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By M. Isi Eromosele
The essence of global strategy is an expansive world vision
that considers the possibilities of every location as a market and as a source
of competitive advantage, both alone and when integrated with the rest of the
firm.
Global enterprises must craft strategies for international
expansion, diversification, and integration to develop, protect, and exploit
their resources and capabilities.
Determinations of geographical scope and degree of coordination
must be taken with respect to a world-wide competitive environment. Concerns
for both strategy processes and strategic goals and objectives are deepened in
the transnational setting.
Building A Global Resource Base
In order to pursue their strategic objectives, global
enterprises must access a wide range of resources, capabilities, brands, markets,
and technologies from world-wide locations.
This process of building a resource base for the enterprise
may involve cross-border mergers and acquisitions, international alliances and
joint ventures, formal and informal networking, internal development, and
offshored/outsourced value-adding activities.
Determinations of the breadth of international dispersion
and the degree of global integration of resources and activities are
increasingly essential for competitive success, but standard models of
transactional governance seem to have limits in an increasingly interactive, integrated
global environment.
While multinational enterprises may be network organizations,
they are also widely seen as entities functioning within larger networks of
affiliated, but not internalized, firms, institutions and activities.
Collaboration at all stages of the value chain across
organizational as well as national boundaries has become an essential feature
of global strategic management, as has
cooperation with partners on a smaller scale within many
local host settings.
The global firm may function as the leader or flagship of
its network, but it must do so through communication and collaborative
mechanisms rather than the command and control relationships of its internalized hierarchy.
Governance Structures And Functions
An important aspect of international strategic management
involves selecting and developing the governance structures and functions of
global firms and their component organizations, including organizational
architecture, management systems, managing resources and capabilities, networking
of subsidiary organizations, and managing operational strategies and information
sharing in organizations engaged in substantial operations across national
borders or located in multiple national environments.
Non-market strategies of pursuing corporate social
responsibilities and working with critical stakeholders in host nations or on a
global basis are increasingly important to pursuing competitive advantage and
reducing environmental and competitive risks for global organizations.
Crafting Strategies For The Global Firm
All organizations interact with their environments; the
complexity of the global business environment makes this interaction
particularly critical to crafting strategies for the global firm.
Global strategy must incorporate aspects and effects of the GBE ,
to include concern for the status of the global economy and international
capital markets, the effect of political
agreements or strife, cultural and institutional differences,
levels of technological advancement, and other global and regional issues as
they affect strategy, strategic management or performance of organizations.
A notable characteristic of international markets is the
presence of multiple sovereign nation-states as economic players. Global
strategies must be tied to political and other non-market strategies to capture
the value that they create.
Effect Of Global Strategy On Emerging Economies
The importance of the global environment and of specific
locations to global and international strategies has been established. However,
the rapid emergence of new market economies has profound implications for the world
economy and for the practice and study of global strategy.
Offshore production of goods and services in emerging
nations has energized international political discussion, brought new focus to
the non-governmental social welfare sector and redefined the concept of relevant
stakeholders as well as expanding the scope of global sourcing strategies.
Multinational enterprises from emerging economies are
absorbing established firms in industrial nations and may well dominate
international merger and acquisition activities in the near future while
traditional global enterprises are facing fundamental changes in their non-market
strategies.
M. Isi Eromosele is the President |
Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance
Copyright Control © 2012 Oseme Group
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