Learning Objectives

LO 15-1 Describe the basic concept of organizational strategy.

To successfully achieve long-term goals, organizations need to place a clear focus on organizational strategy, the process of creating, evalu­ating, and implementing decisions and objectives to achieve long-term competitive success. Tactical planning lays out the short-term actions and plans to implement the strategy. Operational planning aligns the strategic plan with the day-to-day tasks required in the running of the organization. A first mover is an organization that wins competitive advantage by being the first to establish itself in a particular market. A firm that chooses the defender strategy concentrates on stability and efficiency in its internal operations to protect its market from new com­petitors. An analyzer strategy tries to maintain current products and services with a limited amount of innovation. With the reactor strategy an organization simply responds to environmental threats and oppor­tunities rather than following a defined plan. The prospector strategy seeks innovation, creativity, and flexibility and favors taking high risks to accelerate growth and gain competitive advantage.

LO 15-2 Discuss organizational learning as a strategic process.

A learning organization facilitates the acquisition, distribution, and retention of knowledge to enable it to react to change. Mim­icry is the process of learning from the successful practices of others. Scanning seeks solutions from outside consultants, com­petitors, and other successful firms, and grafting means hiring experts to bring their knowledge to the firm.

LO 15-3 Explain the phenomenon of globalization along with the opportunities and challenges it poses to organizations.

Globalization is the integration of economy, trade, and finance on an international scale. Advantages of going global include the possibility of economic growth, the ease of transporting goods and services across borders, and the opportunity to invest in develop­ing and emerging-economy countries. However, global companies can become more dependent on suppliers in other countries for certain goods and services—in the event of political unrest and war, these resources may become limited. There is also a degree of economic risk due to the inevitable rise and fall of interest and exchange rates. A drop in foreign currency can be expensive for a firm as it reduces earnings and capital investment.

LO 15-4 Identify key ways in which organizations adapt their practices across cultures.

Standardization is the degree to which all employees are expected to follow the same rules and policies. Localization is the process of adapting certain functions to accommodate the language, culture, or governing laws of a country.

LO 15-5 Describe how international assignments can be used for employee development.

The first stage of cultural adaptation is the honeymoon stage in which everything seems exciting and new and there is an imme­diate impulse to explore and soak up the new culture. After a few weeks, the disintegration stage sets in; the gloss starts to wear off, and feelings of nervousness and insecurity set in. In reintegration the expatriate reaches an understanding about how the business and social cultures operate and accepts the factors that may have seemed strange in the beginning. During the autonomy stage he or she knows how to function in the new environment and has a clearer understanding of business practices. This leads on to the indepen­dence stage of complete understanding about how the culture oper­ates, enough confidence to handle most situations, and appreciation of the culture for its differences as well as its similarities.