Description
As a minimum, you are required to write and discuss in class an analysis of your own
choosing two different topics and/or case studies included in the unit calendar. You can choose to analyse
and discuss one topic and one case study or two topics or two case studies.
Meeting these criteria will address the minimum requirements for this assignment.
As a rough guideline, your write-up should be about 500 words in order to keep the reading manageable
in the class. The discussion of your analysis in class based on your write-up should be around 5 minutes. As
a guideline, a contribution of around 1000 words would be considered an average or reasonable
‘amount’ of writing to meet the minimal requirements for this assignment. Your class lecturer will allocate
the topics/case studies and dates of discussion of your initial (first) discussion/write-up of 500 words. You
can choose a topic and/or case study for your second discussion and write-up.
The following Rubric is the grading key for assessing your overall learning portfolio contribution. It
provides you some background on the differences between what constitutes meeting the minimum
standards for the assignment versus outstanding contributions to the assignment
Unformatted Attachment Preview
Corporate Strategy: Learning Portfolio
Student:
Name
Student Number:
0000000
Email:
[email protected]
Department:
FBL
Unit:
Corporate Strategy (MGMT6010)
Lecturer:
Word Count:
Topic One: 522
Topic Two: 504
1.0
TOPIC ONE: MANAGING STRATEGIC CONTRADICTIONS
The strategic contradiction of commitment and uncertainty presents significant
challenges for decision-makers when planning long-term organisational strategy (Raynor
2007). Committing to a strategy presents risks; over the past thirty years, there has been
considerable disruption to previously stable industries due to rapid innovation and the
introduction of technology like AI (De Wit 2020). Companies like Apple, Google and
Amazon have changed the global business landscape and how business is conducted (De Wit
2020).
Uncertainty is unavoidable even when adopting a strategy proven previously effective,
customer needs and values evolve rapidly; Raynor (2007) highlights the case of Sony’s
Betamax VCR tapes, retrospectively considered to be a failure of strategic decision making.
Raynor (2007) emphasises that the strategic decision made by Sony to continue with a
business strategy of quality differentiation was reasonable and aligned with their
understanding of customer preferences and market demands. The Apple iPod, a product that,
like Betamax, when launched, was critiqued for being prohibitively expensive, was able to
maintain the market share despite competition from cheaper products produced by Microsoft
and Dell (Raynor 2007). At the time of the iPod’s launch, Apple’s strategy was questioned as
they disregarded the precedent of Betamax that indicated a consumer preference for low-cost
products (Raynor 2007).
The presentation raised the notion of the organisational response to uncertainty caused
by the pandemic; I reflected on the extent to which risk tolerance and strategic mindset can be
cultivated through training and practice. Perhaps the Covid pandemic will equip managers
with experience of operating in an atmosphere of uncertainty, meaning that managers will be
better able to tolerate uncertainty in the future. The benefits to an organisation of a strategy
that can pivot or adapt quickly to harness the potential of new and evolving technology are
significant. Cryptocurrencies like Bitcoin are an example of a source of disruption to
traditional investing and are increasingly being used as an alternative to cash; organisations
are presented with the opportunity to invest in volatile digital economies providing high
returns (Deloitte 2021). However, organisations and decision-makers must have a high
tolerance for risk and have mechanisms to mitigate the potential impact on the business
(Deloitte 2021).
1.1
References
De Wit, Bob. 2020. Strategy: An International Perspective. 7th ed. Hampshire, United
Kingdom: Cengage Learning.
Deloitte. 2021. “Corporates Investing in Crypto: Considerations Regarding Allocations to
Digital Assets.” Deloitte. https://www2.deloitte.com/content/dam/Deloitte/us/
Documents/audit/corporates-investing-in-crypto-microstrategy.pdf
Raynor, Michael E. (2007), “Solving the Strategy Paradox: How to Reach for the Fruit
Without Going out on a Limb.” Strategy & Leadership 35 (4): 4
10. https://doi.org/10.1108/10878570710761327
Tricker, Bob. 2019. Corporate Governance Principles, Policies, and Practices. 4th ed.
Oxford, United Kingdom: Oxford University Press.
