INTERNATIONAL BUSINESS STRATEGY

LECTURE 1. MNCs: SHAPE AND SOURCES OF COMPETITIVE

ADVANTAGE

Multinational: a product or product line that are vastly differentiated but have no or little
cost pressure
International: a company that doesn’t have to make its products different on different
environment, very heavy added value products (high tech)

1.1. What is the fundamental Strategy of any Firm? Be profitable in a sustainable

manner
Companies have to produce products valued by consumers, therefore firms create
value.
Value added when product is modified + customers pays more. i.e. it is
DIFFERENTIATED from competitors.
The cost of value creation is lowered when this activity is performed more efficiently.
Differentiation and Low Cost strategies are the basis for improving profitability.

A company that is struggling to be profitable usually cuts costs (hiring people..), it

should spend more, by doing the first they are ensuring that future profitability will not
come

Core Competence Skills within a firm not easily imitable by competitors, to do it the
competitors would have to use more resources, time, effort, money...
Competitive advantage: adding value and reducing cost

Experience Curve Systematic reduction in production costs that have been observed
to occur over the life of a product (e.g., discovered in the aircraft industry: production
costs of the 4th aircraft would be 20% lower than the costs for the 2nd and
successively (because you get better at doing what you are doing))

Economies of Scale Reductions in unit cost achieved by producing a large volume of

a product

Learning Effects Cost savings that come from learning by doing (e.g., labor
productivity)
Location Economies Economies that arise from performing a value-creation activity in
the optimal location for that activity (national differences).
E.g., China may be the optimal location for low cost manufacturing activities whereas
France or Italy have location economies in high design
But: a) transportation costs; b) trade barriers and c) political risks (location
“diseconomies”)

Economies of Scope Cost reductions or product differentiation due to operating at a

global scale, producing broad lines of customized product without sacrificing
economies of scale. Maintaining the cost reduction in a economy of scale but
differentiating your production

Pressures for local responsiveness

- CONSUMER PREFERENCES AND TASTES (i.e., coke, i-tunes, SUVs in US).
- DIFFERENCES IN INFRASTRUCTURES (i.e., voltage systems 110 volt in US
vs. 240 volt in EU, cars…)
- DIFFERENCES IN DISTRIBUTION CHANNELS
- HOST GOVERNMENT DEMANDS
CONCLUSION: full benefits of going global firms are not always doable. (i.e., the case
of Ford).

Pressures for cost reductions

- WHEN PRICE IS THE MAIN COMPETITIVE WEAPON (i.e., Computer
hardware)
- COMMODITY PRODUCTS (i.e., Sugar)
- WHEN “CONSUMERS/CUSTOMERS” ARE POWERFUL AND FACE LOW
SWITCHING COSTS (i.e., tire industry).
- WHEN THERE IS EXCESS CAPACITY IN THE INDUSTRY (i.e., tire industry
again…25% of world capacity standing idle…) when there’s an excess in
manufacture, prices go down.

Four different environments

1. International strategy Metals, machinery, paper, textiles, printing and
publishing. E.g., Toys R Us, McDonalds, IBM, Kellogg, Procter & Gamble in 70s
80s
 2. Multidomestic strategy E.g., beverages, food, rubber, household appliances,
consumibles Philips in the 70s
3. Global strategy Construction and mining, industrial chemicals, engines,
scientific measuring instruments; semiconductor industry. E.g., Motorola, Intel,
Texas instruments
4. Transnational environment Drugs and pharma, photographic equipment,
computers, automobile. Eg., Unilever, Caterpillar

International
Advantages Disadvantages
Transfer distinctive competencies. Lack of local responsiveness.
Inability to exploit experience curve
effects.
Inability to realize location economies.

Multinational (MNC)
Advantages Disadvantages
Customize produces and marketing to Impossibility of Economies of Scale
local responsiveness.
No experience curve effects
Limited transfer of distinctive
competencies: every country has a set of
value-creation activities.

Global
Advantages Disadvantages
Exploit experience curve effects. Lack of local responsiveness.
Exploit location economies.

Transnational
Advantages Disadvantages
Experience curve effects. Difficult to implement
Exploit location economies.
Customize products and marketing.
Global learning (knowledge produced not
only in the home country).
Economies of scope

LECTURE 1B. FROM ORGANISATIONAL TRANSFORMATION TO

INDUSTRY TRANSFORMATION
The case of IBM
According to many observers;
IBM had the wrong kind of organization, skills, systems, and behaviours for a radically
transformed IT industry.....
The real issue was that it woke up far too late to reconfigure its organization, skills and
people in time to intercept the trends that were radically reshaping its industry.
During the 1980s and early 1990s, IBM was thrown into turmoil by back-to-back
revolutions.
The PC revolution placed computers directly in the hands of millions of people. And
then, the client/server revolution sought to link all of those PCs (the "clients") with
larger computers that labored in the background (the "servers" that served data and
applications to client machines).
Both revolutions transformed the way customers viewed, used and bought technology.
And both fundamentally rocked IBM.
Businesses' purchasing decisions were put in the hands of individuals and departments
- not the places where IBM had long-standing customer relationships.
Piece-part technologies took precedence over integrated solutions.
The focus was on the desktop and personal productivity, not on business applications
across the enterprise.
By 1993, the company's annual net losses reached a record $8 billion.
Cost management and streamlining became a chief concern. And IBM considered
splitting its divisions into separate independent businesses.
Louis V. Gerstner, Jr. arrived as IBM's chairman and CEO on April 1, 1993. For the first
time in the company's history IBM had found a leader from outside its ranks. Gerstner
had been chairman and CEO of RJR Nabisco for four years, and had previously spent
11 years as a top executive at American Express.
Gerstner brought with him a customer-oriented sensibility and the strategic-thinking
expertise that he had honed through years as a management consultant at McKinsey &
Co. Soon after he arrived, he had to take dramatic action to stabilize the company.
These steps included rebuilding IBM's product line, continuing to shrink the workforce
and making significant cost reductions. Despite mounting pressure to split IBM into
separate, independent companies, Gerstner decided to keep the company together.
He recognized that one of IBM's enduring strengths was its ability to provide integrated
solutions for customers - someone to represent more than piece parts or components.
Splitting the company would have destroyed a unique IBM advantage.

