Post on 24-Dec-2015
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ISB-4 Internal triggerISB-4 Internal trigger 11
INTERNAL TRIGGERSINTERNAL TRIGGERS
•Internal triggers to the internatiomalization process
•Shaping an international vision and mindset
•Organisational dynamics
•Managing organisational change
•Assessing and changing corporate culture
•Resource capability and competitive advantage
•Managing organisational change to improve
business performance
•Internal triggers to the internatiomalization process
•Shaping an international vision and mindset
•Organisational dynamics
•Managing organisational change
•Assessing and changing corporate culture
•Resource capability and competitive advantage
•Managing organisational change to improve
business performance
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External triggersExternal triggers
INTERNATIONALISATIONINTERNATIONALISATIONMarket
penetration
Geographical expansion
Product development
Organizational dynamics
Vision mindset
Meta trendsIndustry
competition
RETRENCHMENT*RETRENCHMENT*
Internal triggersInternal triggers
Product extension
Restricted
national market scope
Figure 2.1. Developing an international business strategy
Intern’l business
development
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Firms Firms in the same industry in the same industry in the same environmentin the same environment commonly follow differing strategiescommonly follow differing strategies
Why?Why? Different managerial beliefs about sources, Different managerial beliefs about sources,
competitive advantagescompetitive advantages Different way of managementDifferent way of management
ImplementationImplementation:: „„Doing the right things” (Doing the right things” (effectivityeffectivity)) „„Doing the things right” (Doing the things right” (efficiencyefficiency))
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Internal context:Internal context: What are the tangible and intangible reources?What are the tangible and intangible reources? How core skills and capabilities are developed?How core skills and capabilities are developed?
These are firm specific => strategic answer dependent These are firm specific => strategic answer dependent on organizational dynamicson organizational dynamics
ResultResult: sustainable competitive advantage: sustainable competitive advantage
Organizational changeOrganizational change (discontinuity) (discontinuity) Creating a shared mindset Creating a shared mindset Building competenciesBuilding competencies Changing corporate valuesChanging corporate values
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External and internal triggers to a External and internal triggers to a stage changestage change
External triggersExternal triggers
Internal triggersInternal triggersInternal triggersInternal triggers
Current phase Next phaseDiscontinuityDiscontinuity
new internationalstrategic thrust
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Components of internal contextComponents of internal context Vision/mindset:Vision/mindset:
geographic scope, strategic development geographic scope, strategic development driven through the firm’s mindset driven through the firm’s mindset role of senior managementrole of senior management
Organisational dynamics:Organisational dynamics: ability and ability and willingness to implement strategywillingness to implement strategy
Vital people and processes to implement visionVital people and processes to implement vision Unique skills, technologies (core competences)Unique skills, technologies (core competences) Ability to adopt and innovate (organizational Ability to adopt and innovate (organizational
learning)learning) Administrative heritageAdministrative heritage
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Vision / mindset
Organizational dynamics
Match?
Generate forces for changes
Dampened Sustained
Balancedy
n
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Internal triggers
Succession Succession eventsevents
Succession Succession eventsevents
Vision/Vision/mindsetmindset
Internal context
Organisational Organisational dynamicsdynamics
Internal triggers to change
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Succession eventsSuccession events PlannedPlanned: : retirementretirement
natural event, easier to managenatural event, easier to manage minor or fundamental changes to strategyminor or fundamental changes to strategy
Not planned: Not planned: in time of dificoultiesin time of dificoulties Occure abruptly, forcedOccure abruptly, forced Internal appointment or a „new” personInternal appointment or a „new” person Setting visionSetting vision Style of implementation can be unacceptableStyle of implementation can be unacceptable
Changes in style, strategy, vision, mindsetChanges in style, strategy, vision, mindset ( (BPBP))
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What was Horton’s vision?What was Horton’s vision? What are the actions of the project?What are the actions of the project? Were the actions accepted?Were the actions accepted? What is the directors’ point of view?*What is the directors’ point of view?*
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Balance:Balance: match between match between vision/mindsetvision/mindset and and organisational organisational
dynamicsdynamics
MismatchMismatch: tensions: tensions
AppreciateAppreciate: : whywhy and and whenwhen they change, they change, howhow an initial change is dampened or sustained an initial change is dampened or sustained
