Gcs Amend 01.Vp

University of Sunderland Master of Business Administration (MBA) Global Corporate Strategy Published by The University of Sunderland The publisher endeavours to ensure that all its materials are free from bias or discrimination on grounds of religious or political belief, gender, race or physical ability. These course materials are produced from paper derived from sustainable forests where the replacement rate exceeds consumption. The copying, storage in any retrieval system, transmission, reproduction in any form or resale of the course materials or any part thereof without the prior written permission of the University of Sunderland is an infringement of copyright and will result in legal proceedings. © University of Sunderland 2004 Every effort has been made to trace all copyright owners of material used in this module but if any have been inadvertently overlooked, the University of Sunderland Press will be please to make the necessary arrangement at the first opportunity. These materials have been produced by the University of Sunderland Business School in conjunction with Resource Development International. Global Corporate Strategy Contents How to use this workbook Introduction Unit 1 Strategy Defined and Key Concepts Introduction 1 Definition of Strategy 2 Levels of Strategy 5 Strategic Concepts 7 Strategic Thinking 9 Strategic Models 12 Summary 34 Unit 2 Strategic Capability Introduction 37 The Different Management Perspectives 38 Portfolio Management 39 The Core competencies perspective 48 Divestment 51 Summary 57 Unit 3 Globalisation Introduction 61 What is Globalisation 61 The Globalisation of Markets 66 The Globalisation of Production 68 Drivers of Globalisation 70 The Changing Demographics of the Global Economy 73 The Globalisation Debate: Prosperity or Impoverishment? 76 Managing in the Global Marketplace 78 Summary 88 Unit 4 ‘Altering the Boundary’ – Alliances and Mergers Introduction 91 Paradox of Competition and Co-operation 92 Global Strategic Alliances 92 Mergers and Acquisitions 104 Summary 131 Unit 5 Value Management Introduction 133 Paradox of Profitability and Responsibility 134 The Concept of Value 134 Value Management 137 What is a Value-Driven Approach 141 Summary 151 Unit 6 Corporate Governance and Ethics Introduction 155 Corporate Governance 156 Business Ethics 173 Summary 188 Unit 7 Managing Complexity Introduction 191 Paradox of Control and Chaos 192 Systems Thinking 193 Soft Systems Methodology (SSM) 200 Strategic Control? 204 Summary 207 Unit 8 Knowledge Management Introduction 209 Theoretical Concepts on Knowledge 210 Knowledge 212 Knowledge Transfer 215 Practical steps to promote Knowledge Management 218 Summary 237 Global Corporate Strategy Global Corporate Strategy – Contents Unit 9 Innovation Introduction 239 Innovation strategies 240 Innovation and established companies 241 Conclusion 248 Summary 255 Unit 10 Strategic IT and e-Business Introduction 259 The Link between Business and IT Strategy 260 IT Strategy Methodology 264 Summary 275 References 276 5 How to use this workbook This workbook has been designed to provide you with the course material necessary to complete Global Corporate Strategy by distance learning. At various stages throughout the module you will encounter icons as outlined below which indicate what you are required to do to help you learn. This Activity icon refers to an activity where you are required to undertake a specific task. These could include reading, questioning, writing, research, analysing, evaluating, etc. This Activity Feedback icon is used to provide you with the information required to confirm and reinforce the learning outcomes of the activity. This icon shows where the Virtual Campus could be useful as a medium for discussion on the relevant topic. This Key Point icon is included to stress the importance of a particular piece of information. It is important that you utilise these icons as together they will provide you with the underpinning knowledge required to understand concepts and theories and apply them to the business and management environment. Try to use your own background knowledge when completing the activities and draw the best ideas and solutions you can from your work experience. If possible, discuss your ideas with other students or your colleagues; this will make learning much more stimulating. Remember, if in doubt, or you need answers to any questions about this workbook or how to study, ask your tutor. i Global Corporate Strategy Preface Corporate Strategy is a very wide and all encompassing subject area. One only has to look at the relative content of individual key texts in this area (e.g. De Wit & Meyer, Lynch, Johnson & Scholes, etc.) to appreciate the volume of material that has been written over the years. However, relatively speaking, it