Global Strategy and Organization

Readings

This subject draws on a mix of time-tested, current and forward-looking materials. The frameworks and models for the subject are drawn from various authors including Bartlett & Ghoshal; Doz, Santos & Williamson; Ghemawat; Johanson & Vhalne; Lessard; and Porter. We selected a set of case studies of companies from different origins, different industries, and different ages. These are well-known companies and industries, and this should allow us to focus on their internationalization, global strategy and organization. Other companies will be used as examples during class sessions.

LEC #	TOPICS	READINGS
1	Going “Global” and Being “Global”: To be global or not to be global—is that one question? Study Questions Compare the notions of “globalization” and “global” in the classic and influential article by Levitt (1983), in the bestselling book by Friedman (2005) and in the celebrated vision of IBM’s Palmisano (2006). What do you think? Consider the car industry, the perfumes industry, the construction industry, and the banking industry. Which of these would you say are “global industries”? Why? What would you pick as the best exemplar of a “global product”? Why? Silicon Valley was the “global hotspot” of semiconductors. Is that still the case? Why?	Required Readings Levitt, T. “The Globalization of Markets.” Harvard Business Review, May–June 1983. “The World is Flat.” Wikipedia. IBM. “The Globally Integrated Enterprise.”
2	The Advantage of Internationalization: Why go “against a sea of troubles”? Study Questions What is particular about the economics of the cement business that led to old predictions that there would never be multinational companies in cement? Why were such predictions wrong? Compare the features and internationalization of the cement industry and the beer industry. Any conclusions? Characterize CEMEX’s internationalization strategy. Compare it with the internationalization strategy of Lafarge, the leading companies in the world of cement. What were the performance implications of the different internationalization strategies?	Case Lessard, Donald, and Cate Reavis. “CEMEX: Globalization ‘The CEMEX Way’.” (PDF) MIT Sloan School Case 09–039, March 5, 2009. Required Reading Ghemawat, Pankaj. “Global Value Creation.” Chapter 3 in Redefining Global Strategy: Crossing Borders in a World Where Differences Still Matter. Harvard Business School Press, 2007. ISBN: 9781591398660. [Preview with Google Books]
3	Exploiting Home-Based Advantage: Is it easier when you have a paragon at home? Study Questions Why did IKEA internationalize? Can you spot a pattern in the sequence of countries where IKEA entered? And on how IKEA entered and progressed in each country? What can explain the remarkable global performance of IKEA until today in such a competitive industry as furniture? Many companies around the world have tried to imitate IKEA but none succeeded so far. Why?	Case Bartlett, Christopher A., and Ashish Nanda. “Ingvar Kamprad and IKEA.” Harvard Business School Case. Harvard Business School Publishing. Case: 9-390-132, May 07, 1990. Required Reading Porter, M. “Competing Across Locations: Enhancing Competitive Advantage through Global Strategy.” In On Competition. Harvard Business School Press, 1998. ISBN: 9780875847955.
4	Augmenting Home-Based Advantage: When do foreign CATs improve home RATs? Study Questions How has Shimano’s business model changed over time? How has this reflected the changing advantages conveyed by its Japanese home base? How did Shimano’s internationalization strategy in the 1960s differ from its internationalizations strategy in the earlier decades? What steps should Shimano take to improve its competitive position? Should it, for example, develop additional functions in North America (besides sales and service) as it has in Asia and in Europe? Why or why not?	Case Westney, Eleanor. “Shimano Inc.” MIT Sloan School Case. Required Reading Lessard, D., R. Lucea, and L. Vives. “Global Strategy for the 21st Century: The RAT/CAT Capabilities Perspective.” (PDF) MIT Sloan Management Review.
5	Building Metanational Advantage: To be national or not to be national—is that the question? Study Questions What motivated the creation of the Renault-Nissan alliance in 1999? How did that initial motivation evolve over time? Why an international alliance? Why not a cross-border merger? What are they key features of the organization of the Renault-Nissan alliance? Why such organizational choices? Both the Lexus (by Toyota) and the Leaf (by Nissan) are non-Japanese cars though they are differently non-Japanese. Why?	Case Renault-Nissan. “Alliance Facts and Figures 2009.” (PDF - 1.5MB) Required Readings Doz, Y., J. Santos, and P. Williamson. “The Metanational Advantage.” Chapter 1 in From Global to Metanational: How Companies Win in the Knowledge Economy. Harvard Business School Press, 2001. ISBN: 9780875848709. [Preview with Google Books] Doz, Y., J. Santos, and P. Williamson. “Marketing Myopia Re-visited: Why Every Company Needs to Learn from the World.” Ivey Business Journal 68, no. 3 (2004).
