CHAPTER 7 - Globalization and
International Strategy
Global Strategy – selling more goods and
service outside the market. It is the process
of diversifying operation to the wider based
operation
BUSINESS LEVEL STRATEGY IN THE GLOBAL
MARKET
The firm’s resources and capabilities are
duplicated and transferred into the
country of operation that capitalized on
the following factor.
1. Factors of production- dimension refers
to necessary to compete in any industry
These factors of production are important
considerations in cost of competitive
advantage as it has something to do with
the following:
a. The Cost of Labor
It is one important component in the
production of goods and services because
no international business would locate their
operations where the labor cost is more
than its domestic operation.
b. Cost of Land for Construction of
Facilities- Land is required for corporate
expansion of plants and facilities. The cost
of land in suburban Metro Manila, such as
Laguna and Batangas, is an important factor
to consider where deciding to locate their
operations in the Philippines.
c. Natural Resources of the Country of
Operation- the Philippines is rich in natural
resources that could be converted into
finished goods for export to other
International Strategy - plans laid down by
strategic managers to guide commercial
transactions in different countries
countries. Our copper and iron ores are
exported to their country for processing
before being re-exported as semi-finished
goods for further processing into electronic
components and automobile accessories.
d. Infrastructure Development
The development of more infrastructure,
such as expressways, and the expansion of
the road system are factors that would
encourage multinational corporations to
locate their operations in the country.
2. The size of Market Demand
It is the nature and size of the buyers' needs
in the domestic market for the industry's
goods and services. The sheer size of a
market segment can produce the demand
necessary to create scale efficient facilities.
This scale efficiency can create leadership
dominance of the industry in another global
market. Specialized demand may also
create opportunities beyond home country
boundaries.
3. Related and Supporting Industries
The manufacturing of goods is not a
monopoly of one company. They rely on the
assistance of available suppliers of material
inputs in the production of goods or basic
products.
4. Firm Strategy, Structure and Rivalry
Growth encouragement in specific
industries varies among firms in the global
market. This dimension refers to the
technical competencies of the firm along
the areas of their expertise.
5. The Government Policy of the Country of
Operation
The success or failure of international
expansion and operation is also influenced
by the government policy in which the
multinational corporation operates.
THE LEVEL OF CORPORATE STRATEGY IN
INTERNATIONAL OPERATIONS
The strategy is based on the type of market
conditions in the operating country. When
the strategies could be patterned in the
mother company in terms of product
standardization and sharing of resources,
the operational styles become similarly the
same with the mother company.
two level of corporate level strategies:
1. Multi-Domestic Strategy
It is the process of decentralizing operating
decisions in order to tailor fit the product to
the needs and wants of the consumer in the
specific country. The focus us competition
within each country and assumes that
market needs, and desires need
segmentation according to the buying
behavior of the market.
2. The Global Strategy through
Standardization
As the operation is more controlled by the
central office in the home country, this
strategy focuses on the development of
more standardized products across country
markets. While each country unit operates
using standardized products and a
CHAPTER 8-
competitive strategy in order to achieve
economies of scale.
THE MODE OF ENTRY IN INTERNATIONAL
OPERATIONS:
Exporting – it is the process of stablishing
marketing ad distributing of the products
Licensing arrangement with foreign
partners – process of allowing a foreign firm
to purchase the right maufactor.
INTERNATIONAL STRATEGIC ALLIANCE -
allow companies to share the risks and
resources required to enter international
markets.
ACQUISITION OF EXISTING LOCAL FIRM - a
transaction in which a firm gains control of
another firm by purchasing its stock.
THE GREEN FIELD VENTURE OPERATION -
establishment wholly own new subsidiary in
a foreign country .
THE RISK OF INTERNATIONAL
MANAGEMENT - A firm's expansion…carries
multiple risks as it is difficult to implement
and manage.
The political environment - factors outside
the company, relating to the government or
public affairs.
The economic risk - exchange rate
fluctuations, a shift in government policy or
regulations, political instability.
Organization Structure - provides the
framework within which strategies are used
and provides the necessary mechanism for
its effective implementation and control.
