economic value
addedtm, and Shareholder value) to include other forms of value such as
employee value, customer value, supplier value, channel partner value,
alliance partner value, managerial value, and societal value.
Many of these forms of value are not directly measured in monetary
terms.
Business value often embraces intangible assets not necessarily
attributable to any stakeholder group. Examples include intellectual
capital and a firm's business model.
The Balanced scorecard methodology is one of the most popular methods
for measuring and managing business value.
Literature Review
Value Creation - Business Value
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Philosophy
History
Components of Business Value
Shareholder Value
Customer Value
Employee Value
Channel Partner Value
Supplier Value
Managerial Value
Societal Value
Strategies for Creating Business
Value
• Business Value of Information
Technology
• Criticisms
Click on Image. Larger Image
Source: Andersen
Literature Review
Value Creation - Shareholder Value
• Shareholder Value
• What is Shareholder Value?
• What Drives Shareholder Value?
• Shareholder Value Analysis
Larger Image
Source: Accenture
Literature Review
Shareholder Value Analysis
Larger Image
Source: agility.com.au
• Rediscovering Shareholder Value: A Proven
Approach
• How to Build Value into a Merger
• Shareholder Value Tool
Literature Review
Value Management Models
Larger Image
Source: performgroup
Click on Image for further
information
Literature Review
Value Management Models
Six Sigma
Six Sigma was pioneered by Bill Smith at Motorola
in 1986[1]. Originally, it was defined[2] as a metric
for measuring defects and improving quality; and a
methodology to reduce defect levels below 3.4
Defects Per (one) Million Opportunities (DPMO). Six
Sigma is a registered service mark and trademark
of Motorola, Inc[3]. Motorola has reported over
US$17 billion savings[4] from Six Sigma to date.
AlliedSignal and GE became early adopters of Six
Sigma and reported benefits of over US$300 million
during its first year of application[5]. Their CEO's,
Larry Bossidy and Jack Welch, played a vital role in
popularizing Six Sigma. Other major organizations
who claim to have benefited from Six Sigma
implementation are Ford, Caterpillar, Microsoft,
Raytheon, Quest Diagnostics, Seagate Technology,
Siemens, Merrill Lynch, Lear, 3M and many more.
Click on Image
Source: KETCH.ca
Literature Review
Value Management Models
Six Sigma
• Definition
• Application & Success
• Healthcare
• Banking
• Insurance
• Construction
• Military
• Methodology
• DMAIC
• DMADV
• Roles Required for Implementation
• Examples of Some Key Tools Used
• Criticisms of Six Sigma
• Of its origin
• Of the term: Six Sigma
• Of statistics
• Of methods
• Of effects
• References
• See also
• External links
Click on Image
Source: QCI International. All rights reserved.
Literature Review
Value Management Models
Value Chain
Click on Image
Source: Vickers
Literature Review
Centralization, Decentralization and Delegation
Advantages of Centralization
•
Close control of operations
•
Uniformity of policies, practices, and procedures
•
Better use of centralized experts
Advantages of Decentralization
Click on Image
Copyright:
Cornell University
•
Faster decision-making
•
Decision better adapted to local condition
•
Better management experience for managers that are considered for
promotion to higher level management
Literature Review
Why Delegate?
At a certain point, there are just too many facets to running a successful business
to continue doing it alone.
In an increasingly complex business environment, with all the trends affecting
business today, such as globalization, the information technology explosion,
strategic alliances, increased mergers and acquisitions, heightened competition,
and higher expectations of nearly every customer, it just isn't possible to still be
that one person in control of everything. Bringing in others to manage is an
absolute necessity for survival now.
Source:
Literature Review
An Assessment of HSBC's Corporate Social
Responsibility Report 2004
HSBC
• Business case for CSR
• Corporate Governance
• Click on images for
further information
Source: ethicalcorp.com
Image: Big banks are
under fire from NGOs on
lending practices on both
sides of the Atlantic.
Copyright:
ethicalcorp.com
Literature Review
HSBC Financial Highlights 2001, 2005
Source: Johnson Matthey
Annual Results 2005
Click on image for further information.
Literature Review
Global Strategies
Globalization
Larger Map
Source: BizEd,
University of Bristol
Also see:
• World Economic Forum
• Banking
• Financial Services
Click on image for further information
Literature Review
Global Strategies
Globalization (or globalisation1) refers to the worldwide phenomenon of
technological, economic, political and cultural exchanges, brought about by
modern communication, transportation and legal infrastructure as well as the
political choice to consciously open cross-border links in international trade and
finance.
