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Peng Inst Chapter 13 REVISED (2nd Edition)

Peng Inst Chapter 13 REVISED (2nd Edition) - Peng...

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Peng  Global Business 2e Chapter 13 Strategizing, Structuring, and Learning  around the World 1
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LEARNING OBJECTIVES After studying this chapter, you should be able to: 1. Describe the relationship between multinational strategy and  structure. 2. Explain how institutions and resources affect strategy, structure, and learning. 3. Outline the challenges associated with learning, innovation,  and knowledge management. 4. Participate in two leading debates on multinational strategy,  structure, and learning. 5. Draw implications for action. 2
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MULTINATIONAL STRATEGIES AND  STRUCTURES The relationship between strategy and structure is  explained using the  integration-responsiveness  framework. According to this framework, the  strategy adopted by  the firm (e.g., global strategy) is determined by the  need for  integration  (dictated by cost pressures) and  local  responsiveness.   For each strategy, a particular structure is best to  implement that strategy (e.g.,  the global product  division  for the global strategy).    3
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Pressures for Cost Reductions and  Local Responsiveness MNEs primarily confront two sets of pressures:  1.Pressures for cost reductions Almost universal for both domestic and international  competition.  2.Pressures for local responsiveness Unique to international competition and refer to consumer  preferences and host country demands.  Example: Bombardier  manufactures Austrian, Belgian, an other tailor-made versions of its  railcars. 3.Integration-responsiveness framework A framework on how to simultaneously deal with the two sets  of pressures. 4
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Four Strategic Choices Home replication strategy International replication of home country-based  competencies. Goods via export, services via licensing or franchising. All value chain in home country. Domestic bigger than international. No FDI.  Example? U.S. motion picture industry. 6
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Four Strategic Choices Localization (multidomestic) strategy Focuses on a number of foreign countries or regions, each with a  stand-alone “local” market worthy of significant attention and  adaptation. All value chain in host country or region. Decentralized structure. Country managers are autonomous. International part of company is bigger.
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