Legend
Red contents represent answer guides extracted from lecture slides/text readings. Otherwise
answers are as were discussed during class, but from some additional resources mentioned in
footnotes.
You got to better structure the clues to produce a seamless answer.
Section A
1. The answers involve identifying the environment Factors
a. Political & economical
 + Government investment in infrastructure , aided by UN and already
attracting foreign companies to invest --- elaborate with case info
 + Ethiopia already has reputation as a country with emerging economies as
China & India
 + Has a long history in textile, leather and shoe production capacities since
its Italian occupation in 1939
 + Has a large low cost labour
 + Affluent neighbouring countries (Egypt & Morocco & Africa) who are
already H&M's growing customer markets
 - closed financial and economy
 - poor country with lacking social services and community infrastructures
b. Social
 Multilingual population
 Poor population, which is not an attractive country for retail selling
c. Technology
 developing because of government supported infras developments
You can tabulate these PEST and comment about the importance of each one for supplier
markets or retail expansion, to formulate the answer.
Make sure you also elaborate the key highlights of the table.
H&M might consider using franchising its retail stores in Ethiopia to reduce the risks of the
country closed financial and economic systems; small retail market base (because the pop is
poor) and see what you can make up from the advantages of franchising. Later down the
track, when Ethiopia's economy has picked up well and retail consumption has grown to the
level to warrant H&M switching to a master franchising model and to increase more control
of retail operations in Ethiopia.
2. The Q statement says Ethiopia is a country exposed to poverty, corruption, poor
governance in government and industries, political instability and natural disasters .
Firstly decide which areas of CSR would you recommend as the CSR theme or goals, to
address which issues stated in the Q statement above.
Secondary say what an appropriate program is about, using the answer outline to guide
description of your answer:
An appropriate program
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One that builds on the key strengths of the company – e.g. give example how
the CRS program would increase the company's reputation positively
Need to ensure commitment throughout the organisation
Must decide if same CSR plan globally – as concern for health of all global
citizens it could be run centrally. Problem is why CSR only runs at HQ at the
moment!
May run each program country by country rather than same everywhere –
however more likely locally as only some countries will be tropical and only
some developing.
Need to engage stakeholders – is there a lack of skills or resources outside of HQ
Your answer should relate to Ethiopia in some way and cover the following:
1.
Understand drivers.
Key questions:
• What are the internal and external motivations for the CSR plan and structure?
• What are you hoping to accomplish through your CSR plan?
2.
Identify key CSR issues.
Key issues:
• What are the key CSR issues your company is facing – currently and on the
horizon?
• How do you prioritize these issues?
3.
Identify and evaluate stakeholders.
Action: Assess your stakeholder relationships by identifying and evaluating them
4.
Identify functions that support CSR efforts.
Action: Identify internal functional areas, departments, business units and other
formal or informal groups involved in CSR
Analyse company systems, culture & any impending changes.
Action: Put it all together. Analyse data about your priority CSR issues, stakeholders
and current functions and any relevant information about your company’s current
systems, culture or impending changes.
5.
6.
Evaluate structural options.
Action: Choose an appropriate structural framework to help your company
successfully develop and implement its CSR strategy.
7.
Develop a staffing plan.
Action: Identify CSR-specific staff roles and responsibilities at the board, executive,
senior, and management and specialized-staff levels that are appropriate to your
company’s culture and desired structure
8.
Create structure for cross-functional interaction.
Action: Determine effective mechanisms for involving various functional areas,
departments and/or specialized groups with CSR charters in developing and
implementing the company’s CSR effort
9.
Assess process and framework for budget and resource allocation
Action: Assess the type of budget process, structure and size that is most
appropriate given your company’s short- and long-term CSR priorities and business
realities
Section B
1. Answer as follows
State which MoE you would recommend: There is no ONE right answer just has to make
sense via solid argument - make assumptions of what are your decision criteria (ensure one
is about risk tolerance (high, med or low).
2. Answer clues:
Key organisational characteristics
Strategic
approach
Multinational
International
National
responsiveness
World-wide transfer of Global-scale
home country
efficiency
innovations
Decentralised and
nationally self-
Sources of core
competencies
Key strategic
capability
Configuration of
assets and
Global
Centralised and
capabilities
sufficient
centralised others
decentralised
globally scaled
Role of overseas
operations
Sensing and exploiting
local opportunities
Adapting and
leveraging parent
company
competencies
Implementing
parent-company
Development and
diffusion of
knowledge
Knowledge developed
and retained within
each unit
Knowledge developed
at the centre and
transferred to
overseas units
Knowledge
developed and
retained in the
centre
Three organisational characteristics that distinguish the transnational organisation from
these other three structures.
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It builds and legitimizes multiple diverse internal perspectives able to sense the complex
environmental demands and opportunities
Its physical assets and management capabilities are distributed internationally but are
interdependent
It has developed a robust and flexible internal integrative process.
Also note that international and transnational strategies are in betweens of global and multidomestic strategies, however the key difference is transnational allows both regional and local
control of operations 1
3. Answer clues:
First identify, using the case information, which strategy the company has adopted (multidomestic). Say "Multidomestic strategy maximizes local responsiveness by giving decentralizing
decision-making authority to local business units in each country so that they can create products
and services optimized to their local markets"
Secondly define the other 2 strategy models:
 " A global strategy is centralized and controlled by the home office and seeks to maximize
global efficiency. Under this strategy, products are much more likely to be standardized
rather than tailored to local markets"2
1
http://yourbusiness.azcentral.com/differences-between-transnational-multinational-companiesmarketing-27276.html
2
https://new.edu/resources/international-strategy--2