2.0
TOPIC TWO: BUSINESS-LEVEL STRATRGY
It is essential for businesses to be adaptable to changes in their internal and the
external environment; decision-makers much decide whether their organisation should “adapt
itself to its environment or should it attempt to adapt the environment to itself?” De Wit
(2020, p.200). Day and Moorman (2010) put forward the notion of the inside-out or outside-in
approach to strategy. An inside-out strategy has an inward orientation, strategy is based upon
using existing competencies and resources to create value (Tarkoff 2010). In comparison,
with an outside-in approach, strategy begins with the market and has its foundations in deep
market insights (De Wit 2020, Tarkoff 2010). These approaches made me think of a
restaurant I worked at in London; the menu was ‘modern antipodean fusion’, with very
unusual and challenging ingredients. The owner wanted us to expose customers to new
concepts, textures and flavour profiles even if customers were skeptical. This inside-out
approach produced an exceptional product but required a lot of additional resources,
particularly to train employees so they were able to educate customers and explain the
owners’ vision. Each method has advantages depending on factors such as industry and
business size; Day and Moorman (2010) identify Ikea as an organisation whose business
strategy engages both approaches to establish competitive advantage and create sustainable
long-term performance in diverse global markets.
While much of Ikea’s operational procedures, concept and organisational values are
consistent across markets, creating a replicable business model, recognisable brand identity
and style, Ikea has successfully adapted its offering to create superior customer value in the
long term (Jonsson and Foss 2011). Burt et al. (2021) put forward that Ikea’s market
orientation exists on a continuum of behaviours; their long-term competitive advantage has its
foundation in a mix of market-driving and market-driven approaches to business operations
and strategy. Jonsson and Foss (2011) describe Ikea’s international expansion strategy as
flexible replication; after some initial failures entering the US, Chinese and Japanese markets,
a more flexible approach to operations has resulted in solid international performance. The
flexibility manifested in changes to the geographical location of stores, products available for
purchase and the customer segment targeted, as Ikea was less able to be competitive on
pricing in markets with low-cost furnishings readily available (Burt et al. 2021).
Ikea has many points of interest, such as the limited vertical integration in their supply
chain and their reliance on strong strategic partnerships with suppliers. As a human resource
student, however, I am interested in how large companies use strategically human resource
strategy to support their business-level strategy. The knowledge and expertise of employees
must be maintained and managed like any other resource; knowledge-based businesses like
Tesla invest heavily in human resources to ensure they can keep pace with rapid technological
advancement, with their employees being a source of competitive advantage (De Wit 2020).
As we witnessed in our simulation activity, reducing operational costs by decreasing training
and labour spending is attractive and effective in the short-term. Investing in human resources
can lead to an engaged, stable and committed workforce which is valuable as a source of
advantage even for organisations with a cost reduction business strategy (De Wit 2020).
2.1
References
Burt, Steve, John Dawson, Ulf Johansson, and Jens Hultman. 2021. “The Changing
Marketing Orientation within the Business Model of an International Retailer: Ikea in
China over 10 Years.” The International Review of Retail, Distribution and Consumer
Research 31 (2): 229-255. https://doi.org/10.1080/09593969.2020.1857294.
Day, George S., and Christine Moorman. 2010. Strategy from the Outside in: Profiting from
Customer Value. 2nd ed. New Jersey, USA: McGraw Hill
De Wit, Bob. 2020. Strategy: An International Perspective. 7th ed. Hampshire, United
Kingdom: Cengage Learning.
Jonsson, Anna, and Nicolai J. Foss. 2011. “International Expansion through Flexible
Replication: Learning from the Internationalization Experience of Ikea.” Journal of
International Business Studies 42 (9): 10791102. https://doi.org/10.1057/jibs. 2011.32.
Tarkoff, Rob. 2010. “The Value of an ‘Outside-In’ Strategy.”
Forbes. https://www.forbes.com/sites/ciocentral/2010/12/01/the-value-of-an-outsidein-strategy/?sh=10148cf1042f
11/04/2020
2020_1_MGMT6010_V1_L1_A1_INT_704987
Name
2020 AoL Assessment 1 Rubric – Learning Portfolio Bentley
Description
Rubric Detail
Levels of Achievement
Criteria
Does Not Meet
Expectations
0-49
.
Meets
Expectations
50-69
.
