1. Strategizing Around the Globe1
Strategizing Around the Globe
chapter
Part I: Foundations of Global Strategy
Global Strategy Mike W. Peng
Copyright © 2009 Cengage. PowerPoint Presentation by John Bowen, Columbus State Community College All rights reserved.

2. Outline A global global-strategy book Why study global strategy?
What is strategy?
Fundamental questions in strategy
What is global strategy?
What is globalization?
Global strategy and globalization at a crossroads
Copyright © 2009 Cengage. All rights reserved.

3. A Global Global-Strategy Book
Text departs from traditional view of global strategy
Important to respond to local needs
Traditional view of global strategy is incomplete and unbalanced
Sacrifices local responsiveness and global learning
Ignores how domestic firms compete with each other and with foreign entrants
Traditional global strategy is only appropriate for large MNEs in developed countries
It is dangerous to ignore less developed economies
Copyright © 2009 Cengage. All rights reserved.

4. Why Study Global Strategy?
Job and career aspiration opportunities
Awareness of what is going on in the world
Avoid downside risks of globalization
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5. What is Strategy? Origin-Greek word (strategos)-art of the general
Sun Tzu, Chinese military strategist in 500 B.C.
Modern-day application to business and competition dates to the 1960s
Plan versus Action - strategy is “explicit, rigorous formal planning” versus “a set of flexible, goal-oriented actions”
Strategy as Theory-how to compete successfully
Firms have both intended and emergent strategies
One firm’s strategies may not work in all situations
Past success does not guarantee future success
It is often difficult to change strategy
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6. What is Strategy? Cont’d
Strategy should give coherence to decisions and actions
Managers must exert effective strategic leadership
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7. Strategy STRATEGY AS PLAN STRATEGY AS ACTION
“Concerned with drafting the plan of war and shaping the individual campaigns and, within these, deciding on the individual engagements” (Von Clausewitz, 1976)1
“A set of concrete plans to help the organization accomplish its goal” (Oster, 1994)2
STRATEGY AS ACTION
“The art of distributing and applying military means to fulfill the ends of policy” (Liddel Hart, 1967)3
“A pattern in a stream of actions or decisions” (Mintzberg, 1978)4
“The creation of a unique and valuable position, involving a different set of activities ... making trade-offs in competing ...creating fit among a company’s activities” (Porter, 1996)5
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8. Strategy, Cont’d. STRATEGY AS INTEGRATION
“The determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals” (Chandler, 1962)6
“An integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage” (Hitt, Ireland, and Hoskisson, 2003)7
Sources: Based on (1) K. Von Clausewitz, 1976, On War, vol. 1 (p. 177), London: Kegan Paul; (2) S. Oster, 1994, Modern Competitive Analysis, 2nd ed. (p. 4), New York: Oxford University Press; (3) B. Liddell Hart, 1967, Strategy, 2nd rev. ed. (p. 321), New York: Meridian; (4) H. Mintzberg, 1978, Patterns in strategy formulation (p. 934), Management Science, 24: 934–948; (5) M. Porter, 1996, What is strategy? (pp. 68, 70, and 75), Harvard Business Review, 74(6): 61–78; (6) A. Chandler, 1962, Strategy and Structure (p. 13), Cambridge, MA: MIT Press; (7) M. Hitt, D. Ireland, & R. Hoskisson, 2003, Strategic Management, 5th ed. (p. 9), Cincinnati: Thomson South-Western
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9. The Essence of Strategy
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Figure 1.2

10. Our definition: Strategy as theory
Integrating both planning and action schools
Leveraging the concept of “theory”
A theory serves two purposes: Explanation and prediction
Requiring replications and experimentations
To establish the temporal (time-related) and geographic limits of an existing theory
Understanding the difficulty of strategic change
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11. Fundamental Questions in Strategy
Why do firms differ?
Cultural differences between Western firms and Japanese companies
Networks of relationships have powerful effect - keiretsu, guanxi, chaebol, blat
How do firms behave?
Industry-based view - focus on competitive forces within an industry that impact all firms
Resource-based (capabilities) view - focus on internal strengths and weaknesses, firm specific resources and capabilities
Institution-based view - focus on government and societal forces
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12. Fundamental Questions in Strategy cont’d
What determines the scope of the firm?
What determines the international success or failure of firms?
Industry-based view - degree of competitiveness in the industry
Resource-based view - firm specific differences in capabilities
Institution-based view - institutional forces, such as economic reforms and government policy
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13. The “Strategy Tripod” Three Leading Perspectives on Strategy
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Figure 1.3

14. What Is Global Strategy?
Provide standardized products and/or services on a worldwide basis (i.e., traditional view)
Any strategy outside one’s home country
Our definition of global strategy:
Strategies of firms around the globe
Both international and non-international (domestic)
Both developed and emerging economies
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15. What is Globalization? A new phenomenon since the late 20th century?
A part of long-run human history?
A pendulum view: Transportation and communication revolutions + breakdown of artificial barriers in trade and investment
A process similar to the swing of a pendulum: Postwar history
Semiglobalization?
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16. Global Strategy and Globalization at a Crossroads
Three Defining Events - have brought corporate social responsibility, ethics, and governance to the forefront of strategic decisions
Anti-globalization protests - lost jobs, downward pressure on wages for unskilled labor, environmental destruction
Terrorist attacks
Corporate governance crisis (Asian financial crisis, U.S. scandals)
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17. Global Strategy and Globalization at a Crossroads, Cont’d.
Know Yourself, Know Your Opponents
Understand strengths AND limitations
Recognize the social, political, and environmental costs associated with globalization
Current business school students exhibit values and beliefs different from the general public
Be aware of bias and strategic blind spots
Do not ignore non-government organizations (NGOs)-view them as partners
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18. Organization of the book
Part I: Foundations of global strategy
Chapter 1: Strategizing around the globe
Chapter 2: Managing industry competition
Chapter 3: Leveraging resources and capabilities
Chapter 4: Emphasizing institutions, cultures, and ethics
Part II: Business-level strategies
Chapter 5: Growing and internationalizing the entrepreneurial firm
Chapter 6: Entering foreign markets
Chapter 7: Making strategic alliances and networks work
Chapter 8: Managing global competitive dynamics
Part III: Corporate-level strategies
Chapter 9: Diversifying, acquiring, and restructuring
Chapter 10: Strategizing, structuring, and learning around the globe
Chapter 11: Governing the corporation around the globe
Chapter 12: Strategizing with corporate social responsibility
Copyright © 2009 Cengage. All rights reserved.