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Strategic Options for Competing Globally

Global firms are continually seeking new markets and customers. To best compete across the world market, the businesses must institute an apt business strategy to secure the customers and expand their reach. Companies have three main strategic options to explore, namely: multicountry, global and hybrid strategic approaches.

The multicountry strategic approach works on the philosophy, “think local, act local.” It involves the adapting of a company’s products and strategic decisions to each country of operation in a way that addresses the differing consumer preferences, competitive situations, and market conditions (Thompson et al. 155).  In the multicountry strategies, local decisions on competition, advertisement, product development are delegated to local managers. While this strategic approach succeeds on most fronts, the resulting decentralization of operation and management creates a management challenge that halts efficiency (Mukherjee et al. 94).  The multicountry strategic approach is considered the most responsive to the local market because majority of the decisions that affect the quality of product and service offered are done at the local levels. Indeed, most of the companies that engage in this strategic approach employ local professionals in the top management to optimize the organization’s responsiveness to local needs. MTV embodies the multicountry strategy. Instead of showing its media sourced from the US across all stations globally, MTV customizes its programs to meet the preferences of its customers in Singapore, New Zealand, Australia and other countries where it operates.

The global strategy works on the “think global act global” premise. Companies that use this approach employ a consistent fundamental strategic method in all the countries of operation. These companies sell particular products with identical brand names across nations, advertise a single global brand, use the same resources to develop and produce their products and exhibits an immense headquarter control (Thompson et al. 156). Unlike the multicountry approach that is best for companies where local responsiveness is critical, the global strategy is best suited for an organization whose main selling point is efficiency and uniformity of quality. The approach is often better than the multicountry approach where cross-country business distinctions are small enough to allow the adoption of the global strategy because it assures economies of scale, less costly regarding employee development and eases the establishment of a worldwide brand.

The global approach is particularly vital to firms that offer products whose quality standards and customer preferences are standard across culture and thus require a worldwide brand reputation. When adopting the global strategy, the firms gain by acquiring a global brand, strengthen and refine their competitively essential resources, have a sufficient number of personnel to expand into newer markets, and secure coordination and integration of their worldwide strategy (Thompson et al. 157). Technology firms and pharmaceutical firms are often the most suited for a global strategy. Microsoft, for instance, provides the same software and hardware to its customers across the world. Facebook also tends to adopt a global strategy although it tries to let a few aspects of its features remain responsive to cultural needs. It is the same for IBM, Twitter, and Youtube.

The hybrid approach combines the local and global methods to create a new, simpler way of doing business. The philosophy that guides this approach is “think globally act local.” While it allows the use of a single competitive strategy theme, the hybrid approach allows its local managers to make decisions and variations that suit the local consumer preferences (Thompson et al. 157). Firms relying on this approach build a global brand, uses global strategies to fight international competition, and local methods to battle home competition. Mcdonalds and KFC employ this approach. While they maintain the same brand name and image and are guided by similar essential menu items, they suit their offers to the preferences of local consumers. For instance, McDonalds France serves wine in their outlets, and the vegetable burger is introduced in India. The hybrid approach is a middle ground approach to the global and multi-country strategies, and therefore, balances between efficiency and responsiveness.

Ethical Schools of Thoughts

The school of ethical universalism posits that global cultures agree on what is generally right or wrong. Consequently, a universal moral standard can be applied across the world without any difficulty (Thompson et al. 195). For instance, it is agreed across the globe that dishonesty is unethical behavior that should be avoided in all relationships. This school of thought gives multinational corporations an authority to develop a single binding ethical standard document that applies to all its subsidiaries in different countries. The assumption that the world is ideologically homogenous in its view of ethics is detrimental for organizations that work within the confines of cultures that may be unique and differing in their ethical prescription.

The school of ethical relativism holds that although cultures across the world share some fundamental moral values, there are overarching disparities about societal beliefs on ethically right and wrong acts and behaviors. These cultural differences affect how business activities are pursued. It is, thus, essential that an organization prepares multiple moral standard documents that independently set standards for the different cultural groups (Shapiro and Stefkovich 29). For instance, a business operating in the US may be unethical by breaching one’s freedom of movement although this cannot be considered immoral if the same company works in China.

The integrated social contract theory plays a moderating role between universalism and relativism. The theory holds that a firm’s ethical standards should be controlled both by the universally accepted moral principles placing a robust ethical limit on apt behavior and actions in all circumstances and traditional and cultural conditions prescribing the constitution of the ethical act at a local level (Thompson et al. 197). While the universal principles form the basis of the ethical standards, they leave a “moral free space” that can only be filled by the local situation. Indeed, the universal principles form a valid “social contract” with the society, prescribing a binding stance on what constitutes ethical and unethical behavior or action. The Social contract is exemplified when a multinational applies stringent measures on bribery and establishes in a culture where tokens of appreciation are acceptable and encourage after great service.

Types of Management Morality

Management morality refers to a set of principles or standard of behavior that guides the actions of the manager in their running of the business. These principles outline what is right or wrong to direct the decision of the manager when handling any issues within the organization (Greenbaum 29). Three categories of management morality define the moral and ethical principles of the manager. Moral, immoral and amoral are the three main categories of management ethics. These categories explain the ethical and moral behavior exhibited by the manager as well as the overall business view regarding ethics and morality.

