ISB-4 Internal trigger1 INTERNAL TRIGGERS Internal triggers to the internatiomalization process Shaping an international vision and mindset Organisational dynamics Managing organisational change Assessing and changing corporate culture Resource capability and competitive advantage Managing organisational change to improve business performance Internal triggers to the internatiomalization process Shaping an international vision and mindset Organisational dynamics Managing organisational change Assessing and changing corporate culture Resource capability and competitive advantage Managing organisational change to improve business performance

ISB-4 Internal trigger2 External triggers INTERNATIONALISATION Market penetration Geographical expansion Product development Organizational dynamics Vision mindset Meta trends Industry competition RETRENCHMENT* Internal triggers Product extension Restricted national market scope Figure 2.1. Developing an international business strategy Intern’l business development

ISB-4 Internal trigger3 Firms Firms in the same industry in the same industry in the same environment in the same environment commonly follow differing strategies commonly follow differing strategies Why? Why? Different managerial beliefs about sources, competitive advantages Different managerial beliefs about sources, competitive advantages Different way of management Different way of management Implementation: Implementation: „Doing the right things” (effectivity) „Doing the right things” (effectivity) „Doing the things right” (efficiency) „Doing the things right” (efficiency)

ISB-4 Internal trigger4 Internal context: Internal context: What are the tangible and intangible reources? What are the tangible and intangible reources? How core skills and capabilities are developed? How core skills and capabilities are developed? These are firm specific => strategic answer dependent on organizational dynamics Result: sustainable competitive advantage Result: sustainable competitive advantage Organizational change (discontinuity) Organizational change (discontinuity) Creating a shared mindset Creating a shared mindset Building competencies Building competencies Changing corporate values Changing corporate values

ISB-4 Internal trigger5 External and internal triggers to a stage change External triggers Internal triggers Current phaseNext phase Discontinuity new international strategic thrust

ISB-4 Internal trigger6 Components of internal context Vision/mindset: Vision/mindset: geographic scope, strategic development geographic scope, strategic development driven through the firm’s mindset driven through the firm’s mindset role of senior management role of senior management Organisational dynamics: ability and willingness to implement strategy Vital people and processes to implement vision Vital people and processes to implement vision Unique skills, technologies (core competences) Unique skills, technologies (core competences) Ability to adopt and innovate (organizational learning) Ability to adopt and innovate (organizational learning) Administrative heritage Administrative heritage

ISB-4 Internal trigger7 Vision / mindset Organizational dynamics Match? Generate forces for changes DampenedSustained Balanced y n

ISB-4 Internal trigger8 Internal triggers Succession events Vision/mindset Internal context Organisational dynamics Internal triggers to change

ISB-4 Internal trigger9 Succession events Planned: retirement Planned: retirement natural event, easier to manage natural event, easier to manage minor or fundamental changes to strategy minor or fundamental changes to strategy Not planned: in time of dificoulties Not planned: in time of dificoulties Occure abruptly, forced Occure abruptly, forced Internal appointment or a „new” person Internal appointment or a „new” person Setting vision Setting vision Style of implementation can be unacceptable Style of implementation can be unacceptable Changes in style, strategy, vision, mindset (BP) Changes in style, strategy, vision, mindset (BP)

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ISB-4 Internal trigger11 What was Horton’s vision? What was Horton’s vision? What are the actions of the project? What are the actions of the project? Were the actions accepted? Were the actions accepted? What is the directors’ point of view?* What is the directors’ point of view?*

ISB-4 Internal trigger12 Balance: match between vision/mindset and organisational dynamics match between vision/mindset and organisational dynamics Mismatch: tensions Appreciate: why and when they change, why and when they change, how an initial change is dampened or sustained how an initial change is dampened or sustained Change sustained: both shows in the same direction

