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MANAGING PROJECTS

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Projects represent nonroutine business activities that often have long-term strategic ramifications for a firm. In this chapter, we examined how projects differ from routine business activities and discussed the major phases of projects. We noted how environmental changes have resulted in increased attention being paid to projects and project management over the past decade. In the second half of the chapter, we introduced some basic tools that businesses can use when planning for and controlling projects. Both Gantt charts and network diagrams give managers a visual picture of how a project is going. Network diagrams have the added advantage of showing the precedence between activities, as well as the critical path(s). We wrapped up the chapter by showing how these concepts are embedded in inexpensive yet powerful software packages such as Microsoft Project. If you want to learn more about project management, we encourage you to take a look at the Web site for the Proj...
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Global Strategy: Competing Around the World

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This chapter discussed the roles of MNEs for economic growth; the stages of globalization; why, where, and how companies go global; four strategies MNEs use to navigate between cost reductions and local responsiveness; and national competitive advantage.
Globalization, multinational enterprise (MNE), foreign direct investment (FDI), and global strategy.
Globalization involves closer integration and exchange between different countries and peoples worldwide, made possible by factors such as falling trade and investment barriers, advances in telecommunications, and reductions in transportation costs.
A multinational enterprise (MNE) deploys resources and capabilities to procure, produce, and distribute goods and services in at least two countries.
Many MNEs are more than 50 percent globalized; they receive the majority of their revenues from countries other than their home country.
Product, service, and capital markets are more globalized than labor markets. The level of everyday activities is roughly 10 to 25 percent integrated, and thus semi-globalized.
Foreign direct investment (FDI) denotes a firm’s investments in value chain activities abroad.
Why companies compete abroad, and evaluate the advantages and disadvantages of a global strategy.
Companies expand beyond their home market if the benefits outweigh the risks.
Advantages to competing internationally include gaining access to a larger market, gaining access to low-cost input factors, and developing new competencies.
Disadvantages to competing internationally include the liability of foreignness, the possible loss of reputation, and the possible loss of intellectual capital.
Applying the CAGE distance framework to explain which countries MNEs enter.
Most of the costs and risks involved in expanding beyond the domestic market are created by distance.
The CAGE distance framework determines the relative distance between home and foreign target country along four dimensions: cultural distance, administrative and political distance, geographic distance, and economic distance.
Comparing and contrast the different options MNEs have to enter foreign markets.
The strategist has the following foreign entry modes available: exporting, strategic alliances (licensing for products, franchising for services), joint venture, and subsidiary (acquisition or greenfield).
Higher levels of control, and thus a greater protection of IP and a lower likelihood of any loss in reputation, go along with more investmentintensive foreign entry modes such as acquisitions or greenfield plants.
Applying the integration-responsiveness framework to evaluate the four different strategies MNEs can pursue when competing globally.
To navigate between the competing pressures of cost reductions and local responsiveness, MNEs have four strategy options: international, multidomestic, global-standardization, and transnational.
An international strategy leverages home-based core competencies into foreign markets, primarily through exports. It is useful when the MNE faces low pressures for both local responsiveness and cost reductions.
A multidomestic strategy attempts to maximize local responsiveness in the face of low pressure for cost reductions. It is costly and inefficient because it requires the duplication of key business functions in multiple countries.
A global-standardization strategy seeks to reap economies of scale and location by pursuing a global division of labor based on wherever bestof-class capabilities reside at the lowest cost. It involves little or No. local responsiveness.
A transnational strategy attempts to combine the high local responsiveness of a localization strategy with the lowest cost position attainable from a global-standardization strategy. It also aims to benefit from global learning. Although appealing, it is difficult to implement due to the organizational complexities involved.
Applying Porter’s diamond framework to explain why certain industries are more competitive in specific nations than in others.
National competitive advantage, or world leadership in specific industries, is created rather than inherited.
Four interrelated factors explain national competitive advantage: (1) factor conditions, (2) demand conditions, (3) competitive intensity in a focal industry, and (4) related and supporting industries/complementors.
Even in a more globalized world, the basis for competitive advantage is often local.

  

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