1. TQM Implementation The specific objectives of this chapter are:
IDENTIFY the basic steps in TQM implementation, including environmental scanning, internal resource analysis of the company’s strengths and weaknesses, and goal formulation.
EXPLAIN what strategic planning is all about (PDSA)
DESCRIBE how an Organization implements the strategic plan, such as how it chooses a site for overseas operations.

2. Strategy Formulation and Implementation
The specific objectives of this chapter are:
DESCRIBE how an organization implements the strategic plan, such as how it chooses a site for overseas operations.
REVIEW the three major functions of marketing, production, and finance that are used in implementing a strategic plan.
EXPLAIN specialized strategies appropriate for emerging markets and international new ventures.

3. Determinants of Quality
1. Design, planned quality
Intension of designers to include or exclude features in a product or service
EX: Designed size, actual durability
Customer input is accounted for
2. Conformance to design (standards), executed quality
The degree to which goods or services conform to the intent of the designers
EX: Actual size, actual durability
Design for quality: Design with quality in mind
3. Ease of use
EX: Directions, instructions, training
4. Service after delivery

4. The Consequences of Poor Quality
Loss of business
Liability
Productivity
Costs

5. The Consequences of Poor Quality
Loss of business: Customer quietly stops buying. Customer complaints rarely reach to the upper management.
Liability: Due to damages or injuries resulting from poor quality (design, conformance, ease of use, service)
Low productivity: Rework or scrap. More input but does not increase the output.
High costs

6. Costs of Quality (continued)
Appraisal Costs
Product and/or service inspection costs.
EX: Time and effort spent for course evaluations
Prevention Costs
Quality training, planning, customer assessment, process control, and quality improvement costs to prevent defects from occurring
EX: Instructor training for better course presentation

7. Responsibility for Quality
Top management, past vs. current
Design teams
Procurement departments, standard input
Production/operations, processes conform to standards
Quality assurance
Packaging and shipping, damaged in transit
Marketing and sales, customer wishes
Customer service, quality feedback

8. Ethics and Quality Substandard work Defective products
Substandard service
Poor designs
Shoddy workmanship
Ownership of the work
Substandard parts and materials
Having knowledge of this and failing to correct
and report it in a timely manner is unethical.

9. Strategic Management Strategic management
Process of determining an organization’s basic mission and long-term objectives, and then implementing a plan of action for pursuing this mission and attaining these objectives
How to allocate finite resources to achieve long-term objectives
Growing need for strategic management
Increasingly diversified operations in a continuously changing international environment.
More resources, more places to allocate them
Increased complexity

10. Approaches to Strategic Planning
Economic Imperative
Administrative Coordination
Political Imperative
Quality Imperative

11. Approaches to Strategic Planning
Economic Imperative
Economic imperative focused employ a worldwide strategy based on cost leadership, differentiation, and segmentation
They often sell products for which a large portion of value is added in the upstream activities of the industry’s value chain
Research and development
Manufacturing
Distribution
Strategy also used when the product is regarded as a generic good and therefore does not have to be sold based on name brand or support service

12. Approaches to Strategic Planning
Using the political imperative approach to strategic planning are country- responsive; their approach is designed to protect local market niches
Success of the product or service depends heavily on
Marketing
Sales
Service
Country-centered or multidomestic strategy.
Political Imperative

13. Approaches to Strategic Planning
Quality Imperative
Two paths of quality imperative
Change in attitudes and a raising of expectation for service quality
Implementation of management practices designed to make quality improvement an ongoing process
“Total quality management,” (TQM)
Cross-training personnel to do the jobs of all members in their work group
Process re-engineering designed to help identify and eliminate redundant tasks and wasteful effort
Reward systems designed to reinforce quality performance

14. TQM Implementation
Quality is operationalized by meeting or exceeding customer expectations
The quality strategy is formulated at the top management level and is diffused throughout the organization
Deliver quality products or services to internal and external customers.
TQM techniques
Traditional inspection (no!) and statistical quality control
Cutting-edge human resource management techniques, such as self-managing teams and empowerment

15. Approaches to Strategic Planning
Administrative Coordination
Administrative coordination approach
Making strategic decisions based on merits of the individual situation rather than using a predetermined economic or political strategy
Least common approach to formulation and implementation of strategy because of the firm’s desire to coordinate its strategy both regionally and globally

16. Approaches to Strategic Planning
Globalization
Production and distribution of products and services of a homogeneous type and quality on a worldwide basis
Many customers of MNCs have homogenized tastes, which helps spread international consumerism
National responsiveness
Understand different consumer tastes in segmented regional markets
Respond to different national standards and regulations imposed by autonomous governments and agencies
Adapt tools and techniques for managing the local workforce