Part II: Relating Strategy and Organization
6	Between a Global Business and a Global Company: Exporter or multinational—is that an option? Study Questions Why did Haier globalize into developed markets early? Would you have advised differently? Could Haier have chosen to be a pure exporter of white goods from China? Why? Is Haier’s “three thirds” strategy a viable or wise approach?	Case Khanna, Tarun, Ingrid Vargas, and Krishna G. Palepu. “Haier: Taking a Chinese Company Global.” Harvard Business School Case. Harvard Business School Publishing. Case: 9–706–401, Oct 17, 2005. Required Readings Fung, V., William Fung, and Jerry Wind. “The Orchestration Imperative.” Chapter 1 in Competing in a Flat World: Building Enterprises for a Borderless World. Pearson Prentice Hall, 2007. ISBN: 9780132618182. [Preview with Google Books] Zeng, Ming, and Peter J. Williamson. “How to Meet China’s Cost Innovation Challenge.” Ivey Business Journal 72, no. 3 (2008).
7	Global Integration and National Responsiveness: Global and local—is that an imperative? Study Questions What is special about “local implementation” in a multinational company? How important is global integration and local adaptation for IBM? Why? How important is global integration and local adaptation to IBM Canada? Why? If you arrived at IBM Canada on Oct 13, 2009, sent from IBM corporate headquarters to audit the implementation of the global CRM application, what would you do?	Case Compeau, D., and K. Mark. “IBM Canada Ltd.: Implementing Global Strategy.” Ivey Publishing. Case: 9B10E008, November 09, 2010. Required Reading Bartlett, Christopher A., and Sumantra Ghoshal. “Managing Across Borders: New Organizational Responses.” MIT Sloan Management Review. October 15, 1987.
8	Local Adaptation: Can you weld uniformity in different places? Study Questions How important is incentive pay-for-performance to Lincoln Electric? Why? Note the differences in incentive plan and other organizational features between Lincoln Electric in the US, Poland, the Netherlands, Venezuela and Mexico? How did such differences come about? What are the potential benefits and drawbacks of “flexible intermediate adaptation”? If you were the general manager of Lincoln Electric in your country, what could you do and what would you do in terms of piecework wages?	Case Siegel, Jordan I., and Barbara Zepp Larson. “Labor Market Institutions and Global Strategic Adaptation: Evidence from Lincoln Electric.” (PDF) Management Science 55, no. 9 (2009): 1527–46. (The case of Lincoln Electric is described in the article. You may skip sections 4, 5, and 6 of the article in your preparation for class discussion.) Required Reading Bartlett, Christopher A., and Sumantra Ghoshal. “What is a Global Manager?” Harvard Business Review, August 2003.
9	Global Strategy and Knowledge Management: How do you spread it all over the world? Study Questions What are the challenges posed by knowledge sharing at Danone? What is the impact of global knowledge management on Danone’s global strategy and performance? What is your assessment of the Networking Attitude initiative? Have you experienced the difficulties of sharing “best-practices” in your company? How and why?	Case Edmondson, Amy C., Bertrand Moingeon, Vincent Dessain, et al. “Global Knowledge Management at Danone (A).” Harvard Business School Case. Harvard Business School Publishing. Case: 9–608–107, Dec 11, 2007. Required Reading Szulanski, Gabriel, and Sidney Winter. “Getting it Right the Second Time.” Harvard Business Review, January 2002.
10	Global Delivery: Why bother? Study Questions What do you find special about Infosys’s internationalization and global strategy? Why is “global delivery” so relevant for Infosys? Do you think IBM considers Infosys a major competitor? Why or why not? How different are the global strategies of Infosys and Haier? Why?	Case Haour, G., C. Billington, and A. Pahwa. “Infosys: Effectively Leveraging Global Resources.” IMD. Case: 3-1814, November 11, 2007. Required Reading Santos, José. “Strategy Lessons from Left Field.” Harvard Business Review, April 2007.
11	Global Innovation: Local Innovation—seriously? Study Questions Why would it take so long for a company like GE to innovate for markets such as India or China? Is the “MAC 400” or the “MAC 800” a case of “local innovation” or of “global innovation”? Why? Does it matter? How likely is a “reverse innovation” to succeed? Why? Do you consider that “reverse innovation” is “an approach critical to the very survival of Western MNCs as they prepare to fight the threat of emerging market companies going global”? Why?	Case Singh, Jasjit. “GE Healthcare (A): Innovating for Emerging Markets.” Insead. Case: 311-048-1, March 2011. Required Readings Immelt, Jeffrey R., Vijay Govindarajan, and Chris Trimble. “How GE Is Disrupting Itself.” Harvard Business Review, October 2009. Prahalad, C. K. “The Invisible Market.” Across the Board 41, no. 5 (2004): 23. Santos, J., Y. Doz, and P. Williamson. “Is Your Innovation Process Global?” MIT Sloan Management Review 45, no. 4 (2004).