Exceeds
Expectations
70-100
Assurance of
Learning
0.00 to 49.00 %
0.00 to 0.00 %
50.00 to 69.00 %
0.00 to 0.00 %
70.00 to 100.00 %
Critical
Thinking
Graduates will
be able to think
critically, draw
conclusions and
defend these
conclusions
Weight
0.00%
Assurance of
Learning
Oral
Communication
Graduates will
be able to
demonstrate
oral
communication
skills
appropriate to
the discipline,
audience,
purpose and
context
Weight
0.00%
• Uses information
sources that are
not reliable or
credible. •
Decisions and
recommendations
are not based on
the evidence
provided or are
unjusti ed. • Fails
to generate
multiple options
when making
decisions or
recommendations.
• Lists sources
without analysis,
synthesis or
evaluation.
0.00 to 49.00 %
• Appears
unprepared and
reads directly
from a poorly
structured written
script. • No or
minimal eye
contact with the
audience. •
Di cult to
understand (e.g.
low volume,
mumbling).
• Gathers credible
information from
a range of
sources. •
Demonstrates
some ability to
synthesise and
evaluate
information from
di erent sources.
• Generates
options and
choose between
them to reach an
evidence-based
decision or
recommendation.
• May require
more justi cation
or
acknowledgement
of limitations.
0.00 to 0.00 %
50.00 to 69.00 %
• The talk is
structured
logically. • Makes
eye contact with
the audience at
least half of the
time. • Speaks
clearly at a good
pace and volume.
• Needs to
develop both
voice and body
language further
in order to truly
engage the
audience.
• Synthesised a
diverse range of
data from a wide
range of credible
sources. •
Generated and
carefully
considered
multiple options
to reach robust
evidence-based
decisions or
recommendations
that are clearly
justi ed in
relation to the
problem. • The
limitations of the
decision are
explicitly
recognised. • Able
to draw on
interdisciplinary
evidence to
develop new
insights into the
problem or
solution.
0.00 to 0.00 %
70.00 to 100.00 %
• Engaging to
listen to, using
vocal prosody
(e.g. pace, tone,
stress) to
maintain interest.
• Strong eye
contact with the
audience and
using appropriate
hand gestures to
reinforce their
message. • The
talk has a single,
clear take-home
message. • May
need to improve
on 1-2 minor
points (e.g. some
hesitations, could
project more).
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2020_1_MGMT6010_V1_L1_A1_INT_704987
Levels of Achievement
Criteria
ASSESSMENT
MARKING
CRITERIA
Weight
0.00%
Relevant
Information
(Discipline
Knowledge and
Skills Standard):
the ability to
integrate the
unit materials
and provide
scholarly
references’ into
discussion and
written work
20.00%
Does Not Meet
Expectations
0-49
0.00 to 49.00 %
Below
Expectations
(Fail)
0.00 to 49.00 %
• Collects few
relevant
references and/or
little relevant data.
• Where
applicable,
generates simple
additional
information or
data
Weight
20.00%
Issue (Critical
Thinking
Standard): the
ability to
formulate
lessons learnt
from the
original post
expanding class
learning
through their
work,
discussing with
the class
ideas/opinions,
how they are
used in
di erent
settings 20.00%
0.00 to 49.00 %
• The
issue/problem to
be considered
critically is not
clearly stated and
described. • There
are serious
omissions and/or
errors.
.
50.00 to 59.00
%
Meets
Expectations
(Pass)
50.00 to 59.00
%
• Collects
relevant
references
and/or data
from reliable
sources. •
Where
applicable,
generates data
using
prescribed
protocols.
50.00 to 59.00
%
• The
issue/problem
to be
considered
critically is
stated clearly
and described
with enough
information
for an
adequate
understanding.
• There are
several
omissions
and/or errors
Meets
Expectations
50-69
.
Exceeds
Expectations
70-100
60.00 to 69.00 %
70.00 to 79.00 %
80.00 to 100.00 %
Meets
Expectations
(Credit)
Exceeds
Expectations
(Distinction)
Exceeds
Expectations
(High Distinction)
60.00 to 69.00 %
70.00 to 79.00 %
80.00 to 100.00 %
Collects adequate
relevant
references and/or
data, as well as
some other
information from
reliable sources. •
Where applicable,
generates
convincing data
using prescribed
protocols.
• Collects a
comprehensive
set of relevant
references
and/or data as
well as other
information
from reliable
sources. • Where
applicable,
generates
complex data
using
appropriate
protocols.
• Collects a
comprehensive
set of relevant
references and/or
data as well as
other reliable
information from
several di erent
sources. • Where
applicable,
generates
relevant, in depth
data using
appropriate
protocols.