- it defines the duties and responsibilities of
the people in the organization and the
implementation of effective control system.
Top Executives of the Firm - they have the
final responsibility for ensuring the
matching of its strategies with the
appropriate organizational structure and
the changes that would be necessary when
needed.
Effective Strategic Leadership -
presupposes the ability to select the most
appropriate strategies and match it with the
appropriate organizational structure that
would deliver the firm to its target
objective.
Structural Elements - it must be properly
aligned with one another that will facilitate
effective implementation of the desired
strategies.
Firm Structure - it specifies specific work to
be done and the procedures to do it given
the desired strategies.
- It influences how managers work and
implement decisions.
Decision Framework - it must be able to
match with the strategies to be
implemented in order to get the desired
results.
Effective Structures - it provides the
stability the firm needs to successfully
implement its strategies and maintain its
current competitive advantage.
Structural Stability - it is the capacity of the
firm to consistently and predictably manage
its ongoing activities and its daily routine
without effect to its direction of profitable
operation.
Structural Flexibility - it is the capacity of
the firm to explore opportunities in the
future and shape the strategy for
competitive advantage that will generate
successful operation.
Top Management - they must act
proactively in changing the structure and its
corresponding strategies before the
stockholders get its foot into the problem.
Changes in Structure and Strategies - these
must be made before the firm experience
performance decline as dictated by market
forces.
Organizational Control - it guides the use of
strategy and indicates performance
standards.
Strategic Controls - it is intended to verify
that the firms are using appropriate
strategies to achieve its corporate goals and
objectives against its competitive advantage
in bot the external and internal
environment.
Financial Controls - are the procedures,
policies, and means by which an
organization monitors and controls the
direction, allocation, and usage of its
financial resources.
Strategic Formulation- the process of using
available knowledge to document the
intended direction of a business and the
actionable steps to reach its goals. It is the
plan of action.
Strategic Implementation – it is the extent
by which the firm operates based on plan
and goals.
Increase in Sales Volume – as the firms
increase its sales volume, they need new
people to handle marketing and distribution
of its products then later on develop its own
advertising agency to handle its
promotional activities.
Geographical Distribution –Its regional
managers develop strategies consistent
with their target goals and objectives.
Sometimes geographic distributions are not
limited to the home country as expansion in
product exports needs country managers
and executives. As expansion worldwide
increases so are the strategies to cope with
the demand of the organization
Vertical and Horizontal Integration – this
growth factor develops higher calibre of
executives who are trusted by the
management in their strategies for
corporate growth.
Product Diversification – the manufacturing
of new product of the integration of new
technology in the production of goods
needs new structure and the same time
developed new strategies to make the
product.
Business Diversification –This diversified
organization develop define structure and
strategies that will analyze the internal and
external environment and develop new
opportunities for its sustained operation
and growth.
Simple Structure - organizational structure
that the owner-manager makes all major
decisions form production of products and
services.
Line Organizational Structure - simple
direct line of supervision and control
through the direct line relationship between
the owner/manager, and it will
development as the simple structure from
the view point of management
professionals.
Line and Staff Organizational Structure -
This structure, the owner/executive needs
the service of staff assistance and managers
with known capabilities to handle day-to-
day business activities under his direction
rather.
Functional Structure - in this structure it
consist of operating officers in each unit
with the board of directors as the policy
making body while corporate strategies are
determine by the chief executive officer
with the concurrence of the board.
Divisional Function Structure - the
functional structure along this line could be
more complex that the division of the firm
into specialized area of activity within the
mother corporation.
Divisional Product or Regional Structure -
through its corporate board of directors, in
this structure the mother company
monitors of operation of its product division
and regional operation.
Growth of Multi-divisional Structure -
consist of division or diversified operational
company representing different or separate
firms.
Chapter 9: Strategic leadership for
effective organization
Effective leadership strategies - the
foundation of corporate managers in
handling the affairs of the business
enterprise towards the attainment of its
corporate goals and objectives
Strategic Leadership and Management -
important dimensions that develop
managerial competencies in anticipating
future events in the business environment.
