Global Issues In Strategic Management Pdf
Strategic management is the deployment and implementation of the strategic plan and measurement and evaluation of the results. Deploy- ment involves completing the plan and communicating it to all employ- ees. Implementation involves resourcing the plan, putting it into action, and managing those actions. Strategic Management in Global Environment: Need for Globalization, Different Types of International Companies, Development of a Global Corporation, Complexity of Global Environment, International Culture, Implementing Global Strategies. Guidelines for Success as a Global. Robert Allio mentioned guidelines for customer loyalty and market share: 1. Get to know global markets first. Counterattack at home for parent. Global Issues Prof. Counterattack at home for parent firms (attack them at their homes).
Strategic management focuses on how an organization uses a strategic planning process to make decisions. All managerial actions must theoretically match an organization's central goals and department-level operational goals. Ethical issues in strategically managed organizations surface when managers make decisions to advance goals that have negative consequences.
Self-Gain
One of the biggest problems a company could face in terms of corruption occurs when a manager or another powerful person uses a position of power to make deals that benefit himself while not benefiting the company or its stakeholders, including shareholders and workers. A company must define a code of ethics to hold all of its employees accountable for their decisions, including prohibiting them from using their business relationships, knowledge, equipment and other resources belonging to the company for personal financial gain.
Social Impact
A business strategy may call for finding the most cost-effective ways to produce goods for the company. For example, contracting out to factories in developing countries because labor and materials are cheaper could save tons of money for the company; however, the social impact for the company brand might not be worth it if workers are employed in sweatshops with very low wages and poor working environments. A company must consider the ethics of services it pays for inside and outside of the country to demonstrate its social responsibility.
Public Interest
Companies can develop and operate in such a large arena that the amount of resources they control makes them more powerful than a small or resource-poor country. In this way, the decisions of the company that seem to benefit one part of the company and be in the public interest and economic interest for one country might hurt the interests of another country. A company should study the impact of its business strategies across national borders and within regions and smaller communities to gauge whether they are in the public interest.
Environmental Impact
Companies also take actions that negatively affect the natural environment, such as pollution and natural resource exploitation, in one or more operational locations. A firm can make better decisions and protect the environment using standards of an environmental management system. This system might include standards shared by companies in the same industrial or commercial sector, including compliance with laws and regulations, studying health and safety effects of business practices and products, and working with the public and government agencies in an open way to comply with acceptable standards.
he globalization of business has become so rapid that a new field called 'Global Strategic Management' has now emerged. This new field is a blend of strategic management and international business that develops worldwide strategies for global corporations. Whereas most studies in this field focus on ordinary business conditions, the revolutionary events of the past few years make it clear that the present is not ordinary. Such epoch-shattering events as the collapse of communism, the unification of Europe, the information revolution, the arrival of an environmental ethic, and other remarkable new developments signal that a new era is emerging in global affairs. This article describes a broader approach to global strategic management that encompasses these revolutionary changes.
The viewpoint presented here was developed in a project sponsored by the World Future Society called 'WORLD 2000.' WORLD 2000 focuses on conducting a global strategic management process among business, government, education, and other sectors of society to define the emerging global system and help institutions adapt to changes. It represents a fresh examination of the forces that are integrating the earth into a coherent global order as well as those that are creating the disorder that tends to characterize our time: the unification of markets and communications, as well as the vast differences in cultures, local problems, and values erupting around the globe. By gaining new insights into the emerging world system, social institutions may better understand how they can adapt to these changes.
This seems to be an opportune time for such an examination. The transition to a new global system is likely to be made during the next decade; the year 2000 offers a highly symbolic turning point at which the emerging global order can be shaped and molded.
Following is a global strategic plan, developed by synthesizing the literature and then reviewing the plan with groups of executives. It follows the logic of a typical strategic plan but carried to a global level. First, we summarize nine supertrends that describe a long-term trajectory toward an advanced stage of 'global maturity.' Second, we note five principal obstacles that must be overcome to clear the way ahead. Third, we argue that these issues can be resolved by a newly emerging perspective that recognizes the essential unity of a global community.
THE TRAJECTORY TO GLOBAL MATURITY
The following trends represent the principal driving forces that are now moving the world in new directions. They could be called 'supertrends.' Little attempt is made to offer justifications, and many other trends that capture finer details are not covered. This summarizes the major features that characterize the emerging shape of the globe as it moves along a long-term trajectory toward a new stage of global maturity.
