- Email: [email protected]
Strategic management in multinational companies
Book
Reviews
123
Ian Webb is an independent consultant specializing in the problems and challenges facing smaller businesses in Britain. His chapters cover: entrepreneurship and the buy-out; buyouts and the divesting company; achieving a buy-out; financing a buy-out; organizing a new company-some tax and law; choosing a scheme for the buy-outsome points of law and tax; after the buy-out, together with four case studies; Amari PLC, Sarasota Technology Ltd, Stratford Colour Co Ltd and Wardle Storeys. The material is relevant and readable. An essential introduction for anyone interested in this exciting, and risky, area.
a danger that theories are only mechanistic rather than effective guides to future action.
Mike Wright and John Coyne have also effectively covered the subject-in some ways more thoroughly than the above book. Unfortunately, in my view, the use of typesetting presentation is likely to make it much less widely read by the busy manager.
The role of the management consultant is to document the obvious. These consultant’s book is no exception. Take, for example, their recipe for organizational success:
BRUCE LLOYD, Northern
Investors
Ltd.
(1305)
BRUCE LLOYD, Northern
Sense of mission
Chapter 1 assesses the relative benefits of alternative multinational strategies from an economic and competitive perspective. Chapter 2 complements that approach by taking best government concerns into account and attempts to develop an integrative framework to account for the interaction between competitive and political factors. Chapter 3,4 and 5 apply this framework to automobiles, telecommunications, switching equipment, and electronic data processing equipment and components, respectively. Chapter 6 generalizes the approach to cover data from the overall sample of industries and companies. Chapters 7,8 and 9 attempt to draw the managerial implication of strategic choices by analysing in detail the organizational, administrative and managerial issues faced in following various types of strategies. The final chapter outlines an approach to increase a firm’s strategic capability. The author sets himself an enormous task ‘hoping to appeal to practising Managers in MNCs, public policymakers, students and educators.’ It should be useful on the International Business Sections of MBA programmes, and to others, not because it is the last word on the subject, but because it provides a framework within which to explore the real issues. The author has taken, perhaps inevitably, a mechanistic approach-nowhere is an individual person mentioned. There are those who argue that, particularly where significant innovations are involved, people are the key. The author has recognized there are no simple or easy answers. Essentially the key to multinational survival and success in the 1980s is success in managing trade-offs; those discussed in the back are half the story-there is no mention of corruption in the book! Unless we understand the role of the key people in the process there is
and shared
People
management
Action
orientation;
Strong
This book is about the Strategic integration of multinational companies (MNCs) in the context of national pressures for fragmentation. It is based on detailed research in selected multinationals (IBM, Ford, General Motors, Fiat, Honeywell Bull, Philips, Brown Boveri, Massey Ferguson, Ericsson and General Telephone & Electronics) which analyses the types of strategic choices and organizational capabilities that underly the success-or explain the failure of MNCs. Many of the companies have been the subject of detailed case studies that are available elsewhere.
Ltd.
(1412)
The Winning Performance: How America’s High-growth Midsize Companies Succeed DONALD K. CLIFFORD, JR. and RICHARD E. CAVANAGH, Sidgwick and Jackson Ltd. (1986) 292 pp. Al3.95
Market-driven/close
Strategic Management in Multinational Companies YVES DOZ, Pergamon Press (1986) 243 pp. E21.50 (hardback).
Investors
rationalizations
values;
at the top;
to the customer
and
incentives.
Nothing new under the sun, right? Wrong! What is exceptional about The Winning Performance is that is has taken its own lessons for entrepreneurs to heart. A strong sense of mission. Donald Clifford began his studies of high-growth midsize companies as a consultant for McKinsey & Co. in the early 1970s. He coined the term ‘threshold’ to described companies with annual turnovers between $25 and $2OOm, which were at that time undergoing transition from the entrepreneurial stage to professional management. In a September 1973, article for the Harvard Business Review (‘Growth pains of the threshold company’), Clifford established a mission: ‘. . to describe these threshold companies, to set forth the critical characteristics that affect their management, and to analyse the management processes adopted by successful companies to cope with the problems of growth.’ Four years later, he examined threshold company performance during a recession and found, contrary to conventional wisdom, that the fastest growing group encountered less difficulty in maintaining growth than the so-called ‘stable’ group of larger companies (‘Thriving in a recession,’ Harvard Business Review, July 1977). By 1981, Clifford has assembled a team who shared his zeal for the threshold company: Richard Cavanagh, a fellow consultant at McKinsey; Arthur Levitt and Jack Albertine, then President of the American Stock Exchange and co-founder of the American Business Conference (ABC), respectively; and Dee d’lirbeloff, Chief Executive of the Millipore Corporation and first President of the ABC. The ABC is an exclusive club 119 threshold companies whose members have had between $25m to $lbn turnover and have had 5 years of growth in excess of 15 per cent compounded annually. The book described the formation of a new pressure group for entrepreneurship in America. People management at the top. In addition to the backing of the mentioned business leaders, consensus over the aims of the study was necessary for the authors to gain access to confidential corporate information. Analog Devices, for instance, described their strategic plan: ‘The plan articulates strategies with respect to the company’s relationships with institutions of higher learning, alternative career paths, and attracting and retaining women and minorities.’ A chapter is devoted to case studies of the competitive strategies of Cray Research, Automated Data Processing and Sealed Air Corporation.