Organizational Leadership - primarily on
the top executive usually the Chief
Operating Officer (COO) or the president of
the firm.
Achievement of return in investments -
primarily dependent on the strategic
approaches and leadership in decision
making that sustain the firm's competitive
advantage as it is the prevailing challenge of
new century
The art of leadership - the making of people
follows you by motivating them to achieve
the greatest efficiency and productivity.
Strategic focus and actions - the making of
diverse managers as they approach their
strategic actions in identifying
environmental change in new opportunities
and threats that requires differentiated
strategies
Leadership screening system - identify
individuals with managerial and strategic
leadership potential.
Managerial Intervention - an attempt to
select and shape leaders for effective
performance in the corporate world of
business.
Internal sourcing strategy - the assessment
of people within the organization who are
ready for corporate governance
External Sourcing Strategy - It is the
process of collecting career positions from
outside the organization other than the one
for which they work currently.
Core corporate ideology - reflected in the
desire of most future employers to be
employed in such big corporations
Ability to Develop Human Resources- It is
the ability of the firm to develop the critical
elements of strategic leaderships and
effective implementations of strategies
through committed executives and
employees of the firm
Organizational culture - a complex set of
corporate ideologies and core values that is
shared throughout the firm and it
influences the way business is conducted
Sustainable and Effective Organizational
Culture - It reflects the way the firm
conducts business and the way they control
their employee's behaviour in dealing with
its various stakeholders.
Entrepreneurial Opportunities - important
sources of growth and innovation. It could
be encouraged or discouraged
The Culture Autonomy - It allows the
employees to take actions that are free of
organizational constrains and permits
individuals to be self-directed
The Culture of Innovativeness - It is the
tendency of the firm to encourage
employees to engage in experimentation
and creative process or develop new
products and support new ideas and
technological development for the firms
competitive advantage.
The Culture of Risk Taking - It is the
willingness of the employee and firm to
accept risk when pursuing new
entrepreneurial opportunities
The Culture of Pro-activeness - It is the
tendency to be market leaders in the
industry rather than: to be follower
The Culture of Competitive Aggressiveness-
It is the tendency of the firm to develop
strategies and actions that allows it is
consistently and substantially outperform
other firms in the industry
Corporate Culture and Re-engineering
Strategies - Strategic leadership recognizes
the importance of corporate cultural
changes when needed even it is quite
difficult to change overtime as it is
incremental to the implementation of
corporate structural reforms and re-
engineering strategies
Strategic Leadership - it stems from the
development of the management process
of planning, organizing, directing and
controlling and vital resources of human
and financial capital of the firm.
Managerial Leadership - it is a leadership
that sets organizational goals, needs
analysis, sets achievable priorities including
planning, budgeting, implementing and
evaluating organizational performance.
Corporate Managers - is a business
professional who oversees an organization's
general operations.
Strategic Decision - it includes effective
lateral actions, concerning the
implementations of plans and programs.
Technological Advancement - it is the
business of corporate strategies and
organizations that has to race towards that
direction as it is a way to produce more
products with high quality standards.
Effective Strategic Leadership - it involves
the long-term vision of the firms' strategic
intent.
Core Competencies - are the resources and
capabilities that comprise the strategic
advantages of a business.
Corporate Strategic Direction - is the set of
activities and decisions a firm needs to
make in order to achieve its goals and
objectives.
The Managerial Performance of
Management Teams - the management
team must be composed of executives with
knowledge and commitment for work
productivity and efficiency in delivering the
stockholders trust for their investments.
Corporate Ethical Standards and Practice-
The characteristics of high performing
teams are related to innovation and
strategic system.
Balancing Organizational Control-
Developing and using balance organization
control is the final component of effective
strategic leadership.

CHAPTER 10
Technology - is an important factor in
producing product as the economies scale
determine the price index.
Sound performance- is making of people
who are properly trained and have
developed the culture and ethics for good
performance.
CASH VALUE
Competencies - It is the ability to manage
the firm towards its vision and mission
and to direct the organization to attain its
projected above average return.
Attitude - It is a personal commitment for
excellence in handling the operational
system of the firm.
