Session Details & Questions for Discussion
Session 1. Thursday, September 5 -- The Multinational Firm
"Big is back: A survey of multinationals," The Economist, (June 24, 1995).
John H. Dunning, Multinational Enterprises and the Global Economy (Wokingham, England: Addison-Wesley, 1993), pp. 54-95.
Questions for discussion:
1) Why do firms invest internationally?
2) Under what circumstances is internationalization a source of sustainable competitive advantage
3) Referring to Dunning's' OLI constructs, are all three necessary to give rise to sustainable competitive advantage or are there circumstances where O and I or L and I do?
Additional Resources and References:
Session 2. Friday, September 6 -- The Product Cycle and the Process of Internationalization
Howard Perlmutter, "The tortuous evolution of the multinational firm, "in Christopher Bartlett & Sumantra Ghoshal, Transnational Management (Homewood, IL: Irwin, 1992), pp. 92-101.
Raymond Vernon, "The product cycle hypothesis in a new international environment," Oxford Bulletin of Economics and Statistics 41(4) (November 1979), pp. 255-267.
Case: "Eli Lilly and company (A): Globalization," (HBS 9-391-032)
Questions for discussion/write-ups:
(1) What have been the key stages of Lilly's internationalization to date?
(2) In each stage, how would you characterize the firm's key activities in terms of:
a) the proportion of value added in the U.S. versus OUS countries,
b) the "mindset" or information base of these activities, e.g. local versus continental versus global,
c) the nature of local capabilities, e.g. dependent, participating, contributing, leading?
(3) What factors have pushed Lilly from one stage to the next?
Additional Resources and References:
Session 3. Tuesday, September 10 -- Globalization of Industries
Michael Porter, "Changing patterns of international competition," in David J. Teece, ed., The Competitive Challenge (Cambridge: Ballinger, 1987), pp. 27-57.
"The New music biz," Business Week (January 15, 1996), pp. 48-52.
Harlan Byrne, "Power plays," Barrons (January 29, 1996), pp. 17-18.
Theodore Levitt, "The globalization of markets," Harvard Business Review 61(3) (May-June 1983), pp. 92-102. (reprint 83308)
"McDonald's Conquers the World," Fortune (October 17, 1994), pp. 103-116.
Questions for discussion/write-ups: For the industry of your choice, be prepared to discuss:
(1) To what extent is competition global? Continental? National? Subnational?
(2) How do you define, measure gloablization?
(3) What factors explain the globalization of competition (or lack thereof ) in this industry?
4) How does McDonalds fit into this explanation? Why is this industry made up of both local and global firms?
5) Use these same factors to explain the (recent) globalization of electrical power production and music industries.
Additional Resources and References:
Session 4. Thursday, September 12 -- Country v. Firm-based Advantages
Michael Porter, "The competitive advantage of nations." Harvard Business Review 90(2) (March-April 1990), pp. 73-93, (reprint 90211).
Case: Building the Benetton system , (ECCH 390-042-1).
Questions for discussion/write-ups:
(1) Discuss Benetton's competitive advantage in terms of Porter's diamond.
(2) To what extent can these advantages be described as "home based" (based on the conditions existing in Italy) vs. "home-bound" (applicable only in Italy)?
(3) Do you think Benetton could be as successful in North America or Asia as it has in Europe?
Additional Resources and References:
Benetton: Company webpage on company overview and company information.
Session 6. Tuesday, September 17 -- Organization of International Operations
Christopher A. Bartlett and Sumantra Ghoshal, "Managing across borders: new organizational responses," Sloan Management Review (Fall 1987), pp. 43-53. (Reprint 2914) I
kujiro Nonaka, "Managing globalization as a self-renewing process: experiences of Japanese MNCs," in Christopher A. Bartlett, Yves Doz and Gunnar Hedlund, Managing the Global Firm (New York: Routledge, 1990), pp. 69-94.
Case: "Phillips and Matsushita: A portrait of two evolving companies," (HBS 9-392-156)
Questions for discussion/write-ups:
(1) How would you characterize the two ways in which Philips and Matsushita have become multinational enterprises?