With the rise of the Internet and network computing the company experienced another
dramatic shift in the industry. But this time IBM was better prepared. All the hard work
IBM had done to catch up in the client/server field served the company well in the
network computing era.
Once again, customers were focused on integrated business solutions - a key IBM
strength that combined the company's expertise in solutions, services, products and
technologies.
In the fall of 1995, delivering the keynote address at the COMDEX computer industry
trade show in Las Vegas, Gerstner articulated IBM's new vision - that network
computing would drive the next phase of industry growth and would be the company's
overarching strategy. That year, IBM acquired Lotus Development Corp., and the
next year acquired Tivoli Systems Inc. Services became the fastest growing segment
of the company, with growth at more than 20 percent per year.
In May 1997, IBM dramatically demonstrated computing's potential with Deep Blue, a
32-node IBM RS/6000 SP computer programmed to play chess on a world class level.
In a six-game match in New York, Deep Blue defeated World Chess Champion Garry
Kasparov. It was the first time a computer had beaten a top-ranked chess player in
tournament play, and it ignited a public debate on how close computers could come to
approximating human intelligence. The scientists behind Deep Blue, however,
preferred to stress more practical concerns. Deep Blue's calculating power - it could
assess 200 million chess moves per second - had a wide range of applications in fields
calling for the systematic exploration of a vast number of variables, among them
forecasting weather, modeling financial data and developing new drug therapies.
As the decade drew to a close, IBM stood on the threshold of the new century having
reestablished itself as a leading information technology innovator. Its leadership helped
create the e-business revolution. And it had successfully transformed itself, achieving
an impressive business turnaround. As the new century opened, IBM moved
confidently into a future it helped create, one that is linked to the ubiquitous and
surging presence of the global networks that are connecting every computer, and soon
perhaps, every electronic device in the world.

The case of Chrysler

In july 93 Chrysler’s Bob Eaton assembled the senior managers to discuss the
company’s second quarter earnings, after praising the execs for producing the best
results since 1984, Eaton revealed that the same accolades had been written at least
one a decade since 1956, and that once every 10 years the company had undergone a
miraculous resurrection.

Competition for the future

No company can escape the need to reskill its people, reshape its product portfolio,
redesign its processes and redirect its resources. Organizational transformation is a
must for every enterprise. The real issue is whether transformation happens belatedly
– in a crisis atmosphere – or with foresight-in a calm and considered atmosphere and
WHO sets the transformation agenda, more prescient competitors?. Is the
transformation spasmodic and brutal or continuous and peaceful, Palace coups and
bloodletting make great press, but the real objective is a bloodless revolution.
The high price that companies pay for belated culls, is that the most talented
employees anticipate the carnage and flee for safety (the first rats off the ship are the
best swimmers)
Architectural treasures are looted, (when healthy businesses are forced to slash
headcount and investment to compensate for lousy strategic decisions)
Only when restructuring and reengineering fail to halt corporate decline do most
companies consider the need to regenerate their strategy and ultimately reinvent their
industry.
To get ahead of the industry change curve, top management must recognize that the
company may be blind as well as fat and lazy, it must attack strategy regeneration and
industry reinvention in concert, or better yet, in anticipation of, the restructuring and
reengineering agenda.

LECTURE 2. The organization of international business MCGraw-Hill chapter 13

Organizational change at unilever
Organized in a decentralized basis
Annual conferences on company strategy and executive education sessions, establish
connections between managers
Duplication of facilities and high cost structure a problem in new competitive
environment
1996: introduced structure based on regional business groups
“Lever Europe” established to consolidate the company’s detergent operation in order
to reduce costs and speed up new product information

Organizational architecture and profitability

The term we use when we discuss the structure of the company

Totality of a firm’s organization, including structure, control systems, incentives,

processes, culture and people.
Superior organization profitability requires three conditions:
- An organization’s architecture must be internally consistent.
- Strategy and architecture must be consistent.
- Strategy, architecture and competitive environments must be consistent.
 To maximize profitability a firm must achieve
consistency between the various components of its architecture

Organizational structure: Location of decision-making responsibilities within the

structure (vertical differentiation)
- Formal division of the organization into subunits e.g. product divisions
(horizontal differentiation)
- Establishment of integrating mechanisms including cross-functional teams and
or pan-regional committees
Control systems: metrics used to measure performance of subunits and judge
managerial performance

Horizontal differentiation: organizational structure, the way the company is structured

Vertical differentiation: where the decisions are made, it can be centralized or
decentralized

Incentives: Devices used to reward appropriate employee behavior. Closely tied to

performance metrics
Processes: Manner in which decisions are made and work is performed
Organizational culture: Values and norms shared among employees of an
organization. Strategy used to manage human resources
People: Employees. Strategy used to recruit, compensate, and retain individuals with
necessary skills, values and orientation

Vertical differentiation
Concerned with where decisions are made: Where is decision making power
concentrated?
Two Approaches
- Centralization
- Decentralization
Strategy and organization structure
Major strategic decisions are centralized at the firm’s headquarters while operating
decisions are decentralized

Structure of the domestic firm

Concerned with structure design
Decisions made on basis of function, type of business or geographical area
Structure of domestic firms:
- Single entrepreneur or small team of individuals therefore a centralized
structure
- With introduction of more product lines, product divisional structure introduced
- Each division responsible for single product line
- Self-contained, largely autonomous entities
- Responsible for operating decisions and performance

Functional structure
The structure that evolves in a company’s early stages. Coordination and control rests
with top management
Product division structure
Probable next stage of development. Reflects company growth into new products.
Each unit responsible for a product. Semiautonomous and accountable for its
performance.
Eases coordination and control problems.

International division
Widely used
1. Can create conflict between domestic and foreign operations.
2. Implied lack of coordination between domestic and foreign operations.
Growth can lead to worldwide structure.

Organized on geography
Initially export goods to foreign subsidiary but later outsource production
Problems:
- Heads of foreign subsidiaries relegated to second-tier position
- Lack of coordination between domestic and foreign operations
Therefore firms begin adopting worldwide structures
Depending on how much we sell or how diverse we are in terms of product offering, it
determines our path on organizational structure.