Trend 1: A Stable Population of 10-14 Billion
The earth, which already is teeming with 5.5 billion people, is expected to double its population to reach a stable level somewhere between 10-14 billion humans by the mid-21st century. About 95 percent of this growth will occur in the less developed countries (LDCs).
Trend 2: Industrial Output Will Increase by a Factor of 5-10
The aggregate level of material consumption, or industrial output, should increase by a factor of 5-10 over the next few decades as most remaining parts of the world industrialize to reach the equivalent standard of living enjoyed by Americans, Europeans, and Japanese. Industrial throughout, however, is likely to grow less as more efficient means are found to insure a sustainable form of development.
Trend 3: The Wiring of the Globe
Current Issues In Strategic Management
Information technology (IT) is a revolutionary force that will continue to overthrow governments, restructure corporations, and unify the world. This revolution will wire the earth into a single communication network, a central nervous system for a planetary society. However, the gap between information haves and have-nots is apt to persist.
Trend 4: The High-Tech Revolution
The IT revolution is accelerating technical advances to create breakthroughs in all fields: the mapping of DNA, genetic therapy, robotics, materials research, sustainable 'green technology,' automated transportation, and even a 'technology of consciousness.'
Trend 5: Global Integration
The globe is becoming integrated into a single community connected by a common communication system, a global economy, and a shared international culture. In time, this process may unify today's growing economic blocs and political federations into a universal system of open trade, a global banking system and common currency, and some form of world governance.
Trend 6: Diversity and Complexity
It is a great paradox that global integration will be accompanied by disintegration into a highly diverse system. Ethnic enclaves, such as those in the former republics of the USSR, will continue to seek autonomy; various groups within nations will form pockets of self-governing subcultures; and modern societies generally will splinter into a far more complex, differentiated social order.
rend 7: A Universal Standard of Freedom
Freedom and the recognition of human rights should continue spreading around the globe, though this movement may ebb and flow at times. A majority of nations now have political democracy and free market systems, and the number should grow to the extent that freedom becomes the accepted norm, with authoritarian systems being the exception.
Trend 8: Continued Crime, Terrorism, and War
Traumatic upheaval is likely to produce disgruntled individuals, groups, and nations resorting to a variety of crimes, terrorism, and limited wars. However, global wars and the old fear of nuclear holocaust now seem unlikely.
Trend 9: Transcendent Values
As this transformation unfolds, most people in advanced nations should strive for quality of life, community, self-fulfillment, art, spirituality, and other higher-order values that transcend material needs. Many are cynical about such claims, but as the philosopher Andre Malraux predicted, the twenty-first century will be the century of religion.
Global Strategic Management Inc
CRITICAL ISSUES BLOCKING THE PASSAGE AHEAD
Although this evolutionary trajectory is likely to stabilize into a mature, coherent global order in the mid-twenty-first century, business and government must resolve the following five issues, which pose barriers to this forward movement. Once again, this represents a quick survey--not a detailed summary--to highlight key issues that now present major obstacles to progress.
Issue 1: Making the Leap to a Global Order
Most of the problems the world struggles with result from the fragmented economic and political systems that continue unchanged from the industrial past. Trade barriers, fluctuating currency exchange rates, and difficulties in communicating are 'old' problems that should not exist in a 'new' global order managed as a coherent system; they do not exist in the United States, Germany, China, or other societies governed as coherent systems. The transition to some type of world order is monumental because it requires sophisticated global systems that integrate the world into a single whole, permitting a quantum leap to a global level of governance heretofore unknown.
Issue 2: Reconciling Economic Interests
Communism may have yielded to markets, but markets do not exist only in capitalism. The strength of Japan, for instance, hinges on a market system that is based on collaborative working relations: a 'Human Enterprise System' (Ozaki 1991). In contrast, the capitalism practiced in Western nations, such as the United States, is in trouble because it exacerbates conflicts between labor and management, rich and poor, business and government, domestic and foreign trade, private and public sectors, and other basic incompatibilities. A sound global economy for the future, therefore, awaits the creation of a new economic paradigm based on some form of free enterprise that can reconcile these diverse interests into a productive and harmonious community.
Issue 3: Achieving Sustainable Development
The present conflict between economic growth and environmental protection will be resolved either rationally or through some form of decline. The anticipated five- or ten-fold increase in industrial output is incompatible with any reasonable forecast under existing conditions. Many solutions are being proposed to achieve sustainable development, but the task of implementation remains formidable. Ecological systems are suffering unsustainable stress even under today's far more modest load. Developed countries (DCs) show little inclination to alter their profligate lifestyles, and LDCs seem to be striving for Western affluence.
