INTERNAL TRIGGERS
•Internal triggers to the internatiomalization process
•Shaping an international vision and mindset
•Organisational dynamics
•Managing organisational change
•Assessing and changing corporate culture
•Resource capability and competitive advantage
•Managing organisational change to improve
business performance
ISB-4 Internal trigger
1
External triggers
INTERNATIONALISATION
Market
penetration
Product
extension
Industry
competition
Meta trends
Restricted
Intern’l
national
business
development
market scope
Geographical
expansion
Product
development
Organizational
dynamics
Vision
mindset
RETRENCHMENT*
Internal triggers
Figure 2.1. Developing
international
business strategy
ISB-4an
Internal
trigger
2

Firms
in the same industry
in the same environment
commonly follow differing strategies

Why?



Different managerial beliefs about sources,
competitive advantages
Different way of management
Implementation:


„Doing the right things” (effectivity)
„Doing the things
right” (efficiency)
ISB-4 Internal trigger
3

Internal context:
What are the tangible and intangible reources?
 How core skills and capabilities are developed?
These are firm specific => strategic answer dependent
on organizational dynamics


Result: sustainable competitive advantage

Organizational change (discontinuity)



Creating a shared mindset
Building competencies
Changing corporate values
ISB-4 Internal trigger
4
External and internal triggers to a
stage change
External triggers
Current phase
Discontinuity
new international
strategic thrust
Next phase
Internal triggers
ISB-4 Internal trigger
5
Components of internal context
Vision/mindset:



geographic scope, strategic development
driven through the firm’s mindset
role of senior management
Organisational dynamics: ability and




willingness to implement strategy
Vital people and processes to implement vision
Unique skills, technologies (core competences)
Ability to adopt and innovate (organizational
learning)
Administrative heritage
ISB-4 Internal trigger
6
Vision / mindset
Organizational dynamics
y
Match?
Balanced
n
Generate forces
for changes
Dampened
Sustained
ISB-4 Internal trigger
7
Internal triggers to change
Vision/
mindset
Succession
events
Internal
context
Succession
events
Organisational
dynamics
Internal triggers
ISB-4 Internal trigger
8
Succession events

Planned: retirement



Not planned: in time of dificoulties





natural event, easier to manage
minor or fundamental changes to strategy
Occure abruptly, forced
Internal appointment or a „new” person
Setting vision
Style of implementation can be unacceptable
Changes in style, strategy, vision, mindset (BP)
ISB-4 Internal trigger
9
ISB-4 Internal trigger
10
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

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What was Horton’s vision?
What are the actions of the project?
Were the actions accepted?
What is the directors’ point of view?*
ISB-4 Internal trigger
11
Balance:

match between vision/mindset and organisational
dynamics
Mismatch: tensions
Appreciate:


why and when they change,
how an initial change is dampened or sustained
Change sustained: both shows in the same
direction
ISB-4 Internal trigger
12
Volvo-Renault proposed merger
1990: announced agreement to form strategic
alliance
1991: exchange of cross-shareholdings
Full merger proposed: by 1993
Failure



shareholder: terms are unacceptable
Critics: chairman Gyllenhammer (1971- , style of
manegement, preparations secretly, no info)
Gyllenhammer forced resign with 4 board members
Volvo: uncertain future



small domestic market
little product range
difficulties in existing Volvo-Renault alliance
Importance of internal factors!*
ISB-4 Internal trigger
13
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Changes accepted, style unaccepted =>
new CEO, old strategy implemented (BP)
Vision changes and style not accepted =>
new CEO, new strategy (Volvo)
ISB-4 Internal trigger
14
Sample - vision is changing
Change of chief executive
Succession event
Crisis
Vision
Retirement
Reappraise the position
of business
Vision
retained
Mismatch
Discontinuity
Organisational
dynamics
System
Operation
People
Culture
ISB-4 Internal trigger
15
ISB-4 Internal trigger
16
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What is the so called sharpbend?
What is turnaround?
Short term corrective action – advantages,
disadvantages
Long term corrective actions - advantages,
disadvantages
ISB-4 Internal trigger
17
Equelibrium portfolio
S
T
R
U
C
T
U
R
A
L
I
FINANCIAL PRESSURE
High adaptation
High adaptation
High integration
Low integration
P
R
E
S
S
U
R
E
High
Low adaptation
Low integration
High
Low
ISB-4 Internal trigger
18
Vision/mindset on international field
Domestic bias
National specialities in operation
Cultural differences
ISB-4 Internal trigger
19
Map of national cultures
(Hofstede)
Distance from power
11
44
94
8
Market
Family
f.i. USA
f.i. India
56
of
Smoothly working
112
Avoidance
machine
Pyramid
f.i.. Germany
f.i. Japan
uncertainty
Hungary
ISB-4 Internal trigger
20
Organisational dynamics
Core
competence
Organisational
learning
Administrative
heritage
ISB-4 Internal trigger
21
Competencies-resources
Same as competitors
or easy to imitate
Resources
Competencies
Better than competitors
and
difficult to imitate
Necessary
resources
Unique
resources
Threshold
competencies
Core
competencies
•Market access
•Integrity related
•Functionally related
ISB-4 Internal trigger
22
History of the organisation
Administrative heritage
Assets
Human resources
Decisions
Resource configuration
Cultural elements
ISB-4 Internal trigger
23
Degree of change
Managing organisational change
fundamental/incremental
Change of the environment
Change of strategy
Time
Flux Transformational
Incremental
ISB-4 Internal trigger
24
The components of organisational
change
Creating a
new shared
mindset
Improved
business
performance
Building
competencies/
capabilities
Changing corporate
culture
ISB-4 Internal trigger
25
Discontinuity
Change
Refreezing
Reconfiguring
Discontinuity
Unfreezing
Time
ISB-4 Internal trigger
26
Reactions connected to the change
Activity and
self appreciation
7. Building-in*
2. Denial
6. Awareness
3. Depression
5. Tryout
1.Shock
4. Acceptance
Time
ISB-4 Internal trigger
27
Resistance of change and change strategies
Lack of understanding
and trust
Personal
self-interest
Alternative
assessment
Coercion
ISB-4 Internal trigger
Manipulation
Negotiation and
agreement
Education and
communication
articipation and
involvement
Individuals’
fears and concerns
28
Web of the corporate culture
Stories
and
myths
Rituals and
routines
Symbols
Corporate
mindset/
paradigm
Power
structures
Organisatio
nal structure
Control
systems
ISB-4 Internal trigger
29
ORGANISATION’S INTERNAL CONTEXT
Scope
Differentiation
Competitive
advantage
Time
Cost
Linkages
ISB-4 Internal trigger
30
ORGANISATIONAL LEARNING
Mismatch
between
performance
&
aspirations
Initial
change
strategies
Business
performance
Revised
change
strategies
Continual
process:
re-examine
match of
performance
& aspirations
Time
ISB-4 Internal trigger
31