Worldwide area structure

- Favored by firms with low degree of diversification & domestic structure based
on function World is divided into autonomous geographic areas Operational
authority decentralized
- Facilitates local responsiveness
- Fragmentation of organization can occur
- Consistent with multi-domestic strategy

Product division structure

Reasonably diversified firms.
Attempts to overcome international division and worldwide area structure problems.
Believe that product value creation activities should be coordinated worldwide
Weak local responsiveness

Worldwide product divisional structure

Adopted by firms that are reasonably diversified
Original domestic firm structure based on product division
Value creation activities of each product division coordinated by that division worldwide
- Help realize location and experience curve economies
- Facilitate transfer of core competencies
Problem: area managers have limited control, subservient to product division
managers, leading to lack of local responsiveness
Matrix structure
Attemps to meet needs of transnational strategy
Doesn’t work as well as theory predicts
‘flexible’ matrix structure
Conflict and power struggles

Horizontal differentiation: global matrix structure

Helps to cope with conflicting demands of earlier strategies
Two dimensions: product division and geographic area
Product division and geographic areas given equal responsibility for operating
decisions
Problems:
- Bureaucratic structure slows decision making
- Conflict between areas and product divisions
- Difficult to make one party accountable due to dual responsibility

Integrating mechanisms
Need for coordination follows the following order on an ascending basis (from high to
low)
- Transnational companies
- Global companies
- International companies
- Multidomestic companies

Impediments to coordination
- Differing goals and lack of respect
- Different orientations due to different tasks
- Differences in nationality, time zone & distance
 - Particularly problematic in multinational enterprises with its many subunits both
home and abroad

Formal integrating systems

- Direct contact between subunit managers
- Liaison roles: an individual assigned responsibility to coordinate with another
subunit on a regular basis
- Temporary or permanent teams from subunits to achieve coordination
- Matrix structure: all roles viewed as integrating roles: Often based on
geographical areas and worldwide product divisions

Informal integrating mechanisms

- Informal management networks supported by an organization culture that
values teamwork and a common culture
- Non-bureaucratic flow of information
- It must embrace as many managers as possible
- Two techniques used to establish networks
o Information systems
o Management development policies: Rotating managers through various
subunits on a regular basis

Control systems and incentives

Types of control systems
- Personal controls
- Bureaucratic controls
- Output controls
- Cultural controls
Incentive systems
- Refer to devices used to reward appropriate behavior
- Closely tied to performance metrics used for output controls

Factors influencing incentive system

Seniority and nature of work: Reward linked to output target that the employee can
influence
Cooperation between managers in subunits: Link incentives to profit of the entire firm
National differences in institutions and culture
Consequences of an incentive system should be understood

Performance ambiguity: you can’t put your finger on what’s the problem in the
company
Key to understanding the relationship between international strategy, control systems
and incentive systems
Caused due to high degree of interdependence between subunits within the
organization
Control systems:
- Multinations: output/bureaucratic
- Global/transnationsl: cultural

Strategy, interdependence and ambiguity

Level of performance ambiguity depends on number of subunits, level of integration &
joint decision making
Ascending order of ambiguity in firms
Cost of control for the four international business strategies

Implications for control and incentives

Costs of control:
- Time top mgt. must devote to monitoring and evaluating subunits performance
- Performance ambiguity increases cost of control
- Creates conflicts as the costs of controlling transnational strategy are much
higher
- Cultural controls
Incentive pay of senior managers should be linked to the entity to which both subunits
belong

Processes
Manner in which decisions are made and work is performed
- Cut across national boundaries as well as organizational boundaries
- Can be developed anywhere within the firms global operations network

Organization culture
Values and norms shared among people
Sources:
- Founders and important leaders
- National social culture
- History of the enterprise
- Decisions that result in high performance
Cultural maintenance:
- Hiring and promotional practices
- Reward strategies
- Socialization processes
- Communication strategy

Organization culture and performance

A “Strong” Culture:
- Not always good
- Sometimes beneficial, sometimes not
- Context is important
Adaptive cultures.
Culture must match an organization’s architecture
Culture does not necessarily translate across borders

Firms need to periodically alter their architecture to conform to changes in environment

& strategy
Hard to achieve due to organizational inertia
Sources of inertia
Possible redistribution of power and influence among managers
Strong existing culture
Senior manager’s preconceptions about the appropriate business model
Institutional constraints such as national regulations including local content rules
regarding layoffs

LECTURE 2B. UNLEARNING THE PAST

What we already know gets in the way of what we want to learn
Creativity and innovation bubble up during the process of unlearning
Gene replacement therapy: defective genes must be replaced by healthy ones, in
business terms this is best described as unlearning. Creating a learning organization is
only half of the solutions.

Decomposing the economic engine: it helps us decide where we make our dollar

Threats to the profit engine

- Redefing the boundaries of the served market; as Canon did with copiers
- Coming up with a new Value Proposition; as money market mutual funds did in
the US when they began to target individuals as investors rather than just
savers.
 - Discovering how to take margins out of the business system; (capturing a price
premium for built in quality, rather than relying on service revenues)
- Reconfiguring assets and skills to provide the same value more economically
(consolidating backroom operations to reap economies of scale)

The ‘Profit Engine’ is different form a value chain: it encompasses deep seated beliefs
about:
- What business we’re in
- What we’re delivering to customers
- How money is made in this business
- What assets and skills are critical
- Who our competitors are

Finding the limits of the current economic engine

LECTURE 3. COMPETING TO SHAPE THE FUTURE

Make the rules – lead industry standard/change
Up market share + profitability
Sustainable way of maintaining 1st position
Capability to attract talent
Reshaping/redefining the future
Disproportionate profit leakage

Strategic architecture is worth little if we can’t turn talent into market leadership
Getting to the future first allows firms to establish an ‘installed base’ (infrastructure) not
easily duplicated by latecomers (core competence), infrastructure for future success

Getting to the Future First

Amortize quickly past investments in competence building, forces competitors, who are
denied early revenues, to downscale or abandon investment programs.
In entering the laptop computer business half a decade after Toshiba and Compaq,
IBM have ceded millions of profits to its rivals.

Better to be a quick follower? Risk avoidance or second best?

If you miss the opportunity you have to be a fast follower, but you’ll never be a product
that led to a generation
Timing not right, product not sufficiently well developed, customer doesn’t really need
or want the new service.
The risk that matters most to companies is financial risk.
Creativity in leveraging scarce resources.

Getting to the Future First

But being first only carries these disproportionate risks of failure when the firm’s
financial commitment races ahead of its understanding of the emerging opportunity.
“Failed pioneers often claim that the market wasn’t ready, but the market is always
ready, what wasn’t ready was the product or service in that it was too expensive, too
difficult to use, too unreliable, or lacking some other dimension of performance.”
IBM surrendered leadership in the microprocessor to Intel in the early 80’s.