is the newest area of management research. Initial work in strategy took place in the early sixties. In their book Strategy Safari, Mintzberg, Alhstrand and Lampel (1998) break down strategy theory development into ten schools of thought and this provides a thoughtful starting point for the study of this module. It also indicates a wide range of divergent views on the subject. The ten schools are; 1 The Design school – strategy seeks to match internal capabilities to external possibilities 2 The Planning school – strategy is a formal, planned process 3 The Positioning school – only a few key strategies are desirable in any given industry (generic strategy) and these are formulated by analytical processes 4 The Entrepreneurial school – strategy is a ‘visionary’ process where an organisation is responsive to the dictating individual 5 The Cognitive school – strategy is a mental process dependant upon what the strategy process means in the mind of the strategist (human cognition) 6 The Learning school – strategies emerge as people / organisations come to learn about a situation as well as their organisation’s capability of dealing with it 7 The Power school – the use of power and politics to negotiate strategies favourable to particular interests 8 The Cultural school – strategy as a collective process of social interaction, based on the beliefs and understandings shared by the members of an organisation 9 The Environmental school – the business environment becomes the central actor in the strategy making process – the organisation must respond to these forces iii Preface Global Corporate Strategy 10 The Configuration school – strategy making is a process of leaping from one state to another with relative stability in between All of these schools have key writers. However, it would be erroneous to regard these schools as being ‘separated’ or that it is right to look at these in isolation. Indeed, it is the opposite. Each perspective is inter-mingled with one another and interacts over time. Mintzberg, Alhstrand and Lampel use the analogy of an elephant to emphasise the holistic nature of strategy - one cannot get a clear picture of ‘the elephant’ by looking at each separate part of its body. Hence, as a student of strategy, you must keep in mind ALL TEN schools. The ten schools can be split into two ‘types’. Schools 1-3 can be seen as ‘prescriptive’, that is to say they are based on the belief that Corporate Strategy is a planned, analytical hard data process. On the other hand, Schools 4-10 can be seen as ‘descriptive’. In these areas, writers believe that strategy is a complex, uncertain, subjective and ‘soft’ data process. There is a range of theory and academic writing to support all of these perspectives. Another range of key perspectives is related to your core textbook supplied with these materials. Whereas major texts such as Johnson & Scholes, and Lynch take a ‘linear’ view of strategy by presenting concepts ‘one after the other’, de Wit & Meyer (2004) analyse a series of ‘paradoxes’. They define the opposite ends of a continuum, leaving the student with the tools to analyse case studies and decide for themselves the key strategic perspective for organisations. This approach is particularly important for this module. Students will be expected to produce an academic and fully referenced argument seeking to define the key strategic perspectives of organisations. The argument, and supporting evidence, produced is key – stating an appropriate school of thought or positioning an organisation in relation to a strategic paradox is not the key issue. The ability to analyse (rather than describe) strategy and coming to a reasoned judgement is the overriding objective in assessment. The paradoxes addressed by de Wit & Meyer (2004) are; · The Paradox of Logic and Creativity (Strategic Thinking – Rational vs. Generative). · The Paradox of Deliberateness and Emergentness (Strategy Formulation – Planned vs. Incremental). · The Paradox of Revolution and Evolution (Strategic Change – Continuous vs. Discontinuous). · The Paradox of Markets and Resources (Business Level Strategy – Outside-In vs. Inside-Out). iv Global Corporate Strategy Preface · The Paradox of Responsiveness and Synergy (Corporate Level Strategy – Portfolio vs. Core Competence). · The Paradox of Competition and Co-operation (Network Level Strategy – Discrete vs. Embedded Organisations). · The Paradox of Compliance and Choice (Industry Context – Industry Evolution vs. Industry Creation). · The Paradox of Control and Chaos (Organisational Context – Leadership vs. Dynamics). · The Paradox of Globalisation and Localisation (International Context – Global Convergence vs. International Diversity). · The Paradox of Profitability and Responsibility

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