1. Multinational Corporations consideration & application of diversity in strategy MGMT 734 Presentation Jess Maher | 3328773
2. Multinational Corporations Operate across national borders Feature large numbers of employees Commonly encounter issues Feature diversity; in number of areas; process, employees, customers & environments In a number of layers & take a number of approaches
4. Questions for you How to strategist’s approach diversity? What level of diversity do you think strategist consider in planning & theorising about strategy? How do you think theorists can better manage difference in an environment where organisations are so diverse? Do you think strategists are overlooking potential benefits and/or advantages that could be gained through fostering diversity?
6. Classical Strategy Literature Foundations of strategy drawn from economics, 3 main works from 60’s; Chandler (1962) Strategy & Structure Ansoff (1965) Corporate Strategy Andrew (1965) Business Policy Not until 80’s when Purdue – proposed; Performance = ( Strategy & Environment ) Porter’s (80) Five Forces Industry specific analysis Rumelt, R. P., Schendel, D., & Teece, D. J. (1994). Fundamental issues in strategy : a research agenda. Boston, Mass.: Harvard Business School Press. p9-47.
7. Globalisation & Technology New framework for conceptualisation structure and process of strategy Marshall’s Neoclassical economic theory Transaction cost economics Agency Theory Game Theory Evolutionary economics Classical Strategy Literature
8. Limitations of “Classical Strategy” approach ‘Macro-level consideration – little evidence of human action’ ‘Lost sight of the human being’ Over conceptualised, removed from reality of firms operations ‘concern over gap between theory of what people do and what people actually do have given rise to the ‘practise’ approach in management literature’ (Jarzabkowski, 2004, p529) Jarzabkowski, P., Balogun, J., & Seidl, D. (2007). Strategizing: The challenges of a practice perspective. Human Relations, 60(1), 5.
9.
10. Micro-Context – action highly localised(Jarzabkowski, 2004, p536) ‘Focus upon strategist engaged in the real world of strategizing.. Knowledge is not something that a firm has, but knowing in action, something that a firm and its actors do… strategy not as something a firm has, but something the firm does.’ (Jarzabkowski, 2004, p529)
11. Practise Theory New Institutionalism Recursive ; sedimented rules & resources that govern how to act Adaption ; varying degrees of change between the actor (individual) & the social environment ‘Social movement of practise occurs within and between social levels – firms to individuals’ (Jarzabkowski, 2004, p)
12. Strategic theory & the perpetuation of diversity: Recourse & Adapt Jarzabkowski, P. (2004). Strategy as Practice: Recursiveness, Adaptation, and Practices-in-Use. Organization Studies, 25(4), 529-599
24. Values Based Organisation Value Purposive Leadership & Involving all employees in major decision making processes Wellbeing, Attitude, Validity & Energy (WAVE) Designed to enhance and assist employees reach personal goals International Rotation for Managers Gender Diversity Strategy
outline classical academic approach to strategy & some contemporary alternatives Explore some current strategies implemented by MNCs attempting to embrace & capitalise on diversityConsider diversity in terms of strategic leadership, exploring the change process undertaken within VFNZ
Considered strategic approach to diversity in international business MNC selected because; Operate across national bordersFeature large numbers of employeesCommonly encounter issues arising from diversity or differenceMNCs Feature diversity; in number of areas; process, employees, customers & environments In a number of layers& take a number of approaches within their organisations to these issues as they operate in generally some decentralised type of fashion
2 kinds of discrimination – direct (overt, explicit) – not as common in business today indirect (covert, hidden) – more common as not always intentional Within these kinds, there are layers, which I argue in this model are layered and interlinked, with perpetuating currents between them; individual – cognitive organisation – social structure – For this presentation, I focus on how strategy is handled here (org) – of course, as explained and im sure you understand, diversity and its perpetuation through these layers, means no layer is in isolation from the others.
My area of interest and the field of my dissertation is in MNCs use of global strategy in dynamic and diverse markets. So in urexsisting knowledge of diversity and MNCs use of strategy, I would like to start this presentation during which I encourage your feedback and questions by asking you a few questions;
First going to review classical literature for you
First signs of strategic mgmt in academia – Harvard Business School, Business Policy Course 60’s - Foundations of strategy drawn from economics - ignored peopleChandler (1962) Strategy & StructureAnsoff (1965) Corporate Strategy Andrew (1965) Business Policy Late 60’s – Practise of strategy been in place longer than conceptualisation & influential insights came from consulting agencies during this period – Boston Consulting Group – Growth Share matrix (featuring Cash Cows, Stars, Question Marks & Dogs) – further economic framework for considering market share & margins Not until 80’s when Purdue – proposed; Performance = ( Strategy & Environment )That enabled the considerable heterogency in strategy & performance in a single industry (much more than expected by theorist working in any area) until diversity or diversification of strategy was even considered. Porter (80) – 5 forces – combined understandings industrial organisational economist theroy and transaction cost economics – differentiated analysis in context specific terms by providing overall framework for application- before now, strategy had only be conceptualised in vague and general terms and contexts.