Change sustainedChange sustained: both shows in the same : both shows in the same directiondirection
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Volvo-Renault proposed mergerVolvo-Renault proposed merger1990: announced agreement to form strategic 1990: announced agreement to form strategic
alliancealliance1991: exchange of cross-shareholdings1991: exchange of cross-shareholdingsFull merger proposed: by 1993Full merger proposed: by 1993FailureFailure
shareholder: terms are unacceptableshareholder: terms are unacceptable CriticsCritics:: chairman Gyllenhammer (1971- , style of chairman Gyllenhammer (1971- , style of
manegement,manegement, preparations secretly, no info)preparations secretly, no info) Gyllenhammer forced resign with 4 board membersGyllenhammer forced resign with 4 board members
Volvo: uncertain future Volvo: uncertain future small domestic marketsmall domestic market little product rangelittle product range difficulties in existing Volvo-Renault alliancedifficulties in existing Volvo-Renault alliance
Importance of internal factors!*Importance of internal factors!*
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Changes accepted, style unaccepted => Changes accepted, style unaccepted =>
new CEO, old strategy implemented (BP)new CEO, old strategy implemented (BP) Vision changes and style not accepted =>Vision changes and style not accepted =>
new CEO, new strategy (Volvo)new CEO, new strategy (Volvo)
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Change of chief executiveChange of chief executive
RetirementRetirementCrisisCrisis
Vision retainedVision
retainedReappraise the position
of businessReappraise the position
of business
SystemSystem OperationOperation
PeoplePeople CultureCulture
Succession event
Vision
Organisationaldynamics
MismatchDiscontinuity
Sample - vision is changing
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What is the so called sharpbend?What is the so called sharpbend? What is turnaround?What is turnaround? Short term corrective action – advantages, Short term corrective action – advantages,
disadvantagesdisadvantages Long term corrective actions - advantages, Long term corrective actions - advantages,
disadvantagesdisadvantages
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FINANCIAL PRESSURE
High adaptation
High integration
High adaptation
Low integration
Low adaptation
Low integration
High
High
Low
S T R U C T U R A L I P R E S S U R E
EquelibriumEquelibrium portfoli portfolioo
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Vision/mindset on international fieldVision/mindset on international field
Domestic biasDomestic bias
National specialities in operationNational specialities in operation
Cultural differencesCultural differences
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Distance from power
Smoothly working
machine
f.i.. Germany
Hungary
Pyramid
f.i. Japan
Market
f.i. USA
Family
f.i. India
Map of national culturesMap of national cultures(Hofstede)(Hofstede)
Avoidance
of
uncertainty
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Organisational learning
Administrative heritage
Core competence
Organisational dynamicsOrganisational dynamics
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CompetencCompetenciies-resourceses-resources
ThresholdThresholdcompetenccompetenciieses
CoreCorecompetenccompetenciieses
NecessaryNecessaryresourcesresources
UniqueUniqueresourcesresources
Same as competitorsor easy to imitate
Better than competitorsand
difficult to imitate
Competencies
ResourcesResources
•Market access•Integrity related•Functionally related
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Administrative heritageAdministrative heritage
AssetsHuman resourcesDecisionsResource configurationCultural elements
His
tory
of
the
orga
nis
atio
n
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Managing organisational changeManaging organisational changefundamental/incrementalfundamental/incremental
Incremental Flux Transformational
Change of the environment
Change of strategyTimeD
egre
e of
ch
ange
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Creating a new shared
mindset
Building competencies/
capabilities
Changing corporate culture
Improved business
performance
The components of organisationalThe components of organisationalchangechange
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Change RefreezingDiscontinuity
Reconfiguring
Unfreezing
Time
Discontinuity
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Time
Activity andself appreciation
1.Shock
2. Denial
3. Depression
4. Acceptance
5. Tryout
6. Awareness
7. Building-in*
Reactions connected to the change
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Resistance of change and change strategiesResistance of change and change strategies
PersonalPersonalself-interestself-interest
Lack of understandingLack of understandingand trustand trust
AlternativeAlternativeassessmentassessment
Individuals’Individuals’fears and concernsfears and concerns
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Man
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Stories and
myths
Symbols
Rituals and routines
Corporate mindset/
paradigm
Power structures
Control systems
Organisational structure
Web of the corporate cultureWeb of the corporate culture
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Scope
ORGANISATION’S INTERNAL CONTEXTORGANISATION’S INTERNAL CONTEXT
Differentiation Cost
Time Linkages
Competitive Competitive
advantageadvantage