Managing Migration Paths:

A company must first find the shortest path between today and tomorrow.
Let’s consider a brief example of Pre-market competition.
In 1994, the dream of fully interactive television was still a decade away,
Many firms including HP, General Instruments, AT&T, Microsoft, Silicon Graphics,
Philips, were already competing and sometimes collaborating to create the set top
signal convertors, video servers, and software standards for interactive television.
“Typically many firms hope to find future treasures in more or less the same
opportunity arena.”
“The ideal migration path will be different for different companies depending on the
unique starting point of each firm in terms of skills resources and market
position......and also on each company’s rather idiosyncratic view of just where
tomorrow’s opportunities lie.”

Maximising the Share of Influence:

Competition to maximise share of influence is part of the broader competitive battle to
maximise one’s future share of profits. This is determined by 4 factors.
1. Capacity to build and manage coalitions. (harnessing complementary resources
in other companies)
2. Success in building core competencies central to the provision of customer
value in the new opportunity arena.
3. To rapidly accumulate market learning (racing to identify just where the “mother
lode” (la veta madre) of demand is in the emerging market.
4. Its global share of mind (worldwide brand presence) and distribution capacity.

If a company is particularly adept in any one of these arenas of premarket competition

it may gain for itself a share of influence disproportionate to its size.
Indeed the goal is to maximise the ratio of influence over size, every company wants to
punch above its weight.

Coalitions – Becoming a Nodal Company :

Many of tomorrow’s most intriguing opportunities, interactive TV, sat nav systems for
cars and trucks, satellite based personal communication devices (smartphones),
alternatives to the internal combustion engine, will require the integration skills of a
wide range of companies.
Coalitions may be required for several reasons, the most obvious being that no one
firm possesses al the requisite resources to bring the new product or service to fruition.

Almost every large company has a ‘Spaghetti Bowl’ of alliances, but there is seldom an
overall logic to the set of partnerships, thus although many companies have a wide
variety of partnerships, the individual partnerships are often disconnected, each
serving an independent and unrelated purpose.
Sega’s partners (AT&T, Time Warner, TCI, Pioneer, Yamaha, Hitachi and Matsushita)
give the company access to the technologies that will be needed to download
computer games over a cable television network.
Over time, the relative importance of a company’s different competencies or
capabilities may shift, provoking power realignments within the coalition...
Walter Kumerth –VP at Siemans
“The future shape of our industry will be much more complex, the same companies will
compete in one field and cooperate in another. This is only possible if you have mutual
trust and common business ethics. If you’ve been hitting someone over the head for
many years, cooperation is very difficult.”

Setting Standards:
It’s impossible to ‘go it alone’ Vertical integration and a concern for keeping all core
competencies inside no longer makes sense, ‘Virtual Integration’ is replacing ‘vertical
integration’
Competing Stands confuse customers and make them less apt to buy many will prefer
to wait until a clear winner emerges, companies competing for the future are therefore
keen for standards to emerge as early as possible.

PHILIPS VS MATSUSHITA
Neither of them had the capacity for organizational change

Philips era competitive requirements

1950s-1960s competitive requirements:
l Develop radical new technologies
l Translate technology into products
l Adapt, produce, and sell products within individual national markets
Matsushita era competitive requirements
1970s-1980s competitive requirements:
l High quality, low cost, standardized products
l Rapid product and process innovation (e.g., miniaturization)
l Export sales to world markets

Matsushita wants the innovative subsidiaries of Philips.

– I would like to see Matsushita develop a kind of innovation and
entrepreneurship which has long characterized the success of Philips.
They are very good at adapting central products and strategies to meet
 local needs. Moreover, they have been able to use the technical and
other resources available in the host country to create new products and
new businesses.
Philips wants the global efficiency of Matsushita.
– The Japanese have taught us the value of pursuing a global strategy
with standard products. They had tremendous cost advantages in being
able to supply the world market from factories at home. We were trying
to compete on a country by country basis with all the additional costs
associated with fragmented operations.

The case illustrates

– traditional MNC organizational models: Multinational and Global.
– that rapidly globalizing industries strain traditional strategic approaches.
– the difficulty of transition.
Conclusions
– A company’s “administrative heritage” can be both an asset and a
constraint.
– Reconciling pressures for global integration and local responsiveness is
a fundamental problem of managing a multinational corporation.
– Depending on the complexity of the business, coping with this problem
may require high levels of managerial sophistication.

LECTURE 4. GLOBAL OPERATIONS – OUTSOURCING AND LOGISTICS

POINTS TO CONSIDER:
1) WHERE TO LOCATE PRODUCTION ACTIVITIES
LONG TERM STRATEGIC ROLE OF FOREIGN PRODUCTION SITES: OWNED OR
OUTSOURCED?

2) MANAGEMENT OF A GLOBALLY DISPERSED SUPPLY CHAIN: MATERIAL

MANAGEMENT: OWNED OR OUTSOURCED?

Outsourcing: we want to decrease costs and increase profits. We are looking for
location economies, where I can perform the same task at a lower price without
compromising quality or critical aspects of the manufacturing process.
The part of the manufacturing we would outsource are those that don’t compromise the
core competences of the company.
If we can reduce costs and increase performance = competitive advantage

The global operation networks

Issue: improving or maintaining quality

Any serious manufacturing process has a linked six sigma process incorporated to
ensure quality (TQM- total quality management: generated an environment where
workers could report problems)
PRODUCTION AND LOGISITICS AS PART OF THE VALUE CHAIN
Close link between the two: efficient production means the company has benefited
from good material management or logistics

Production: Activities involved in the creation of a product. Can be tangible and also
non tangible such as ‘services’.
Logistics: The transmission of physical activities through the chain, from procurement
to production to distribution.
Strategic objectives of these functions:
To lower costs; Dispersing production activities around the globe to locations where
each activity can be performed at a lower cost
Increase quality by eliminating defective products from the supply chain and the
manufacturing process (quality here means reliability and performance) Tool used by
mangers SIX SIGMA METHODOLGY which is a direct of descendant of TQM (Total
Quality Management)

Where should the MNC locate its manufacturing activities

1. Country factors
- Supply chain/ infrastructure
- Location economies
- Laws/ regulation
- Resources
- Political economy
- Related and supporting economies
2. Technological factors
- Infrastructure (technological)
- Fixed costs
- Minimum efficient scale: where the cost is as low as it can go (I’m producing at
the most efficient point). If I hit it at the beginning of the product, I’m going to
manufacture the product at maximum efficiency through all the manufacturing, I
can take the most profit from it for the following months

