Assessment of Global Strategy: an Organizing Framework by Ghoshal - Article Example

Critical Assessment of “Global Strategy: An Organizing Framework.” Name of Student Institution Date Global Strategy: An Organizing Framework. The article “Global Strategy: An Organizing Framework,” highlights the need for an organizing framework targeted at managers in multinational corporations and academic researchers. The author suggests managers can profit from the use this framework because it anchors on strategic objectives and exploiting the fountains of competitive advantages; for the academic researchers he presents hard data which sensitizes them to the manager’s real life experiences in the business world. Ghoshal (1987), prescribes an organization framework, built on existing literature, to guide managers and academics identify and formulate the intricacies of global strategic management. The author, from the inception of the article, points out that globalization is not a virgin conception. Additionally, he shows a clear indication that the issue is one of importance and has been and is still a challenge to managers of multinational corporations. He develops this theory and illuminates how the authorities in the field have contradictory and inconclusive information that does has not borne practical solutions to MNC managers. Ghoshal admits that there is not one strategy that is free from flaws, and the field seeks information and strategies to serve better global strategic management. According to Ghoshal, the framework he presents is not to help “formulate policies” it acts as a guide and points out factors that need addressing to succeed at global strategic management. He qualifies this statement by using prescriptions to meet perspectives. However, Ghosal maintains that there are no identified strategies applicable on a global scale. He uses valid resources using examples and real life experiences of various corporations and industries. Ghoshal provides views in the face of the growth of globalization not only in the business world but also in the academic. He holds fast to the fact global strategy is ladened with conceptual ambiguity. However, he developed an organizing framework. His aim was to create a “road map” to aid managers of multinational corporations (MNC) and academics in formulating, analyzing and classifying strategies. Using the foundations of strategic objectives and the sources of competitive advantages, Ghoshal constructs his proposed organizing framework. Ghoshal constructs the framework and explains its function using global and corporate dimensions to validate his arguments. Whereas the structure is adaptable, he points out its limitation. In addition, he urges the academics to carry on the work of systemic research, using the available secondary data and verify hypotheses while testing their feasibility and practicality to see if the prescriptions tended forth actually work. Mazzucato (2002), agrees with Ghoshal’s (1987) explanation to the managers of MNC that many of the underlying factors affecting global strategy hid in systems, especially in labels and categorizes. The paper presents a good argument because Samantra Ghoshal contributes actively in the field of global strategy through books and reviews on the same. Therefore, he is an authority on the subject of global strategy. Methodology Ghoshal uses three tables to emphasize his argument. These are well structured and easy to follow. Also, he does not feel the different segments with cumbersome information; it is concise and to the point. Ghoshal uses authorities in the field of global strategic management to develop his argument. Ghoshal is also a contributor to this area, he is an author of reviews and books in this area. Additionally, he consistently, throughout the paper, points out the limitations, solid angles, disqualifiers and tried and tested scenario. However, in some section of the article, there is a need to develop the concepts further, more material information could enhance his argument. Also, Ghoshal emphasizes the point that variables could alter the desired effect on global strategies. Subsequently, Ghoshal describes effectively, how the organizing framework helps managers try different approaches through mixing the offered strategies and objectives. However, Table 3 is not a reliable depiction of the matrix suggested. Ghoshal (1987) writes, “Pigeon-holing academic contributions into parts of a conceptual framework tends to be unfair,” this statement makes the reader skeptical because it represents that the information presented is inconclusive (Kogut 1989). Ghoshal allows the reader to look at the table with a full knowledge of its flaws, perhaps to let the MNC managers make their own conclusions or assumptions. Style Ghoshal’s organizing framework addresses MNC managers and academics, yet he uses simplified language, he avoids jargon. As a result, the paper is logical, and therefore,the reader finds it easy to follow. Ghoshal’s tone in some sections is conversational and creative, for instance, according to Hout “… the global strategist is the heavyweight champion who knocks out the opponents,” as cited by Ghoshal (1987). He intrigues the reader and the statement lodges in the reader’s mind, it is original and easy to remember. Again, he uses this strategy as he cites and uses the analogy of “hedgehog” and “fox” descriptive of global strategy (Ghosal, 1987). Ultimately, he delivers the message clearly and memorably and the reader identifies with the “prickly” and “cunning” aspects he tries to bring to attention. Also, Ghoshal keeps to the facts by appropriately citing his sources. Therefore, it is easy to double check and confirm his contentions and arguments, following his thought process and pattern. The paper is authoritative yet not intimidating, Ghoshal is persuasive and succeeds in holding the reader's attention by the natural flow of the article and the use of individual sources. Even when the information iscontradictoryand is thus qualified as impractical and inconclusive, Ghoshal presents the reader with the source of information. Subsequently, this forms a solid platform from which the reader “analyzes, discussions, decisions, classifies