International Business
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Gaspar2eChapter09.pptx© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Chapter 9 Control of Global Business
Introduction to Global Business
Discuss the importance of mission statements and the difference between shareholder and stakeholder orientations in such statements and in general corporate strategy formulation.
Explain tactical versus operational plans in implementing corporate strategy, and Miles’ and Snow’s four basic types of longer-term strategic implementation.
Analyze various impediments to the coordination of strategic implementation that might exist for global businesses, and the positive role knowledge management and systems can play in this regard.
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After studying this chapter, you should be able to:
Discuss and analyze various types of control systems utilized by global businesses including bureaucratic controls, interpersonal controls, output controls, and measurement systems like six sigma initiatives.
Analyze the role that organizations’ culture plays in controlling organizational activities, and how, when necessary, organizational cultures can potentially be changed.
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After studying this chapter, you should be able to:
Strategy Formulation
Mission statement
A written statement of why a company exists and what it plans to accomplish
Provides general guidelines for the firm’s strategy formulation and decision-making processes
Useful in monitoring the firm’s performance against its stated mission and goals
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Shareholders versus Stakeholders
Shareholder model of strategy formulation
The key strategic purpose of a business is to maximize financial returns for its owners/shareholders.
Stakeholder model of strategy formulation
Businesses exist to benefit not just their shareholders, but also various groups, such as employees and customers, that have a meaningful stake in their operations.
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EXHIBIT 9.1 SHAREHOLDERS MODEL OF STRATEGY FORMULATION
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EXHIBIT 9.2 STAKEHOLDER MODEL OF STRATEGY FORMULATION
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Strategy Implementation
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Operational Plans
Tactical Plans
Strategic Plans
Very short-term (less than one year) plans that support annual goals
One-to-three-year plans formulated for implementing strategic goals
Long-term plans (five or more years) for achieving strategic goals
Miles and Snow Typology
Extend their success through global expansions and finding new market opportunities
Prospectors
Concentrate on existing operations and defend their home turfs
Defenders
Respond to strategic actions initiated by competitors
Reactors
Take a middle ground between being prospectors and defenders
Analyzers
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Coordination
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Impediments to Coordination
Legal
Political
Economic
Technological
Other impediments
Knowledge Management and Systems
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Tacit Knowledge
Explicit Knowledge
Absorptive Capacity
Knowledge that is informal in nature and difficult to communicate
Knowledge that is codifiable and easy to communicate or write down
The ability of organizations to recognize, assimilate, and apply new knowledge
Control Systems
Bureaucratic controls
Systems of rules and regulations promulgated within a global business
Interpersonal controls
Involves executives engaging in personal contact with subordinates as a way of managing an organization
Output controls and measurement
Involves establishing specific goals on given metrics and then measuring to what extent these goals are being achieved at certain time intervals
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Output Controls and Measurement
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Controlling and Measuring Output
Profits
Growth
Productivity
Market share
Quality control
Corporate social responsibility
Organizational Culture and the Change Control Function
Organizational culture
The personality of a given organization, its shared norms and values
Types of organizational culture:
Strong cultures can either support or resist change.
Weak cultures provide little guidance to employees.
Organizational change
Involves implementation of a different business or cultural path for an organization
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mission statement
shareholder model of strategy formulation
stakeholder model of strategy formulation
operational plans
tactical plans
prospectors
defenders
reactors
analyzers
tacit knowledge
explicit knowledge
absorptive capacity
bureaucratic controls
interpersonal controls
output controls and measurement
organizational culture
organizational change
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Key Terms