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Meaning & Debate
History
Nature and existence of globalization
Characteristics
Anti-globalization
Pro-globalization (globalism)
Other uses
Measurement of Globalization
Notes
See also
External links
Also see The Global Economy, World
Economy
Illustration by Viktor
Koen for Newsweek
Literature Review
Economics
Larger Map
Source: BizEd,
University of Bristol
Economics
Source: Wikipedia
Economics, which focuses on measurable variables, is broadly divided into
two main branches: microeconomics, which deals with individual agents,
such as households and businesses, and macroeconomics, which considers
the economy as a whole, in which case it considers aggregate supply and
demand for money, capital and commodities. Aspects receiving particular
attention in economics are resource allocation, production, distribution,
trade, and competition. Economic logic is increasingly applied to any
problem that involves choice under scarcity or determining economic value.
Click on Image for further information.
Literature Review
Microeconomics
• Microeconomics
Larger Map
Click on Image
Image by BizEd
Literature Review
Macroeconomics
• Macroeconomics
Macroeconomics is the economics sub-field of study that considers aggregate
behavior, and the study of the sum of individual economic decisions. This is in
contrast to microeconomics which is the study of the economic behaviour of
individual consumers, firms, and industries.
Macroeconomics can be used to analyze how best to influence government policy
goals such as economic growth, price stability, full employment and the
attainment of a sustainable balance of payments.
Larger Map
Click on Image
Image by BizEd
Literature Review
Global Economy
The rise of technology has allowed our
environment to be characterized as a global
one. “The global economy gave business the
ability to market products and services all over
the globe. It has also allowed them to develop
partnerships and alliances throughout the world,
which has become essential for success in
today’s business.”
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•
Advantages
Disadvantages
Economies of Scale
The Global Economy
See also
References
Click on Image
Source: 2006 Deloitte
Development LLC.
Also see Economies of Scale
Literature Review
World Economy
The world economy can be evaluated in various ways, depending on the model
used, and this valuation can then be represented in various ways (for example, in
2006 US dollars). It is inseparable from the geography and ecology of Earth, and is
therefore somewhat of a misnomer, since, while definitions and representations of
the "world economy" vary widely, they must at a minimum exclude any
consideration of resources or value based outside of the Earth.
• Economy - overview
• Statistical indicators
• Economy
• Employment
• Industries
• Energy
• Cross-border
• Gift economy
• Communications
• Transport
• Military
• See also
• External links
Click on Image
Source:
Literature Review
Economic Value Added
What Does Economic Value
Added Really Mean?
Click on Images for further
information
Larger Image
Source: David Harper, (Contributing
Editor - Investopedia Advisor)
Larger Image
Literature Review
Economies of Scale
Larger Map
Source: BizEd,
University of Bristol
Economies of Scale
Source: Wikipedia
Economies of Scale
Economies of Scale refers to the decreased per unit cost as output
increases. Click on image for further information.
Literature Review
Economies of Scale - Integration
Integration
This occurs when two firms
join together to form one new
company. Integration can be
voluntary (a merger) or forced
(a takeover). The figure below
shows the three main types of
integration.
Source: BizEd,
University of Bristol
Click on image for further information
Literature Review
Economies of Scope
Economies of Scope
From Wikipedia, the free encyclopedia
Economies of scope are conceptually similar to Economies of scale.
Whereas economies of scale apply to efficiencies associated with
increasing or decreasing the scale of production, economies of scope
refer to efficiencies associated with increasing or decreasing the scope
of marketing and distribution.
Whereas economies of scale refer to changes in the output of a single
product type, economies of scope refer to changes in the number of
different types of products. Whereas economies of scale refer primarily
to supply-side changes (such as level of production), economies of
scope refer to demand-side changes (such as marketing and
distribution). Economies of scope are one of the main reasons for such
marketing strategies as product bundling, product lining, and family
branding.
Literature Review
Outsourcing
Outsourcing (or contracting out) is often defined as
the delegation of non-core operations or jobs from
internal production within a business to an external
entity (such as a subcontractor) that specializes in
that operation.
Outsourcing is a business decision that is often made
to lower costs or focus on competencies. A related
term, offshoring, means transferring work to another
country, typically overseas.
Offshoring is similar to outsourcing when companies
hire overseas subcontractors, but differs when
companies transfer work to the same company in
another country.
Outsourcing became a popular buzzword in business
and management in the 1990s.
Paper shredding can be
contracted out
Literature Review
Demographic and Business Trends in Asia
• Conference Themes and Policy Issues:
Regional Conference on Migration and
Development in Asia
by: Frank Laczko
• The second industrial revolution
• Internal Migration in China - China Case
Study by: Prof. Huang Ping and
Mr. Zhan Shaohua
• Labour Migration in PRC
by: Xiang Biao
• How Migrant Labour is Changing Rural China
by: Rachel Murphy
Image: Shanghai has been the template for
many of the developments. Copyright BBC
• Global Business
Literature Review
Michael Porter's Diamond
Source: Bundesministerium
fur wirtshaftliche
Zusammenarbeit und
Entwicklung
Click on image for further information and other
useful models
Literature Review
Opportunities for Growth
• Retail Banks Must Focus on Organic Growth to Remain Competitive
as Battle for Market Share Heats up Globally
• The Golden Rules of Successful Offshoring
• Succeeding with Growth: Creating Value in Banking 2005
• The Age of the Banking Titans
• Searching for Profitable Growth: Global Wealth 2005
• Delivering Profitable Growth in a Crowded Market
Global Corporate Banking 2005
From
Literature Review
Relation between Uncertainty and Risk
Relation between Uncertainty, Probability
and Risk
In his seminal work Risk, Uncertainty, and Profit,
Frank Knight (1921) established the important
distinction between risk and uncertainty:
"… Uncertainty must be taken in a sense radically
distinct from the familiar notion of Risk, from
which it has never been properly separated. …
The essential fact is that "risk" means in some
cases a quantity susceptible of measurement,
while at other times it is something distinctly not
of this character; and there are far-reaching and
crucial differences in the bearings of the
phenomena depending on which of the two is
really present and operating. … It will appear that
a measurable uncertainty, or "risk" proper, as we
shall use the term, is so far different from an
unmeasurable one that it is not in effect an
uncertainty at all."
Source: Coblands Consulting
Literature Review
Decision Analysis
Decision model
A decision method is an
axiomatic system that contains
at least one action axiom.
See also
Decision theory
Decision support
Larger Image
Source: Global Decision Analysis
CHAPTER 9
Annotated Lecture Outline 1/3
Lecture
Introduction
The move from a focus on competitive strategy to a focus on corporate strategy.
A discussion of the growth in multi-business firms with illustrative examples
Slide: Definition of corporate strategy.
Changes in Organisational Structures over Time
An explanation of the ways in which organizational structures have evolved and
developed over time and a discussion of the advantages and disadvantages of U
versus M forms of organization
Slide: Figure 9.2 plus bullet points
outlining strengths and weaknesses
of this form of organization
Slide: Figure 9.3 bullet points
outlining strengths and weaknesses
of this form of organization
Click on Image for further information
CHAPTER 9
Annotated Lecture Outline 2/3
Strategy and Structure
A discussion of the two-way relationship between strategy and structure and Alfred
Chandler’s work. A consideration of the questions raised by the rise of M forms of
organization
Slide: Bullet points of issues (page 343)
Managing the Multi-business Firm 1: The Corporate-Business Interface
An introduction to issues of business unit boundaries, groupings of businesses and
headquarter/business unit relationships. An exposition of common corporatebusiness interface styles.
Slide: Bullet points relating to three different styles (p.347)
Managing the Multi-business Firm 2: The Role of the Corporate
Headquarters
An explanation of the different ways in which the centre can add value and a
description of Gold and Campbell’s work on parenting styles
Slide: Figure 9.7
Slide: Figure 9.8
CHAPTER 9
Annotated Lecture Outline 3/3
Managing the Multi-business Firm 3: Managing the Portfolio
A brief review of portfolio models such as the familiar BCG matrix plus an
explanation of the limitations of these models and the reasons why they are no
longer popular.
Slide: Figure 9.9
Evidence and Experience
A brief review of the finding of some of the empirical work in the area,
emphasizing the difficult of measuring relatedness
Slide: bullet points on concept of ‘relatedness’
Concluding Comments
Link back to the resource-based view highlighting the connection between core
competences and relatedness. A summary of the key tensions in managing
portfolio businesses including centralization v decentralization, vertical v
horizontal focus and co-operation v competition
CHAPTER 11
Annotated Lecture Outline 1/5
Lecture
The ‘global strategies and international advantage' topic covers a lot of ground
and on undergraduate programmes it might be worthwhile covering the topic over
two lectures. The first lecture could focus on the concept globalization and the
pursuit of international competitive advantage at the nation and industry level.
The second could focus on firm level choices and the strategic options available to
international firms
Introduction – opening remarks should establish the link with previous lectures
on competitive and corporate strategy and explain this lecture’s focus on the
global arena
The Terminology of International Business – an explanation of key terms
and the introduction of the notions of internationalization and globalization.