and relates” just as he intends for them because the information tendered is impartial to present a practical scene.The reader is aware of the flaws that render some concepts, redundant, contradictory or successful. Besides the organizing framework is structured on observations and thoughts of the literature he presents to the reader. Credibility Ghoshal provocatively uses renowned authorities of this period,1987, and he goes as far back as 1975 to 1987 showing systematically how global strategic management has been affected by past and present circumstances. Besides, he uses authors respected in the various fields connected to global strategic management; he cites Perlmutter, Hannan, Prahalad, Toder, Barlett, Kogut, and Aldrich to mention but just a few. He has an extensive list of references, consequently, showing the intensity and commitment of his research and he emphasizes the stance of this argument. The validity of Ghoshal’s presentation is according to Roughan (2013) “makes authority reflective to reason of making the relationship of standing reflective to reason.” Again, Ghoshal points out that regardless the fact that corporations formulate objectives; it is hard to prioritize these on a global scope. His argument implies costs aligned to each objective are an underpinning factor in how the objectives get ranked. Therefore, the importance of the goal is not the determinant. Also, as he concludes the paper, he honestly provides the reader with the notion that the framework is not an elixir to global strategy, but a guide to assist in decision making and formulating strategies. Ghoshal captured the importance of the problems of global strategic management and backs this with reliable sources which allow the reader to cross reference easily. He illuminates the easily overlooked, unidentified or unaddressed factors, and explains the perils of the decision-making without these considerations. Also Ghoshal’s (1987) arguments on adaptation is not a convincible nor feasible global strategy are supported by authors who are of the later century, for example Ungson and Wong (2008) agree that adaptation as a global strategy lack flexibility and is costly in the long run. Ghoshal’s arguments have withstood the test of time the above one stands over twenty years since his presenting the organizing framework. Further, Ghoshal uses a diversity of samples to exemplify the reality of data used; he mentions cars, airplanes, communication technology, water, among others. He covers this range of products and services leading the reader to realize his arguments are feasible for a broad variety of goods. Ultimately, this gives the information a practical angle. Again, the resources and data used are all relevant to the organizing framework, and for every section there is explanation corresponding to the table presented, he maintains this all through the paper. Therefore, the paper follows a guided format. Scope First, it is important to recognize Ghoshal’s authority on the subject of global strategy, Ghoshal (1987) observes, keenly, the key to experiencing the full potential of subsidiaries to the benefit of the whole system lies in the foundations of a well-governed integrated network. This is argument is further supported by Bartlett, C., & Ghoshal, S. (1988) . In addition, Ghoshal explains the importance of global networking, unlike his counter parts he recognized the advantages of distributing and using local resources in their related areas of operation at the international level (1987). Secondly, Ghoshal uses a simple illustration, a matrix which logically “maps out the means and ends” of his framework (1987). Ghoshal understands the challenge MNC managers face when it comes to “formulating, analyzing, describing and relating,” so he uses this simpleformat to pass across an otherwise complicated and taxing exercise. He breaks down the information into digestible chunks by identifying the strategic objectives: Efficiency Managing risk Innovation, learning and adaptation Therefore, the reader notes these as valid points and their important consideration. Ghoshal, logically points that apart from these, the MNC managers need to consider their competitive advantages: National differences Scale economies Scope economies Consequently, as he builds upon these two pillars of his suggested framework, it is logical and systematic, and a quick analysis is possible, it ispractical to the managers of MNCs and researchers as well. Moreover, the values of the organizing framework are explicit and straightforward, and decipherable. Third, Ghoshal recognizes and acknowledges the contributions from authors in the field of global strategy; he gives credit to them in this respect because many of their theories and conflicts are used even in today’s MNCs managerial decision making and also for research purposes such as this paper. Take for an example; multinational networking is well rooted in the works, according to Perlmutter, where he contends that for effective global strategy, there is a need to distinguish and understand the three different approaches which he classified as “the geocentric, the polycentric and ethnocentric (Ghosal, 1987). Alongside this theory and other strategies, individual victories no matter how colossal or minute are realized. Also, as Ghoshal sets out to present the picture on how contradictory and impractical some of the inaugural concepts of global strategy seem they, on the other hand, laid a basis on which other productive arguments stand on. For instance, according to Hamal and Prahaladas cited by Ghoshal (1987) the diversity of products and exploit of chartered distribution channels was the best way to attain successful global strategy. However, this is disputed according to Levit, who advocates for standardization of goods: worldwide (Ghoshal, 1987). Therefore, Ghoshal presents his readers with the historical growth and development of global strategic management. This information allows the reader a look at the challenges and background of formulating strategies and their practical elements and conflicting ideologies. Therefore, the presentation of different arguments from different authorities on the