(2) How do they differ in the extent to which their core activities are globally integrated/coordinated vs. localized?
(3) How do Philips and Matsushita differ in the way in which they take advantage of opportunities created by differences in local conditions (e.g. factor conditions, demand conditions) vs. those created by global scale or scope?
Additional Resources and References:
Philips Electronic N.V.: Company webpage on company overview and company information.
Matsushita Electronics: Company webpage on company overview and company information.
Session 7. Thursday, September 19 -- Configuring Production Across Countries
Bruce Kogut, "Designing global strategies: Comparative and competitive value-added chains," Sloan Management Review 26(4) (Summer 1985), pp. 15-28, (reprint 2642).
John H. Dunning, Multinational Enterprises and the Global Economy (Wokingham, England: Addison-Wesley, 1993), pp. 185-209.
Case: "BMW: U.S. manufacturing investments." ECCH 394-070-1.
Questions for discussion/write-ups:
(1) What are the kinds of decisions involved in a major greenfield investment like BMW's?
(2) What is BMW trying to achieve in locating production outside of Germany?
(3) Using Dunning's OLI (ownership, location, internalization) framework, why do you think BMW chose South Carolina?
(4) What are the risks surrounding BMW's location decision?
(5) Would you use U.S. or German managers?
Additional Resources and References:
Session 8. Friday, September 20 -- Regional Strategies
Shijiro Urata, "Changing patterns of direct investment and the implications for trade and development," from C. Fred Bergsten and Marcus Noland, eds., Pacific Dynamism and the International Economic System (Washington, DC: IIE, 1993), 273-297.
Mitchell Bernard and John Ravenhill, "Beyond product cycles and flying geese: regionalization, hierarchy, and the industrialization of east Asia." World Politics 47(2) (January 1995), pp. 171-209
Louis Kraar, "Try the Singapore Connection," Fortune, March 4, 1996.
Dunning (review from session 6)
Case: "Otis Pacific Asia operations (B): Regionalization," (HBS 9-393-010)
Questions for discussion/write-ups:
(1) How does regional strategy differ from a collection of strategies for countries in a region?
(2) Which activities should be performed on a regional basis? Where should these regional activities be located? Should they all be concentrated in one location or dispersed?
(3) What are the tradeoffs between integration/coordination of Otis's activities within PAO and the integration/coordination of these activities with Otis as a whole?
Additional Resources and References:
Session 9. Tuesday, September 24 -- Investing in Emerging Market Infrastructure
Louis T. Wells and Eric S. Gleason, "Is foreign infrastructure investment still risky," Harvard Business Review, Sept.-Oct., 1995 (reprint 95511).
World Bank, Infrastructure for Development, World Development Report 1994, excerpts.
Case: "Endesa's (Chile) Argentine investments," Escuela de Negocios de Valparaiso, Universidad Adolfo Ibañez, 1994.
Questions for discussion/write-ups:
1) What are Endesa's competitive advantages in Argentina relative to:
a) Argentine firms b) firms from industrialized countries?
2) How should Endesa determine the "right" degree of internationalization?
3) What are the principal types of risks that Endesa faces in investing in Argentine activities?
4) What is Endesa's comparative advantage in taking on these risks relation to other possible investors or partners?
5) How should Endesa structure its investment in Argentina (full owner, majority owner, minority owner, contract operator, etc.)?
Additional Resources and References:
Session 10 . Thursday September 26 -- Entry/Participation Strategies: Economies in Transition/ China
John Child, "Establishing joint ventures" chapter 11 from Management in China during the Age of Reform (Cambridge University Press, 1994), pp. 215-240.
Case: Otis Elevator Co.: China Joint Venture (A), (HBS 9-391-062.
Guest Lecturer: Ed Steinfeld, MIT
Questions for discussion/write-ups:
(1) What different kinds of uncertainties was Otis confronting when deciding whether to invest in China or not?
(2) What safeguards, if any, should Otis ask for?
