2 Index Workshop Case Analysis Value Based Management Debate Case QuestionsHow to Use Your Workshop ResourcesDisclaimerLearning ObjectivesIntroduction to Multinational CorporationsIntroduction to Financial Institution and HSBCOverviewCorporate Objectives and StrategiesCorporate ObjectiveCorporate StrategiesManaging for Value 2000 – 2001Guide to Using Case StudiesBusiness DriversBusiness AnalysisBalanced ScorecardQuantitative MethodsCorporate StrategyBusiness Strategy OverviewBusiness LocationValue Based ManagementValue CreationBusiness ValueEconomic Value AddedShareholder ValueShareholder Value AnalysisValue Management ModelsCentralization, Decentralization and DelegationWhy Delegate?An Assessment of HSBC's Corporate Social Responsibility Report 2004HSBC Financial Highlights 2001, 2005Click on ImageSource: Wikipedia
3 Index Global Strategies Globalization Economics Microeconomics MacroeconomicsEconomic Value AddedEconomies of ScaleEconomies of Scale – IntegrationEconomies of ScopeOutsourcingDemographic and Business Trends in AsiaMichael Porter's DiamondOpportunities for GrowthRisk, Uncertainty and StrategyRelation between Uncertainty and RiskDecision AnalysisChapter Annotated Lecture OutlineChapter 11 - Annotated Lecture OutlineChapter 14 - Annotated Lecture OutlineClick on ImageSource: Wikipedia
4 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 PracticeJohn McGee, Warwick Business School Howard Thomas, Warwick Business School David Wilson, Warwick Business School
7 HSBC: Migrating for value Workshop Debate Workshop discussion topics have been divided into four parts according to the relevant chapters of the book:IntroductionCorporate Strategy: Adding Value in Multi-business FirmsGlobal Strategies and International AdvantageRisk, Uncertainty and StrategyYou 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 ResourcesLearning ObjectivesLearning from Case Studies: A Short Guide for Students
8 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.Measure the stakeholder value created by the function migration to Guangzhou?How could the bank learn from its earlier experiences in Guangzhou to facilitate a smoother function migration to Shanghai?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
9 HSBC: Migrating for Value How to Use Your Workshop Resources ViewingYou will need either MS PowerPoint program or PowerPoint Viewer installed on your computer. The latter may be downloaded free from Microsoft website here.NavigationThe 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.
10 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.
11 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 theirstrategic thinking skillsappreciations of the complex decision making process involved in economic strategies such as migration and outsourcingunderstanding of the economic and social impact of operational migration and/or outsourcing to firm’s business environmentanalytical and critical thinking skills by reviewing the factors that influenced corporate centre's decisions on the businesses in their portfolios
12 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 firmsevaluation of the different ways in which the corporate centre can add value in multi-business firmsappreciation of the ways in which firms can gain competitive advantage through globalizationdecision analysis and risk assessment skills with a range of techniques and frameworks that can be used for the purposetransferable skills, particularly in areas such as web search and research.Adapted from the Learning Objectives, Chapters 9, 11 and 14.
13 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.Annual Report on the Guidelines for Multinational Enterprises The 2005 edition includes a special focus on corporate responsibility in the developing worldCritiquesExamplesIn fictionSee alsoFostering Growth and Promoting a Responsible Market Economy - A G8 Declaration
14 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.
