The Strategic Assembly of Global
Firms: A Micro-Structural Analysis of
Local Learning and Global Adaptation
Mitchell Koza, Rutgers Univ
Stephen Tallman, Univ of Richmond
Aylin Ataay, Galatasaray Univ
Strategic Assembly
The process of constructing a business firm
in a calculated and forward-looking
manner with the intention of gaining and
maintaining competitive advantage under
the dynamic environmental and
competitive conditions facing that firm
The Global Multi-Business Firm
• Move the concept of the international firm
beyond the traditional Multi-National Firm
or B&G’s Trans-National Firm
• A firm to match a chaotic environment – in
which neither direction nor rate of change
is predictable
• A co-evolutionary model of the modern
international firm
Globalization Stages and
Organizing Structures
The Multinational
Global HQ
Local
Unit
The Transnational
Local
Unit
Local
Unit
Local
Unit
Global HQ
Local
Unit
The GMBF
Global HQ
Local
Unit
Managing the Globalization Stages
Multinational
Transnational
Global Multi-Business
Growth Logic
Diversification
Leveraging
Competencies
Strategic Assembly
of Assets
Leadership
Focus
Command &
Control
Coaching
Animation of the
Capacity for SelfRenewal
Managerial
Task
Capital Allocation
Interdivisional
Integration
Enabling Emergent
Processes
Control
Mechanism
Financial Controls
Behavioral
Controls
Coordination and
Communication
Strategic Assembly –
What Assets?
• Access to the services of resources and
capabilities, not ownership of the assets
• What is strategic and what is complementary
requires careful analysis
• Avoiding resource and capability traps to
maintain flexibility and innovation
• Assembling a network of accessible,
productive, technologically advanced assets
Strategic Assembly – Where Are
These Assets?
• Comparative advantage in productivity
• Separation of market and value-adding site
• Global logistics networks as a core
competency
• Focus on the city-region with “Nation” as
part of the background
• Fading of the Industrial Triad concept
Governing Strategic Assembly –
Access, Capture, or Control?
• Hierarchical command and control losing
relevance compared to contract/network
speed and adaptability
• Innovation and flexibility over protection of
assets and rents
• Competitive advantage from organizing
skills rather than production skills
• The “Apple Model”
The Intent of Strategic Assembly–
Why These Assets?
• Strategic intent in a co-evolutionary world
• Need to retain world-wide flexibility and
local competitiveness
• Market seeking vs. asset seeking vs.
capability building
• Command without control; control without
command
Renault in Turkey – Strategic
Assembly in an Emerging Market
• Case method
– Semi-structured interviews in Turkey
– Archival data
– Interviews at Group Renault
• Strategic assembly of Renault in Turkey
– Group Renault as an evolved GMBF
– Co-evolutionary processes observable
Renault in Turkey – Strategic
Assembly in an Emerging Market
• Entry, growth, and domination in Turkey
– Seen as key market since 1960s
– OYAK-Renault (51% owned)
• Largest Renault plant outside EU
• Production for local market and export
• 119 local and international suppliers
– Mais International
• Sales and marketing JV in Turkey
• Leading car distributor in Turkey
Renault in Turkey – Strategic
Assembly in an Emerging Market
• Corporate renewal and global positioning
– Model plant
• 5 different car models
• Closely integrated operations and HR
– R&D center established in 2009 for processes
– Supplier of managerial talent to France and to
other ME/NA locations; site for successful
expat learning experiences
– Regional training and development center
Turkey and Overcoming “NIH” in
Making Renault a GMBF
“I and several of my colleagues were convinced that we
needed to value input and innovation from our overseas,
especially emerging market, operations. Our traditional
insularity was becoming an obstacle to our plans and
ambitions. I am proud to have contributed to managing
this in a constructive way with our colleagues in Turkey
and elsewhere. Renault is a better company because of
it.” – Private Communication from a Renault Board
Member
Group Renault & Strategic Assembly
• Asset Identification
• Co-specialization & synergy of GR and Renault-Turkey (OyakRenault & Mais Int’l)
• R-T competencies in emerging markets match Renault expansion
strategy
• Location
• Early: Large emerging market, Eurasian location
• Later: Production for local and export, supplier networks, process
knowhow
• Structure: Equity joint ventures with Oyak (tied to Turkish Army)
• Purpose
• Enter and dominate Turkish market
• Produce and then assist design for export to France
• Training and experiential capabilities
Conclusion: Managing the GMBF
• Strategic assets and the external
environment
• Avoiding resource traps on a regular basis
• Dynamic capabilities for learning and
innovation; real options on location and
activity
• Assembly, disassembly, and reassembly
on the fly and under competitive pressure