(3) What mechanisms are available to reduce risk?
(4) Do you think it made sense for the decision-makers at Otis to view the China investment opportunity in terms of risk alone?
Additional Resources and References:
Session 11. Friday, September 27 -- Entry/Participation Strategies: Economies in Transition: Eastern Europe
Readings and case to be assigned
Guest Lecturer -- Simon Johnson, MIT and Duke University
Additional Resources and References:
Session 12. Tuesday, October 1 - Investing in Emerging Market Infrastructure (CONTINUED FROM ONHE WEEK AGO-PLEASE RERAED STARRED ITEMS)
*Louis T. Wells and Eric S. Gleason, "Is foreign infrastructure investment still risky," Harvard Business Review, Sept.-Oct., 1995 (reprint 95511).
World Bank, Infrastructure for Development, World Development Report 1994, excerpts. *Case: "Endesa's (Chile) Argentine investments," Escuela de Negocios de Valparaiso, Universidad Adolfo Ibanez, 1994.
Questions for discussion/write-ups:
1) What are Endesa's competitive advantages in Argentina relative to:
a) Argentine firms b) firms from industrialized countries?
2) How should Endesa determine the "right" degree of internationalization?
3) What are the principal types of risks that Endesa faces in investing in Argentine activities?
4) What is Endesa's comparative advantage in taking on these risks relation to other possible investors or partners?
5) How should Endesa structure its investment in Argentina (full owner, majority owner, minority owner, contract operator, etc.)?
Additional Resources and References:
Session 13 . Thursday, October 3 -- Integrating Activities Across Boundaries-
M. Therese Flaherty, "Coordinating international manufacturing and technology,' Ch 3. in Michael Porter, ed., Competition in Global Industries (HBS Press, 1986), pp. 83-109. (SKIM)
*Case: International sourcing at Intercon (HBS 9-688-055, rev 2/12/91), Intercon Japan, Intercon Singapore
Christopher Bartlett and Sumantra Ghoshal, "Tap your subsidiaries for global reach," Harvard Business Review, (July-August 1986, Reprint No. 86602). (SKIM)
I will prepare a "selective reading guide and questions cutting cross three cases--will distribute in class on October 1. I will ask different member of class to assume US, Japan, and Singapore roles in order to highlight conflicts, issues in integration.
Questions for discussion/write-ups:
(1) How should Intercon "follow" its customers to Singapore?
(2) Should it seek to transplant its Japanese-based system, its U.S.-based system, or a hybrid?
(3) How should it organize to do this?
Additional Resources and References:
Session 14. Friday, October 4 -- Growth through M&A: Integrating Acquired Positions/ Capabilities/ Activities
*Charles W. F. Baden-Fuller and John M. Stopford, "Globalization frustrated: The case of white goods," Strategic Management Journal 12 (1991), pp. 493-507.
*Case: "Electrolux: The acquisition and integration of Zanussi" (INSEAD-CEDEP, 1989).
Questions for discussion/write-ups:
(1) Is the white goods industry global or multidomestic?
(2) How would you describe the key characteristics of Electrolux and Zanussi in 1983 in terms of positioning, capabilities, organization, culture, and performance?
(3) As Leif Johansson, would you have recommended the Zanussi acquisition in 1983?
(4) What lessons, if any, do you draw from the Electrolux approach to acquisition decision-making?
What lessons, if any, do you draw from the Electrolux approach to acquisition integration.? Could it have been done differently?
(5) What strategic and organizational challenges remain in 1988? What are the main options?
(6) Why is managing M&As so important in this industry?
Additional Resources and References:
Session 15. Tuesday, October 8 -- Strategic Alliances
J. Peter Killing, "Understanding alliances," in Farok J. Contractor and Peter Lorange, eds., Cooperative Strategies in International Business (Lexington, Mass.: Lexington Books, 1988), PP. 55-67.
Case: "Collision course in commercial aircraft: Boeing-Airbus-McDonnell Douglas 1991," HBS 9-391-106 Rev. 7/23/91.
