The hazards of strategic planning for global markets

Global strategic marketing planning has emerged as a key process in managing today's worldwide marketplace. This survey of 90 large American global corporations reveals that most are bottom-up planners. US firms appear to have distinct cost and numbers orientations. Industry and competitive analyses are used in many companies, although managers appear to lack suitable frameworks for SWOT analyses. Economic climate changes tend to be most disruptive to global planning efforts. When faced with non-achievement of goals, most firms reformulate both objectives and strategies.     

Doing Well by Reporting Good: Reporting Corporate Responsibility and Corporate Performance

This article aimed to examine the impacts of reporting‐type corporate responsibility activities (CRA‐R) on corporate social and financial performance. Academic research has explored how varying attributes of markets, industry sectors and firms might shape corporate social and financial performance, but includes little effort to examine the impacts of different kinds of CRA on corporate performance. We build on debate about the value of firms' reporting activities related to corporate responsibility. Recent literature suggests that CRA‐R is superficial marketing or “greenwashing.” Despite this viewpoint, corporate reporting activities related to responsibility are rising. In order to solve this puzzle, this article explores the impact of CRA‐R on corporate performance. First, drawing from the institutional perspective, we propose that CRA‐R will positively impact corporate social performance (CSP) oriented toward secondary stakeholders. Second, combining the stakeholder–agency perspective and corporate responsibility literature, we motivate the hypotheses that CRA‐R positively influences corporate financial performance (CFP). Empirical testing with a unique dataset of large US corporations selected in the Fortune 500 support the proposed hypotheses. In particular, both corporate social responsibility and Global Reporting Initiative (GRI) activities positively influence corporate environmental performance, and financial performance. In particular, GRI reporting is a strong indicator to impact both social and financial performance. Our findings indicate that CRA‐R should not simply reflect shallow motivations, but deliver value to noninvestor stakeholders as well as investors.     

Subsidiary-level determinants of global initiatives in multinational corporations

This article examines subsidiary-level factors that promote global initiatives in MNCs. Global initiatives are a key capability of MNCs that domestic firms do not possess, yet there has been little research on how MNCs promote initiatives on a global basis. I draw principally on the knowledge-based view to develop a model in which three subsidiary-level variables explain the propensity of the MNC to pursue global initiatives. These variables are: (1) inter-unit networking, (2) subsidiary learning from internal and external sources, (3) shared strategic goals. A survey of 118 subsidiary managers, triangulated with interviews with 20 key informants, provides support for the hypothesized effect of subsidiary learning and shared strategic goals on global initiatives. The result for inter-unit networking is less clear. These variables combine to activate initiatives within the MNC and thus act as a source of competitiveness on a worldwide basis. The results have important implications for MNC managers as well as for theory, and these are discussed.     

Research on global strategy

This paper reviews the extant literature on global strategy. We argue that the literature has developed along three major directions, namely: (1) the literature identifying the emergence of a global village; (2) the literature identifying the advantages to a firm following a global strategy; and (3) the literature addressing the management challenges and the implementation issues faced by an international firm. We find that the literature has arrived at a number of important conclusions, namely: (1) the global environment places conflicting demands on participating firms; (2) there is no one strategy called global strategy, firms adopt different strategies to compete in the global arena; (3) the benefits accruing from a global strategy are contingent on the industry environment; (4) it is imperative to have multidimensional capabilities in the global arena; (5) matrix structures are becoming increasingly vital in implementing global strategies; and, finally, (6) the actual benefits of adopting matrix structures are contingent on the adoption of appropriate management processes. We identify the trends in the literature and suggest some directions for further research on the topic.     

Enhancing the Quality of Reporting in Corporate Social Responsibility Guidance Documents: The Roles of ISO 26000, Global Reporting Initiative and CSR‐Sustainability Monitor

The intent of this article is to review the phenomenal growth of Corporate Social Responsibility reports published by large corporations around the world. The reports provide companies with an opportunity to inform large segments of society about the impacts of their business operations on the environmental, socio‐political, and governmental (regulatory) aspects of a society. The mostly voluntary nature of these reports, however, places the burden on the corporations creating them to (a) provide an adequate amount of information, (b) cover all the major issues that are relevant to the company and industry, and (c) provide measures of assurance as to the accuracy of information. In this article, we compare and examine three institutional approaches that have played an important role toward improving the quality and consistency of these reports. The institutions involved are ISO 26000, Global Reporting Initiative (GRI), and Corporate Social Responsibility (CSR)‐Sustainability Monitor. We intend to show their different approaches to guiding CSR reporting, and assess their relative strengths and limitations.     

Asian Corporates: Willing Participants in the Reporting Revolution?

Asia represents one of the most diverse regions of the world in terms of culture, politics and economies. Not surprisingly, there is a comparative variety in who is publicly reporting, where and why. As might be expected, those countries with stronger, more mature economies are the regional leaders, notably Japan, South Korea and Hong Kong. Japan is far ahead in terms of numbers of companies reporting and also has two award schemes in place to reward best practice and innovation. Both South Korea and Hong Kong are increasingly reporting, but with limited sophistication and an emphasis on environmental issues.With the development of the Global Reporting Initiative (GRI), participating Asian companies are able to access a global network of reporting organisations and substantial collective experience. A number of Japanese companies have already cited using the GRI framework in preparing their reports, whilst five Asian companies are involved in the current GRI feedback process, including one in Singapore and one in Thailand.The region's reporting pioneers are being driven by globalisation and international peer pressure. Moreover, whilst Asian companies have been notorious for limited corporate governance and transparency in their financial affairs, business models are changing and this evolution is likely to promote better disclosure not only of fiscal performance but also on environmental, health, safety and social issues.     