Slide: The terminology of international business (list of key definitions drawn from
p.412 and 413)
CHAPTER 11
Annotated Lecture Outline 2/5
The Context of International Strategy – a brief review of the major trends in
trade and foreign direct investment. A discussion of the factors driving globalization
Slide: Table 11.1 and 11.2
National Competitive Advantage – an introduction to, and explanation of, the
determinants of national competitive advantage (Porter’s diamond model). Lectures
to postgraduate audiences could also include a discussion of the limitations of the
model (discussed on p.434-436 of the text) and introduce the double diamond
model.
Slide: Figure 11.1
The Internationalization process – an explanation of the ways in which domestic
firms develop their overseas activities and the evolution of different forms
engagement in foreign markets over time. A summary of the advantages and
disadvantages of these different forms of international activity, e.g. licensing, foreign
direct investment, etc.
Slide: Figure 11.2
CHAPTER 11
Annotated Lecture Outline 3/5
From international to global strategies – a reiteration of the opening themes of
internationalization, moving to a discussion of the strategic options available to
multi-national firms, introducing the notion of multi-domestic and global strategies.
Slide: Figure 11.3
Slide: Bullet points contrasting multi-domestic and global strategies
The Drivers of Globalization – a discussion of the forces that are driving the
industries and firms to go global and the limitations of, and tensions in, this process
Slide: Table 11.4
Global v Local – an outline of the
trade-offs between standardisation
and differentiation and the link
between the strategic environment
and available strategic options.
Slide: Table 11.5
Click on Image for further
information
CHAPTER 11
Annotated Lecture Outline 4/5
Strategic Choices – an explanation of Bartlett and Ghosal's four basic strategies
used to enter and compete in international environments
Slide: Figure 11.5
The Best of Both Worlds – Transnational Strategies – an outline of what is
understood by a transnational strategy and an explanation of implementing this
strategy in practice.
Strategy and Organization – a return to one of the key themes running through
the strategy literature, namely the strategy/structure debate. A discussion of the fit
between strategy and structure in international firms, paying particular attention to
Bartlett and Ghoshal's (1989) model. If time permits the lecturer may also like to
re-introduce the notions of country-specific and firm-specific advantages and
Rugman & D'Cruz's (2000) 'flagship'model
Slide: Figure 11.7
Slide: Figure 11.11 (optional)
CHAPTER 11
Annotated Lecture Outline 5/5
Managing International Organizations – an
explanation of the complexity inherent in
organizing a multi-product, multi-market firm and
a discussion of the ways in which managers may
seek to organise and control such businesses.
Slide: Bullet points for and against a matrix
structure
Slide: Figure 11.13
Concluding Comments – a summary of some of
the main themes including the nature of
globalization and the significance of national
competitive advantage, the global/local debate
and the way this connects with firm-specific
versus country-specific advantages, the tantalizing
possibility of gaining the 'best of both worlds'
through transnationality and the possibilities and
problems of developing appropriate organizational
structures and systems to make the transnational
organization a reality.
Click on Image for
further information
CHAPTER 14
Annotated Lecture Outline 1/3
Lecture - A statement of the problems of
decision making in the absence of complete
information and dealing with risk and
uncertainty. Topical examples of crafting
strategies in the face of risks and uncertainties
to highlight some of the key debates.
Examples might include 3G licences in the
mobile phone industry or risks from natural
disasters.
What is risk?
An explanation of different definitions and
perspectives on risk.
Slide: definitions of risk taken from page 530
Organisational versus Management Risk
A discussion of the location and sources of
risks and the relationship between the two.
Slide: Definitions taken from
page 533/Table 14.2
Click on image for further information.
Larger Image
Source: uscg.mil
CHAPTER 14
Annotated Lecture Outline 2/3
Prospect Theory and Risk
An explanation of the key propositions of
prospect theory and the relevance of this
theory for managers. This section may be
omitted in undergraduate lectures.
Slide: Bullet points taken from p 536.
Dealing with Uncertainty
An explanation of the difference between
risk and uncertainty and the notion of a
scale of uncertainty. A recap on PEST and
the link with Miller’s (1992) work on the
micro and macro influences that create
macro and micro level uncertainties.
Slide: Table 14.4
Click on image for further information.
Larger Image
Source:LiveWire.org
CHAPTER 14
Annotated Lecture Outline 3/3
Risk Analysis and Assessment
Techniques and Quantitative
Techniques
A brief discussion of NPV, IRR and decision
tree techniques which refer students to
other parts of their programme where the
mechanics of these techniques are dealt
with in great depth. The emphasis here is
on the link to strategic decision making in
the face of uncertainty rather than to the
techniques themselves.
Slide: Bullet points testing main
techniques analysis plus limitations.
Risk Analysis and Assessment Techniques:
Risk Indices
An explanation of the technique plus its
limitation.
Larger Image
Source: MurTon Group