Chapter 7: Global Strategic Planning
marginally.
Strategic planning is the process within which decisions are
designed before they are taken and evaluated so as to increase
the probability of a successful outcome. It is future-oriented but
sensitive to the past, and involves an inter-generational
interaction between managers, industry, the state and the region.
Overview on Global Strategic Planning
How external and internal aspects affect a company's
competitiveness is core to strategic planning. Global planning
necessitates an awareness that decisions taken by managers,
firms, industries, nations, and regions are done in a cross-cultural
environment. Re-engineering the operational processes in
response to conditions internal to the firm or outside the firm can
facilitate competitiveness in markets worldwide.
FDI Inflows Down
The UNCTAD notes that FDI flows to different regions and
countries were uneven. Worldwide, 111 countries experienced a
rise in FDI inflows and 82 a decline. FDI inflows were lower for 16
countries in the region and higher for 10.
FDI Outflows Up
Unlike inflows, FDI outflows from developed countries rose in
2003, albeit marginally. While uneven performance characterized
outward FDI by developed countries, the world’s 100 largest
transnational corporations (TNCs) showed signs of resumed
growth in terms of sales and employment in 2002, Unlike inflows,
FDI outflows from developed countries rose in 2003, albeit
Dynamic Growth of Services FDI
What is being seen, however, is a dramatic shift toward the
services sector. Indeed, today the services sector accounts for
about 60 percent of the global inward FDI stock, compared to less
than 50 percent a decade earlier. Service firms invest more and
more abroad as they seek new clients and exploit their own
ownership advantages, frequently spurred on by competitive
pressures.
FDI Prospects
Prospects for global FDI are expected to be positive in both the
short term (2004–2005) and the medium term (2006–2007). The
extent and the speed of the FDI recovery, however, will vary by
region and industry. Competition for FDI is expected to remain
fierce in the years to come.
Prospects for Major Host and Home Countries
Top Destinations for FDI
In Africa, South Africa and Nigeria are the only sub-Saharan
African countries in the top five destinations for the continent as
a whole. The largest recipients of FDI flows in each region are
expected to be the most likely destinations of foreign direct
investment (FDI) in the future. In Asia, India was ranked right
behind China, even though it is yet to become a major FDI
recipient.
Leading Sources of FDI
For the first time, a developing country, China, has made the list
of the expected top five home countries worldwide in terms of
geographical coverage (2004–2005), replacing Japan, which
traditionally has been a significant home country.
The Role of the Transnational Corporations
Transnational corporations are envisioned as engines of growth
partly because of their role in providing capital and training. Key
to any global strategic planning approach is the awareness of the
linkage FDI provides among trade, financial, and technological
flows. The significance of strategic planning by managers is
heightened by the assumption that FDI to some degree
determines the flow of trade, capital, and technology.
The Strategic Planner in a Global Multicultural Environment
For global competitiveness and success, organizations of today
need the multicultural manager who must possess the necessary
cultural sensitivity and skills to enable their organizations to adapt
to the foreign countries' overall environment, according to the
International Management Association's (IMA) World Manager of
the Year award. These multicultural managers should be able to
do the following:
 Think beyond local perceptions, and transform stereotypes
into positive views of people.
 Prepare for new mind shifts while eliminating old mindsets.
 Re-create cultural assumptions, norms, and practices based
on new insights and experiences.
 Reprogram their mental maps and constructs.
 Adapt readily to new and unusual circumstances and lifestyles.
 Welcome and facilitate transitional experiences.
 Acquire multicultural competencies and skills, including
foreign languages.
 Create cultural synergy whenever and wherever feasible.
 Operate effectively in multinational/multicultural
environments.
 Envision transnational opportunities and enterprises.
 Create optimistic and doable scenarios for future.
Furthermore, multicultural managers are (as adapted from
Simons, Vazquez, and Harris.
 Students of worldwide human relations and values.
 Open and flexible in dealing with diversity in people.
 Comfortable with those from different disciplines, fields,
backgrounds, races, and genders.
 Facilitators of newcomers, strangers, minorities, and
immigrants to the workplace.
 Collaborators in joint ventures, consortia, or coalitions.
 Planned change agents and futurists.
The multicultural strategic planner will have to become familiar
with the value systems across cultures. The importance the
American culture places on independence and individual freedom
of choice obviously leads to the idea that everyone is equal
regardless of age, social status, or authority.