Global Issues in Strategic

Management

Determinants of Org. Performance

Global Issues Prof. Dr Majed El- ١

Farra 2009
The key drivers to globalization
Global
market
Drivers: Convergence
Similar customer needs,
Global customers, Transferable marketing

Trade policies, Technical Scale economies,

GovernmentStandards, host government, Global Sourcing efficiencies Cost
Influence policies Strategies Countries costs,
Advantages
High product development costs

Interdependence, Competitors global

High exports/imports,
Global
Competition

Global Issues Prof. Dr Majed El- ٢

Farra 2009
Advantages & Disadvantages of
International Operations

Advantages:
1. Foreign operations can absorb excess
production capacity, the benefits:
2. Allows firms to establish low-cost
production facilities.
3. May be less competition
4. Reduce tariffs
5. Enables firms to learn technology
and other cultures
Global Issues Prof. Dr Majed El- ٣
Farra 2009
Advantages & Disadvantages of
International Operations

Disadvantages:
1. Firms confront with different
cultures, sometime they cannot
understand the rules of game.
2. Dealing with different monetary
systems can complicate international
bus.

Global Issues Prof. Dr Majed El- ٤

Farra 2009
Global challenge
1. How to gain and maintain exports to
other international markets.
2. How to defend domestic markets
against imported goods.

Global Issues Prof. Dr Majed El- ٥

Farra 2009
Guidelines for Success as a Global
Competitor
Robert Allio mentioned guidelines for
customer loyalty and market share:
1. Get to know global markets first.
2. Counterattack at home for parent
firms (attack them at their homes).
3. Invest in new technology.
4. Consider alternative sources, e.g.,
establish in low labor cost.
Global Issues Prof. Dr Majed El- ٦
Farra 2009
Guidelines for Success as a Global
Competitor (continue)
5. Install the right management at host
countries.
6. Sacrifice short-term profit for long-
term profit.
7. Join forces with competitors.

Global Issues Prof. Dr Majed El- ٧

Farra 2009
Others advice for going global
1. Focus on the most important 3 world
markets.
2. Develop new international products.
3. Glocalize: Think global & act local.
4. Train people to think internationally.
5. Open senior ranks to foreign
employees.

Global Issues Prof. Dr Majed El- ٨

Farra 2009
The reality of 21st Century

The 20th century was the century of
great manufacturing corporation,

The 21 st century will be the time of
knowledge businesses.

Global Issues Prof. Dr Majed El- ٩

Farra 2009
Global Driving forces of Change in
Org. at 21st Century
1. Demographic –An aging and Diverse
Society: Workers will have longer
work lives, and young workers have
different expectations.
2. Globalization of labor: It is expected
that 50+% of employees in
transnational companies will be from
developing countries: requires what
to know on management level?

Global Issues Prof. Dr Majed El- ١٠

Farra 2009
Global Driving forces of Change in
Org. at 21st Century
3. The rise of new consumer: Highly educated,
high level of income and familiar of
information and communication
technology:
He will be loyal to value rather than brands.
4. Torrid/extreme Technological Growth:
Technology will continue to be a major
driver of org. change and transformation.

Global Issues Prof. Dr Majed El- ١١

Farra 2009
Global Driving forces of Change in
Org. at 21st Century
5. The Global Separate centers of
innovation: International networks.
(provides, ideas, capital, people, info.)
6. The new-knowledge-based economy,
will be driven by rapid innovation in
technology, process.

Global Issues Prof. Dr Majed El- ١٢

Farra 2009