15 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 ImageSource:
16 HSBC: Migrating for Value Introduction Financial InstitutionHSBC OverviewThe Nature of the Large CorporationCorporate Objectives and StrategiesManaging for Value 2000 – 2001An assessment of HSBC's Corporate Social Responsibility Report 2004HSBC Financial Highlights 2001, 2005Guide to Using Case StudiesLarger ImageSource: Ten3Click on Image
17 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 financeFinancial economicsMacroeconomicsFinancial marketsFinancial services companiesEconomics and finance stubsHSBC Tower by flore-leval.9online.fr
18 Financial Institutions China Opinion: Spent: The End of the American EmpireThe provisions of WTO membership threaten China's antiquated banking systemSource: Yale Economic ReviewClick on Image
19 HSBC: Migrating for Value Overview IntroductionCustomer groupsPersonal Financial ServicesCommercial BankingCorporate, Investment Banking and MarketsPrivate BankingStrategyManaging for ValueManaging for GrowthLocal OperationsAmericasAsia PacificEuropeMiddle East and AfricaGlobal product lines and programmesGlobal Service CentresHSBC PremierHSBC Bank InternationalHSBCnetBrand and AdvertisingHexagon symbolSponsorshipSloganHistory of HSBC Holdings plcAwards and rankings2005See alsoExternal linksArticles
20 HSBC: Migrating for Value Overview HSBC Holdings PLC (LSE: HSBA, SEHK: 005, NYSE: HBC, Euronext: HSBC, BSX: ) is one of the largest banking groups in the world, the fifth-largest company and second-largest banking company in the world by the Forbes Global 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 ImageSource: Wikipedia
21 HSBC: Migrating for Value Overview The bank is the second largest corporation in the world in terms of assets (). 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 .Click on ImageSource: Wikipedia
22 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 ImageSource: Wikipedia
23 HSBC: Migrating for Value Corporate Objectives and Strategies Managing for ValueIntroductionCorporate Objectives 1998Corporate StrategiesLarger ImageSource: Ten3Click on Image
24 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.
25 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?
26 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 centresStrengthening 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.
27 HSBC: Migrating for Value Managing for Value 2000 - 2001 Literature ReviewManaging for ValueManaging for GrowthGlobal Leadership - White PaperLarger ImageSource: .webpronews.comClick on Image
28 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 and 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?’
29 Business Analysis Business Drivers Larger ImageSource: Metapraxis
30 Business Analysis Overview IntroductionBenefits of business analysisRoles of business analystsBusiness process improvementGoal of business analystsExternal linksAlso seeBalanced ScorecardQuantitative MethodsQuantitative Method From Wikipedia, the free encyclopediaLarger ImageSource: BizEdClick on Image
31 Business Analysis Balanced Scorecard Literature ReviewsBalanced ScorecardA comprehensive view of business performancePublic sector Balanced ScorecardPurpose of the Balanced ScorecardEvolution of the Balanced ScorecardSee alsoReferencesBalanced ScorecardClick on Image by PA Consulting Group
32 Business Analysis Quantitative Methods Quants HandbookLecture 1: Functions & Economic RelationshipsLecture 2: Economic Models/Linear ModelsLecture 3: Basic Differential CalculusLecture 4: OptimisationLecture 5: Functions of Several VariablesLecture 6: Unconstrained OptimisationLecture 7: Constrained OptimisationLecture 8: Growth & DynamicsLecture 9: Introduction to Difference EquationsSource: Bob BeachillLeeds Metropolitan UniversitySource: Brian C. McCarthy Ohio UniversityClick on Image
33 HSBC: Migrating for Value Corporate Strategy Literature ReviewsBusiness Strategy MapBusiness LocationValue Based ManagementValue CreationValue Management ModelsCentralization, Decentralization and DelegationStrategy Modelling Technique for Financial ServicesSynergyClick on image for further informationImage by The Knowledge Management AdvantageAlso see Annotated Lecture Outline
34 HSBC: Migrating for Value Global Strategies 1 Global Strategies and International AdvantageLiterature ReviewsGlobalizationClick on image for further informationGlobalizationEconomicsGlobal EconomyWorld EconomyEconomies of ScaleEconomies of Scale – IntegrationEconomies of ScopeOutsourcingDemographic and Business Trends in AsiaImage by IRCCAlso see Annotated Lecture Outline
35 HSBC: Migrating for Value Global Strategies 2 Five emerging trends will reshape global banking in next decade: IBM studyCompetitiveness of Nations: The FundamentalsThe Competition of CountriesThe Competitive Advantage of Global FinanceEconomist Country BriefingsFinancial 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 ImageSource: Agrium Inc. 2004
36 HSBC: Migrating for Value Global Strategies 3 Global Strategies and International AdvantageLiterature ReviewsMichael Porter’s DiamondOpportunities for GrowthAlso see Annotated Lecture OutlineLarger MapImage by BizEdClick on image for further information
37 HSBC: Migrating for Value Risk, Uncertainty and Strategy Literature ReviewProspect TheoryClick on image for further informationRelation between Uncertainty, Probability and RiskDecision AnalysisAlso see Annotated Lecture OutlineImage by Wikipedia
38 Literature Review Business Strategy Overview Larger MapSource: BizEd, University of BristolClick on image for further information
39 Literature Review Business Location Operations ResearchOR-Notes are a series of introductory notes on topics that fall under the broad heading of the field of operations research (OR):Facility locationSource: J E BeasleyLarger ImageSource: BizEdClick on Image
40 Literature Review Value Based Management Source: Dresden International UniversitySource: FDCClick on Images for further information
42 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.