- Mass customization: manufacture on a large scale incorporating customization

(it gives us economy of scope: where we can continue obtaining economies of
scale and diversify our products)
3. Product factors
- Size/ weight
- Accessibility to raw materials
- Partial manufacturing (tax benefits)

Concentration of manufacturing is meaningful when:

- There are differences between countries in factor costs, political economy, and
culture, which affect manufacturing costs
- Trade barriers are low
- Exchange rates are expected to remain stable
- Production technology has high fixed costs, a high minimum efficient scale, or is
flexible
 - The value-to-weight is high
- There are no differences between countries in factor costs, political economy,
and culture, which affect manufacturing costs
- Trade barriers are high
- Exchange rates are expected to fluctuate
- Production technology has low fixed costs, a low minimum efficient scale, or is
not flexible
- The value-to-weight is low
- The product does not serve universal needs

Make or buy decisions

- Advantages of make
Lower costs.
Facilitating specialized investments.
Protect technology.
Scheduling and coordination.

- Advantages of buy
Gives you strategic flexibility (i.e., political risks, trade barriers changes,…).
Costs associated with doing everything yourself (i.e., coordination costs, higher
transfer prices….)
Offsets.

Main message (Kogut, 1985)

“The unique feature of an international strategy lies less in its content than in creating
the operational flexibility to profit from uncertainty regarding: exchange rates,
government policy, and competitors’ moves”.
“The key issue in achieving a global advantage is whether a firm has the managerial
skills and organizational resources to coordinate its international activities in response
to market and political fluctuations”.

Volatility in international markets

Sources of volatility:
- Changes in real economic variables (e.g. wage rates, labor cost, transportation
costs, prices of goods)
- Fluctuations in foreign exchange rates
 - Structural shifts in the economy (e.g. inflation rate instability, new government
policies)

Risk profiles and investment decisions

1. SPECULATIVE – Japanese firms through the 70’s and 80’s investment in
newer technology to over come higher labor costs.
+ their levels of FDI were heavier in services than in manufacturing.
2. HEDGED - Invest in excess capacity in multiple countries. E.g. Volkswagen in
the ’80s: construction plants in Brazil and Mexico for lower segment of cars,
USA for middle segment, Germany for top tier. V. matched the exposure to
exchange rate fluctuations on the cost side to those on the revenue side.
3. FLEXIBLE - Invest in flexible technologies that increase capital leverage but
permit firms to tailor products to other markets.
A flexible strategy allows companies to exploit valuable options deriving from variance
and volatility of the markets.

LECTURE 4.B. EMBEDDING THE CORE COMPETENCE PERSPECTIVE

3M was very advanced in the field of agenda of core competence acquisition
Marry skills with requirements

1. Opportunities for growth will be needlessly truncated

2. Even if someone in the organisations spots a new opportunity, if the
competences needed to respond lie in another business unit, there may be no
way to redeploy the people that carry those competences into the new
opportunity arena.
3. Companies often divisionalize into smaller business units, a popular trend at
present. Competencies then may become fragmented and weakened.
4. A lack of core competence perspective can also desensitise a company to its
growing dependence on outside suppliers of core products
5. A company focused only on end products may fail to invest adequately in new
core competencies that can propel growth
6. A company that fails to understand the core competence basis for competition
in its industry may be surprised by new entrants who rely on competencies
developed in other markets
7. Companies may unwittingly relinquish valuable skills when they divest an
underperforming business.

Identify opportunities (3), identify resources necessary to exploit it (1) and mobilise
the resources to the new opportunity (2)

Identifying Core Competencies:

q A firm can’t actively manage core competencies if managers don’t share a view
of what those competencies are.
“...the first task of managing core competencies is therefore to
produce an ‘inventory’ of core competencies...”
q A wide group of people must be able to describe the competencies in
reasonably similar terms and share an understanding of just what the
constituent skills are embodied within a competence.
q Senior managers must be full participants in the process of identifying core
competencies the process will involve many meetings, heated debate, frequent
disagreements, etc.
 Establishing the core competence acquisition agenda

LECTURE 5. THE TRANSNATIONAL SOLUTION

Four strategies to compete in the international environment
1. Multidomestic strategy
2. International strategy
3. Global strategy
4. Transnational strategy

1. Multinational strategy
Transfer products developed at home to foreign markets.
To achieve maximum local responsiveness
Customize products and marketing strategies to different national conditions
- Lower performance ambiguity
- High level of authonomy
- Innovation
Negative points:
- No economies of scale
- No standarization
- Decentralized structure: low control at the centre

2. International strategy
Transfer skills to foreign markets.
Where local competitors lack those skills and products
- Low cost pressure
- Low responsiveness
- You go to a market place that doesn’t have the technology, there’s no adaption
of the product, is the market that adapts to your product (high-tech, medical
machinery)

3. Global strategy
To increase profitability by reducing costs
Cost reduction derives from experience curve and location economies
Market standardized products (only a slight adaptation to national differences)

Forces pushing for globalization

Need for Global Efficiency (playing chess worldwide…)
Need for responsiveness (i.e., consumers reject standard products, government
reactions,…): Multinational Flexibility.
Increasing need for learning: knowledge produced everywhere in the world…

4. Transnational strategy
The transnational centralizes some resources at home, some abroad, and distributes
yet others among its many national operations.
To exploit experience-based cost economies and location economies
At the same time, it pays attention to local responsiveness
The result is a complex configuration of assets and capabilities that are distributed, yet
specialized

Atributes
Some resources are centralized to realize scale economies, to protect core
competences, provide supervision… (i.e., basic research, treasury function…)
Centralization does not mean “at home”.
Other resources are decentralized because there are small economies of scale, there’s
a need for flexibility and avoidance of dependence on a single facility.
Units may be dispersed, interdependent, and specialized (i.e., specific subsidiary has
proved to be good at research…).
Interdependence may be reciprocal rather than sequential.
The transnational varies the roles of its subsidiaries operations:
Some national markets adopt standard global product, while others are encouraged to
differentiate.
(i.e., not the same entering in a mature market than in an emerging market…).
Government regulations, subsidiaries´ internal resources, customer tastes, the
position of competitors…, are all considered in determining subsidiary roles in the
transnational.
Sharp competition has historically erased firms’ emphasis in worldwide learning.
Managers of transnational organizations are sensitive to dispersed knowledge creation:
innovations are created by subsidiaries as well.
Knowledge is developed jointly and shared worldwide in a reciprocal manner.

