IBMGT Semester 1

• No universally accepted definition
• Switzerland & EU: less than 250 employees

• import and export their products and services
• don't invest outside of home country

• managed from home country (major decision are made in home county)
• significant production and marketing operations spread in different countries
• E.g.: Toyota, General Electric

• operates in many countries
• delegates many decisions to local managers

• operates in many countries
• production/service processes are in many global locations
• E.g.: Novartis

• Mostly SMEs that seek to derive significant competitive advantage from the use of resources and sale of outputs in multiple countries
• E.g: Google, Skype

• well-established organization which now focuses on rapid internationalization

A company reaches a competitive advantage if it is able to perform at a higher level than other in the same industry or market through its resources and capabilities (core competencies)

• export & import
• off-shoring
• Foreign Direct Investment (FDI)
• Licensing
• franchising
• joint venture

Transporting physical products or delivering services across national boundaries

Investing shareholder funds directly in another country by building or buying physical facilities or by buying a company.

Giving another firm the right to use assets such as patents or technology in exchange for a fee

Extending a business by giving other organizations the right to use your brand name, technology or product specifications in return for a fee

Forming an alliance in which the partners agree to form separate, independent organizations for a specific business purpose

Responsibility of companies to contribute to the solution of societal challenges (e.g. climate change, human rights, rainforest protection, population helath)

It communicates the underlying and enduring core principles that guide an organization's strategy and define the way that the organization should operate.

• Societal challenges become CR issues for a company if there is a gap between stakeholder expectations and company behaviour and,
• as stakeholders can reward or punish a company's behaviour it can make good business sense to react to stakeholders' expectations

• computational strategy -> Rational model
• judgemental strategy -> administrative, incremental and intuitional models
• compromise strategy -> political model
• inspirational strategy -> garbage-can model

• clear problem and goals
• high degree of certrainty
• much information about costs and benefits
• rational choice to maximize benefit

• vague problems and goals
• high degree of uncertainty
• little information about costs and benefits of alternatives
• satisfying choice - good enough

• conflict over goals
• uncertainty and/or conflict
• conflicting views about costs and benefits of alternatives
• choice by bargaining amongst players

• Goals and solutions independent
• ambuigity
• costs and benefits unconnected at start
• coice by accidental merging of streams

• programmed decisions are repetitive and can be handled by a routine approach
• non-programmed decisions require unique solutions because no procedure exists for finding a solution

Per unit cost of production falls as the volume of production increases

Value of the products or services increases as a function of the number of businesses that the firm operates in

• Different stages of production process are located in different countries
• Globalization motivates companies to restructure their operations internationally through outsourcing and off-shoring of activities
• Firms try to optimize their production processes by locating the various stages across different sites
• Strong trend towards the international dispersion of value chain activities such as design, production marketing, distribution, etc.

• profit advantage
• unique products
• technological advantage
• exclusive information
• tax benefit

• competitive pressure
• overproduction
• declining domestic sales
• excess capacity
• saturated domestic market
• proximity to customers and ports

Identifies and evaluates resources, capabilities and core competencies. To do so, an organization must know its strengths and weaknesses.

• Autocratic -> you solve the problem yourself
• Information-seeking -> obtain information from subordinates then decide yourself
• Consulting -> share problem with subordinates and get ideas, then decide yourself
• Negotiating -> share with subordinates as a collective, then decide
• Group -> share with subordinates and try to find a solution without influencing the group yourself

Advantages of division of labor:

• lowers training costs
• reduces labor costs because you can employ unskilled workers
• saves time of moving between jobs
• increases their specialized skills (know more about less)

• by eliminating unnecessary motions time could be saved and output increased
• use scientific methods to find best way of doing a task
• select best person for the job
• train them to follow defined procedures
• provide financial incentives
• shift responsibility of planning from worker to manager

• realized the idea of Taylor and established an assembly line for his cars. This reduced the time required to buld a car by a factor of nearly 10

Hawthorne experiment:

when workers notice that management cares about their workplace, output increases because of high morale