Issue 4: Managing Complexity
One of the most striking trends of the emerging future is the explosion of complexity that is almost impossible to contain within today's cumbersome institutions. Much of what passes for unsolvable disorder reflects an inability to respond effectively to the diversity of individual and community challenges. This problem, which toppled communism, is becoming severe in the West. Top-down corporations are struggling to diversify so they can serve myriad market niches; governments have not yet begun to grapple with the intricacies of education, poverty, crime, and other chronic social problems. Dramatically different institutions are needed to manage this complex new world, which may require an upheaval similar to the one now plaguing the former communist bloc.
Issue 5: Alleviating the North-South Gap
The enormous disparity between the wealth of LDCs in the South and the DCs of the North shows little sign of improvement, fanning an explosive antagonism between these two halves of the globe. Average income in the South is now about six percent of that in the North; little progress is being made in alleviating the misery of these people, who make up three-quarters of all humanity. Unless serious efforts are made to close this gap by bringing LDCs into the modem world, the Southern hemisphere will seethe with the same potential for violent confrontation that was released in the Los Angeles riots of 1992.
These five dilemmas are exacerbated by one of the most pervasive problems of our time: a collapse of faith in the familiar old ideology that guided humans through the past epoch with good success. It could be thought of as a 'meta-issue.' With the USSR now defunct and the United States in crisis, the lack of superpower leadership has left a vacuum of power. ideas, and moral guidelines at a time when the world is facing Herculean new challenges. The result is political gridlock, economic stagnation, destructive personal stress, social disorders, and many other symptoms of breakdown. From all this apparent chaos, a new paradigm, model, or belief system must somehow be formed that allows people to make sense of today's different global realities.
A STRATEGY BASED ON A NEW GLOBAL PERSPECTIVE
An enormous variety of policies and remedial programs are being proposed to resolve all these problems, but their sheer number and diversity scatter attention into confusing, uncoordinated, and ineffectual directions. This section synthesizes these proposals into a 'master strategy' based on a different perspective now gaining increasing attention, one that recognizes the essential unity of the emerging global system.
The key to understanding the emerging world view is to see that unprecedented new imperatives have arisen--especially the revolutionary force of IT--that are unleashing powerful new forces to integrate the globe. As communication systems encircle the earth to form a central nervous system for the planet, the fragmented parts of today's failing global order are being joined together into an interconnected, coherent system. The most recent report of the Club of Rome (King and Schneider 1991) notes that current dramatic changes represent the first global revolution because the entire earth is experiencing these events together at the same time. This shift to a new global perspective is summed up in the Table. This perspective then leads to the following elements of a master strategy required to overcome the issues defined before:
Strategy 1: Disseminate Advanced Technology to Unify the Globe
Although many people fear its effects, the relentless advance of modern technology--especially information technology--is the primary force driving the globe through its present transition. It was the ubiquitous presence of television, radio, facsimile, and video, for instance, that armed citizens of the former USSR and the Eastern Bloc with the knowledge required to overthrow their governments.
Information technologies should be diffused, therefore, by corporations selling sophisticated products abroad, governments fostering joint research and development projects, individuals sharing technical knowledge, and any other reasonable methods. There is a particular need to find ways of introducing these technologies into LDCs to advance their modernization and unite them with the world. All technology can be misused, so care is needed to ensure that it is applied appropriately. The emerging global order is being constructed on a technological foundation; the sooner that foundation is in place, the sooner this system can behave as a coherent global community.
Strategy 2: Integrate Economics and Society
The conflict between economic life and social life is being reconciled, as evidenced by breakthroughs that would have been unthinkable a few years ago. Japan has shown the world that a union of economic and social interests is more productive, spurring others to emulate this 'human-centered' form of enterprise. Even General Motors, long regarded as the antithesis of this idea, has formed GM-Saturn as a prototype of socially responsive business, managed by a coalition of workers, customers, suppliers, distributors, and local citizens. Saturn production lines cannot keep up with demand because Saturn cars are now the best in their class, proving that social goals are compatible with economic goals.
Intense global competition should, in time, drive most economies in this direction because it is efficient. Decisions ranging from the shop floor to national macroeconomic policy may then be made collectively by all affected parties, including workers, labor, consumer advocates, governments, and citizens. If this can be done, the leaders of business and other social institutions may then act as stewards rather than managers, creating the badly needed trust, quality, mutual service, and collaborative economic relationships that can instill the essential sense of community that vitalizes society.