Basic MNC forms

Administrative heritage
History of this configuration of assets and capabilities
The challenge does not lie in the future strategy, but in the new organization form.
They seldom ask themselves where they’re coming from…
But this is crucial: the administrative heritage may represent both a major asset and/or
a powerful impediment in the change process

Shapers of administrative heritage

Many forces shape a company’s configuration of assets, dominant management style,
organizational values

Most influential:
- Impact of leadership
- Influence of home country culture
- Influence of organizational history

3 key factors to build the transnational solution

1. Making Central Management Flexible: Lessons from Matsushita.
2. Making Local Management Effective: Lessons from Philips.
3. Building Transnational Capabilities: Lessons from Ericcson.

1. Making central management flexible: lessons from Matsushita

Philips did not manage to commercialize its V2000 (vs. VHS and Beta formats) system
and the project failed.
Matsushita built its strategy on its ability to control its global strategy from the
headquarter in Japan, but implementing it in a responsive local manner.

Factors of Matsushita’s success

Gained the input of subsidiaries into its management process:
– Time spent with subsidiaries.
– There are representatives of the subsidiaries in the headquarters.
– Having headquarter members in the subsidiaries.
– Day-to-day communication with the subsidiary.
Ensure that strategies are linked to market needs:
– High-level managers are close to front-line operations.
– Research projects that are initiative of subsidiaries.
– Projects must be redesigned by merchandise managers.
Connecting departments through personnel flow:
– You gain integration among departments.

Matsushita – factors of success

1. Gaining Subsidiary Input – MULTIPLE LINKAGES –
People who develop products often do not understand market needs – Matsushita,
aware of this spent time creating ‘MULTIPLE LINKAGES’ between HQ and subsidiary.
They give HQ a better idea of the local country level needs + involve local managers at
HQ level
2. Linking Direction to needs - MARKET MECHANISMS –
They have created an integrative process that ensures top managers and central staff
groups are not sheltered from pressure constraints and demands felt by managers on
the front line of operations.
Budgets research activities allocated to product divisions and not research labs –
forces researchers to keep a close eye on market orientation.
3. Managing Responsibility Transfer – PERSONNEL FLOWS –
Careers of Research Engineers are structured so they spend 5-8 years in central
research labs, then the rest of their working lives in direct operational functions. This
helps to implement central innovations and builds networks to bridge research and
production functions

THESE ORGANISATIONAL MECHANISMS ARE SIMPLE ENOUGH TO BE

IMPLEMENTED BY OTHER COMPANIES – They allow management to at the core to
influence control over WW operations without compromising motivation or operating
effectiveness.

2. Making Local Management Effective: Lessons from Philips.

Use a cadre of entrepreneurial expatriates:
– It’s an important agent developing capabilities of local unites while
keeping them linked to headquarters´ objectives.
– They identify strongly with subsidiaries´ point of view.
– By creating this environment, they have no difficulty in attracting capable
local management.
Decentralized authority and dispersed responsibility:
– Decentralization of resources is not enough.
– Delegate true responsibility in order to develop autonomy.
Integrating technical and marketing functions within each subsidiary (at different
organization levels):
– Enhances efficiency in local decision making and action.

3. Building Transnational Capabilities: Lessons from Ericsson.

1. Interdependence of Resources and Responsibilities:
- Such interdependence of resources and responsibilities breaks down the
hierarchy between local and global interests by sharing resources, ideas and
opportunities.
- By changing responsibilities, shifting assets, and modifying relationships,
Ericsson maintained a dynamic interdependence among its operating units.
2. Interunit Integrating Devices:
- There is a need for effective organizational integrating mechanisms to link
operations to tap the full potential of the interdependent configuration.
- Devices as temporary assignments, joint teams, and interunit decision forums
where differences can be resolved.
3. Strong Corporate ID and well developed worldwide management perspective.
- Ericsson have developed a management attitude – simultaneously locally
sensitive and globally conscious.

LECTURE 5.B. THE FORTUNE AT THE BOTTOM OF THE PYRAMID

Who are the world’s 4bn poor? People who live on less than 2 dollars a day

“For more than 50 years, many institutions have fought the good fight but have not
eradicated poverty, the adoption of the MDG (Millennium Development Goals) by the
UN only underscores that reality as we enter the 21st century poverty-and the
disenfranchisement that accompanies it – remains one of the world’s most daunting
problems.”
There are companies fighting disease with educational campaigns and innovative
products, organisations helping the handicapped walk, helping subsistence farmers
check commodity prices and connect with the rest of the world.
There are banks adapting to the financial needs of the poor, power companies
reaching out to meet energy needs and construction companies doing what they can to
house the poor in affordable ways that allow for pride.
We may find many examples of MNC’s that have undermined the efforts of the poor,
the greatest harm they might have done to the poor is to ignore them altogether. The
poor cannot participate in the benefits of globalisation without an active engagement
and without access to the products and services that represent global quality
standards.

- The power of dominant logic

All of us are prisoners of our own socialization, the lenses through which we perceive
the world are coloured by our own ideology, experiences and established management
practices.
In the developing world, more than one third of the urban population lives in shanty
towns and slums

The dominant assumption is that the poor have no purchasing power and therefore, do
not represent a viable market..”
We cannot compare buying powers of someone who earns 2 usd per day with that of
individuals in developed nations, however, by virtue of their numbers, the poor
represent a significant latent purchasing power that must be unlocked.
The poor pay a significantly higher price for everything, as they reside in high cost
ecosystems, even within developing countries. Let’s compare the shanty town of
Dharavi, just outside Mumbai with Desai Road, Maharashtra (suburb of Mumbai) the
‘poverty penalty can be as high as 5-25 times, this is the result of local monopolies,
inadequate access, poor distribution and strong traditional intermediaries. Large scale
private sector business can unlock this poverty penalty.

