The Main Arguments of Evolution Theory

out-of-door Management Prof. dr. Niels Noorderhaven Lecture 1 Agenda 1. 2. 3. Introduction and organizational matters Does multinational simmer down matter? Conceptual foundations of international business strategy (1) Case Honda in the USA Literature Textbook chapter 1 (pp 13-33 + 59-62) Team Lectures Niels Noorderhaven Cases Fons Naus Ana Aranda Gutierrez Zhengyu Li didactics strategy Complementarity of lectures readings one-on-one case participation Each lecture, one or several cases from the book will be expanded to put the theory into employ Importance of research articles Grading 70% MC exam See Study manual for correction formula Exam dates December 13, 2012 and April 12, 2013 30% 2 Interactive lectures individual participation Interactive lectures grades of 2010 and 2011 can be exchangered Book http//www. cambridge. rg/features/management/verbeke/ Does international still matter? 7 Transportation & communication cost fall 17 September 2012 8 Tariffs fal l, anti-dumping measures rise anti- 17 September 2012 9 Globalization Theory Linguistic, trade and cultural barriers become less central Stateless MNCs Within MNCs worldwide diffusion of technologies, companionship and information Convergence of world economies 17 September 2012 10 Why is nationality important to people? Individual identity and social identity Three processes of social identity formation social categorization social comparison social identification (Self-)categorization what is the salient household? 17 September 2012 11 Why is nationality important to people? Positive stereotyping of in-group, negative stereotyping of out-group Nationality differences are particularly salient when people have no ordinary history Nationality then becomes a source for ones own identity and for the ascribed identity of the other 7 September 2012 12 Does international still matter? Yes, because . Cultural , institutional and language differences persist Leading to diff erences in (business) decision making Nationality forms an important basis for social categorization processes Leading to shortcuts the like cultural attribution and stereotyping With the effect that doing business across borders is different than domestic business 13 Conceptual foundations of international business strategy 4 interpretation of international business strategy International business strategy means effectively and efficiently matching a multinational enterprises (MNEs) privileged strengths (relative to competitors) with the opportunities and challenges found in geographically dispersed environments that cross international borders. Such matching is a precondition to creating value and satisfying stakeholder goals, both domestically and internationally. 15 TABLE OF circumscribe (1) Introduction and overview of the books frame achievement Part one Core concepts (1) Conceptual foundations of international business strategy (2) The critical portion of firm-specifi c advantages (3) The nature of home country location advantages (4) The problem with host country location advantages (5) Combining firm-specific advantages and location advantages in an MNE network 16 TABLE OF CONTENTS (2) Part two Functional issues (6) (7) (8) (9) (10) International innovation International sourcing and exertion International finance International marketing Managing managers in the multinational enterprise 7 TABLE OF CONTENTS (3) Part three Dynamics of global strategy (11) Entry mode kinetics 1 foreign distributors (12) Entry mode dynamics 2 strategic alliance partners (13) Entry mode dynamics 3 mergers and acquisitions (14) The role of emerging economies (15a) International strategies of corporate social responsibility (15b) International strategies of environmental sustainability 18 The seven concepts of the unifying framework Internationally transferable (or non-location bound) firmspecific advantages (FSAs) Non-transferable (or location-bound) FSAs L ocation advantages Investment in and value creation through recombination Complementary resources of external actors bounded rationality Bounded reliability The MNEs unique resource base Physical resources (natural resources, buildings, plant equipment). Financial resources (equity and loan capital) Human resources (individuals and teams, entrepreneurial and operational skills). upriver knowledge (sourcing knowledge, product and process-related technological knowledge). Downstream knowledge (marketing, sales, distribution and after sales service). Administrative knowledge (organizational structure, culture and systems). Reputational resources (brand names, reputation for honest business dealings). International transferability of FSAs? Paradox If the FSA consists of easily codifiable knowledge (i. e. , if it can be articulated explicitly, as in a handbook or blueprint), then it can be inexpensively transferred abroad, but it can also be easily imitated by other firms.Thou gh expensive and time-consuming to transfer tacit knowledge across borders, the benefit to the MNE is that this knowledge is also difficult to imitate. It is often a key source of competitive advantage when doing business abroad. Some FSAs are not transferable abroad location-bound locationFSAs (1) quaternion main types Stand-alone resources linked to location advantages (privileged retail locations). Local marketing knowledge and reputational resources, such as brand names (may not be relevant to a host country context, or valued to the same extent). Local best practices (i. e. routines), such as incentive systems or buyer-supplier relations (may not work abroad). Domestic recombination capability (may not work in foreign markets e. g. , because co-location of resources is needed). Some FSAs are not transferable abroad location-bound locationFSAs (2) Even if transferability of the relevant resources were technically possible, this does not mean potential for profitable deplo yment, i. e. the resource bundles that may be transferable from a technical perspective (e. g. , the way n which a product is marketed at home), do not constitute an FSA abroad. Location advantages Entire set of strengths of a location, and accessible by firms in that location. Should always be assessed relative to the strengths of other locations. implemental to FSAs Motivations for foreign expansion Natural resource seeking Verbeke physical, financial or human resources Market seeking Strategic resource seeking e. g. , knowledge, finance force seeking E. g. , low labor cost Case Honda in the USA Background Prior to 1970s exports of motorcycles and cars Drivers of foreign production Rising value of the yearn against US$ Fear of import restrictions The Clean Air Act in the US First oil crisis Motivation for expansion (natural resource, market, strategic resource, efficiency seeking? ) Hondas approach After four-year decision process Honda of America Manufacturing established in Marysville, Ohio, in 1978 Top priority attain Japanese-level quality and efficiency plectron of employees Training program Fly in managers and workers from Japan Develop lean supplier network Upgrade supplier quality level 1980 start production of cars Present 9 production plants in USA Hondas FSAs Non-location bound FSAs Know-how four-strike engines with optimal power-to-weight ratio Management principles Quality systems Employee selection processes Training and knowledge transfer routines Manufacturing expertise Supplier management approach Location-bound FSAs in the host country High demand for specific products Resource recombination Use four-strike engines in many products (motorcycles, thin cars, generators, ) Design and manufacturing skills + knowledge of consumer preferences in USA Melding existing and new resources through management exchange program Exploit new capabilities worldwide Complementary resources of external actors Opportu nity to study American way of production at Ford Extensive use of American experts and consultants (especially for selecting location) Critical role of suppliers Bounded rationality issues leave out of knowledge topical anaesthetic conditions Suppliers lack of familiarity with Honda New employees lack of familiarity with The Honda Way Bounded reliability issues Moral hazard/adverse selection employees American managers have local priorities Deliberate strategy? Agenda for next lecture 1. 2. 3. 4. Four types of MNEs Recombination Bounded rationality & reliability Firm-specific advantages (FSAs) Cases 3M & IKEA Literature Textbook chapter 1 (pp 33-76) + chapter 2 NB var. will be in SZ 31