60.00 to 69.00 %
70.00 to 79.00 %
80.00 to 100.00 %
• The
issue/problem to
be considered
critically is stated
clearly and
described
comprehensively
for an adequate
understanding. •
There are some
omissions and/or
errors
• The
issue/problem to
be considered
critically is stated
clearly and
described
thoroughly. •
There are only
minor omissions
and/or errors.
• The
issue/problem to
be considered
critically is stated
clearly and
described
comprehensively,
succinctly
delivering all
relevant
information
necessary for a
full
understanding. •
There are no
omissions and/or
errors.
Weight
20.00%
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Levels of Achievement
Criteria
Evidence-based
Analysis
(Critical
Thinking
Standard):
the ability to
interpret and
share personal
experience,
insights in
relation to the
chosen
concepts
20.00%
Weight
20.00%
Quality of class
discussions:
the a ability to
support
and/or discuss
the
ideas/theories,
engaging
peers through
raising
questions,
o ering
insights
and o ering
practical
examples
20.00%
Does Not Meet
Expectations
0-49
0.00 to 49.00 %
• The analysis is
super cial and
based on
irrelevant
information,
concepts and
methods. • The
information
analysed is
gathered from
very limited
source(s) or only
those provided.
0.00 to 49.00 %
Fail to prepare the
topic and engage
the class into
discussions
.
50.00 to 59.00
%
• A coherent
analysis is
based on
partial use of
relevant
information,
concepts and
methods. • The
information
analysed is
gathered from
some relevant
source(s)
beyond those
provided.
50.00 to 59.00
%
Good ability to
engage the
class into
discussions by
sharing learnt
lessons and
examples
Meets
Expectations
50-69
.
Exceeds
Expectations
70-100
60.00 to 69.00 %
70.00 to 79.00 %
80.00 to 100.00 %
• A coherent
analysis is based
on relevant
information,
concepts and
methods. • The
information
analysed is
gathered from
several source(s)
beyond those
provided.
• A coherent
analysis is based
on thorough use
of the most
relevant
information,
concepts and
methods • The
information
analysed is
gathered from
many diverse,
relevant
source(s)
beyond those
provided
•A
comprehensive
analysis is based
on a deep
understanding of
relevant
information,
concepts and
methods. •
Information
analysed is from
many diverse,
high quality
source(s) beyond
those provided.
60.00 to 69.00 %
70.00 to 79.00 %
80.00 to 100.00 %
Good ability to
engage the class
into discussions
by sharing learnt
lessons and
examples
Very good ability
to engage the
class into
discussions by
sharing learnt
lessons and
examples,
preparing
questions and
exercises for the
class
Excellent ability to
engage the class
into discussions
by sharing learnt
lessons and
examples,
preparing
questions and
exercises for the
class
60.00 to 69.00 %
70.00 to 79.00 %
80.00 to 100.00 %
• The written
submission is
sound, clear and
relevant. • Some
statements are
generally
supported by the
evidence and/or
the process of
analysis. •
Assumptions are
stated and
described
adequately.
• The written
submission is
relevant,
signi cant and
well organised. •
Most
conclusions are
logically
supported by
the evidence
and/or the
process of
analysis. •
Assumptions are
stated and
comprehensively
described.
The written
submission is
relevant,
signi cant and
well organised. •
Most conclusions
are logically
supported by the
evidence and/or
the process of
analysis. •
Assumptions are
stated and
comprehensively
described and
justi cation for
their use is
provided.
Weight
20.00%
Quality
Standard of a
written
submission
20.00%
Weight
20.00%
0.00 to 49.00 %
• The written
submission is
vague. • The text is
not logically
supported by the
evidence and/or
process of
analysis. •
Assumptions are
inadequately
described.
50.00 to 59.00
%
• The written
submission is
clear and
relevant. • Few
statements are
generally
supported by
the evidence
and/or the
process of
analysis. •
Important
assumptions
are stated.