subjects, highlights the culminating better strategic plan attained through research is key in Ghosal’s organizing framework. According to Peng (2009) it helps the MNC manager’s determine at what position their organizations are then can use this knowledge to interpret and identify the factors best suited for them. Fourthly, Ghoshal uses tables to demonstrate his arguments; the approach is creative and agreeable. Again, the framework serves as an excellent “road map” for managerial decision making. However, the information should have been more extensive. For instance, in Table 3, as he highlights, the competitive advantage of scope economies and scale economies, and national differences, Ghoshal explains the given list of authors under each category is, “illustrative” and “suffer deficiencies” this does a disservice to the reader. Moreover, more explicit information should be used so that MNC managers realize the practical guidance fully.He presents this table with its weakness. Unfortunately,Ghoshalput this table in the section titled “Prescription in Perspective,” literally abrogating his input. Also,the matrix is not straightforward, important factors affecting global strategic management should not be dealt with without reflecting on hindsight. The table begs more information to affect good judgment. Probably Ghoshal took it for granted that some information was not vital, particularly because the paper is to a very specified audience: managers of MNCs and academics. He might have overlooked the fact and assumed that every need would understand the table in its simplified form without extra details. Again, Ghoshal leaves the reader with a need for further information, for instance, he does not go into depth on the subject of subsidizing he merely points it out and touches lightly on its advantages and disadvantages. Also, the importance of diversity and how it should be attended with the aim of the successful global strategy, yet this is a key area when looking business on a global level is not dealt with in depth. There is no evidence of this in the organizing framework. Diversity covers how human resources are operated in different subsidiaries to meet market demand (Özbilgin& Tatli, 2008). Finally, Ghoshal (1987) quotes companies such as NEC and Proctor and Gamble, Ford, and Nissan, these were the first multinational corporations of the early 20th century. He presentsa well-informedpaper. However, he fails to build up substantiallyon some crucial factors, leaving ambiguity in some of his statements.However, Ghoshal is justified in this aspect in that at the time of this article, 1987; he mostly presented theory, and many of the concepts not yet tried or tested. Again, in his paper, Ghoshal suggests mixing and trying out which strategy fits the corporation best. Perhaps, it was impractical to gauge the intricacies of the unforeseen or the variables in future developments. However, his organizing framework has a practical edge to it and evokes intrigue in the reader, although he could provide a follow-up and conclusion to the lingering gaps in this paper. For instance, in regards to the dynamic demands of present day globalization, develop the concept of transnational companies through advocating for exploitation of opportunities offered by adapting to the local environment and reaping the advantages of global integration (Bartlett & Ghoshal1998). Conclusion To sum up, Sumantra Ghoshal presents a well-researched, in-depth paper; the reader finds it easy to follow his line of arguments and well-documented evidence. Ghoshal provides both managers of MNC as well as academics with facts that ultimately help them formulate issues aligned with global strategic management. His cue is informing the managers with information that is essential for any decisions on global strategy; he also simultaneously informs the academics of the realities of worldwide ridding the facts of partially. Additionally, he points out the need to get rid of unrealistic hypothesis and also the role of variables by using factual data. He points out to the academics that many hypotheses are not feasible because they cannot work independently of the implied variables. Again, he also breaks down the information in digestible chunks, which can be addressed methodically, point by point, because of the easy to follow structure. Granted, the article he wrote this article twenty-nine years ago. However, there is room forsimilar international organizations without limiting himself mostly to the United States andJapan. Subsequently, he would reach a greater audience by using multiple examples and thus more comparison. Ghoshal presents both categories with the pros and cons of each objective and competitive advantages; this exemplifies through the clarity depicted in the framework. Further, if implemented with well thought out strategy, carried out usingthe highlighted factors, they should work well in a constructive manner.Ghoshal successful developed an organizing framework that can be implemented and numerous MNCs use it. Therefore, it can be declared a success. References list Bartlett, C., & Ghoshal, S. (1988). Harvard business review Christopher A. Bartlett and Sumantra Ghoshal, (Novermber–December 1986), pp. 87–94. Journal of Product Innovation Management,5 (1), 80-81. Retrieved March 24, 2016. Bartlett, C., & Ghoshal, S. (1998). Managing Across Border: The Transnational Solution (Second Ed.). Boston, Massachusetts: Harvard Business School Press. Ghoshal, S. (1987). Global Strategy: An Organizing Framework.Strategic Management Journal, 8 (5), 425-440. Retrieved March 24, 2016. (Kogut, "Research notes and communications a note on global strategies," 1989, pp. 383-389) Mazzucato, M. (2002).Strategy for business: A reader. London: Sage in association with the Open University. Ungson, G. R., & Wong, Y. (2008).Global strategic management. Armonk, NY: M.E. Sharpe. Özbilgin, M., &Tatli, A. (2008).Global diversity management: An evidence-based approach. Basingstoke: Palgrave Macmillan. Peng, M. W. (2009). Global strategic management. Australia: South-Western Cengage Learning. Roughan, N. (2013). Authorities: Conflicts, cooperation, and transnational legal theory. Read More