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6430 – MNE Strategic Framework

6430 – MNE Strategic Framework. IBUS 6430 Professor Charles McMillan September 13, 2004. Performance. Theoretical Output: Knowledge, Change, Resource Allocations, Will, Finance,Luck. Strategy Gap. Actual Output: Growth, Benchmarks. Time. Corporate Strategy And Levels of Analysis.

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6430 – MNE Strategic Framework

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  1. 6430 – MNE Strategic Framework IBUS 6430 Professor Charles McMillan September 13, 2004

  2. Performance Theoretical Output: Knowledge, Change, Resource Allocations, Will, Finance,Luck Strategy Gap Actual Output: Growth, Benchmarks Time

  3. Corporate Strategy And Levels of Analysis High Impact Global: Energy, Internet, Technology, Etc. Regional: e.g. Europe, Latin America Industry Impacts: Technology, Financial Corporate Strategy Competitive Advantage

  4. 1914 Russia, Central Asia Canada: (Immigrants & Raw Materials) USA: (UK Capital & Markets) Europe: Finance & Capital:Britain Germany France India, SE Asia China: Closed Japan Middle East Africa: Commodities Latin America: Markets

  5. 1945 Canada: Immigrants, Commodities USA: Capital, Technology, Markets USSR + Eastern Europe (Closed, Self-Sufficient) Western Europe: Technology, Markets Middle East (Oil) China Latin America Japan: Markets, Technology Africa: Commodities India, Southeast Asia

  6. 2000 North America (Nafta) EU Japan, SE Asia Russia India China Brazil, S. America

  7. Countries and The Wealth Creation Process Factor Endowments: D. Ricardo Wealth Creation: Per Capita GNP Scale & Specialization: A. Marshall Science-Based Innovation: Schumpeter

  8. Economic Growth: The Anatomy of Miracle Development Policy Choices Competitive Discipline Growth Outcomes Fundamentals Macro-economic Stability Secure Financial System Low Inflation Openness to Foreign R&D Agricultural Policies Accumulation Human Capital High Savings High Investment Sustained Growth Export Growth Demographic Transition Agricultural Transformation Rapid Industrialization Markets Export Competition Domestic Competition Resource Allocation Labour Markets High ROIs Selective Interventions Export Push Directed Credit Selective Promotion Financial Repression Contested Policies Export[ Credit Investment Coordination Information Exchange Income Equality Reduction of Poverty Social Indicators Institutions Technocratic Insulation Quality Civil Service Monitoring Productivity Technology Catch Up Rapid Technological Change Source: World Bank:The East Asian Miracle: Economic Growth and Public Policy

  9. Globalization: A Management Gap? • Sources of • Wealth: • Factor Endowments • Scale Economies • Science Innovation Per Capita GDP Impact Globalization Gap? Management Innovation USA: 100,000 MBAs Canada: 7000 MBAs China: 10,000 MBAs

  10. Economic Freedom and Wealth $6000 $4000 $2000 Countries grouped according to Economic Freedom ranking: Income per $2000; Least Free = Poorest 10% share of Total Income Least Free Most Free Source: Economic Freedom Network

  11. Scorecard: The Move to The Invisible Continent SOURCE: Ohmae, 1999

  12. Global Growth Model for Industries Country Growth Value Chain’s “sophistication” Adjustment Domestic Environment Competition New Rules and Players International Expansion Entry – Exit Barriers Adjustment Market Openness Time

  13. Transnational Organization: The Corporate Center Distributed Resources & Capabilities Complex Coordination: Cooperation & Shared Decision Making, Culture Operations abroad Appendages to HQ Assets, Decisions Decentralized, but HQ controlled Tight Planning and Control linkages Flows of Resources, People and Information among Independent Units International Organization Global Organization

  14. Global Integration Tilting to International Tilting to Global Worldwide Learning National Responsiveness Tilting to Multinational

  15. Strategy and Operations Strategy Strong Flawed Value Creation Bad Management Strong Operations Weak Poor Execution Value Destruction

  16. Why Flawed Strategy? • Protected Market • Technology Obsolescence • Poor Management/Leadership • Slack: Easy Access to Resources • Bad Business Plan: Financial Model • All of the Above

  17. Why Poor Execution? • Deming: 85-15 Rule • Organizational Structure, Design • HR – Training • Technology-People Systems, Interface • Poor Learning Tools • All of the Above

  18. Global System Competition (Oil, China) Competitive Dynamics Technology Disruption Changing Dynamics Political Frameworks (Cold War, Terrorism, Third World, etc.) Internet, Communications Revolution Dilemmas for Managers

  19. Course Preparation • Course Text • Text Readings • Outside Readings/Handouts • Cases • Class Preparation • Writing Cases • Course Project

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