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Chapter
Strategy: An international perspective
Chapter 5
Corporate level strategy
Bob de Wit
Strategy: An international perspective 6th edition
5
Chapter
5
AGENDA
1
▪
▪
2
▪
▪
The issue of corporate configuration
Corporate composition
Corporate management
The paradox of synergy and responsiveness
International perspective
▪
Corporate level strategy in international perspective
5
▪
▪
▪
The demand for multi-business synergy
The demand for business responsiveness
3
Perspectives on corporate level strategy
▪
▪
The portfolio perspective vs. the integrated organization perspective
Managing the paradox
Bob de Wit
4
Readings
5.1 Hedley, Strategy and the business portfolio
5.2 Prahalad & Hamel, The core competence of the organization
5.3 Campbell & Goold, Seeking synergies
Strategy: An international perspective 6th edition
2
Chapter
THE ISSUE OF CORPORATE CONFIGURATION
5
Corporate composition
Where the firm wants to have which level of involvement – where to allocate resources, build up activities and achieve market sales
Key elements:
Bob de Wit
•
Corporate scope
The more ‘business components’ chosen
the broader the scope of the corporation
•
Corporate distribution
The composition depends on the relative
size of the activities in each business area.
Strategy: An international perspective 6th edition
3
Chapter
THE ISSUE OF CORPORATE CONFIGURATION
5
Corporate composition : Portfolio manag emen t
Bob de Wit
Strategy: An international perspective 6th edition
4
Chapter
THE ISSUE OF CORPORATE CONFIGURATION
5
Corporate manag em en t: Integration mech an isms
Bob de Wit
CENTRALIZATION
COORDINATION
STANDARDIZATION
Physically bringing
resources and activities
together into one
organizational unit.
Orchestration of
resources, activities
and/or product offerings
split between different
business units.
Creating a common norm
for resources, activities
and/or product offerings
across business units.
Strategy: An international perspective 6th edition
5
Chapter
THE ISSUE OF CORPORATE CONFIGURATION
5
Corporate manag em en t: Managemen t mech an isms
Key elements:
Bob de Wit
•
Control
To give someone the formal power to
enforce centralization, coordination and
standardization.
•
Cooperation
Business units might be willing to
cooperate because it is in their interest to
do so, or because they recognize the
overall corporate interests.
Strategy: An international perspective 6th edition
6
Chapter
THE PARADOX OF SYNERGY & RESPONSIVENESS
5
The deman d for multi -bu sin ess synergy
MARKET ADAPTATION
Synergy by leveraging resources:
•
•
Resource reallocation
Resource replication
Synergy by aligning positions:
•
•
Improving bargaining position
Improving competitive position
Synergy by integrating value chain activities
•
•
Bob de Wit
Sharing value-adding activities
Linking value-adding activities
Strategy: An international perspective 6th edition
7
Chapter
THE PARADOX OF SYNERGY & RESPONSIVENESS
5
The deman d for business responsiv en ess
BUSINESS RESPONSIVENESS
Responsiveness is the ability to respond to the competitive demands of a specific
business area in a timely and adequate manner. This is made difficult by:
Bob de Wit
•
High governance costs. Coordinating activities within a firm requires managers.
Layers of management, and the bureaucratic processes can lead to escalating costs.
•
Slower decision-making. Business units must usually deal with more layers of
management, more meetings for coordination purposes, more participants in
meetings, more conflicts of interest and more political infighting.
•
Strategy incongruence. Some business units might need to compromise, adapting
their business strategy to fit with the corporate strategy. Such internal adaptation
might lead to a misfit with the business demands.
•
Dysfunctional control. The corporate center might not have the specific business
know-how needed to judge business unit strategies, activities and results.
•
Dulled incentives. Limited autonomy combined with the aforementioned problems
can have a significant negative impact on the motivation to perform optimally.
Strategy: An international perspective 6th edition
8
Chapter
PERSPECTIVES ON CORPORATE LEVEL STRATEGY
5
Portfolio organization perspectiv e vs. Integrated organization perspectiv ea
Portfolio organization perspective
Integrated organization perspective
•
Responsiveness is emphasized over synergy.
•
•
The only synergies emphasized are financial
synergies.
A corporation should be a tightly knit team of
business units grouped around a common core.
•
All business units should tap into and contribute to
the corporation’s core competences, thus the
business units’ autonomy is limited.
•
Growth through acquisition is difficult.
•
Portfolio approach is well-suited to diversify through
acquisition.
•
Business units are responsible for their own
competitive strategy.
•
Corporate centres should be modest in ambition and
size.
Bob de Wit
Strategy: An international perspective 6th edition
9
Chapter
PERSPECTIVES ON CORPORATE LEVEL STRATEGY
5
Portfolio organization perspectiv e vs. Integrated organization perspectiv ea
Bob de Wit
Strategy: An international perspective 6th edition
10
Chapter
PERSPECTIVES ON CORPORATE LEVEL STRATEGY
5
Managing the paradox
Navigating
Focus on one perspective at a time – Manage
different perspectives over time by a series of
contrary initiatives
The common means of managing the paradox to
focus on one demand at a time.
