Introduction to Global Strategic Management

Rohit Singh Master Click to edit Tomar subtitle style Asst. Prof. GLAU

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What is Strategy?

A unified, comprehensive, and integrated plan designed to ensure that the basic objectives of the enterprise are achieved. (Glueck, 1980:9) pattern or plan that integrates an organizations major goals, policies, and action sequences into a cohesive whole. (Quinn, 1980) pattern of resource allocation that enables firms to maintain or improve their performance. good strategy neutralizes threats and
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The

What is Strategic management?

Strategic Management is the process of setting long- term direction for the organization. management is the process of strategic decision making.

Strategic

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Strategic Management Steps

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Strategic Management
On

combining previous concepts we can say that the strategic management is the process of strategic decision making which set the overall direction of the organization to achieve sustainable competitive advantage and success.

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S.NO International Strategy 1.

Difference in International & Global Strategy

Global Strategy International strategyGlobal strategy does not require strongrequires coordination coordination from thebetween the activities centre. of the centre and those of the subsidiaries . This strategy beliefs inProduct responding towards theStandardization is what local business needsis required and therefore subsidiariestherefore , follow the local needs. organizations tries to produce globally 5/5/12

2.

Definition of Global Strategic Management

Definition

of global strategic management has to be built on basic definition of strategic management , with an added explanation of the global dimensions.

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Global Strategy Dimension

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1. Coordination and configuration

According

to this view , global strategy is the process of exploiting the synergies that exist across different countries, as well as the comparative advantage offered by the different countries.

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2.Standardization
Standardization

dimension expressed by Levitt (1983) defines strategic management as the process of offering products across countries. According to this view multinational firms pursuing a standardization strategy have a global strategy, while multinational firms pursuing an adaptation strategy should be referred to as implementing an international strategy. Strategy to be global absolute standardization across countries is not necessary.
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3. Integration
According

to this view , global strategy is concern with the integration of competitive moves across country markets. The firms make competitive view not because they are best for the particular country but they are best for the firm as a whole. The ability of a firm to coordinate activities globally across markets depends on its ability to cross subsidize ,across market.

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 We

define global strategic management as a process of crafting a coherent ,coordinated, integrated and unified strategy that sets the degree to which the firm globalizes its strategic behavior in different countries through standardization of offerings, configuration and coordination of activities in different countries and integration of competitive moves across countries.

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Motives and determinants of internationalization of a firm

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Motives and determinants of internationalization of a firm

A

firm should receive internationalization stimuli , which is defined as the internal and external factors that influence the firms decision to initiate , develop and sustain the international activity.

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Organizational Factors
1.

DecisionMaker Characteristics: Recognition by the top manager , or the top management team , of the importance of international activities is an essential part of the process of internationalization. Management characteristics such as perception of risk in foreign operation have a strong influence on management perceptions of international business activities.

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Continue..
Reid

found the following characteristics positively influenced the internationalization decision: 1. Foreign travel and experience abroad : Managers who travel abroad extensively are more open minded and interested in foreign affairs , thus being more able and willing to meet foreign managers and form business partnerships.

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 2.

Foreign language proficiency : The number of foreign languages spoken by the foreign manager is a good indicator of a firm to go for internationalization. They are in good position to understand , learn ,negotiate and deal with the foreign people.

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 3.

Personal Characteristics : Natural risk takers are most likely to engage in an international activity than risk averse managers. 4. The decision maker background

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Firm Specific Factors

1.

Firm Size : Bigger size firms tends to internationalized faster than the smaller firm. This is because large firms would like to exploit the advantage of the economies of scale.

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 2.

International appeal : Production of a unique product or service with an international appeal could act as a stimulus for international expansion.

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Environmental Factors

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Firm & Strategy

Focus Firms How

is on the environment of the firm itself. choice of strategy. with the competition

it deals internationally ?

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Firm & Strategy

firms strategy can be defined as the action that a manager take to attain the goals of the firm. Firms have different goals : 1. To maximize long term profit : By increasing profitability ROS = /TR Where ROS = Return on Sales;TR= Total Revenue
A

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Firm & Strategy

the firms strategy would be the appropriate action by which this goal of increasing ROS is attained. 2. Other goal is to maximize the firms ROI: ROI = / I Where ROI= Return on Investment. I = Total capital including both equity and debt.
Therefore

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