Moral, amoral and immoral managers differ regarding their ethical norms, motives, goals, and orientation towards law. Moral managers adopt an ethical norm that focuses on adhering to the required ethical principles and standards. These managers are dedicated to adhering to a high standard of ethical behavior when making any business decision. On the other hand, immoral managers are less concerned with ethical standards, their decision-making or behavior is discordant with acceptable ethical standards and principles (Thompson et al. 198). Amoral managers are neither immoral nor moral, though their ethical norms are outside what is regarded as moral standards of behavior.

The motives of the three kinds of managers also differ. While the moral manager wants to achieve business success within the confines of acceptable ethical precepts, the immoral and amoral managers hold a selfish motive; they are more concerned with the business success. The main goal of a moral manager is to attain maximum profitability within the confines of ethical and legal requirements (Thompson et al. 198). Even though, the amoral managers focus on achieving profitability within the required statutory regulations, they are less concerned with the ethical implications of their actions. The immoral managers, however, only aim at accomplishing maximum profitability at all cost.

Moral managers prefer to operate above the mandate of the law and ethical standards. On the other hand, amoral managers abide by the law and focus on ensuring that all their activities are legally binding. Immoral managers, however, do not take the law or the ethical standards into consideration when doing business (Thompson et al. 199). They view the law and ethics as barriers that must be avoided for an organization to report higher profitability.

Companies such as H&M and Nestle view have depicted a form of immoral form of management immorality in the recent past. The engagement of child slaves as laborers in Nestle cocoa farms in Cote d’Ivoire was not only illegal but also unethical. Similarly, subjecting casual laborers to longer working hours and low pay is an immoral form of management adopted by H&M in China. The two organizations are more concerned with profitability at the expense of the ethical and legal standards set to control the business operations. On the other hand, Hartford insurance firm has been honored for the moral nature of its management. The business is praised for its adherence to the law and participation in corporate social responsibility activities.

Discuss and analyze the eight components of the Strategy Execution process

Managers are required to undertake eight significant tasks in the execution of a new business strategy. The first step is the staffing of the organization and enhancing the capabilities and resources needed for the implementation of the plan. A successful strategy execution process requires competent employees and more than adequate competencies and skills. A proper internal organization is essential in achieving a proficient strategy implementation process (Thompson et al. 230). Some of the actions that need to be undertaken to attain the goal of the first stage include: Recruiting new employees, training and development of the recruits and retention of the employees with the desired competency and expertise (Menon and Dennis 1954). Also, the manager would be required to develop and strengthen the available resources and capabilities to enhance their effectiveness in executing the critical value chain activities. The first stage also requires the manager to structure the organization in a way that the value chain activities and business processes are highly integrated.

The second stage entails the steering of the necessary finances for the execution of the strategy. Under this stage, the manager is required to update the company resources and competencies acquired in stage one to match the constant change in market conditions and consumer expectations. The idea is to ensure that there are adequate financial resources needed in the execution of the strategy, regardless of any possible changes in the business environment (Thompson et al. 225). The third stage aim at identifying the organization’s policies and strategies and ascertaining whether they support the execution of the new organizational changes. The management needs to evaluate whether the regulatory policies and procedures hinder or back the implementation of the new strategy.

At the fourth stage, the management focuses on adopting best organizational practices and advocating for their continuous improvements to ensure they support the new change to completion. The best organizational practices are essential in enhancing the quality and effectiveness of the value chain activities. Quality value chain activities foster the development of a superior and imitable strategy that is considered a significant source of competitive advantage to any organization (Menon and Dennis 1960). The unique approach will enhance the capability of an organization to out-perform other players in the industry. Out-strategizing is achieved when the organizational activities are done with maximum cost efficiency and significant differentiation such that they cease to be easily imitable. A superior strategy promises the attainment of success since the new approach cannot be easily duplicated to counter its competitiveness in the market.

At the fifth stage, the management put in place suitable operating systems are then installed to enable the personnel efficiently executes their strategic roles. A decision on whether the activities should be centralized or decentralized must be made depending on the suitability of each approach. Also, the management needs to support effective coordination between the employees and the management to ensure the right decisions are made and implemented. Employee rewards and motivation are essential in fostering the successful implementation of a strategy. The sixth stage of strategy execution aims at tying incentives and rewards to the strategic and financial performance targets to act as motivation towards the attainment of the desired change. The management then instills a suitable organizational culture that will promote the implementation of the strategy. Lastly, strong leadership is put in place and exercised to drive the strategy execution process and to ensure that the various tasks are performed efficiently.

In their implementation of the new business strategy “production of customer-centric products,” the Coca-Cola Company focused on improving the competencies of the existing staff so that they exhibit the needed skills and expertise for the new product manufacturing. Resource acquisition and building of an organizational culture that supports the new strategic direction was also evident (Shenkar et al. 223). The company further focused on training and development of the staff to improve their innovativeness in coming up with such customer-centric products, an approach that resulted in the birth of the coke-zero beverage. The reward system and the strong leadership promoted by the company ensured the success of the new strategy.

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