Balancing
Trading off opposing perspectives – Not a
search for synthesis, but to create a
company specific balance from both
perspectives
After having navigated the firm to accumulated
multi-business synergies or enhanced business
responsiveness, the strategists have to manage the
new equilibrium.
Resolving
Focus on one perspective at a time – Manage
different perspectives over time by a series of
contrary initiatives
Bob de Wit
This tension has resulted in arguably the most
effective means to combining advantages of
synergy and responsiveness: the franchise.
Strategy: An international perspective 6th edition
11
Chapter
INTERNATIONAL PERSPECTIVE
5
Corporate level strateg y in intern ation al perspectiv e
On the national level
–
On the industry level
To the strategist
Bob de Wit
In the early 1980s, waves of hostile takeovers and overall poor performances in Western
conglomerates, led to a focus on integration
In European countries, especially Germany banks gained prominent positions by investing in
promising new enterprises in their home country
In Japan, the keiretsu structure, conglomerations of businesses linked by cross- shareholdings,
links indutry stakeholders through ownership of long-term equity and production activities
South Korea’s chaebol, conglomerates run by powerful families and supported by the South
Korean government, expand internationally and focus on diversification
–
When laws allow it, the common investors in federations of businesses are often banks
In the case of both keiretsu and chaebol banking, insurance, chemicals, manufacturing and
steel are common businesses.
–
A strategist has to understand how to deal with the international playing field
Strategists also have to decide whether to control as a parent or to cooperate without one
Strategy: An international perspective 6th edition
12
Chapter
READINGS
5
5.1 Hedley, Strateg y and the business portfolio
The business portfolio or growth–share matrix
Bob de Wit
Growth rate and relative competitive position
Strategy: An international perspective 6th edition
13
Chapter
READINGS
5
5.2 Prahalad & Hamel, the core comp eten ce of the organization
Bob de Wit
Strategy: An international perspective 6th edition
14
Chapter
READINGS
5
5.2 Prahalad & Hamel, the core comp eten ce of the organization
Bob de Wit
Strategy: An international perspective 6th edition
15
Chapter
READINGS
5
5.3 Campb ell & Goold , Seeking synergies
Bob de Wit
Strategy: An international perspective 6th edition
16
Chapter
Strategy: An international perspective
Chapter 6
Network level strategy
Bob de Wit
Strategy: An international perspective 6th edition
6
Chapter
6
AGENDA
1
▪
▪
▪
▪
2
▪
▪
The issue of inter-organizational relationships
Relational actors
Relational objectives
Relational factors
Relational arrangements
The paradox of competition and cooperation
4
International perspective
▪
Network level strategy in international perspective
5
▪
▪
The demand for inter-organizational competition
The demand for inter-organizational cooperation
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Bob de Wit
Readings
6.1 Hamel, Doz & Prahalad, Collaborate with your competitors – and win
6.2 Lorenzoni & Baden-Fuller, Creating a strategic centre to manage a web
of partners
6.3 Moore, Coevolution in business ecosystems
Perspectives on corporate level strategy
The discrete organization perspective vs. the embedded organization perspective
Managing the paradox
Strategy: An international perspective 6th edition
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Chapter
THE ISSUE OF INTER-ORGANIZATIONAL RELATIONSHIPS
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Aspects of inter-o rg an ization al relation sh ip s
Bob de Wit
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Relation al actors
Socio-cultural actors
Political/regulatory actors
Bob de Wit
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Upstream vertical (supplier) Relations:
The relationship with suppliers defined as the
providers of raw materials, parts, machinery and
services, but also with suppliers further upstream in
the industry.
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Downstream vertical (buyer) relations:
On the output side, the firm has relationships with
its customers. These can be the actual users or
intermediaries trading the output.
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Direct horizontal (industry insider) relations:
The relation between the firm and other industry
incumbents (competitors).
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Indirect horizontal (industry outsider) relations:
Relationships with companies outside the own
industry of the firm.
Economic actors
Technical actors
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Relation al objectiv es
Bob de Wit
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Leveraging resources:
• Learning: The objective is to exchange knowledge
and skills.
• Lending: If a firm can not make full use of own
resources it can be attractive to lend them to others.