- Access to BOP Markets

The dominant assumption is that distribution access to the BOP markets is difficult and
therefore, represents a major impediment for the participation of large firms and
MNC’s.
- The BOP Markets are Brand-Conscious.
Brand consciousness among the poor is universal; this should not be a surprise; an
aspiration to a new and different quality of life is the dream of everyone. These
consumers represent a new challenge for managers with increased pressure on costs
of development, manufacturing and distribution, as a result BOP markets will force a
new level of efficiency in MNC’s1

COESIA PEOPLE STRATEGY

Different brands with different strategies
They want to keep the competitive advantage every brand has by not changing the
name
In 2015 it became a strategic enabler, Having a common structure in key functions

LECTURE 6. SHAREHOLDER VS STAKEHOLDER

Enron, Global Crossing ImClone Tyco International and Worldcom
Many observers have claimed that these scandals serve as evidence of the failure of
the Shareholder theory.
The victory of the stakeholder theory - A mangers’ duty is to balance the interests of
other stakeholders such as employees, customers and the local community.
EVEN IF IT REDUCES SHAREHOLDERS RETURNS
Both theories are nominative theories of CSR and dictate what the corporations’ role
ought to be.
Unfortunately, the two theories are very much at odds as to what is right:

1. Shareholder theory
Advance capital to Company Managers who are supposed to spend funds only in ways
that have been authorized by the shareholders
MILTON FRIEDMANN: “There is only one social responsibility of business – to use its
resources and engage in activities designed to increase its profits so long as it
engages in open and free competition without deception or fraud.”

2. Stakeholder theory
Managers have a duty to both the corporation’s shareholders and individuals and
constituencies that contribute, either voluntarily or involuntarily to a company’s wealth
creating capacity and activities, and who are therefore its potential beneficiaries and/or
risk bearers. (Customers employees, suppliers and the local community.)

The fundamental distinction

Stakeholder theory demands that the interests of all stakeholders be taken into
consideration, even if it reduces company profitability.
Under shareholder theory: NONSHAREHOLDERS are viewed as a ‘means to an end’
of profitability
Under stakeholder theory: The interests of many NONSHAREHOLDERS are also
viewed as ‘ends’.

Misinterpretation of shareholder theory:

“Do anything you can do to make a profit” even though the shareholder theory obliges
managers to increase profits only through legal non-deceptive means.
Prohibits giving funds to charitable events or projects to boost company moral, in fact
these things are encouraged providing they are the best investments of the capital
available.
Criticisms of Shareholder theory:
Geared to short term profit maximization at the expense of the long run.
However, ‘enlightened self-interest’ would lead to a long term orientation.

Misinterpretation of stakeholder theory:

Sometimes claimed that a company should not focus on profitability, even though the
stakeholders’ ultimate objective is the concern’s continued existence.
It must be achieved by balancing the interests of all stakeholders, including
shareholders.

Conflicting Interests:
Society norms clearly align with the shareholder theory, most US economists + those
associated with financial markets accept the shareholders theory.
Business schools have unanimously embraced the shareholders theory.
However, it is startling to note that there is evidence that public perceptions do not
comport with those of economists and the financial community.

Potential dangers of shifting:

Many M&A’s in the late 90’s provides evidence that a greater emphasis was being
placed on the Stakeholder theory, If managers are not maximizing profits, the
company’s underperformance will be noted in the marketplace and the company will be
subjected to a hostile takeover.

Theories at odds:
The fact remains that the theories demand very different things.
….lay off the workers or lower the dividend?
Perceptions of norms across society are more suggestive of a stakeholder than a
shareholder orientation and that neither legal nor market place mechanisms can be
relied on to enforce the shareholder theory in a uniform fashion.
So the dispute is with us for some time and the recent financial scandals prove the
failure of the shareholder theory deserves careful scrutiny before they can be
accepted.

Whither the shareholder theory?:

2002 saw corporate executive behaviour that was at best disruptive and at worst
downright illegal, the real question of course is if the shareholder theory prescribes and
rewards this behaviour that is actually detrimental to society.
Did the shareholder theory drive executives to behave in an illegal immoral manner?
Embracing whatever manipulations were necessary to achieve the goal, setting up
illegal partnerships then shredding the evidence, as long as the execs don’t get
caught?

Not all bad…

Results are measured in dividends but also in share prices.
According to theory, executives who broke the law were not operating according to
shareholder theory, as it clearly states that all actions should be carried out within the
confines of the legal context.
Also the basic premise of the shareholder theory is that execs should act only in the
shareholders interests and not in their own, therefore these corrupt managers were not
following shareholder theory conduct

What are Executives and Boards to do?

Change of language – from maximizing shareholder value to maximizing our
company’s value or even better -. Maximizing our company’s contribution to our
economic system.
Execs and CEO should be freer to voice views, if they kept quiet about moving to a
stakeholder viewpoint because of fear of a takeover, this will filter down and embed
itself as a negative approach.
Communication to middle management about the corporations’ objectives. Otherwise
they will make inconsistent decisions.

SHAREHOLDER VALUE PERSPECTIVE VS STAKEHOLDER VALUE

PERSPECTIVE
Organisations also have certain social responsibilities, profitability and responsibility.
The profits are not only a result but also a source of corporate competitive health and
wealth.
Employees nowadays represent a major part of the value of any company (intellectual
capital)
Likewise it is important for trust to develop between the organisation and its external
environment.

The shareholders’ side

The Shareholder value perspective emphasizes profitability over responsibility
Organisations are primarily instruments of their owners
see stakeholder management rather as a means than an end in itself.
They believe social responsibility is not a matter for organisations and claim society is
best served by organisations pursuing self interest and economic efficiency.
However, recognising that is expedient (instrumental) to pay attention to stakeholders,
does not mean it is the corporations purpose to serve them.
The purpose of the company is first and foremost to maximise shareholder value and
that society is best served by economic rationale.
pursuing maximal value for the shareholder will result in societal wealth being
maximised

The stakeholders’ side

The Stakeholders Values Perspective emphasises responsibility over profitability
Organisations are primarily coalitions to serve all parties involved.
They believe social responsibility is an organisational matter and claim society is best
served by pursuing joint interests and economic symbiosis.
A company is not an instrument of shareholders but a coalition between various
resource suppliers, with the intention of increasing the common wealth.
Recognising the moral claims by stakeholders other than the shareholders introduces
other values than financial value into the spectrum of what needs to be pursued by the
organisation.
pursuing the joint interests of all stakeholders is not only more just, but will also
maximise societal health.