Skills - managers must have conceptual,
human and technical skills in order to be
effective in visioning and planning strategies
* Human skills - refers to managerial
leadership strategies in handling people
* Technical skills - refers you to the
operational strategies
Habits - it refers to personal discipline that
is developed in the individual manager in
handling himself with the various public in
the organization
Strategic leadership - is the art of making
people follow without telling them directly
what a leader wants to do them
Entrepreneurial Activity
- is an important mechanism for creating
changes, helping firms adapt to the
prevailing economic condition.
Entrepreneurial Opportunities
- represent condition in which new products
and services can satisfy market needs
- is the process of identifying and exploiting
the environmental opportunities not
presently perceived by others
Inventions
- bring something new into being
- is the process of creating new products
that develops corporate competitive
advantage
Innovation
- bring something new in the use of the
product
Technical Criteria
- used to determine the success of an
invention
Commercial Criteria
- Primordial measurement of innovation
Entrepreneurial Visioning
- is the art and science of formal process of
looking ahead on the course of actions that
the firm goes from where it started in terms
of its strength and capabilities as he looks
for opportunities and threats in the
business environment.
Strategic Planning
- is the process of analyzing the present
environmental conditions through the
different data available to the
entrepreneur.
Defining Firm Strategies
- is the setting of priority programs and
policies to bring into the reality of the set
plans according to the desired objectives.
Strategic Procedures
- are carefully planned strategies defining
the steps to be followed in tracking the
activities towards the attainment or
achievement of the policies laid down in the
planning process.
Budgets
- are sets of financial programs that will be
necessary to implement targeted strategies
Functional and Operational Strategy
- is the approach a business functional
takes to achieve corporate and business
unit objectives and strategies by maximizing
resource productivity. It deals with a
relatively restricted plan that provides the
objectives for a specific business function
Production Process
- a method of using economic input or
resources, like labor, capital equipment or
land, to provide goods and services to
consumers.
Inventory Management
- a critical element of the supply chain, is
the tracking of inventory from
manufacturers to warehouses and from
these facilities to a point of sale. The goal of
inventory management is to have the right
products in the right place at the right time.
Marketing And Distribution
-As slightly different from e-distribution
and supply chain distribution, marketing
distribution is how the marketing
department makes products and services
available to potential customers. Availability
can be through the manufacturer, supplier,
distributor, retailer, or wholesaler.
Financial management
-is strategic planning, organizing, directing,
and controlling of financial undertakings in
an organization or an institute. It also
includes applying management principles to
the financial assets of an organisation, while
also playing an important part in fiscal
management.
Information and Data Base Management
- is an organizational program that
manages the people, processes and
technology that provide control over the
structure, processing, delivery and usage of
information required for management and
business intelligence purposes.
Strategic human resource management
(strategic HRM)
- provides a framework linking people
management and development practices to
long-term business goals and outcomes. It
focuses on longer-term resourcing issues
within the context of an organization’s goals
and the evolving nature of work.
Strategy Evaluation Process
- assesses whether a particular strategy or
set of plans effectively achieves its intended
goals. The goal of assessment is to improve
the effectiveness of a company's strategy by
identifying opportunities for improvement
and providing feedback to management
measurable criteria is SMART
CHAPTER 11
Corporate Social Responsibility (CSR)- It is a
business process which involves interaction
with stakeholder, the customer, supplier,
employees and its communities towards
compliance with government policies,
environmental, social and economic
concerns.
5 E's CSR Programs are:
• Education
• Electrification
• Environment Protection &
Preservation Employment
&Livelihood
• Economic Empowerment
Drivers of Corporate Social Responsibility
External Drivers
a. Regulation - Compliance with
government laws and policies of concerned
cities and municipalities in the form of
environmental compliance, community
development, permits and others.
b. Market Forces - All business operations
deal with various market forces like:
Competition - The impact of rival
businesses that provide comparable goods
and services. These analyze the level of
competition in a specific industry, taking
into account things like aggressive pricing,
effective marketing, and entry obstacles.
specific, measurable, achievable, relevant,
and time-bound (SMART) objectives is a
good way to plan the steps to meet the
long-term goals in your grant. It helps you
take your grant from ideas to action.