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Integrating activities:
• Linking: Relationships where products/ services are
exchanged.
• Lumping: Firms bring similar activities together to
gain economies of scale.
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Aligning positions:
• Leaning: Firms get together to improve their
bargaining position vis-à-vis other industry actors.
• Lobbying: Firms cooperate with one another to gain
a stronger position vis-à-vis contextual actors.
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Relation al factors
General categories
Legitimacy
Urgency
Inter-organizational relations are also shaped by the factor ‘timing’.
Relations develop differently when the parties act under time pressure
to achieve results.
Frequency
Relations also depend on the frequency of interaction and the
expectations of future interactions which the firms that are involved
have.
Power
Bob de Wit
Relations are highly impacted by what is deemed to be legitimate.
Which agenda is chosen and how interaction is taken place are
decided by what both parties accept as ‘the rules of engagement’.
Power is the ability to influence others’ behavior in interorganizational relationships and organizations can have many sources
of power like resource dependency.
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THE ISSUE OF INTER-ORGANIZATIONAL RELATIONSHIPS
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Relation al factors
Bob de Wit
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THE ISSUE OF INTER-ORGANIZATIONAL RELATIONSHIPS
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Relation al arrangem en ts
• Research consortium
• Lobbying coalition
• International marketing
alliance
• Joint standard settings
• Learning communities
• Export partnership
• Cross-selling deal
• R&D staff exchange
• Market information sharing
agreement
Bob de Wit
• Shared payment system
• Construction consortium
• Joint reservation system
• Licensing agreement
• New product joint venture
• Co-development contract
• Cross-border joint venture
• Co-branding alliance
• Local joint venture
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Chapter
THE PARADOX OF COMPETITION AND COOPERATION 6
The deman d for inter -o rg an ization al comp etition
INTER-ORGANIZATIONAL COMPETITION
Bob de Wit
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Competition is the rivalry behaviour exhibited by
organizations or individuals where one’s win is
the other’s loss (mutually exclusive)
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Without the will to engage in competitive
interaction, the organization will be at the mercy
of more aggressive counterparts
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To be competitive an organization must have the
power to overcome its rivals and it must have the
ability and will to use its power
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Chapter
THE PARADOX OF COMPETITION AND COOPERATION 6
The deman d for inter -o rg an ization al cooperation
INTER-ORGANIZATIONAL COOPERATION
Bob de Wit
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The act of working together with others, where
two or more organizations’ goals are mutually
beneficial
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Without the will to engage in cooperative
interaction, the organization will miss the
opportunity to reap the advantages of joint efforts
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An important ingredient for overcoming the lure
of opportunism is to build long-term commitment
to one another, not only in words and mentality,
but also practically, through a high level of
interdependence.
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PERSPECTIVES ON NETWORK LEVEL STRATEGY
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The discrete organization perspectiv e vs. the embed d ed organization perspectiv e
Discrete organization perspective
Embedded organization perspective
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Managers view companies as independent entities
competing in a hostile market environment.
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Managers believe that business is about value
creation.
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Companies must strengthen their competitive
position in relation to external forces – effective
power requires independence
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A company can always find many organizations with
which it shares an interest and whose objectives are
largely parallel to its own.
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Collaborative arrangements are always second-best to
doing things independently. Collaboration is bad for
the company’s long-term health.
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Companies should strive for ‘strategic selfsufficiency’.
Firms must be sure that its partners are willing to
invest in the relationship and will not behave
opportunistically. Durable partnerships are based on
mutual dependence and reciprocity.
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Collaboration is a real alternative means of dealing
with other organisations.
Bob de Wit
Strategy: An international perspective 6th edition
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PERSPECTIVES ON NETWORK LEVEL STRATEGY
The discrete organization perspectiv e vs. the embed d ed organization perspectiv e
Bob de Wit
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PERSPECTIVES ON NETWORK LEVEL STRATEGY
Managing the paradox
Navigating
Focus on one perspective at a time – Manage
different perspectives over time by a series of
contrary initiatives
Parallel processing
Separate perspectives in different internal or
external organizational units and integrate
them at a higher organizational level
By focusing on one contrary element at a time,
the paradox is managed by a series of contrary
initiatives, eg Japanese strategists collaborate with
competitors from the West with the intention to
learn, and then beat them as competitors.
Companies interact with partial congruence of
interests eg car manufacturers share components
of city cars w
