Chapter 15 Flashcards
Global integration (or aggression) strategies:
Strategies that focus on synergies between
operation at different locations
Local responsiveness (or adaptation) strategies:
Strategies that deliver locally adapted
products in each market
Levers of adaptation
Practical strategies firms can use to adapt their offerings or operations to different markets without excessive costs or inefficiency.
- Focus on activities and products that require less adaptation across markets
- Externalise the costs of adaptation by working with local partners
- Design the basic product in ways that increase flexibility of the final product to be produced for different markets
- Organize innovation processes with effectiveness of variation in mind
Integration-responsiveness framework:
A framework of MNE management on how to
simultaneously deal with global integration and local responsiveness
Localisation strategy (Geographic area strategy)
Pressure for local responsiveness: HIGH
Pressure for global integration: LOW
A strategy that focuses on a number of foreign
countries/regions, each of which is regarded as a stand-alone ‘local’ (domestic) market worthy of
significant attention and adaptation
=> Maximizes local responsiveness
Home replication strategy (International division)
Pressure for local responsiveness: LOW
Pressure for global integration: LOW
A strategy that emphasizes international replication of home country-
based competencies such as production scales, distribution efficiencies and brand power
=> Leverages home country-based advantages; Relatively easy to implement
Global standards strategy (Global product division)
Pressure for local responsiveness: LOW
Pressure for global integration: HIGH
A strategy that relies on the development and distribution of
standardized products worldwide to reap the maximum benefits from low-cost advantages
=> Leverages economies of scale; Emphasizes integrated innovation
Transnational strategy (Global matrix)
Pressure for local responsiveness: HIGH
Pressure for global integration: HIGH
A strategy that aims to be simultaneously cost-efficient, locally
responsive and learning-driven around the world
=> Cost-efficient while being locally responsive; Engages in global learning and diffusion of innovations
Corporate headquarters (HQ):
An MNE’s central unit that hosts corporate executives as well as
central staff functions
International division:
A structure bundling all international activities into one unit
Geographic area structure:
An organisational structure that organises the MNE according to
different countries and regions
Regional headquarters:
An organisational unit coordinating and supporting activities across a
multi-country region
Country managers:
Business leaders of a specific geographic area or region
Global product division:
An organizational structure that assigns global responsibilities to each
product division
Global matrix:
An organizational structure with two set lines of authority, typically a regional line
and a product line
Worldwide (or global) mandate:
A global mandate gives a subsidiary or business unit strategic control over a function, product line, or business activity for the entire company across all countries.
These functions might include:
R&D
Manufacturing
Marketing strategy
Subsidiary initiatives:
The proactive and deliberate pursuit of new opportunities by a subsidiary
to expand its scope of responsibility
Knowledge management:
The structures, processes and systems that actively develop, leverage
and transfer knowledge
Explicit knowledge:
Knowledge that is codifiable (that is, can be written down and transferred
with little loss of its richness)
Tacit knowledge:
Knowledge that is non-codifiable, and its acquisition and transfer require
hands-on practice
Organizational (team-embedded) knowledge:
Knowledge held in an organization that goes
beyond the knowledge of the individual members
Reverse knowledge transfer:
Knowledge created in a subsidiary being transferred from the
subsidiary to a parent organisation
Community of practice:
Group of people doing similar or related work and sharing knowledge
about their practices of work
Virtual communities of practice:
Communities of practice interacting via the internet
Knowledge governance:
The structures and mechanisms MNEs use to facilitate the creation,
integration, sharing and utilisation of knowledge
Absorptive capacity:
The ability to recognise the value of new information assimilate it and apply it
Social capital:
The informal benefits individuals and organizations serve from their social
structures and networks
National innovation systems:
The institutions and organizations that influence innovation activity
in a country
Business unit headquarters:
The central coordination unit for an entire business unit
Boundary spanners:
Individuals with strand networks across business units, and frequently
communicating with their network
=> Individuals or entities that act as bridges between different organizations, groups, industries, or disciplines
