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Strategy and International Business - Essay Example

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Summary
The Parenting Styles theory of Michael Goold, Andrew Campbell is a framework about the role of the corporate centre in a corporation. It was dealt with in their book, "Strategies and Styles", and several articles. They argue that there are many successful approaches to corporate strategy based upon management styles…
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Strategy and International Business
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Strategic Planning
This style is best suited to businesses that have important potential synergies between businesses, often requiring large, risky decisions and facing tough international competition. This means concentrating on one or two core businesses and divesting peripheral businesses - the fit between the businesses is critical e.g. Cadbury Schweppes; BOC; Lex; STC.
Strategic Control
This style seems to require some homogeneity between the businesses in terms of their strategic characteristics so that the centre can have a good feel and understanding for each. However, there does not seem to be a need to concentrate upon just one business or industry, or even a closely related set of core businesses, provided that the diversity is not too great e.g. the demerger of ICI into ICI and Zeneca; Courtaulds.
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Table 3 - Advantages and Disadvantages of each style

Style
Advantages
Disadvantages
Financial Control / Portfolio Approach
Quantifiable
Responsiveness
Lose Direction
Centre does not add value
Strategic Planning / Core competence Approach
Empowerment
Growth on corporate as a whole
Coordination
Competitive advantage
Effective
SBU structure tends to hinder development as competences cross organisational boundaries.
Centre out of touch
Divisions tactical - by preventing other SBUs exploiting the particular competence of one SBU (e.g. transferring staff).
Acquisitions critical
Strategic Control / Linkages Approach
Centre/divisions Complementary
Cost control by monitoring each activity
Efficient
Coordination
Motivation
Competitive advantage
Problems in sharing...
Each style is different in its approach, can offer different advantages to the corporation, but has different strengths and weaknesses.
This style works when the businesses in the group are largely autonomous and the centre can act to improve performance in each business, often by turnaround of under-performing businesses, and ultimate disposal e.g. Hanson and Ever Ready; BTR; Tarmac.
This style is best suited to businesses that have important potential synergies between businesses, often requiring large, risky decisions and facing tough international competition. This means concentrating on one or two core businesses and divesting peripheral businesses - the fit between the businesses is critical e.g. Cadbury Schweppes; BOC; Lex; STC.
This style seems to require some homogeneity between the businesses in terms of their strategic characteristics so that the centre can have a good feel and understanding for each. However, there does not seem to be a need to concentrate upon just one business or industry, or even a closely related set of core businesses, provided that the diversity is not too great e.g. the demerger of ICI into ICI and Zeneca; Courtaulds.
Portfolio/Financial Control companies are likely to develop into unrelated products/markets/processes, usually by acquisition, with the decision likely to rest on wheth ...Download file to see next pagesRead More
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