Mintzberg’s view
“We are certainly seeing some of the trend toward shareholder value in Europe. I don‘t
know whether they‘ll wake up and realize what nonsense shareholder value really is, or
whether they will keep pursuing it until people are out in the streets protesting.
It is a philosophy of greed, not a philosophy of large institutions serving society as well
as their own particular needs.
It’s anti societal, and the only advantage to it sweeping through Europe and Japan is
that it will decrease the damage of our own nonsense in North America. So if others
are stupid enough to do it that will only help North American business”

LECTURE 8. STRATEGY AND SOCIETY

The link between competitive advantage and corporate social responsibility
Governments should intervene

5 factors that bring about the need for CSR

1. Increased Affluence:
CSR becomes more relevant as economies grow and stabilize.
Therefore, the greatest attention to CSR is found in developed countries.
Stable work and security provide the luxury of choice and socially responsible activism.
(stable work comes from regulations, governments contributing to the economy so we
can have healthcare and live well)
No such luxury exists when basic needs are in question.

2. Ecological Sustainability:
Perhaps the most obvious and most talked about of the drivers, concerns over
pollution, waste, natural resource depletion, climate change and the like continue to
fuel the CSR discussion and heighten expectations for proactive corporate action.
After all, it is in the best interest of firms to protect for the sustainable future the long-
term availability of the resources on which they depend.

3. Globalization: Increased wealth = decreased authority of the nation-state,

especially in developing areas.
Cultural differences have added to the complexity of CSR as expectations of
acceptable behavior vary regionally.
Increased power = increased responsibility and globalization has fueled the need to
filter all strategic decisions through a CSR lens to ensure optimal outcomes for diverse
stakeholders.

4. Free Flow of Information:

Due to the Internet and other electronic mediums the flow of information has shifted
back to the stakeholders, especially in the case of three important groups: Consumers,
NGOs and the general media.
Easily accessible and affordable communication technologies have permanently
changed the game and only truly authentic and transparent companies will profit in the
long term.

5. The Power of the Brand:

Brands are today the focal point of corporate success and much of the health of the
brand depends on public perception of the corporation.
In other words, reputation is key and honest CSR is a way to protect that reputation
and therefore the brand.

Companies are ranked on their CSR performance; it has therefore become an

inescapable priority for business leaders worldwide: (E.g.The Dow Jones Sustainability
Index)
HOWEVER:
q 1) It pits business against society, when clearly the two are independent.
q 2) It pressures companies to think of CSR in generic ways instead of the way
most appropriate to each firms strategy.

The emergence of CSR:

q Nike faced an extensive consumer boycott after media outlets reported labour
abuses at some of its Indonesian suppliers in the early 1990’s
q Shell Oil’s decision to sink the brent spar, an obsolete oil rig in the north sea,
led to Greenpeace protests in 1995.
q Pharmaceutical companies discovered they were expected to respond to the
AIDS pandemic.
q Fast food companies are now being held responsible for obesity and poor
nutrition.

Activist organisations of all kinds have grown much more aggressive and effective in
bringing public pressure to bear on corporations, activists may target the most visible
or successful companies merely to draw attention to an issue:

According to Porter & Kramer (Strategy & Society. The link between Competitive
Advantage and CSR)
Four Prevailing Justifications for CSR:
1. Moral Obligation
2. Sustainability
3. License to Operate
4. Reputation.
Porter and Kramer make the point that all four schools of thought focus on the tension
between business and society rather than on interdependence.

1. The Moral appeal – Achieve commercial success in ways that honour ethical
values and respect people, communities and the natural environment.
2. Sustainability Justification - To balance long term objectives against short term
costs they incur, without a strategic understanding of CSR managers are prone to
postpone costs which can lead to far greater costs when the company is later judged to
have violated its social obligation.
3. The Licence to Operate – More pragmatic, it fosters constructive dialogue with
regulators, local citizens and activists. One reason that it is prevalent among
companies that depend on government consent such as mining and forestry, also at
companies that rely on the forbearance of their neighbours, such as chemical
manufacturing.
4. The Reputation Argument - focus on satisfying external audiences, in consumer
oriented companies, it often leads to high profile, cause related marketing campaigns
in stigmatized industries, such as chemical and energy, CSR initiatives as a form of
insurance, in a hope that its reputation for social consciousness will temper public
criticism in the event of a crisis.

All 4 schools of thought share the same weakness, they focus on the tension between
business and society rather than on their interdependence.
Each one creates a generic rationale that is not tied to the strategy of operations of any
specific company or the places in which it operates, consequently none of them is
sufficient to help a company identify, prioritize and address the social issue that matter
most or the ones on which it can make the biggest impact.

Integrating Business and Society.

q To say broadly that business and society need each other might seem like a
cliché, however it’s a basic truth.
q Successful corporations need a healthy society, education, health care, equal
opportunity are essential to a productive workforce. Efficient use of land, water
and energy makes business more productive.

Identifying the points of Intersection:

q Interdependence takes 2 forms; 1 Inside out linkages, the way in which a
company affects society through its operations in the normal course of
business.
q External social conditions also affect corporations, Outside In Linkages,
Ensuring the health of the competitive context benefits both the company and
the community, this can be illustrated via Porter’s Diamond, (see corresponding
exhibit on next slide) The ability to recruit appropriate HR for example may
depend on a number of factors.

Choosing which social issues to address:

q Each company must choose issues that intersect with its particular business,
other social agendas are best left to companies present in those industries,
NGO’s or govt institutions that are better positioned to address them.
q Carbon emissions may be a generic social issue for a financial services firm like
Bank of America, a negative value chain impact for transportations-based
companies like UPS or both a value chain impact and a competitive context
issue for a firm like Toyota.

Creating a Corporate Social Agenda.

q Categorizing and ranking social issues is just the means to an end – to create
an explicit and affirmative corporate social agenda, something which looks
beyond community expectations and opportunities to achieve social and
economic benefits simultaneously.
 q Such an agenda must be responsive to stakeholders but cannot stop there, a
substantial portion of corporate resources and attention must migrate to truly
strategic CSR – see exhibit “Corporate involvement in society”

Organising for CSR

q Companies must shift from a fragmented defensive posture to an integrated
affirmative approach. The focus must move away from a focus on image to an
emphasis on substance.
q Value chain and competitive-context investments in CSR need to be
incorporated into the performance measures of managers with P&L
responsibility.
q Overcoming long standing prejudices of the us Vs. them mindset.
q NGO’s Governments and companies must stop thinking in terms of CSR and
start thinking in terms of Corporate Social Integration..
q Corporations are not responsible for all the world’s problems, nor do they have
the resources to solve them all.
q When a well run business applies its vast resources to problems that it
understands and in which it has a stake, it can have a greater impact on social
good than any other institution or philanthropic organisation.