1980’s increased globalisation – more careful analysis of MNC’s directed and coordinated recourses and activities Stopford & Wells (72) – new framework with insights for concepts of structure and process - represents mgmt as needing to differentiate in activities to achieve gains from specialisation or admin isolation and tight integration in other areas to achieve economies of scale & focus; mgmt is actively managing a complex system of linkages among activities enabling critical co-ordination & facilitation for learning Marshalls neoclassical economic theory of strategy still widely used in textbooks despite its “over conceptualisation” and removal from reality – 20yrs of conceptualisation have thrown monkey wrench into neoclassical view of strategy which have lead, in combination to the development of sub fields of economic theory. Transaction cost economics : Williamson (75) – framework for limits and boundaries Agency theory: IS & O – design of incentive agreements & allocation of decision rights (principal & agent paradox) Game Theory & the new Institutional Organisation – IS & AS Evolutionary economics – Nelson & Winter (82) –organisations complete for through the struggle to improve or innovate- fumble to better methods w/only partial understanding of own capabilities & tech opps-capabilities are improves through routine & practise
Jarzbkowski (2007) - ‘Macro-level consideration – little evidence of human action’ ‘Lost sight of the human being’ – ‘needs to refocus on actions and interactions of strategy practioner’‘concern over gap between theory of what people do and what people actually do have given rise to the ‘practise’ approach in management literature’ (Jarzabkowski, 2004, p529) – sociology field, derivent of cultural theory
‘Practise theory designed as an account of diversity’ (Turner, 2007, p119)Macro-Context – broad commonalities of actionMicro-Context – action highly localised(Jarzabkowski, 2004, p536) ‘Focus upon strategist engaged in the real world of strategizing.. Knowledge is not something that a firm has, but knowing in action, something that a firm and its actors do… strategy not as something a firm has, but something the firm does.’ (Jarzabkowski, 2004, p529)
New institutionalism Source of strategic concepts is society (perpetuates) – strongest at explaining structures which are taken for granted Recursiveness- sedimented rules and resources that govern how to act Adaption -‘Social movement of practise occurs within and between social levels – firms to individuals’‘Thematic linkages between actors cognition, firm level adaption and social becoming indicate how coexistent recursive and adaptive tendencies provide social movement at multiple levels of analysis’ (Jarzabkowski, 2004, p)
Considering the 3 different types of approaches to diversity, with the additional consideration of generally overlooking diversity, what approach do you think most MNCs take in the current, increasingly global economy? Assimilation?Legal requirements in most economiesmake it uncommon for orgs to still overtly discriminate in this way- most have minimum requirements to attempt to minimise indifference or prejudice however we do know this still occurs covertly in other areas of business so it is not unfair to assume it may here Accommodation?Common approach to diversity in many orgs, support initiatives for minorities, accommodate difference Amalgation? Some MNCs are view diversity of markets, customers, products, employees globally in a strategic sense as a potential opportunity or advantage rather than something that has to be “accommodated for” Ignored and/or overlooked diversity?In terms of the classical academic understanding of strategic process, the diversity between and within customers, clients and the contexts from which they arise has been largely overlooked… to explore further, I would like to introduce to you the criticisms and limitations of the classical approach…. From this brief overview, what approach to diversity do you think strategy theorist have classically taken?Fair to say that mgmt theorists have ignored diversity, taken an assimilation perspective or at best an accommodation model
Considering current academic approach to strategy with examples from 4 large MNCs – b4 exploring the frameworks and understandings of contemporary strategic planning & process with which reference to examples from these firms will be drawn- I will introduce the 4 orgs and their general understanding and approach to diversity
Going to review the contemporary perspective of strategy with consideration of a number examples from a number of large MNEs whom currently attempt to embrace diversity Felt it best to give you a brief overview of the organisations which will be considered; Johnson & JohnsonDiversity part of culture – ‘recognise the value that differences bring a richness to the working environment’ ‘welcome diverse perspectives and support environment's where they can thrive’DellVodafone IBM also been considered as they have long been identified as a leader in identifying such diversities (eg; Hofstedes studies) – first Equal opportunity Policy 1953 - As such their valued contribution to this area could not be over looked.
In light of the key topics of this course, I wanted to review some of the iniatives by the MNCs introduced previously to manage, embrace and foster diversity Other considerations and attempts of MNCs to benefit from diversity have been identified at these issues which should be considered in strategy Communities of practise – theory underpinning practise theoryHelp us to understand practise; ‘Provides 2 important components of theory of practise: that practise is idiosyncratic and that local contexts provide opportunities for adaptive practise’ (Jarzabkowski, 2004, p536)Also provide potential opportunity for strategic approach to benefit from knowledge held by diverse groups;
Diversity part of culture – ‘recognise the value that differences bring a richness to the working environment’ ‘welcome diverse perspectives and support environment's where they can thrive’Affinity Groups – (Communities of Practise)Voluntary, employee driven associations with J&J organised around shared interests – must be open to ALL members of J&J as condition. Examples of some groups;African American Leadership Council (AALC)Gay & Lesbian Organisation for Business & Leadership (GLOBAL)Woman’s Leadership Initiative (WLI) Diversity UniversityDynamic internal resource designed to help employees understand and value differences and benefits of working collaboratively. Education essential for promoting benefits of diverse and inclusive workplace globally Global Office of Diversity & Inclusion Established to advocate & foster diverse & inclusive work environments. Understands diversity of society represents opportunity that must continually & actively pursue
Gender Diversity & Sexism Occupational Segregation Issue of occupational segregation usually manifests empirically in studies of the amount fo women in leadership positions in orgs, one way of overcoming this is to provide support for such positions; J&J’s affininty groups – Women’s leadership IniativeIBM miniority, women & disabled business development groups Work-Life Balance Dell example IBM – flexible work options Aging Workforce & Ageism
Hope to have; Provided understanding of how classically strategy has been academically considered and conceptualised. Provide an alternative perspective & contemporary approach with reference to some current MNCs and their attemptsIdentify some further attempts by these MNCs to handle these issues arising from the diversity and potential areas that strategic IB management should draw more attention to