Natural Forces - The responsibility to lessen
or eliminate the harmful effects that
businesses have on the environment.
Demographic Factor - To characterize a
population's traits that can be utilized in
influencing a business's or venture's ability
to succeed. Such age, gender, race,
ethnicity, socioeconomic status, and
lifestyle preferences.
c. Societal Forces - The norms and beliefs of
the people in the community.
Internal Drivers
a. Individual Behaviour - Observation of
business conduct. Better worker
productivity will be seen by companies that
can recognize the essential personality
features of their personnel.
b. Operation - The CSR Business
Performance in terms of:
Principles - A business's dedication to acting
sustainably on both the social and
environmental aspects and as good
management of the environments in which
they operate.
Policies Communicated - A fact-based tone
that's not overly self-congratulatory. In
communications, be fair and sincere.
Policies Implemented - The entire strategy
used by businesses and organizations to
develop, carry out, and evaluate their CSR
projects.
Best Practices - Can raise workplace morale
and increase output, both of which have an
effect on how profitable the business can
be.
c. Strategies - To guarantee that your
company's corporate social responsibility
programs are effective.
Performance Data - Presents a way for
businesses to assess whether they are
effective in bringing stakeholders
satisfaction through corporate citizenship
and social responsibility.
Impact Data - Companies can increase
profits, support ethical growth, secure the
environment, and build their reputation and
brand value by implementing socially
responsible strategies.
CORPORATE SOCIAL RESPONSIBILITIES
APPROACHES AND PROGRAM
Approaches gathered are:
1. CSR as value Creation/Innovation
a. Business Mission/Vision
b. Promote competitive edge among
competitors
c. Integrate Business and community
d. Skill Development/Human Capital
Development
2. CSR as Risk Management
a. Promote Policy and Legal Compliance and
Reporting
b. Promote acceptable Strategic Operations
Impact
3. CSR as Corporate Philanthropy
a. Support and access to basic needs like
Education
3 IMPORTANT PRINCIPLES OF CORPORATE
SOCIAL RESPONSIBILITY
1. Sustainability
• most important aspect
• Effect or impact to the communities
in terms of social, environment or
economic development.
• Ways not to compromise the future
needs of the future generations.
2. Accountability
• by being responsible for all
undertakings
3. Transparency
• act of open communication
• reliable level of information
disclosure
• Clarity and accuracy.
Types of Corporate Social Responsibility
Traditional Conflict Model- In the
traditional conflict model for corporate
social responsibility, social values and
benefits are seen as in conflict with
shareholder profits. Under this model,
corporations opting to practice forms of
social responsibility are likely to see added
costs for doing so.
Added Value Model- A second model for Another Type of CSR (according to prof.)
conceptualizing corporate social
Philanthropic Responsibility - refers to a
responsibility is to see social and
business’s aim to actively make the world
environmental commitments as a means to
and society a better place.
increase profit. While proponents of this
model tend to acknowledge that conflicts Environmental Responsibility - refers to the
persist in business decisions, they also belief that organizations should behave in
believe that CSR investments are also as environmentally friendly a way as
capable of generating new revenues. possible. It’s one of the most common
forms of corporate social responsibility.
Multiple Goals Model- a third model for
corporate social responsibility posits a role Economic Responsibility - is the practice of
for social values in corporate decisions that a firm backing all of its financial decisions in
are untethered to economic values. Under its commitment to do good in the areas
this model, corporations have goals beyond listed above. The end goal is not to simply
shareholder value, including the maximize profits, but make sure the
enhancement of their community without business operations positively impact the
respect to monetary gain. environment, people, and society.
Ethical Responsibility - is concerned with c. increased sales and customer loyalty
ensuring an organization is operating in a
d. increased ability to attract and retain
fair and ethical manner.
employees
Advantages of CSR
e. reduced regulatory oversight
a. improved financial performance
f. easier access to capital
b. enhanced brand image and reputation
Disadvantages of CSR
a. less profit
b. competitive disadvantage
c. loss of focus
d. lasting impact
e. costs