43 Literature Review Value Creation - Business Value PhilosophyHistoryComponents of Business ValueShareholder ValueCustomer ValueEmployee ValueChannel Partner ValueSupplier ValueManagerial ValueSocietal ValueStrategies for Creating Business ValueBusiness Value of Information TechnologyCriticismsClick on Image. Larger ImageSource: Andersen
44 Literature Review Value Creation - Shareholder Value What is Shareholder Value?What Drives Shareholder Value?Shareholder Value AnalysisLarger ImageSource: Accenture
45 Literature Review Shareholder Value Analysis Larger ImageSource: agility.com.auRediscovering Shareholder Value: A Proven ApproachHow to Build Value into a MergerShareholder Value Tool
46 Literature Review Value Management Models Larger ImageSource: performgroupClick on Image for further information
47 Literature Review Value Management Models Six SigmaSix Sigma was pioneered by Bill Smith at Motorola in 1986. Originally, it was defined 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. Motorola has reported over US$17 billion savings 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. 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 ImageSource: KETCH.ca
48 Literature Review Value Management Models Six SigmaDefinitionApplication & SuccessHealthcareBankingInsuranceConstructionMilitaryMethodologyDMAICDMADVRoles Required for ImplementationExamples of Some Key Tools UsedCriticisms of Six SigmaOf its originOf the term: Six SigmaOf statisticsOf methodsOf effectsReferencesSee alsoExternal linksClick on ImageSource: QCI International. All rights reserved.
49 Literature Review Value Management Models Value ChainClick on ImageSource: Vickers
50 Literature Review Centralization, Decentralization and Delegation Advantages of CentralizationClose control of operationsUniformity of policies, practices, and proceduresBetter use of centralized expertsAdvantages of DecentralizationFaster decision-makingDecision better adapted to local conditionBetter management experience for managers that are considered for promotion to higher level managementClick on ImageCopyright: Cornell University
51 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:
52 Literature Review An Assessment of HSBC's Corporate Social Responsibility Report 2004 Business case for CSRCorporate GovernanceClick on images for further informationSource: ethicalcorp.comImage: Big banks are under fire from NGOs on lending practices on both sides of the Atlantic.Copyright: ethicalcorp.com
53 Literature Review HSBC Financial Highlights 2001, 2005 Source: Johnson MattheyAnnual Results 2005Click on image for further information.
54 Literature Review Global Strategies GlobalizationLarger MapSource: BizEd, University of BristolAlso see:World Economic ForumBankingFinancial ServicesClick on image for further information
55 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.Meaning & DebateHistoryNature and existence of globalizationCharacteristicsAnti-globalizationPro-globalization (globalism)Other usesMeasurement of GlobalizationNotesSee alsoExternal linksAlso see The Global Economy, World EconomyIllustration by Viktor Koen for Newsweek
56 Literature Review Economics Larger MapSource: BizEd, University of BristolEconomicsSource: WikipediaEconomics, 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.
57 Literature Review Microeconomics Larger MapClick on ImageImage by BizEd
58 Literature Review 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 MapClick on ImageImage by BizEd
59 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.”AdvantagesDisadvantagesEconomies of ScaleThe Global EconomySee alsoReferencesClick on ImageSource: 2006 Deloitte Development LLC.Also see Economies of Scale
60 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 - overviewStatistical indicatorsEconomyEmploymentIndustriesEnergyCross-borderGift economyCommunicationsTransportMilitarySee alsoExternal linksClick on ImageSource:
61 Literature Review Economic Value Added What Does Economic Value Added Really Mean?Click on Images for further informationSource: David Harper, (Contributing Editor - Investopedia Advisor)Larger ImageLarger Image
62 Literature Review Economies of Scale Larger MapSource: BizEd, University of BristolEconomies of ScaleSource: WikipediaEconomies of ScaleEconomies of Scale refers to the decreased per unit cost as output increases. Click on image for further information.