Reviews
123
Ian Webb is an independent consultant specializing in the problems and challenges facing smaller businesses in Britain. His chapters cover: entrepreneurship and the buy-out; buyouts and the divesting company; achieving a buy-out; financing a buy-out; organizing a new company-some tax and law; choosing a scheme for the buy-outsome points of law and tax; after the buy-out, together with four case studies; Amari PLC, Sarasota Technology Ltd, Stratford Colour Co Ltd and Wardle Storeys. The material is relevant and readable. An essential introduction for anyone interested in this exciting, and risky, area.
a danger that theories are only mechanistic rather than effective guides to future action.
Mike Wright and John Coyne have also effectively covered the subject-in some ways more thoroughly than the above book. Unfortunately, in my view, the use of typesetting presentation is likely to make it much less widely read by the busy manager.
The role of the management consultant is to document the obvious. These consultant’s book is no exception. Take, for example, their recipe for organizational success:
BRUCE LLOYD, Northern
Investors
Ltd.
(1305)
BRUCE LLOYD, Northern
Sense of mission
Chapter 1 assesses the relative benefits of alternative multinational strategies from an economic and competitive perspective. Chapter 2 complements that approach by taking best government concerns into account and attempts to develop an integrative framework to account for the interaction between competitive and political factors. Chapter 3,4 and 5 apply this framework to automobiles, telecommunications, switching equipment, and electronic data processing equipment and components, respectively. Chapter 6 generalizes the approach to cover data from the overall sample of industries and companies. Chapters 7,8 and 9 attempt to draw the managerial implication of strategic choices by analysing in detail the organizational, administrative and managerial issues faced in following various types of strategies. The final chapter outlines an approach to increase a firm’s strategic capability. The author sets himself an enormous task ‘hoping to appeal to practising Managers in MNCs, public policymakers, students and educators.’ It should be useful on the International Business Sections of MBA programmes, and to others, not because it is the last word on the subject, but because it provides a framework within which to explore the real issues. The author has taken, perhaps inevitably, a mechanistic approach-nowhere is an individual person mentioned. There are those who argue that, particularly where significant innovations are involved, people are the key. The author has recognized there are no simple or easy answers. Essentially the key to multinational survival and success in the 1980s is success in managing trade-offs; those discussed in the back are half the story-there is no mention of corruption in the book! Unless we understand the role of the key people in the process there is
and shared
People
management
Action
orientation;
Strong
This book is about the Strategic integration of multinational companies (MNCs) in the context of national pressures for fragmentation. It is based on detailed research in selected multinationals (IBM, Ford, General Motors, Fiat, Honeywell Bull, Philips, Brown Boveri, Massey Ferguson, Ericsson and General Telephone & Electronics) which analyses the types of strategic choices and organizational capabilities that underly the success-or explain the failure of MNCs. Many of the companies have been the subject of detailed case studies that are available elsewhere.
Ltd.
(1412)
The Winning Performance: How America’s High-growth Midsize Companies Succeed DONALD K. CLIFFORD, JR. and RICHARD E. CAVANAGH, Sidgwick and Jackson Ltd. (1986) 292 pp. Al3.95
Market-driven/close
Strategic Management in Multinational Companies YVES DOZ, Pergamon Press (1986) 243 pp. E21.50 (hardback).
Investors
rationalizations
values;
at the top;
to the customer
and
incentives.
Nothing new under the sun, right? Wrong! What is exceptional about The Winning Performance is that is has taken its own lessons for entrepreneurs to heart. A strong sense of mission. Donald Clifford began his studies of high-growth midsize companies as a consultant for McKinsey & Co. in the early 1970s. He coined the term ‘threshold’ to described companies with annual turnovers between $25 and $2OOm, which were at that time undergoing transition from the entrepreneurial stage to professional management. In a September 1973, article for the Harvard Business Review (‘Growth pains of the threshold company’), Clifford established a mission: ‘. . to describe these threshold companies, to set forth the critical characteristics that affect their management, and to analyse the management processes adopted by successful companies to cope with the problems of growth.’ Four years later, he examined threshold company performance during a recession and found, contrary to conventional wisdom, that the fastest growing group encountered less difficulty in maintaining growth than the so-called ‘stable’ group of larger companies (‘Thriving in a recession,’ Harvard Business Review, July 1977). By 1981, Clifford has assembled a team who shared his zeal for the threshold company: Richard Cavanagh, a fellow consultant at McKinsey; Arthur Levitt and Jack Albertine, then President of the American Stock Exchange and co-founder of the American Business Conference (ABC), respectively; and Dee d’lirbeloff, Chief Executive of the Millipore Corporation and first President of the ABC. The ABC is an exclusive club 119 threshold companies whose members have had between $25m to $lbn turnover and have had 5 years of growth in excess of 15 per cent compounded annually. The book described the formation of a new pressure group for entrepreneurship in America. People management at the top. In addition to the backing of the mentioned business leaders, consensus over the aims of the study was necessary for the authors to gain access to confidential corporate information. Analog Devices, for instance, described their strategic plan: ‘The plan articulates strategies with respect to the company’s relationships with institutions of higher learning, alternative career paths, and attracting and retaining women and minorities.’ A chapter is devoted to case studies of the competitive strategies of Cray Research, Automated Data Processing and Sealed Air Corporation.