Transcript Informationsverteilungen

International Strategy
and Organization
(Part I)
Josef Windsperger
Professor of Organization and Management
Center of Business Studies
Lecturer:
Josef Windsperger
E-mail:
Homepage:
[email protected]
www.univie.ac.at/IM
Phone:
00431-4277-38180
Content
Part I
1 MNC as Global Network: Existence and Evolution
1.1 Product Life Cycle Theory
1.2 Transaction Cost Theory
1.3 Eclectic Theory
1.4 Network Approach
2 Culture, Strategy and Organization of the MNC
2.1 Country and Organization Culture of the MNC
2.2 Strategy and Organization Design of the MNC
Content
Part II
3 Management of Networks of the MNC
3.1 International Licensing
3.2 International Strategic Alliances, Joint Ventures and Consortia
3.3 International Franchising-Networks
3.4 Networks and M&As
3.5 Internationalization through Countertrade
3.6 International Clusters
3.7 Networks versus Hierarchies of the MNC of the Future
4 Market Entry Decision of the MNC
1 MNC als Global Network
1.1 Product Life Cycle Theory
Vernon (1966):
Extension of the product life cycle view to
explain the internationalization of the firm.
Product Life Cycle
1.2 Transaction Cost Theory
Transaction costs =
» costs of using the price mechanism (Coase 1937)
Search costs
Planning period:
Ex ante costs
Information costs
Costs of decision making
Negotiation costs
Transaction Costs
Contract execution
period: Ex post
costs
Monitoring or control costs
Contract execution costs
Adjustement costs
Transaction Cost Theory
O. E. Williamson (1975)
Atmosphere
Bounded Rationality
Uncertainty/Complexity
‚Information Impactedness‘
Opportunism
Transaction Specifity
Market and Hierarchy
CC
Transaction costs
Organizational costs
(Setup-costs)
Degree of organization
Quasi-Rents, Specific Investments and
Hold-up
g BA
A
B
g AB
D
g AC
g BD
C
B‘s profit with A: gBA
A‘s profit with B: gAB
A‘s quasi-rent: QRAB = (gAB – gAC)
B‘s quasi-rent: QRBA = (gBA – gBD)
Quasi-rent of A (QRBA) =
HOLD-UP Potential of B (HB)
Transaction Cost Theory of the MNC - David
Teece
1.3 Dunning‘s Eclectic Theory
 Definition:
– Eclectic Theory offers a framework to identify
firm specific and industry specific
characteristics, referring to
ownership, location and internalization advantages
(OLI).
Eclectic Theory
Ownership
Advantages
Internalization
Advantages
Local
Advantages
Export
YES
NO
YES
Direct
Investment
YES
YES
YES
1.4 Network Approach
 Internationalization
Process
– current position in the international market
– level of internationalization of the other firms
– Four internationalization situations:
» The early starter
» The late starter
» The lonely international
» The international among others
Degree of internationalization of the market
LOW
The Early Starter
Degree
of the
Internationalization
of the firm
LOW
HIGH
The Lonely
International
HIGH
The Late
Starter
The
International
Among
Others
2 Culture, Strategy and Organization of
MNC
2.1 Country and Organization Culture
•“Culture is the collective programming of the mind.”
Geert Hofstede
Hofstede
Individualism/collectivism
Masculinity/femininity
Uncertainty avoidance
Power distance
Power Distance
Individualism
beschreibt
beschreibt
The extent to which
people tollerate unequal
distribution of power in
economy and society.
The degree of integration
of individuals in groups
Individualism:
Individual values,
individual responsibility,
goal orientation
Collectivism:
Group values, loyal
behaviour, common
responsibility
Percentage opting for Individual Freedom
30%
E g yp t
32%
37%
M e xic o
In d ia
39%
J a pa n
F ra n c e
41%
C h in a
41%
44%
In d o n e s ia
52%
It a ly
53%
G e rm a n y
60%
R u s s ia
61%
UK
64%
F in la n d
65%
N e t h e rla n d s
67%
69%
D e n m a rk
US A
71%
C a na da
89%
Is ra e l
0%
20%
40%
60%
80%
100%
120%
Masculinity
Uncertainty Avoidance
beschreibt
beschreibt
How tolerant are the people
concerning new and
unstructured situations?
How strong are masculin
values (for instance
achievement, success,
money) compared to
feminin values (security,
life quality, social
contact)?
high UA: Many Rules,
regulations and legal norms
to minimize risk
Model of Hofstede
Country Comparison
Uncertainty Avoidance
Formalization
low
Village market (nordic)
-Decentralized, flexible
-Coordination through
personal and informal
communication
Well-oiled machine
(Germanic)
-Decentralized decision
making
-Strong role of experts
-Coordination through rules
and routines
Family or tribe
(Asiatic)
-Centralized decision making
-Loyal, personal relationships
-Social control (clan control)
Traditional bureaucracy
„Pyramid of people“ (Latin)
-Centralized decision making
-Central personal coordination
-Informal relationships
high
low
Hierarchy
high
Power
distance
Trompenaars‘ Cultural Model
Decentralization
Fulfillment-oriented Project-oriented
culture
culture
INCUBATOR
GUIDED MISSILE
Person
Task
FAMILY
Power-oriented
culture
EIFFEL TOWER
Rule-oriented
culture
Centralization
Family Culture
 Power-oriented
culture
 Diffuse relationships
 Status is ascribed (parent figures)
 People are seen like family members
 Father makes the changes
 Management by subjectives
Eiffel Tower Culture
 Role-oriented
culture
 Specific relationships
 Status is ascribed to superior roles
 Rationally thinking
 People are seen like human ressources
 Change through rules and procedures
 Management by job description
 Everything is planned, structured
Guided Missile Culture
 Project-oriented
culture
 Egalitarian and task-oriented
 Specific relationships
 Problem centered way of thinking
 People are seen as experts
 Management by objectives
Incubator Culture
 Self-fulfilment
oriented culture
 Diffuse relationships
 Thinking is process-oriented and creative
 People are seen as co-creators
 Management by enthusiasm
2.2 Strategy und Organization design of the MNC
2.2.1 Strategies of the MNC
What is a competitive advantage?
Sustainable cost and/or revenue advantages
compared to the best competitor
Ressources
Capabilities
Strategy
Industry structure
I.
Strategic Approaches
Porter‘s Model
Competitive advantage through low costs and differentiation
monopolistic Rents
Low-cost, differentiation and focus strategy
Resource-Based Theory (Barney, Grant)
1. Identify and classify
the firm‘s resources
Resources
2. Identify the firm‘s
capabilities
Capabilities
3. Appraise the rent-generating
potential of resources
and capabilities
Competitive
Advantage
5. Identify resource gaps
which need to be filled
Invest in replenishing,
augmenting and upgrading
the firm‘s resource base
Strategic Rents
4. Select a strategy which best
exploits the firm‘s resources
and capabilities relative to
external opportunities.
Strategy
II. International Strategies:
Perlmutter
Ethnocentric Strategy
Polycentric Strategy
Geocentric Strategy
Regiocentric Strategy
Perlmutter‘s Model
Bartlett/Ghoshal-Model
high
Global
Strategy
Cost pressures
International
Strategy
Transnational
Strategy
Multinational
Strategy
low
high
low
Pressure for local
responsiveness