An international strategy groups and control countries by regions. If specific countries are
allowed to operated independently while others are controlled by regions, then the strategy
model becomes transnational1
Thirdly evaluate the 3 options by comparing them based on certain criteria:
Dimension
Multi-domestic
Co-ordinated international
regional
Global
Product/service
Developed in local
markets
Product: Standarised for the
region, with minor
modifications for national
markets
Standardised product sold
worldwide with possible
cosmetic changes for local
markets
Resources,
responsibilities
and control
Resources largely
decentralised to local
organisation. Local
organisations highly
autonomous with little
intervention from the
corporate centre
Key resource areas
centralised on an
international regional basis,
with some relatively minor
functions left with country
based operations.
Centralisation of assets
resources and responsibilities.
Overseas subsidiaries depend
on corporate centre for
resources and direction
Dominant power
group and culture
Country based national
managers. Independent
culture based on
national organisations
Regional product managers.
Emerging culture of
international regional
interdependence.
Centralised product divisions.
Highly dependent culture
based on parent country’s
home location.
Research and
development and
innovation
National R&D facilities
to support local product
development
At least some R&D facilities
regionally based.
R&D facilities wholly
centralised in home location.
National subsidiaries unable
independently to develop new
products. New ideas need to
be adopted by the corporate
centre.
Overall
Each national subsidiary
managed as an
independent entity.
Highly responsive
national organisation.
Independence of
subsidiaries encourages
innovation and
development of new
products to meet local
needs.
Strong coordination and
integration of functions on a
regional basis. Able to
achieve regional scale. Little
or no coordination between
international regions
Role of local units is to
assemble and/or sell products
developed centrally. National
subsidiaries largely concerned
with implementing plans and
policies developed by
corporate centre. Strength is
ability to achieve global scale.
From the above, one can infer that

Multidomestic "strategy allows firms to compete more effectively in the local market
and increase their share in that market. The disadvantage of a multi-domestic strategy,
however, is that the firm faces more uncertainty because of the tailored strategies in
different countries. In addition, because the firm is pursuing different strategies in
different locations, it cannot take advantage of economies of scale that could help
decrease costs for the firm overall"2

The products of its global competitor are much more likely to be standardized rather
than tailored to local markets. Although pursuing a global strategy decreases risk for the
competitor, the competitor may not be able to gain as high a market share in local
markets because the global strategy isn’t as responsive to local markets. 2
When a transnational / international strategy offers the advantages of both the
multidomestic strategy (efficiency) and global strategy (responsiveness to local
conditions), it makes sense for the firm to consider one of its in-between strategy
models.2
The recommendation is to initially adopt a transnational strategy and improve cost
efficiency by grouping the operations of some countries. This transnational strategy can
be incrementally developed into an international strategy where more countries'
operations are manage by regional groups, reducing the number of independently
operating countries.
4. Same answer template as in section A, Q2, except you got to write in the contexts of the
vaccination firm.
5. Answer clues
Firms use scenario planning as part of a change management process. It allows the
firm to proactively identify its future and plan to take advantage of environmental
changes quickly and decisively. It also ensures there will be less resistance to the
change process as staff and other stakeholders are actively involved. Scenario
planning can be done to cover issues that impact on a global basis, regional basis,
country basis, industry basis or even with the company
Steps to implement:
Process (They should be able to get 8 steps – one mark for each step explained)
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Step One: set the scene (define scope)
Step Two: Identify key players and driving forces in the environment
immediate to the problem
Step Three: Generate uncertain and predetermined factors – driving forces
for change, predetermined elements that provide stability and critical
uncertainties
Step Four: Reduce factors and specify factor ranges
Step Five: Choose themes and develop scenario details
Step Six: Check the scenarios for consistency and plausibility
Step Seven: Present scenarios
Step Eight: Assess impact of scenarios
Step Nine: Develop and test strategies
Reasons for success
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Direction clear to senior executives, planners and staff
Change program in place that is clear and understood
Plan is flexible – not tied into one future
A culture of strategic thinking is in place and encouraged
Those involved are committed to the process and alternative solutions
Scenarios are done at the appropriate levels – global, regional, local, industry,
firm
People involved understand and follow the process correctly
Reasons for failure
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Too much money spent causing resentment and criticism
Too much time and effort put in for little or no result
The wrong people were chosen (e.g. need vertical slice across company –
functions and geographically)
Domination of an individual or individuals that devalue process
People used do not have the necessary skill set and training in the scenario
planning process
Poor selection of issues or alternative solutions that lead to failure of process