Strategy 3: Create a Symbiotic Society-Environment Interface
A harmonious economic-societal relationship will mean little if it is not supported by a viable ecosystem. Civilization must be carefully redesigned to form a symbiotic society-environment interface. Business firms are now competing to prove their environmental consciousness because of public pressure. Stephen Schmidheiny, Chairman of the Business Council for Sustainable Development, described the advantages (1992): 'Progress toward sustainable development makes good business sense because it can create competitive advantage and new opportunities.'
A wide range of difficult adjustments are under way to integrate ecological realities into economic and social life. Sustainable technologies and practices are being developed to increase economic efficiency, advance more modest but wholesome lifestyles, develop renewable energy, reforest denuded lands, convert to organic agriculture, recycle waste, and improve pollution controls. To evaluate this complex situation realistically, social indicators must be incorporated into such financial measures as GNP; social costs, such as pollution, should be internalized in the form of taxes and credits to guide balanced economic choices.
Strategy 4: Decentralize Institutions to Empower Individuals
Almost all analysts agree that social institutions need to be restructured for a knowledge-based global order, but confusion reigns over what is needed. The most useful guide can be found in a dominant imperative now sweeping through modern nations: institutions are being decentralized into networks of small, autonomous units to master complexity. This imperative is the entrepreneurial half of the new role emerging for institutions; the move toward collaborative, democratic policymaking described in Strategy 3 constitutes the other half that unifies this diversity into a harmonious whole.
For instance, large corporations are being disaggregated into small 'internal enterprises' that form the equivalent of market economies inside organizations--'internal markets' (Halal et al. 1993). Under the pressure of limited budgets and public demands, governments are also allowing the public to choose among competing agencies. A good example is the way U.S. education is introducing market competition among schools, which are also governed democratically by teachers, parents, local citizens, and administrators.
The result of all these changes is to restructure authority relationships. Markets and democracies share the common feature of placing control in the hands of ordinary people to harness the growing diversity of thought and values into creative forces of change, with institutions providing the overarching systems that support and guide change. The decentralization of authority, then, empowers people to care for themselves more effectively, which provides a self-organizing system for managing a complex world.
Strategy 5: Foster Collaborative International Alliances
A knowledge-based society fosters pockets of collaborative problem solving in which all partners benefit, while competition drives collaborating parties together. This is why business managers and politicians are creating a flurry of strategic alliances with their competitors. Cooperation has now become the most powerful force in world affairs.
This new ethic of strategic collaboration is also being extended to forge productive alliances between business and government, economists and ecologists, and competing nations, knitting together a global community of diverse groups. Note that an ethic of cooperation implies not altruism but a reciprocity of interests that benefits all partners. It is enlightened self-interest.
The conflict between North and South, for example, could yield cooperative ventures, such as the North American Free Trade Agreement, between DCs and LDCs based on mutual advantages for both parties. LDCs gaining capital, jobs, and know-how, while DCs gain access to markets and less costly labor.
Strategic Management Pdf Notes
Obviously there is no assurance that the world will pursue a path of this type. And it is certainly true that difficult choices at dangerous junctures could deflect the trajectory toward maturity into other directions. However, historic breakthroughs have occurred in the past few years--the collapse of communism, a greatly reduced threat of nuclear holocaust, and worldwide concern over the environmental crisis--largely through the natural evolution of the global order. Barring unforeseen disasters, it seems reasonable to expect that the other remaining obstacles noted above could also be resolved from this same natural process, though we cannot now anticipate how or when.
This does not mean that individuals and institutions are passive observers of an immutable process of natural development: change is the sum of countless small human actions that collectively produce social transformation. A coherent new world order will emerge only if global corporations, national governments, and educational institutions are able to adopt major strategies such as those outlined above. Developing and disseminating advanced technologies, especially information technology, will be essential in forming the foundation for a mature global society. A collective model of enterprise must be defined that reconciles the interests of capital with mounting social concerns, particularly environmental sustainability. Large firms must be decentralized to empower individuals if we hope to manage a complex and diverse world. Strategic alliances must be encouraged on a global scale to avoid the conflicts that now divide the world.
Accomplishing these ambitious tasks will test us all because our individual perspectives will have to yield to a broader perspective. In our work conducting the WORLD 2000 global strategic management process for corporations, government agencies, and other management groups, we find a common theme running through all these changes: the emerging global order can be integrated into a workable whole only by accepting the legitimacy of other views, even those we feel are antithetical to our own.
The primary skill required to survive this critical transformation, therefore, is an attentive ability to reconcile the conflicting, endlessly changing, overwhelming complexity posed by today's diverse world. A crucial paradox lies at the heart of this challenge. What is involved, fundamentally, is cultivating a more transcendent mode of thought that can permit all of us to regain command over our affairs by relinquishing the illusion of self-control in favor of shared control.
