Multinational Enterprise of the Future | My Assignment Tutor

CASEThe Multinational Enterprise of the Future: Leading ScenariosEvolving workftowsr technology platfgrm, and market dy-na.mics intensify globalization trends_ MNEs respond in kind, rethinking visions_ clarifying missions_ adjusting strategies, and reconftguring value chains to compete in the brave new world. 1 Forecasts of accelerating change due to digitiza-tion, frugal innovations, robotic cells, and activist transna-tional institutions, among others, spur MN Es to assess the best path to bundling resources, capabilRies, and compe-tencies. Let’s take a look at some high-concept visions of the NINE of the future.The Globally Integrated Enterprise The evolutionary perspective sees IVINEs responding sys-tematically to the steadily unfolding imperatives of global-ization_ As policies and practices progre,ssively connect countries. IVINEs similarly respond, progressively integrating their cross-national operations. Sam Palmisano, the past CEO of IBM, has a provocative take, Reflecting on IBM’s evolution, he contends that it has passed through three stra-tegic phases. each fitting the prevailing circumstances arid collectively foreshadowing the MNE of the future. First, there was The nineteenth-century International modelr whereby the company was headquartered both physically and mentally in its home coy retry’ it sold goods, when it was so inclined. through a scattering of overseas sales offices.-111 Headquarters focused on business activi-ties in its home country and configured international opera-tions with little input from (Dyer-seas units. As such, it used an irterrkational strategy to engage a world composed of uniii.erily connected countries. Phase two of the evolution ushered in the classic multi-national firm of the late twentieth century. Echoing the local-ization strategy, this phase saw HO build smaller versions of itself abroad. Steadil-y, the expanding connection among countries, by supporting concentrated value chains geared toward exploiting location eCOrlariliCS arid scale economies, highlighted the inefficient economics of the “mini-men op-tion.112 The cost of redundancy—each country essentially ran a Stand-alone operation —gnaw unacceptable Fn the face of intensifying competition. The third phase, the ‘globally integrated enterprise:1 speaks to the dawn of globality in which “business flows in every direction, Companies have no centers, The idea of foreignness is foreign. Commerce swirls aid maricel Rance shifts…1 t 3 Competing with everyone from everywhere for everything requires putting investments, people, and work anywhere in the world `cased on the right cost, the right skills and the right business environment fwithl work flow[ing] to the places where it IN ill be done _ most efficient-iy and to the highest quality:11’1 Earlier models saw configu-ration and coordination barriers constrain knowledge flows, production opp-ortunities, and organizational options. Now, like the Internet, the globally integrated enterprise designs its strategyr configures Os activities, and coordi ha.t. es its pro., cesses to connect everything, everywhere, 24;7.Tim MetanationalIn the futtire, goes this scenario, world-class operational efficiency will no longer determine an 11.011fE’s competitive advantage. Nor will an 1v1NE build superior competitive-ness from unique features of its home country or. for that matter. from a set of national subsidiaries.. Rather, victor will go to tlhose who move from designing multinational operations to synthesi2ing me tar iati on al competencies. The metan.ational seeks unique ideas, activities, and in-sights that complement its existing operations as well as create new leverage points, It expands its mission from selling stuff worldwide to mining the treasure trove of ideas, resources, and ca.pabilitie-s that emerge anywhere and everywhere. Its managers scan the world. identifying and interpreting the untapped potential of the specialized knowledge that lays latent in unique market Situations. these opportalitieS poosi :ions Managers to Exploiting “build a new kind of competitive advantage by discover-‘mg, accessing, mobilizing, and leveraging knowledge from many locations around the world.’ Metanationals, goes the theory, orient strategic planning to; ▪ Fircispe….ct for and acces-s untapped technologies and unidentified consumer trends. ▪ Leverage globally the specialized knowledge scattered throughout local subsidiaries, ▪ Mobilize fragmented knowiedge to generate innova-tions that produce, market, and deliver value on a glob scale. Apply superior project management skills across teams to foster a strong collaborative culture and to engage a rob-uset array of communications tools.116MNEs like Shiseido, ARM, McDonald’s, STMicroe!ec-tronics, Acer, Procter & Gamble, SAP, Tata, and PolyGrarn are emergent metanationals, able to turn underused kno.yv:- edge into global-dominant innovations. Consider the experl-ences of McDonald’s in its fast-growing market—Russia,. It has more than 500 outlets and plans to add hundreds mare, given that Russia is one of its fastest-growing and most-profitable markets.’1′ Successfully building its Russian op-erations required McDonald’s to re-think its value chain. In the West, it buys ingredients from third parties, rather than


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