International strategy
– create value by transferring valuable skills and
products to foreign markets
– differentiated products developed at home and
transferred to other markets
– sources of core competencies (e.g. R&D) centralized,
others decentralized
HK
UK
Chile
USA
India
Japan
Mexico

Multidomestic/multinational strategy
– decentralized and nationally self-sufficient
– exploiting local opportunities
– value creation activities (production, marketing and
R&D) in each major national market
HK
UK
Chile
USA
India
Japan
Mexico

Global strategy
– focus on profitability
– prefer a low-cost-strategy
– standardized products, aggressive pricing
– do not customize their products
– implementing parent company strategy
HK
UK
Chile
USA
India
Japan
Mexico

Transnational strategy
– transfer of skills from the home company to the foreign
subsidiaries and vice versa
– knowledge developed jointly and shared worldwide,
“global learning”
– interdependent and specialized
HK
Chile
UK
USA
Japan
India
Mexico
Yip‘s Model: A Framework for Analyzing
‚Globalization‘
Locus of decision making power on corporate,
business, functional strategy issues
World
product
Corporate
headquarters
Regional centers
National units
1
4
7
5
8
Global strategy
Actual product
Characteristics
Regionbased or
adapted
product
Nationbased or
adapted
product
2
Regional strategy
3
6
9
National strategy
2.2.2 Strategy and Organisation Design
Chandler (1962): „Structure follows Strategy“
Matrix structure
Product-/geographic Structure
Differentiation strategy
Functional Structur
Low-cost strategy
Bartlett/Ghoshal-Model
‚Structure follows Strategy‘
Global
Strategy
International
Strategy
Transnational
Strategy
Multinational
Strategy
Transnational
Structure
Global
Product
Structure
Matrix
Structure
International
Division
Multidivisional
Structure
International Division
CEO
HR
Finance
R&D
Int. Division
Europe
Middle East
Brazil
Staff
Global Geographic Structure
CEO
Pacific
Division
European
Division
Latin American
Division
Corporate
Staff
Long Term
Planning
Product
Coordination
ABB
Comparison
Global Heterarchy (Hedlund)
Transnational Organization (Bartlett/Ghoshal)
Country competence centers
Local and global advantages
Decentralisation of decision making
Centralization of control
IT-enabled strategy
Organization culture as clan control
Transnational Form
Objective:
Globally integrated and locally responsive

Global
Product
Form
Multidomestic
Form
Transnational
Form