References
Lester Brown et al., Saving the Planet (New York: W.W. Norton, 1991). Bruntland Report'; World Commission of Environment and Development, Our Common Future (New York: Oxford University Press, 1987). Business Horizons, special issue on 'Business and the Environment,' March-April 1992. Harlan Cleveland, 'Birthday of a New World,' address to the International Insurance Society, Tuscaloosa, Alabama, March 23, 1992. Robert Constanza, Ecological Economics (New York: Columbia University Press, 1991). Encyclopedia of World Problems and Potential (Munich, Germany: Saur Verlag, 1991). Jay Forrester, 'Counterintuitive Behavior of Social Systems,' Technology Review, January 1971. Ken Geiser, 'The Greening of Industry,' Technology Review, August-September 1991, pp. 64-72. William E. Halal, 'A Forecast of the information Technology Revolution,' Technological Forecasting and Social Change (forthcoming). William E. Halal, 'East is East, and West is West,' Business in the Contemporary World, Fall 1992, pp. 95-113. William E. Halal, The New Capitalism (New York: Wiley, 1986). William E. Halal, 'The New Management: Social Institutions for an information Age,' Business in the Contemporary World, Winter 1990, pp. 41-54. William Halal et al., Internal Markets: Bringing the Power of Free Enterprise Inside Organizations (New York: Wiley, 1993). Willis Harman, Global Mind Change (Indianapolis, IN: Knowledge Systems, 1988). Hazel Henderson, 'Beyond Economics: New Indicators for Culturally Specific Sustainable Development,' Development, Vol. 4, No. 4 (1990): 60-68. Samuel Huntington, The Third Wave: Democratization in the Late Twentieth Century (Norman, OK: University of Oklahoma Press, 1991). Alexander King and Bertrand Schneider, The First Global Revolution (New York: Pantheon, 1991). Art Kleiner, 'What Does It Mean to be Green?' Harvard Business Review, July-August 1991, pp. 38-45. Hans Kung, Global Responsibility: In Search of a New World Ethic (New York: Crossroads Publishing Co., 1991). Donald Lesh and Diane Lowrie, Sustainable Development (Washington, DC: Global Tomorrow Coalition, 1990). Jim MacNeill, Pieter Winsemius, and Taizo Yakushiji, Beyond Interdependence The Meshing of the World's Economy and the Earth's Ecology (New York: Oxford University Press, 1991). Donella H. Meadows, Dennis L. Meadows, and Jorgen Randers, Beyond the Limits (Mills, VT: Chelsea Green Publ., 1992). John Naisbitt and Patricia Aburdene, Megatrends 2000 (New York: Morrow, 1990). Julius Nyerere, The Challenge to the South: Report of the South Commission (New York: Oxford University Press, 1990). David Osborne and Ted Gaebler, Reinventing Government (Reading, MA: Addison-Wesley, 1992). Robert Ozaki, Human Capitalism (Tokyo: Kodanshi, 1991). Christopher Plant and Judith Plant, Green Business: Hope or Hoax? (Philadelphia: New Society, 1991). Alan Rugman, ed., Research in Global Strategic Management (Greenwich, CT: JAI Press, 1990). Nafis Sadik (Executive Director, UN Population Fund), 'World Population Continues to Rise,' The Futurist, March-April 1991, pp. 9-14. Stephen Schmidheiny (Chairman of the Business Council for Sustainable Development), Changing Course: A Global Business Perspective on Development and the Environment (Cambridge, MA: MIT Press, 1992). Charlene Spretnak, States of Grace: The Recovery of Meaning in the Postmodern Age (San Francisco: Harper, 1991). Strategic Management Journal, special issue on global strategy, Vol. 12, Summer 1991. Lester Thurow, Head to Head: The Coming Economic Battle Among Japan, Europe, and America (New York: Morrow, 1992). Sandra Vandermerwe and Michael E. Oliff, 'Corporate Challenges for an Age of Reconsumption,' Columbia Journal of World Business, Fall 1991, pp. 6-25. Heidi Vernon-Wortzel and Lawrence H. Wortzel, Global Strategic Management (New York: Wiley, 1992). Robert Wesson, Democracy World Survey 1987 (Boulder, CO: Lynne Rienner Publishers, 1988). Robin Wright and Doyle McManus, Flashpoints: Promise and Peril in a New World (New York: Knopf, 1991).
