CHAPTER 7
Implementing the
Strategy:
Building Multidimensional
Capabilities
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Introduction to Implementing Strategy
Prior chapters delineated strategies to
develop a transnational organization that:
Develops global efficiency and competitiveness
Creates worldwide innovation and learning
Establishes multinational responsiveness
This chapter illustrates how to cope with the
main challenges when implementing
strategies.
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The Challenge Facing MNEs Today
Trying to implement third-generation
strategies…
…through second-generation
organizations…
…with first-generation managers
Thus it is important to understand how transnational
companies define managers’ roles and responsibilities.
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Three Key Management Roles in the
Transnational Company
The Global Business Manager
The Worldwide Functional Manager
The Country Subsidiary Manager
But other roles also starting to emerge
e.g. the Global Account Manager
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Global Business Manager
Responsibilities
Develop global efficiency and competitiveness
Roles
Global business strategist
Architect of asset & resource configuration
Cross-border coordinator
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Role as Global Business Strategist
Incorporate perspectives and interests of
geographic and functional managers
Keep consistency of business strategy with
corporate strategy
Reconcile different views and prepare an
integrated strategy
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Role as Architect of Asset and
Resource Configuration
Oversee the worldwide distribution of key
assets and resources
Shape the future configuration by leveraging
existing resources and capabilities
Link resources and capabilities in a
configuration that resembles the integrated
network form
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Role as Cross-Border Coordinator
Decide on sourcing pattern
Build on the most capable national operations and
capitalize on locations of strategic importance
Organize cross-border transfer processes
Direct central control: for products of high strategic
importance
Develop internal quasi-markets: for commodity-like
products
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Worldwide Functional Manager
Responsibility
Provide support to line managers, particularly by
diffusing innovations and transferring knowledge
on a worldwide basis
Roles
Worldwide intelligence scanner
Cross-pollinator of “best practices”
Champion of transnational innovation
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Worldwide Intelligence Scanner
Capture and transmit leading-edge
information across national boundaries in
order to track the development and make
appropriate adjustments
Establish functional specialist information
channels to link local technologists,
marketers and product experts
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Cross-Pollinator of “Best Practices”
Identify and evaluate leading-edge practices
Take initiatives that will expose others to the
new ideas
Informal contacts
Formal reviews
Cross-unit visits and transfer
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Champion of Transnational Innovation
Locally leveraged
Identify local innovations that have applications
elsewhere by scanning the company’s worldwide
operations
Globally linked
Fully exploit the company’s access to worldwide
information and expertise by linking and leveraging
intelligence sources with internal centers of
excellence
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Geographic Subsidiary Manager
Traditional role
Source of sales and profits
Access to local factors of production
Leverage parent company assets and resources
New role
Bicultural Interpreter
National defender & advocate
Frontline implementer of corporate strategy
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Role as Bi-Cultural Interpreter
Interpret host country environment for corporate
management
Communicate the corporate strategies to local employees
Causes of Failure
Upward communication
Poor receptivity of HQ management
l  Blocked HQ/Subsidiary Channels of
Communication
l  Limited Sensitivity or Understanding at the
Subsidiary
HQ
l
Downward communication
Weak Connections or Support at HQ
l  Limited Understanding of Corporate Strategy,
Priorities
l  Lack of Credibility within the Subsidiary
SUB.
CM
HQ
l
SUB.
CM
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Role as National Defender and Advocate
Defend need for national responsiveness
Advocate for role of subsidiary within the global operations
Causes of Failure
CM unwilling or unable to act as a
strong advocate or defender of
subsidiary interests
Structural or cultural blocks that
prevent CM from gaining access
and influence in corporate
decision-making process
HQ
Business
Perspective
Functional
Perspective
B
Geographic
F
G
Perspective
Subsidiary
Transnational decision process requires multi-dimensional
perspectives; implies that CMs access and influence in process
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Role as Frontline Implementer of Strategy
Convert strategic plans into actions for
subsidiaries
Causes of Failure
Organizational or managerial inflexibility prevents
diversity and changeability of subsidiary roles
CM unable to make the complex trade-offs and
compromises required
Parochialism in subsidiary due to inappropriate
systems or inflexible managers
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Pressures and Constraints on Country Manager
MNC
Internal
Motivations
Organization
Structure
Corporate
& Systems
Strategy
Host Governments
Objectives, Policies
National Constituent
Interests (Employees,
Consumers, Unions)
Host
Country
Interests
Local Norms
& Values
Country
Manager
Personal
Values
Internal
Norms
& Values
National
Competitor’s
Actions
Global Competitive
Activity
Local Market &
Industry Structure
Global
Competitive
Environment
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The Many Hats of the Country Manager
Pioneer Role:
Define the territory:
market structure,
customer needs
Establish the base camp:
make contacts,
develop relationships
Trader Role:
Build profitable operations:
base camp,
trading post;
control expenses,
manage pricing
Develop local resources:
contribute to overall strategy
Intelligence Role:
Analyse the
environment:
intelligence on
competitors,
technology, market trends
Develop innovative ideas and
capabilities as input to strategy
Quarterback Role:
Confer with HQ coaches
to defend, and
advocate the field view
Motivate team to achieve results
Maintain entrepreneurship,
creativity and drive
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Skills & Qualifications of the Country Manager
Entrepreneurial skills:
Innovator & Opportunist
Administrative Skills:
Strategic skills:
Country
Manager
Creative Analyst
Executive Skills:
Controller & Manager
Organizational Leader
Personnel Implications:
Need CMs with different strengths at
various stages of development;
But in a mature subsidiary, the CM must
have all of these characteristics.
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Top Level Corporate Management
Provide long-term direction and purpose
Clarity: simplicity, relevance, reinforcement, etc.
Continuity: commitment to direction and purpose
Consistency : shared by all
Leverage corporate performance
Control systems based on supporting actions of managers,
not directing them
Coordinate and legitimize diverse perspectives
Ensure continuous renewal
Ensure an external orientation
Develop a questioning attitude
Legitimize new initiatives
Help the organization embrace, not deny, complexity
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