5 - Multinational corporate strategy

Summary

Learning points

1.  Outline the contours of the multinational corporation

2.  Discuss the trade-offs of business and geographical diversity

3.  Describe the tensions between integration and responsiveness

4.  Consider applications of integrative strategy making

When firms conduct business the strategic outcomes are affected by decisions made in various parts of the organization and the associated actions pursued over time. An engineer might see an opportunity in the firm's technological competencies to accomplish new ends and then develop these in response to identified customer needs. Sales managers might observe new customer requirements or concrete requests for adaptations to existing products and services and therefore engage production and engineering to accommodate those demands in new market offerings. They might also note that some customers express an interest in establishing overseas sales relationships as their activities move outside the home country. Operating managers might see applications of new technologies and practices that can provide more flexibility in product deliveries and be open for more efficient sourcing channels overseas. At the same time, executives might come across potential acquisition candidates among close competitors or firms operating in adjacent industries, possibly with activities in different countries, and persuade the board to back decisions to acquire or merge with these companies. These examples illustrate how decisions and activities pursued in different parts of the organization can lead to the development of a broader product-market focus in the firm that also may entail a certain internationalization of business activities.