Guest lecturer: Henry Birdseye Weil, MIT
Questions for discussion/write-ups:
(1) How has government intervention affected the strategies and competitive position of the various commercial aircraft makers?
(2) What can we learn from the Airbus experience in cross-border collaboration? Apply Killing's framework to the extent applicable.
(3) What are the implications for Boeing of competing with a "group" or consortium rather than a single firm.
(4) Why is Airbus now moving to a single corporate form? Does this imply that the alliance structure was a mistake?
Additional Resources and References:
Session 16. Thursday, October 10 -- Becoming World Class : Multinationals from the Third World I
Alice H. Amsden and Jong-Yeol Kang, "Learning to be Lean in an Emerging Economy: The Case of South Korea." MIT International Motor Vehicle Program (1995).
Donald Lessard and Alice Amsden, "The multinational firm as a learning organization," forthcoming, IEA Research Annual, 1996.
Nonaka (review from session 5)
Guest lecturer: Alice Amsden, MIT
Additional Resources and References:
Session 17. Friday, October 11 -- Becoming World Class : Multinationals from the Third World II
Materials on Argentina, Siderca, and IMPSA to be distributed
Guest lecturer: Omar Toulan, MIT
Session 18. Thursday, October 17 -- Managing in the Face of Volatile Exchange Rates
Bruce Kogut, "Designing Global Strategies: Profiting from Operational Flexibility." Sloan Management Review (Fall 1985), pp. 27-38 (reprint 2713).
Donald Lessard and Srilata Zaheer, "Breaking the silos: distributed knowledge and strategic responses to volatile exchange rates," Strategic Management Journal, July 1996
Questions for discussion/write-ups:
(1) In what ways to effectively managing operations in the face of volatile exchange rates differ from the treasury function of foreign exchange risk management?
(2) How can a firm take advantage of exchange rate volatility?
Additional Resources and References:
Session 19. Friday, October 18 -- The "Transnational" Firm
(re-read Christopher A. Bartlett and Sumantra Ghoshal from session 5)
William Taylor, "The logic of global business: An interview with ABB's Percy Barnevik," Harvard Business Review (March/April 1991), pp. 91-105, reprint 91201.
Questions for discussion/write-ups:
(1) What are the "core competencies" of ABB?
(2) What traits do you think a senior manager would need in order to succeed at ABB?
(3) Describe and classify ABB's organizational structure. What is the most crucial dimension in this company, the global Business Areas or the national companies?
(4) How many ABB employees actually "see" the matrix?
Additional Resources and References:
Session 20. Tuesday, October 22 -- Alternative Models: Global Niche Players
William Taylor, "Message and muscle: An interview with Swatch titan Nicolas Hayek," Harvard Business Review (March-April 1993), pp. 98-110, (reprint 93205).
Hermann Simon, "You don't have to be German to be a "hidden champion," Business Strategy Review, (Vol. 7, No 2, 1996), pp. 1-13.
Questions for discussion/write-ups:
(1) What are the "core competencies" of SMH? Are they production-based, marketing-based, or both?
(2) Compare and contrast ABB and SMH's strategies in terms of globalization and localization of core activities.
(3) Describe and classify SMH's organizational structure. How is it different from ABB's?
Additional Resources and References:
Session 21. Thursday, October 24 -- Alternative Models: "Global/Local" Federations
"Acer's edge: PCs to go." Fortune (October 30, 1995), pp. 187-204.
"Mini-nationals are making maximum impact." Business Week (September 6, 1993), pp. 66-69.
Emily Thornton, "The Reckoning," other articles on Acer, Far Eastern Economic Review, July 25, 1996, pp. 74-80.
Questions for discussion/write-ups:
(1) What are Acer's "core competencies" ? Are they production-based, marketing-based, or both?
(2) Compare and contrast Acer's strategy with ABB (and/or other relevant models) in terms of globalization and localization of core activities.
(3) Describe and classify Acer's organizational structure. How is it different from ABB's?
Additional Resources and References: