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Teaching Notes: Finntrack Strategy: Analysis and Practice ©2005 McGraw-Hill Education Europe
Discussion Notes
Index
• Workshop• Case Analysis• Debate• Case Questions• How to Use Your Workshop Resources• Disclaimer• Learning Objectives
• Introduction to Multinational Corporations• Introduction to Financial Institution and HS
BC• Overview
• Corporate Objectives and Strategies
• Corporate Objective• Corporate Strategies• Managing for Value 2000 – 2001• Guide to Using Case Studies • Business Drivers• Business Analysis
• Balanced Scorecard• Quantitative Methods
• Corporate Strategy• Business Strategy Overview• Business Location
• Value Based Management • Value Creation • Business Value• Economic Value Added• Shareholder Value• Shareholder Value Analysis • Value Management Models
• Centralization, Decentralization and Delegation
• Why Delegate?• An Assessment of HSBC's Corporate Socia
l Responsibility Report 2004• HSBC Financial Highlights 2001, 2005
Click on ImageSource: Wikipedia
Index
• Global Strategies• Globalization• Economics• Microeconomics• Macroeconomics• Economic Value Added
•Economies of Scale•Economies of Scale – Integration•Economies of Scope•Outsourcing
• Demographic and Business Trends in Asia• Michael Porter's Diamond• Opportunities for Growth
• Risk, Uncertainty and Strategy• Relation between Uncertainty and Risk• Decision Analysis
• Chapter 9 - Annotated Lecture Outline • Chapter 11 - Annotated Lecture Outline• Chapter 14 - Annotated Lecture Outline
Click on ImageSource: Wikipedia
HSBC: Migrating for valueWorkshop
This workshop series is designed to compliment Teaching and Learning Strategies for undergraduate, postgraduate and executive level Strategic Management and related programmes and courses using the case studies featured in the ‘Strategy Analysis and Practice’ text shown below.
The overall aim is to support the learning contents offered in the relevant chapters of the book whilst expanding participants’ knowledge and skills base required to understand, review and analyse the issues faced by HSBC’s managers in the progress of in implementing and reviewing the company’s corporate strategy, ‘Managing for Value’.
Strategy Analysis and Practice
John McGee, Warwick Business SchoolHoward Thomas, Warwick Business SchoolDavid Wilson, Warwick Business School
HSBC: Migrating for value Case Analysis
A case study is a particular method of qualitative research.
Rather than using large samples and following a rigid protocol to examine a limited number of variables, case study methods involve an in-depth, longitudinal examination of a single instance or event: a case.
They provide a systematic way of looking at events, collecting data, analyzing information, and reporting the results.
As a result the researcher may gain a sharpened understanding of why the instance happened as it did, and what might become important to look at more extensively in future research.
Click on ImageSource: © 2002 - 2003 Jian Shuo Wang
HSBC: Migrating for value Case Analysis
Case studies lend themselves especially to generating (rather than testing) hypotheses.
• The scope and relevance of case studies • Types of case study
• Illustrative case studies • Exploratory case studies • Critical instance case studies • Program implementation case studies
• Program effects case studies • Cumulative case studies • Business school case studies • Medical case studies
• History of the case study • Conclusions • Notable case studies • References • See also • External links
Click on ImageSource: © 2002 - 2003 Jian Shuo Wang
HSBC: Migrating for valueWorkshop Debate
1. Introduction
2. Corporate Strategy: Adding Value in Multi-business Firms
3. Global Strategies and International Advantage
4. Risk, Uncertainty and Strategy
Workshop discussion topics have been divided into four parts according to the relevant chapters of the book:
You should ensure that you have understood the contents of chapters 9, 11 and 14 prior to attending any of the above debates.
Also see:
How to Use Your Workshop Resources Learning ObjectivesLearning from Case Studies: A Short Guide for Students
HSBC: Migrating for valueCase Questions
Please Note:
At your instructor’s discretion the indicative questions below and elsewhere in this resource may be varied or deemed unnecessary for teaching and learning purposes for some courses or modules.
Also see Learning Using Case Studies for further information.
1. Measure the stakeholder value created by the function migration to Guangzhou?
2. How could the bank learn from its earlier experiences in Guangzhou to facilitate a smoother function migration to Shanghai?
3. What alternative approaches could Or/HSBC have employed in the first round of function migration?
Also see A Model for Case Analysis and Problem Solving
HSBC: Migrating for Value How to Use Your Workshop Resources
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Navigation
The Learning Contents (Literature Reviews) are linked to a relevant public domain on the Internet.
Most, if not all pictures/images are ‘clickable’, i.e. linked to its source which provides further information on the topic or the copyright holder.
If your version of PowerPoint does not show the navigation buttons on the slide, right click on the screen and select your destination from the dialogue box. Alternatively use the small arrowheads, indicating ‘previous’ and ‘next’ respectively.
HSBC: Migrating for Value Disclaimer
This information is provided with the understanding that the authors and publishers do not assume any legal responsibility for the completeness or accuracy of the contents or any opinions or views expressed on these pages or linked destination sources.
It is the nature of the media (Internet) that some of the pages may not always be available due to broken or dead links, withdrawals, etc. Whilst the publishers will be pleased to take any appropriate corrective action, for example, by replacing or removing the sources when possible, they unable to assume any legal responsibility for unavailability of any third party material for whatever reason beyond their direct control.
HSBC: Migrating for ValueLearning Objectives
• strategic thinking skills
• appreciations of the complex decision making process involved in economic strategies such as migration and outsourcing
• understanding of the economic and social impact of operational migration and/or outsourcing to firm’s business environment
• analytical and critical thinking skills by reviewing the factors that influenced corporate centre's decisions on the businesses in their portfolios
The main objective of the workshop is to evaluate the strategic implementation of HSBC’s partial migration (outsourcing) of their Hong Kong based backroom operations to Guangzhou in mainland PRC.
Participants will have an opportunity of developing and enhancing their
HSBC: Migrating for ValueLearning Objectives
• understanding of distinction between scale and scope and implications that these concepts have for adding value in multi-business firms
• evaluation of the different ways in which the corporate centre can add value in multi-business firms
• appreciation of the ways in which firms can gain competitive advantage through globalization
• decision analysis and risk assessment skills with a range of techniques and frameworks that can be used for the purpose
• transferable skills, particularly in areas such as web search and research.
Adapted from the Learning Objectives, Chapters 9, 11 and 14.
HSBC: Migrating for ValueMultinational Corporations
A multinational corporation (MNC) or multinational enterprise (MNE) or transnational corporation (TNC) is a corporation/enterprise that manages production establishments or delivers services in at least two countries.
• Critiques • Examples • In fiction • See also
• Fostering Growth and Promoting a Responsible Market Economy - A G8 Declaration
Annual Report on the Guidelines for Multinational Enterprises The 2005 edition includes a special focus on corporate responsibility in the developing world
HSBC: Migrating for ValueMultinational Corporations
Multinational corporations (MNC) are often divided into three broad groups:
• Horizontally integrated multinational corporations manage production establishments located in different countries to produce same or similar products.
• Vertically integrated multinational corporations manage production establishment in certain country/countries to produce products that serve as input to its production establishments in other country/countries.
• Diversified multinational corporations manage production establishments located in different countries that are neither horizontally or vertically integrated.
HSBC: Migrating for ValueMultinational Corporations
Multinationals have played an important role in globalization. Given their international reach and mobility, prospective countries, and sometimes regions within countries, must compete with each other to have MNCs locate their facilities (and subsequent tax revenue, employment, and economic activity) within. To compete, countries and regional political districts offer incentives to MNCs such as tax breaks, pledges of governmental assistance or improved infrastructure, or lax environmental and labour standards. This process of becoming more attractive to foreign investment can be characterized as a race to the bottom.
Click on ImageSource:
HSBC: Migrating for ValueIntroduction
• Financial Institution• HSBC Overview• The Nature of the Large Corporation• Corporate Objectives and Strategies
• Managing for Value 2000 – 2001 • An assessment of HSBC's Corporate Social Responsibility Report 2004 • HSBC Financial Highlights 2001, 2005• Guide to Using Case Studies
Larger ImageSource: Ten3Click on Image
Financial InstitutionsIntroduction
In Financial economics, a financial institution acts as an agent that provides financial services for its clients. Financial institutions generally fall under financial regulation from a government authority. Common types of financial institutions include banks, building societies, credit unions, stock brokerages, and similar businesses.
Financial institutions provide a service of moving funds from investors, those with excess funds, to companies, those in need of funds. These financial institutions make it easy and affordable for small investors to invest.
• Financial economics
• Macroeconomics
• Financial markets
• Financial services companies
• Economics and finance stubs
General areas of finance
HSBC Tower by flore-leval.9online.fr
Financial InstitutionsChina
• Opinion: Spent: The End of the American Empire
• The provisions of WTO membership threaten China's antiquated banking system
Source: Yale Economic Review
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HSBC: Migrating for ValueOverview
• Introduction• Customer groups
• Personal Financial Services • Commercial Banking • Corporate, Investment Banki
ng and Markets • Private Banking
• Strategy • Managing for Value 1998-20
03 • Managing for Growth 2003-2
008 • Local Operations
• Americas • Asia Pacific • Europe • Middle East and Africa
• Global product lines and programmes
• Global Service Centres • HSBC Premier • HSBC Bank International • HSBCnet
• Brand and Advertising • Hexagon symbol • Sponsorship • Slogan
• History of HSBC Holdings plc • Awards and rankings
• 2005 • See also • External links
• Articles
HSBC: Migrating for ValueOverview
HSBC Holdings PLC (LSE: HSBA, SEHK: 005, NYSE: HBC, Euronext: HSBC, BSX: 1077223879) is one of the largest banking groups in the world, the fifth-largest company and second-largest banking company in the world by the Forbes Global 2000. Its head office is located at the HSBC Tower in the London Docklands.
The group is named after its founding member, the Hongkong and Shanghai Banking Corporation Limited - a bank established by Scot Thomas Sutherland to finance British trade in the Far East in 1865.
Click on ImageSource: Wikipedia
HSBC: Migrating for ValueOverview
The bank is the second largest corporation in the world in terms of assets ([2]). It reports its results in US dollars since 80% of its earnings come from outside the UK. Nearly 22% of its earnings comes from operations in Hong Kong. Before moving the headquarters to London in 1991, it was headquartered in Hong Kong. It is the largest bank in Hong Kong, and at the end of 2004 it was the third largest banking group in the world by Tier 1 capital [3].
Click on ImageSource: Wikipedia
HSBC: Migrating for ValueOverview
The HSBC logo, known as the Hexagon, is derived from the Hongkong and Shanghai Banking Corporation's 19th Century house flag, itself derived from the Scottish flag which is the angular cross that St. Andrew (the patron saint of Scotland) was crucified upon.
The 2004 Jaguar car, being driven by Mark Webber.
Click on ImageSource: Wikipedia
HSBC: Migrating for ValueCorporate Objectives and Strategies
Managing for Value 2000 - 2001
Larger ImageSource: Ten3Click on Image
Introduction• Corporate Objectives 1998
• Corporate Strategies
HSBC: Migrating for ValueCorporate Objective
On their website HSBC emphasised the priorities of the Managing for Value into the 21st Century:
As a commercial organisation, our governing objective is to provide a satisfactory return on our shareholder’s capital.
The MfV strategy aimed to double shareholder value in the five-year period 1999 – 2003 and again every five years thereafter.
HSBC: Migrating for ValueCorporate Strategies
The Implementation of the final initiative became most disruptive in Hong Kong. As such it required careful planning and management whilst raising myriad issues and concerns across the company.
This poses another, obvious, question:
To what extent were the principle objectives of ‘Managing for Value: HSBC into the 21st Century’ programme met?
HSBC: Migrating for ValueCorporate Strategies
•Transforming traditional branches to financial service centres
•Strengthening the sales force by recruiting dedicated Financial Services Executives (FSE) and re-deploying back-office staff to frontline operations.
•Streamlining the business processes and procedures.
•Migrating back-office operations, currently centralized in the Networking Services Centre (NSC) in Hong Kong, to the Guangzhou Data Centre (GZC) in mainland China.
A series of initiatives were introduced across the HSBC group in a bid to align the organisation with this primary objective, including:
HSBC: Migrating for ValueManaging for Value 2000 - 2001
Literature Review
•Managing for Value 1998-2003
•Managing for Growth 2003-2008
•Global Leadership - White Paper
Larger ImageSource: .webpronews.comClick on Image
HSBC: Migrating for ValueGuide to Using Case Studies
“In using cases you should be aware that before going onto the main theme of the case you will need to carry out a strategy analysis such as that shown in Chapters 5, 6 and 7” (see Literature Review of Chapters 7.5.1 and 7.5.2 here).
Thus, the question posed in this case might be:
‘Was HSBC’s 1998 response to global developments in the banking industry - Managing for Value: HSBC into the 21st Century (MfV) - still appropriate in 2001?’
Business Analysis Business Drivers
Larger ImageSource: Metapraxis
Business Analysis Overview
1. Benefits of business analysis 2. Roles of business analysts 3. Business process improveme
nt 4. Goal of business analysts 5. External links
Introduction
Also see
• Balanced Scorecard• Quantitative Methods• Quantitative Method From
Wikipedia, the free encyclopedia
Larger ImageSource: BizEdClick on Image
Business Analysis Balanced Scorecard
Literature Reviews
• Balanced Scorecard
Click on Image by PA Consulting Group
• A comprehensive view of business performance
• Public sector Balanced Scorecard • Purpose of the Balanced
Scorecard • Evolution of the Balanced
Scorecard • See also • References
• Balanced Scorecard
Business Analysis Quantitative Methods
Lecture 1: Functions & Economic Relationships Lecture 2: Economic Models/Linear Models Lecture 3: Basic Differential Calculus Lecture 4: Optimisation Lecture 5: Functions of Several Variables Lecture 6: Unconstrained Optimisation Lecture 7: Constrained Optimisation Lecture 8: Growth & Dynamics Lecture 9: Introduction to Difference Equations
Source: Bob BeachillLeeds Metropolitan University [email protected]
Quants Handbook
Source: Brian C. McCarthy Ohio University Click on Image
HSBC: Migrating for ValueCorporate Strategy
Literature Reviews
•Business Strategy Map
•Business Location
•Value Based Management
•Value Creation
•Value Management Models
•Centralization, Decentralization and Delegation
•Strategy Modelling Technique for Financial Services
Image by The Knowledge Management Advantage
Synergy
Click on image for further information
Also see Annotated Lecture Outline
HSBC: Migrating for ValueGlobal Strategies 1
Global Strategies and International Advantage
Literature Reviews
Image by IRCC
Globalization
Click on image for further information
• Globalization
• Economics
• Global Economy
• World Economy
• Economies of Scale
• Economies of Scale – Integration
• Economies of Scope
• Outsourcing
• Demographic and Business Trends in Asia
Also see Annotated Lecture Outline
HSBC: Migrating for ValueGlobal Strategies 2 •
Click on ImageSource: Agrium Inc. 2004
• Five emerging trends will reshape global banking in next decade: IBM study
• Competitiveness of Nations: The Fundamentals
• The Competition of Countries
• The Competitive Advantage of Global Finance
• Economist Country Briefings
• Financial Constraints and Growth: Multinational and Local Firm Responses to Currency Depreciations (Abstract)
• A Multinational Perspective on Capital Structure Choice and Internal Capital Markets (Abstract)
HSBC: Migrating for ValueGlobal Strategies 3
Global Strategies and International Advantage
Literature Reviews
Larger Map
Image by BizEd
Click on image for further information
•Michael Porter’s Diamond
•Opportunities for Growth
Also see Annotated Lecture Outline
HSBC: Migrating for ValueRisk, Uncertainty and Strategy
Risk, Uncertainty and Strategy
Literature Review Prospect Theory
Click on image for further information
Image by Wikipedia
•Relation between Uncertainty, Probability and Risk
•Decision Analysis
Also see Annotated Lecture Outline
Literature Review Business Strategy Overview
Larger Map
Source: BizEd, University of Bristol
Click on image for further information
Literature Review Business Location
Larger ImageSource: BizEdClick on Image
Operations Research
OR-Notes are a series of introductory notes on topics that fall under the broad heading of the field of operations research (OR):
• Facility location
Source: J E Beasley
Literature ReviewValue Based Management
Source: FDC
Click on Images for further information
Source: Dresden International University
Literature ReviewValue Creation
• Business Value
• Michael Goold, Andrew Campbell and Marcus Alexander, Corporate Strategy and Parenting Theory, Long Range Planning, Vol.31, No.2, pp.308-314, 1998.
• Parenting Advantage (Goold & Campbell)
• Parenting Styles (Goold & Campbell)
• Core Competence (Hamel & Prahalad)
• Distinctive Capabilities (Kay)
• Financial Institutions Re-evaluate Offshore Operations
Copyright © 2000, Community Intelligence Labs. Click on Image
Also see Economic Value Added
Literature ReviewValue Creation - Business Value
In management, business value is an informal term that includes all forms of value that determine the health and well-being of the firm in the long-run. Business value expands concept of value of the firm beyond economic value (also known as economic profit, Economic value addedtm, and Shareholder value) to include other forms of value such as employee value, customer value, supplier value, channel partner value, alliance partner value, managerial value, and societal value.
Many of these forms of value are not directly measured in monetary terms.
Business value often embraces intangible assets not necessarily attributable to any stakeholder group. Examples include intellectual capital and a firm's business model.
The Balanced scorecard methodology is one of the most popular methods for measuring and managing business value.
Literature ReviewValue Creation - Business Value
• Philosophy • History • Components of Business Value • Shareholder Value • Customer Value • Employee Value • Channel Partner Value • Supplier Value • Managerial Value • Societal Value • Strategies for Creating Business Val
ue • Business Value of Information Tech
nology • Criticisms Click on Image. Larger Image
Source: Andersen
Literature Review Value Creation - Shareholder Value
• Shareholder Value
• What is Shareholder Value?
• What Drives Shareholder Value?
• Shareholder Value Analysis
Larger ImageSource: Accenture
Literature ReviewShareholder Value Analysis
Larger ImageSource: agility.com.au
• Rediscovering Shareholder Value: A Proven Approach
• How to Build Value into a Merger
• Shareholder Value Tool
Literature ReviewValue Management Models
Larger ImageSource: performgroupClick on Image for further information
Literature ReviewValue Management Models
Six Sigma
Six Sigma was pioneered by Bill Smith at Motorola in 1986[1]. Originally, it was defined[2] as a metric for measuring defects and improving quality; and a methodology to reduce defect levels below 3.4 Defects Per (one) Million Opportunities (DPMO). Six Sigma is a registered service mark and trademark of Motorola, Inc[3]. Motorola has reported over US$17 billion savings[4] from Six Sigma to date.
AlliedSignal and GE became early adopters of Six Sigma and reported benefits of over US$300 million during its first year of application[5]. Their CEO's, Larry Bossidy and Jack Welch, played a vital role in popularizing Six Sigma. Other major organizations who claim to have benefited from Six Sigma implementation are Ford, Caterpillar, Microsoft, Raytheon, Quest Diagnostics, Seagate Technology, Siemens, Merrill Lynch, Lear, 3M and many more.
Click on ImageSource: KETCH.ca
Literature ReviewValue Management Models
• Definition • Application & Success
• Healthcare • Banking • Insurance • Construction • Military
• Methodology • DMAIC • DMADV
• Roles Required for Implementation • Examples of Some Key Tools Used • Criticisms of Six Sigma
• Of its origin • Of the term: Six Sigma • Of statistics • Of methods • Of effects
• References • See also • External links
Six Sigma
Click on ImageSource: QCI International. All rights reserved.
Literature ReviewValue Management Models
Value Chain
Click on ImageSource: Vickers
Literature Review Centralization, Decentralization and Delegation
Advantages of Centralization
• Close control of operations
• Uniformity of policies, practices, and procedures
• Better use of centralized experts
Advantages of Decentralization
• Faster decision-making
• Decision better adapted to local condition
• Better management experience for managers that are considered for promotion to higher level management
Click on ImageCopyright: Cornell University
Literature Review Why Delegate?
At a certain point, there are just too many facets to running a successful business to continue doing it alone.
In an increasingly complex business environment, with all the trends affecting business today, such as globalization, the information technology explosion, strategic alliances, increased mergers and acquisitions, heightened competition, and higher expectations of nearly every customer, it just isn't possible to still be that one person in control of everything. Bringing in others to manage is an absolute necessity for survival now.
Source:
Literature ReviewAn Assessment of HSBC's Corporate Social Responsibility Report 2004
Image: Big banks are under fire from NGOs on lending practices on both sides of the Atlantic.
Copyright: ethicalcorp.com
Source: ethicalcorp.com
HSBC
• Business case for CSR
• Corporate Governance
• Click on images for further information
Literature ReviewHSBC Financial Highlights 2001, 2005
Source: Johnson Matthey
Annual Results 2005
Click on image for further information.
Literature ReviewGlobal Strategies
Larger Map
Source: BizEd, University of Bristol
Also see:
• World Economic Forum
• Banking
• Financial Services
Click on image for further information
Globalization
Literature ReviewGlobal Strategies
Globalization (or globalisation1) refers to the worldwide phenomenon of technological, economic, political and cultural exchanges, brought about by modern communication, transportation and legal infrastructure as well as the political choice to consciously open cross-border links in international trade and finance.
• Meaning & Debate • History • Nature and existence of globalization • Characteristics • Anti-globalization • Pro-globalization (globalism) • Other uses • Measurement of Globalization • Notes • See also • External links
Illustration by Viktor Koen for Newsweek
Also see The Global Economy, World Economy
Literature ReviewEconomics
Larger Map
Source: BizEd, University of Bristol
Economics, which focuses on measurable variables, is broadly divided into two main branches: microeconomics, which deals with individual agents, such as households and businesses, and macroeconomics, which considers the economy as a whole, in which case it considers aggregate supply and demand for money, capital and commodities. Aspects receiving particular attention in economics are resource allocation, production, distribution, trade, and competition. Economic logic is increasingly applied to any problem that involves choice under scarcity or determining economic value. Click on Image for further information.
Economics
Source: Wikipedia
Literature ReviewMicroeconomics
Larger MapClick on ImageImage by BizEd
• Microeconomics
Literature ReviewMacroeconomics
Larger MapClick on ImageImage by BizEd
• Macroeconomics
Macroeconomics is the economics sub-field of study that considers aggregate behavior, and the study of the sum of individual economic decisions. This is in contrast to microeconomics which is the study of the economic behaviour of individual consumers, firms, and industries.Macroeconomics can be used to analyze how best to influence government policy goals such as economic growth, price stability, full employment and the attainment of a sustainable balance of payments.
Literature ReviewGlobal Economy
Click on ImageSource: 2006 Deloitte Development LLC.
The rise of technology has allowed our environment to be characterized as a global one. “The global economy gave business the ability to market products and services all over the globe. It has also allowed them to develop partnerships and alliances throughout the world, which has become essential for success in today’s business.”
• Advantages • Disadvantages • Economies of Scale • The Global Economy • See also • References
Also see Economies of Scale
Literature ReviewWorld Economy
The world economy can be evaluated in various ways, depending on the model used, and this valuation can then be represented in various ways (for example, in 2006 US dollars). It is inseparable from the geography and ecology of Earth, and is therefore somewhat of a misnomer, since, while definitions and representations of the "world economy" vary widely, they must at a minimum exclude any consideration of resources or value based outside of the Earth.
• Economy - overview • Statistical indicators
• Economy • Employment • Industries • Energy • Cross-border • Gift economy • Communications • Transport • Military
• See also • External links
Click on ImageSource:
Literature ReviewEconomic Value Added
What Does Economic Value Added Really Mean?
Click on Images for further information
Source: David Harper, (Contributing Editor - Investopedia Advisor)
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Larger Image
Literature ReviewEconomies of Scale
Larger Map
Source: BizEd, University of Bristol
Economies of ScaleEconomies of Scale refers to the decreased per unit cost as output increases. Click on image for further information.
Economies of Scale
Source: Wikipedia
Literature ReviewEconomies of Scale - Integration
Integration
This occurs when two firms join together to form one new company. Integration can be voluntary (a merger) or forced (a takeover). The figure below shows the three main types of integration.
Source: BizEd, University of Bristol
Click on image for further information
Literature ReviewEconomies of Scope
Economies of ScopeFrom Wikipedia, the free encyclopedia
Economies of scope are conceptually similar to Economies of scale. Whereas economies of scale apply to efficiencies associated with increasing or decreasing the scale of production, economies of scope refer to efficiencies associated with increasing or decreasing the scope of marketing and distribution.
Whereas economies of scale refer to changes in the output of a single product type, economies of scope refer to changes in the number of different types of products. Whereas economies of scale refer primarily to supply-side changes (such as level of production), economies of scope refer to demand-side changes (such as marketing and distribution). Economies of scope are one of the main reasons for such marketing strategies as product bundling, product lining, and family branding.
Literature ReviewOutsourcing
Outsourcing (or contracting out) is often defined as the delegation of non-core operations or jobs from internal production within a business to an external entity (such as a subcontractor) that specializes in that operation.
Outsourcing is a business decision that is often made to lower costs or focus on competencies. A related term, offshoring, means transferring work to another country, typically overseas.
Offshoring is similar to outsourcing when companies hire overseas subcontractors, but differs when companies transfer work to the same company in another country.
Outsourcing became a popular buzzword in business and management in the 1990s.
Paper shredding can be contracted out
Literature ReviewDemographic and Business Trends in Asia
• Conference Themes and Policy Issues: Regional Conference on Migration and Development in Asia by: Frank Laczko
• Internal Migration in China - China Case Study by: Prof. Huang Ping and Mr. Zhan Shaohua
• Labour Migration in PRC by: Xiang Biao
• How Migrant Labour is Changing Rural China by: Rachel Murphy
• The second industrial revolution
Image: Shanghai has been the template for many of the developments. Copyright BBC
• Global Business
Literature ReviewMichael Porter's Diamond
Source: Bundesministerium fur wirtshaftliche Zusammenarbeit und Entwicklung
Click on image for further information and other useful models
Literature ReviewOpportunities for Growth
• Retail Banks Must Focus on Organic Growth to Remain Competitive as Battle for Market Share Heats up Globally
• The Golden Rules of Successful Offshoring
• Succeeding with Growth: Creating Value in Banking 2005
• The Age of the Banking Titans
• Searching for Profitable Growth: Global Wealth 2005
• Delivering Profitable Growth in a Crowded MarketGlobal Corporate Banking 2005 From
Literature ReviewRelation between Uncertainty and Risk
Source: Coblands Consulting
Relation between Uncertainty, Probability and Risk
In his seminal work Risk, Uncertainty, and Profit, Frank Knight (1921) established the important distinction between risk and uncertainty:"… Uncertainty must be taken in a sense radically distinct from the familiar notion of Risk, from which it has never been properly separated. … The essential fact is that "risk" means in some cases a quantity susceptible of measurement, while at other times it is something distinctly not of this character; and there are far-reaching and crucial differences in the bearings of the phenomena depending on which of the two is really present and operating. … It will appear that a measurable uncertainty, or "risk" proper, as we shall use the term, is so far different from an unmeasurable one that it is not in effect an uncertainty at all."
Literature ReviewDecision Analysis
Larger ImageSource: Global Decision Analysis
Decision model
A decision method is an axiomatic system that contains at least one action axiom.
See alsoDecision theory Decision support
CHAPTER 9Annotated Lecture Outline 1/3
LectureIntroduction The move from a focus on competitive strategy to a focus on corporate strategy. A discussion of the growth in multi-business firms with illustrative examplesSlide: Definition of corporate strategy. Changes in Organisational Structures over Time An explanation of the ways in which organizational structures have evolved and developed over time and a discussion of the advantages and disadvantages of U versus M forms of organizationSlide: Figure 9.2 plus bullet points outlining strengths and weaknesses of this form of organizationSlide: Figure 9.3 bullet points outlining strengths and weaknesses of this form of organization
Click on Image for further information
CHAPTER 9 Annotated Lecture Outline 2/3
Strategy and Structure A discussion of the two-way relationship between strategy and structure and Alfred Chandler’s work. A consideration of the questions raised by the rise of M forms of organizationSlide: Bullet points of issues (page 343)
Managing the Multi-business Firm 1: The Corporate-Business Interface An introduction to issues of business unit boundaries, groupings of businesses and headquarter/business unit relationships. An exposition of common corporate-business interface styles.Slide: Bullet points relating to three different styles (p.347)
Managing the Multi-business Firm 2: The Role of the Corporate Headquarters An explanation of the different ways in which the centre can add value and a description of Gold and Campbell’s work on parenting stylesSlide: Figure 9.7Slide: Figure 9.8
CHAPTER 9 Annotated Lecture Outline 3/3
Managing the Multi-business Firm 3: Managing the Portfolio A brief review of portfolio models such as the familiar BCG matrix plus an explanation of the limitations of these models and the reasons why they are no longer popular.Slide: Figure 9.9
Evidence and Experience A brief review of the finding of some of the empirical work in the area, emphasizing the difficult of measuring relatednessSlide: bullet points on concept of ‘relatedness’
Concluding Comments Link back to the resource-based view highlighting the connection between core competences and relatedness. A summary of the key tensions in managing portfolio businesses including centralization v decentralization, vertical v horizontal focus and co-operation v competition
CHAPTER 11 Annotated Lecture Outline 1/5
Lecture
The ‘global strategies and international advantage' topic covers a lot of ground and on undergraduate programmes it might be worthwhile covering the topic over two lectures. The first lecture could focus on the concept globalization and the pursuit of international competitive advantage at the nation and industry level. The second could focus on firm level choices and the strategic options available to international firms
Introduction – opening remarks should establish the link with previous lectures on competitive and corporate strategy and explain this lecture’s focus on the global arena
The Terminology of International Business – an explanation of key terms and the introduction of the notions of internationalization and globalization.Slide: The terminology of international business (list of key definitions drawn from p.412 and 413)
CHAPTER 11 Annotated Lecture Outline 2/5
The Context of International Strategy – a brief review of the major trends in trade and foreign direct investment. A discussion of the factors driving globalizationSlide: Table 11.1 and 11.2
National Competitive Advantage – an introduction to, and explanation of, the determinants of national competitive advantage (Porter’s diamond model). Lectures to postgraduate audiences could also include a discussion of the limitations of the model (discussed on p.434-436 of the text) and introduce the double diamond model. Slide: Figure 11.1
The Internationalization process – an explanation of the ways in which domestic firms develop their overseas activities and the evolution of different forms engagement in foreign markets over time. A summary of the advantages and disadvantages of these different forms of international activity, e.g. licensing, foreign direct investment, etc.Slide: Figure 11.2
CHAPTER 11 Annotated Lecture Outline 3/5
From international to global strategies – a reiteration of the opening themes of internationalization, moving to a discussion of the strategic options available to multi-national firms, introducing the notion of multi-domestic and global strategies.Slide: Figure 11.3Slide: Bullet points contrasting multi-domestic and global strategies
The Drivers of Globalization – a discussion of the forces that are driving the industries and firms to go global and the limitations of, and tensions in, this process Slide: Table 11.4
Global v Local – an outline of the trade-offs between standardisation and differentiation and the link between the strategic environment and available strategic options.Slide: Table 11.5
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Strategic Choices – an explanation of Bartlett and Ghosal's four basic strategies used to enter and compete in international environmentsSlide: Figure 11.5
The Best of Both Worlds – Transnational Strategies – an outline of what is understood by a transnational strategy and an explanation of implementing this strategy in practice.
Strategy and Organization – a return to one of the key themes running through the strategy literature, namely the strategy/structure debate. A discussion of the fit between strategy and structure in international firms, paying particular attention to Bartlett and Ghoshal's (1989) model. If time permits the lecturer may also like to re-introduce the notions of country-specific and firm-specific advantages and Rugman & D'Cruz's (2000) 'flagship'modelSlide: Figure 11.7Slide: Figure 11.11 (optional)
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Managing International Organizations – an explanation of the complexity inherent in organizing a multi-product, multi-market firm and a discussion of the ways in which managers may seek to organise and control such businesses.Slide: Bullet points for and against a matrix structureSlide: Figure 11.13
Concluding Comments – a summary of some of the main themes including the nature of globalization and the significance of national competitive advantage, the global/local debate and the way this connects with firm-specific versus country-specific advantages, the tantalizing possibility of gaining the 'best of both worlds' through transnationality and the possibilities and problems of developing appropriate organizational structures and systems to make the transnational organization a reality.
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Lecture - A statement of the problems of decision making in the absence of complete information and dealing with risk and uncertainty. Topical examples of crafting strategies in the face of risks and uncertainties to highlight some of the key debates. Examples might include 3G licences in the mobile phone industry or risks from natural disasters.
What is risk?An explanation of different definitions and perspectives on risk. Slide: definitions of risk taken from page 530Organisational versus Management RiskA discussion of the location and sources of risks and the relationship between the two.Slide: Definitions taken from page 533/Table 14.2Click on image for further information.
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Prospect Theory and RiskAn explanation of the key propositions of prospect theory and the relevance of this theory for managers. This section may be omitted in undergraduate lectures.Slide: Bullet points taken from p 536.
Dealing with Uncertainty An explanation of the difference between risk and uncertainty and the notion of a scale of uncertainty. A recap on PEST and the link with Miller’s (1992) work on the micro and macro influences that create macro and micro level uncertainties.Slide: Table 14.4
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Risk Analysis and Assessment Techniques and Quantitative TechniquesA brief discussion of NPV, IRR and decision tree techniques which refer students to other parts of their programme where the mechanics of these techniques are dealt with in great depth. The emphasis here is on the link to strategic decision making in the face of uncertainty rather than to the techniques themselves.Slide: Bullet points testing main techniques analysis plus limitations.Risk Analysis and Assessment Techniques: Risk IndicesAn explanation of the technique plus its limitation.
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