Week 6 Flashcards
Strategic management controls (examples)
▪ Balanced scorecard
▪ Key performance indicators (KPIs)
▪ Benchmarking
▪ Financial planning and budgeting
▪ Capital budgeting for projects and other LT investments
Operational management controls (examples)
▪ Total quality management (TQM)
▪ Kaizen (continuous improvement)
▪ Access controls
▪ Approval Authority
▪ Physical audits
▪ Separation of duties
Reasons for strategic alliances
- Enhance competencies through a learning partnership
- Extend market presence in new markets
- Fill gaps in your current technological bases
- Turn excess manufacturing capacity into profits
- Reduce your risk and entry costs in new markets
- Accelerate product introduction
- Produce economies of scale
- Overcome legal and trade barriers
- Extend the scope of existing operations
- Cut exit costs when divesting operations
- Establish a presence in a “lead” country
Entry modes in global markets
▪ Wholly-Owned Subsidiary
▪ Acquisition
▪ Joint Venture
▪ License Franchise
▪ Agent Distributor
▪ Representative Office
What is a strategic relationship risk?
Unexpected change in strategic relationships (e.g., parent company or joint venture partner)
Pre alliance phases
▪ Know what the company wants to achieve in the short run
▪ Identify who can help the company to achieve the goal
▪ Design a process to attain short-term and long-term goals
▪ Inform the appropriate people about the alliance
▪ Determine what the company wants to learn from the partner
▪ Determine what to allow the alliance partner to learn, and what to prohibit the partner from learning
Post alliance planning
The emphasis is on education creation
Pre-alliance planning
The Emphasis is on Knowledge
Post alliance phases
▪ Identify the individuals as the “learners” in the alliance
▪ Identify the individuals as the “teachers” who transfer the knowledge back to the company
▪ Design a reward system for alliance education
▪ Watch the changes occurring in the alliance
The future of the global corporation
The relationship-based enterprise will exhibit four distinguishing characteristics
1. Size and global reach
2. Network of independent companies
3. Common mission
4. Act as a single company
Management controls are
systems, processes, and procedures designed to ensure that duties are performed ethically, accurately, effectively, and efficiently
What do Entry Modes in Global Markets need to assess
Benefits, Costs, Feasibility, Risks
Two types of strategic relationship risk
- Relational Risk (Partner cooperation)
- Performance Risk (Alliance Performance)