ISB-4 Internal trigger13 Volvo-Renault proposed merger 1990: announced agreement to form strategic alliance 1991: exchange of cross-shareholdings Full merger proposed: by 1993 Failure shareholder: terms are unacceptable shareholder: terms are unacceptable Critics: chairman Gyllenhammer (1971-, style of manegement, preparations secretly, no info) Critics: chairman Gyllenhammer (1971-, style of manegement, preparations secretly, no info) Gyllenhammer forced resign with 4 board members Gyllenhammer forced resign with 4 board members Volvo: uncertain future small domestic market small domestic market little product range little product range difficulties in existing Volvo-Renault alliance difficulties in existing Volvo-Renault alliance Importance of internal factors!*

ISB-4 Internal trigger14 Changes accepted, style unaccepted => Changes accepted, style unaccepted => new CEO, old strategy implemented (BP) new CEO, old strategy implemented (BP) Vision changes and style not accepted => Vision changes and style not accepted => new CEO, new strategy (Volvo)

ISB-4 Internal trigger15 Change of chief executive Retirement Crisis Vision retained Vision retained Reappraise the position of business Reappraise the position of business System Operation People Culture Succession event Vision Organisational dynamics Mismatch Discontinuity Sample - vision is changing

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ISB-4 Internal trigger17 What is the so called sharpbend? What is the so called sharpbend? What is turnaround? What is turnaround? Short term corrective action – advantages, disadvantages Short term corrective action – advantages, disadvantages Long term corrective actions - advantages, disadvantages Long term corrective actions - advantages, disadvantages

ISB-4 Internal trigger 18 FINANCIAL PRESSURE High adaptation High integration High adaptation Low integration Low adaptation Low integration High Low STRUCTURALIPRESSURESTRUCTURALIPRESSURE Equelibrium portfolio

ISB-4 Internal trigger19 Vision/mindset on international field Domestic bias National specialities in operation Cultural differences

ISB-4 Internal trigger Distance from power Smoothly working machine f.i.. Germany Hungary Pyramid f.i. Japan Market f.i. USA Family f.i. India Map of national cultures (Hofstede) Avoidance of uncertainty

ISB-4 Internal trigger21 Organisational learning Administrative heritage Core competence Organisational dynamics

ISB-4 Internal trigger22 Competencies-resources Threshold competencies Core NecessaryresourcesUniqueresources Same as competitors or easy to imitate Better than competitors and difficult to imitate Competencies Resources Market access Integrity related Functionally related

ISB-4 Internal trigger23 Administrative heritage Assets Human resources Decisions Resource configuration Cultural elements History of the organisation

ISB-4 Internal trigger24 Managing organisational change fundamental/incremental Incremental Flux Transformational Change of the environment Change of strategy Time Degree of change

ISB-4 Internal trigger25 Creating a new shared mindset Building competencies/ capabilities Changing corporate culture Improved business performance The components of organisational change

ISB-4 Internal trigger26 Change Refreezing Discontinuity Reconfiguring Unfreezing Time Discontinuity

ISB-4 Internal trigger27 Time Activity and self appreciation 1.Shock 2. Denial 3. Depression 4. Acceptance 5. Tryout 6. Awareness 7. Building-in* Reactions connected to the change

ISB-4 Internal trigger28 Resistance of change and change strategies Personalself-interest Lack of understanding and trust Alternativeassessment Individuals’ fears and concerns Education and communication Education and communication Participation and involvement Participation and involvement Negotiation and agreement Negotiation and agreement Manipulation Coercion

ISB-4 Internal trigger29 Stories and myths Symbols Rituals and routines Corporate mindset/ paradigm Power structures Control systems Organisatio nal structure Web of the corporate culture

ISB-4 Internal trigger30 Scope ORGANISATION’S INTERNAL CONTEXT DifferentiationCost TimeLinkages Competitive advantage

ISB-4 Internal trigger31 ORGANISATIONAL LEARNING Mismatch between performance & aspirations Initial change strategies Business performance Revised change strategies Continual process: re-examine match of performance & aspirations Time