63 Literature Review Economies of Scale - 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 BristolClick on image for further information
64 Literature Review Economies of Scope From Wikipedia, the free encyclopediaEconomies 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.
65 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
66 Literature Review Demographic and Business Trends in Asia Conference Themes and Policy Issues: Regional Conference on Migration and Development in Asia by: Frank LaczkoInternal Migration in China - China Case Study by: Prof. Huang Ping and Mr. Zhan ShaohuaLabour Migration in PRC by: Xiang BiaoHow Migrant Labour is Changing Rural China by: Rachel MurphyThe second industrial revolutionImage: Shanghai has been the template for many of the developments. Copyright BBCGlobal Business
67 Literature Review Michael Porter's Diamond Source: Bundesministerium fur wirtshaftliche Zusammenarbeit und EntwicklungClick on image for further information and other useful models
68 Literature Review Opportunities for Growth Retail Banks Must Focus on Organic Growth to Remain Competitive as Battle for Market Share Heats up GloballyThe Golden Rules of Successful OffshoringSucceeding with Growth: Creating Value in Banking 2005The Age of the Banking TitansSearching for Profitable Growth: Global Wealth 2005Delivering Profitable Growth in a Crowded Market Global Corporate Banking 2005From
69 Literature Review Relation between Uncertainty and Risk Relation between Uncertainty, Probability and RiskIn 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
70 Literature Review Decision Analysis Decision modelA decision method is an axiomatic system that contains at least one action axiom.See alsoDecision theoryDecision supportLarger ImageSource: Global Decision Analysis
71 CHAPTER 9 Annotated Lecture Outline 1/3 IntroductionThe move from a focus on competitive strategy to a focus on corporate strategy. A discussion of the growth in multi-business firms with illustrative examplesSlide: Definition of corporate strategy.Changes in Organisational Structures over TimeAn 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 organizationSlide: Figure 9.2 plus bullet points outlining strengths and weaknesses of this form of organizationSlide: Figure 9.3 bullet points outlining strengths and weaknesses of this form of organizationClick on Image for further information
72 CHAPTER 9 Annotated Lecture Outline 2/3 Strategy and StructureA 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 organizationSlide: Bullet points of issues (page 343)Managing the Multi-business Firm 1: The Corporate-Business InterfaceAn introduction to issues of business unit boundaries, groupings of businesses and headquarter/business unit relationships. An exposition of common corporate-business interface styles.Slide: Bullet points relating to three different styles (p.347)Managing the Multi-business Firm 2: The Role of the Corporate HeadquartersAn explanation of the different ways in which the centre can add value and a description of Gold and Campbell’s work on parenting stylesSlide: Figure 9.7Slide: Figure 9.8
73 CHAPTER 9 Annotated Lecture Outline 3/3 Managing the Multi-business Firm 3: Managing the PortfolioA 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 9.9Evidence and ExperienceA brief review of the finding of some of the empirical work in the area, emphasizing the difficult of measuring relatednessSlide: bullet points on concept of ‘relatedness’Concluding CommentsLink 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
74 CHAPTER 11 Annotated Lecture Outline 1/5 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 firmsIntroduction – opening remarks should establish the link with previous lectures on competitive and corporate strategy and explain this lecture’s focus on the global arenaThe 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)
75 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 globalizationSlide: Table 11.1 and 11.2National 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 of the text) and introduce the double diamond model.Slide: Figure 11.1The 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
76 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 11.3Slide: Bullet points contrasting multi-domestic and global strategiesThe 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 processSlide: Table 11.4Global 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 11.5Click on Image for further information
77 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 environmentsSlide: Figure 11.5The 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'modelSlide: Figure 11.7Slide: Figure (optional)
78 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 structureSlide: Figure 11.13Concluding 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
79 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 530Organisational versus Management RiskA discussion of the location and sources of risks and the relationship between the two.Slide: Definitions taken from page 533/Table 14.2Click on image for further information.Larger ImageSource: uscg.mil
80 CHAPTER 14 Annotated Lecture Outline 2/3 Prospect Theory and RiskAn 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 UncertaintyAn 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 14.4Click on image for further information.Larger ImageSource:LiveWire.org
81 CHAPTER 14 Annotated Lecture Outline 3/3 Risk Analysis and Assessment Techniques and Quantitative TechniquesA 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 IndicesAn explanation of the technique plus its limitation.Larger ImageSource: MurTon Group