Segment VII: Emerging Issues Chris Calagis, Eric Elliott, Jay Mathias, Mike Maulone, and Serge...
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Transcript of Segment VII: Emerging Issues Chris Calagis, Eric Elliott, Jay Mathias, Mike Maulone, and Serge...
Segment VII: Emerging Issues
Chris Calagis, Eric Elliott,
Jay Mathias, Mike Maulone,
and Serge Svarovsky
The Regional Alternative
• Regional Pressures– Rise of regional trading blocks
– Removing tariffs
– Removing fiscal, physical, and technical barriers
• Regional Competition– companies are pressured to become more regionally
focused
– “globalized” companies downscale to become more competitive regionally
New Organizational Challenges
• Parent– Stay abreast of local market conditions
– Be aware of subsidiary strengths and weaknesses
– Shift autonomy to regional managers
• Subsidiary– Prepare to take strategic initiatives
– Exploit existing strengths, create new strategies
– Manage structural mechanisms more effectively
Summary
• “Miniature replica” strategy– central control, minimal input from local managers– rigid and non-responsive
• Globalization strategy– tight central control– low morale, internal opposition, lost opportunities
• Regionalization strategy– autonomous subsidiaries– better service “insider advantage”– presents compromise between “miniature replica” and global
strategies
Globalization vs. Regionalization
• Why should companies globalize?• A large number of competitors are using global
strategies to compete• Performance can be improved by pursuing global
strategies, especially in industries which have global structural characteristics
• Globalization assumptions• What works at home will work abroad• Exportation and subsidiaries will create global success• Miniature replicas work all of the time
• Strategic Keys to be Globally Successful• Ability to cope with diverse industry standards
• International consumers demand differentiated products
• Being an insider is critically important
• Global organizations are difficult to manage and companies should enter slowly
• Research • A study showed that instead of developing
global strategies, companies should first strengthen regional competitiveness
It Pays to Be Green
• The Managerial Incentive Structure– The Traditional View
• Pollution Pays, Pollution Prevention Doesn’t
• Green Management can be profitable– Cost Reduction– Limits– Recycling and Reusing– Substitution
Environmentally Sound Strategies
• The Supply Side: Efficiency and Optimal Management– Implementation of Cost-Effective
Environmental Strategies
• The Demand Side: Gaining and Maintaining Market Shares– Active and Reactive dimensions to business’s
response to the environmental challenge
Environmentally Aware Companies
• Green Companies– Green Consumerism
• Rent Seeking – Environmentalism is Power
• Niches
• Oligopolies
• Financial Incentives– Greater Investment
Environmentally AwareCompanies (Cont)
• Risk Management– Know the Laws
• A New Business Ecosystem– The Environment - a main business goal– Managers must encourage green strategies– Green manager = Best manager
Chapter 23: Resolving the ConflictSustainable Development (SD)
• Critics say it is simply “permanent financial aid” for the LDCs
• Supporters see it as a way to increase the standard of living
• It will take vast amounts of resources to build the infrastructure, capital equipment and consumer goods in these LDCs.
• How do we raise the standard of living w/o a huge increase in energy consumption?
Global Warming
• Increases in CO2 and other greenhouse gases must be controlled
• Present industrialized countries created most of the CO2 emissions while consuming huge amounts of energy to become industrialized
• LDCs won’t have the same luxury
• May not be a problem– There is no real scientific proof that there is such a
thing as global warming.
What do we do?
• The best solution to this problem involves technology and politics
• The present industrialized countries can give LDCs the technology needed to raise the standard of living quickly enough that population growth will slow rapidly
• The LDCs must have leaders that allow knowledge to flow freely in the market– Corruption will only lead to a wider gap between rich
and poor
THE END