17. Global Integration vs. National Responsiveness
Low
High
Global
strategy
Transnational
strategy
Global integration
Low
High
International
strategy
Multi-domestic
strategy
Adapted from Figure 8–1: Global Integration vs. National Responsiveness

18. Summary of Approaches to Strategic Planning
The appropriateness of each strategy depends on pressures for cost reduction and local responsiveness in each country served
A global strategy is a low-cost strategy which attempts to benefit from scale economies in production, distribution, and marketing
A transnational strategy should be pursued when there are high cost pressures and high demands for local responsiveness
Pressures for cost reduction and local responsiveness put contradictory demands on a company because localized product offerings increase cost
Organizations that can find appropriate synergies in global corporate functions can leverage a transnational strategy effectively

19. Elements of Strategic Planning for International Management
External Environmental Scanning for MNC Opportunities and Threats
Internal Resource Analysis of MNC Strengths and Weaknesses
Strategic Planning Goals
IMPLEMENTATION
Adapted from Figure 8–2: Basic Elements of Strategic Planning for International Management

20. Elements of Strategic Planning for International Management
External Environmental Scanning for MNC Opportunities and Threats
Environmental scanning
Provide management with accurate forecasts of trends that relate to external changes in geographic areas where the firm is currently doing business or considering setting up operations
These changes relate to the economy, competition, political stability, technology, and demographic consumer data
ECLIPTER
Econography, Culture, Legal Systems, Income Profile, Political Risk, Tax Systems, and Exchange Rates

21. Elements of Strategic Planning for International Management
Internal Resource Analysis
Evaluate current managerial, technical, material, and financial strengths and weaknesses
Assessment then is used to determine its ability to take advantage of international market opportunities
Match external opportunities (gained through the environmental scan) with internal capabilities (gained through the internal resource analysis
Key factors for success
The key question is: Do we have the people and resources that can help us to develop and sustain the necessary, or can we acquire them?

22. Elements of Strategic Planning for International Management
Strategic Planning Goals
Strategic Planning Goals
Goal formulation often precedes the first two steps of environmental scanning and internal resource analysis
However, more specific goals for the strategic plan come out of external scanning and internal analysis
These goals typically serve as an umbrella beneath which the subsidiaries and other international groups operate
Profitability and marketing goals almost always dominate the strategic plans .
Once the strategic goals are set, the organization should develop specific operational goals and controls for the subsidiary or affiliate level

23. Elements of Strategic Planning for International Management
IMPLEMENTATION
Implementation
Provides goods and services in accord with a plan of action
Often, this plan will have an overall philosophy or series of guidelines that direct the process
Considerations in selecting a country
Advanced industrialized countries because they offer the largest markets for goods and services
Amount of government control.
Restrictions on foreign investment.
Specific benefits offered by host countries

24. Elements of Strategic Planning for International Management
IMPLEMENTATION
Implementation
Local issues
Once the country has been decided, the firm must choose the specific locale
Important factors influencing this choice include
Access to markets
Proximity to competitors
Availability of transportation and electric power
Desirability of the location for employees coming in from the outside

25. Elements of Strategic Planning for International Management
IMPLEMENTATION
Implementation
Production
When exporting goods to a foreign market, the production process traditionally has been handled through domestic operations.
More recently organizations have found that whether they are exporting or producing the goods locally in the host country, consideration of worldwide production is important.
A recent trend has been away from multi-domestic approach and toward global coordination of operations

26. Elements of Strategic Planning for International Management
IMPLEMENTATION
Implementation
Finance
Transferring funds from one place in the world to another, or borrowing funds in the international money markets, often is less expensive than relying on local sources
Issues include
Re-evaluation of currencies
Privatization
Strategies for the base of the pyramid
International New Ventures and “Born-Global” Firms

27. Elements of Strategic Planning for International Management
IMPLEMENTATION
Implementation
Strategies for the “base of the pyramid” (BOP)
Emerging market customers
People at the bottom of the economic pyramid
Marketing at BOP forces consideration of smaller-scale strategies
Building relationships with local governments, small entrepreneurs, and nonprofits
Less dependence on established partners such as central governments and large local companies
International New Ventures and “Born-Global” Firms

28. Elements of Strategic Planning for International Management
IMPLEMENTATION
Implementation
International New Ventures and “Born-Global” Firms
firms that engage in significant international activity a short time after being established
Successful born-global firms leverage a distinctive mix of orientations and strategies
Global technological competence
Unique-products development
Quality focus
Leveraging of foreign distributor competences

29. Elements for Success Management Support Mission Statement
Proper Planning
Customer and Bottom Line Focus
Measurement
Empowerment
Teamwork/Effective Meetings
Continuous Process Improvement
Dedicated Resources