The development of global IT infrastructure

A research model of the impact of a multinational corporations’ (MNC) global strategic orientation on global IT infrastructure was developed using global integration, or the degree to which a global strategy is actually implemented, as a mediator. A “matched pair” survey of 94 MNCs was conducted (two respondents per firm) in order to guard against common source bias. The results showed that the firms that pursue a globally oriented strategy actually enacted these strategies as indicated by a wide-variety of resource flows across national units. The role of the level of global integration as a mediator between global strategic orientation and global IT capabilities was empirically demonstrated. This confirms that a global strategy is not sufficient to ensure that an enabling IT infrastructure will be developed; rather it is the actual level of integration and interdependence that is achieved as a result of the strategy that drives IT infrastructure. The primary areas in which global integration was found to be closely linked to the global IT infrastructure were human resources, which significantly influenced the reach, range, support services and planning of the global IT infrastructure, and information resources which significantly influenced the planning dimension of the infrastructure. These results strongly suggest that the transfer of people among national units creates an information needs “pull” which leads to the development of better IT infrastructure and that the “push” of standardized information also contributes positively.     

Human Rights in Global Business Ethics Codes

The last decade has witnessed renewed attempts to regulate the conduct of transnational corporations. One way to do this is via global ethics codes. This paper examines seven such codes (the Sullivan Principles, UN Center for Transnational Corporations’ Draft Code, OECD Guidelines, ILO's Tripartite Declaration, the Caux Round Table Principles for Business, Global Compact, and the United Nations Norms) to determine their coverage of human rights and concludes that if these initiatives succeed, particularly the more recent codes, transnational corporations may emerge as a major force in promoting human rights globally.     

Transnationality – Sharpening the Integration-Responsiveness vision in global professional firms

The “transnational” (Bartlett & Ghoshal, 1988, 1989) has become a popular organizational construct, and is increasingly relevant to contemporary global firms. However, there is very little empirical research on the organizational aspects of this form, and there is a lack of knowledge regarding the transnational aspects in professional service firm theorizing. Building on some fundamental organizational and international management literature, as well as an understanding of contemporary global professional firms, we expect that the transnational will exhibit specific organizational structural features with both high levels globalization and local responsiveness. We then proceed to describe an exploratory study of ten global engineering firms—this context is important since engineering firms are far less tied to national (local) jurisdictions than are other professional firms. Our findings reveal that the leadership/management areas were largely globally integrated, the hiring/HR functions were singularly locally oriented, while the other organizational areas we studied – namely structure/process and project teams – exhibited both global and local features. These findings extend professional service firm theorizing, exposing the balance between axes of specialisation, norms of reciprocity and customer management system; to include organizational features that allow a balance between the globally integrated and locally responsive.     

Can we have global ethics in a global economy?

With the collapse of the bi-polar world, we live in an increasingly integrated global economy, which includes economic, political, and cultural dimensions. We argue that there is a need for a global ethic commensurate with a global economy, based upon the claims of interdependence, economic insecurity, multiculturalism, and shared problems. The need to identify some common cross-cultural ethical norms is asserted as an important component of a global ethic and various sources and means for such identification are proposed. Finally, we propose reasons why global corporations ought to embrace cross-cultural ethical norms within their own corporate ethics.A version of this paper was first delivered at a joint business faculty seminar co-sponsored by Anadolu University and Baldwin-Wallace College, held at Anadolu University, Eskischir, Turkey, in December 1992. I express deep gratitude to my losts from Aanadolu University and special thanks to Professor Selva Herekman, who painstakingly translated my English text into Turkish.     

Legitimacy theory may explain the failure of global adoption of IFRS: the case of Europe and the U.S.

We investigate the reasons why “adoption” of one set of globally accepted accounting standards is presently unachievable. By “adoption” we mean that a jurisdiction incorporates IFRS instantly as its national accounting as issued by the IASB. We state that the IASB has used a Legitimacy Theory strategy to gain acceptance of its standards by more than 120 countries across the globe but it has only gained pseudo-“adoption” (not as published by the IASB) of its standards by many countries. We contend that achieving policing and enforcement of its standards globally has proven to be empirically illusive. This legitimacy deficit may explain why convergence between the IASB and FASB is currently idle. We offer a possible solution to bridging the legitimacy gap of global adoption of IFRS. We propose an internationally respected regulator and suggest the IOSCO for this role through its participation in the IFRS Foundation Monitoring Board for policing and enforcement of IFRS for cross-listed firms reporting in compliance with IFRS so that the IASB’s output legitimacy may be achieved globally.     

Planning for corporate social programs—Problems and guidelines

There is mounting evidence that one of the principal impediments to the increased social responsiveness of major corporations is the organizational difficulty of incorporating novel social programmes into existing operations. Four empirical studies that support this thesis are summarized and discussed. Then, a set of guidelines are suggested that will provide a useful checklist in planning for the implementation of new socially oriented programmes in large firms.     

What is Driving Corporate Environmentalism: Opportunity or Threat?

Environmental management systems (EMSs) can differ considerably in the mix of practices and the number of practices adopted by firms. This paper explores the various incentives motivating adoption of different types of practices by a sample of Standard & Poor's 500 firms and provides an explanation for why firms adopt practices selectively. Observable firm characteristics, proxies for the incentives faced by firms, are used to determine the types of firms more likely to adopt certain types of practices. We find that practices, such as having an internal environmental policy, corporate environmental standards and environmental auditing are motivated more strongly by regulatory pressures, while practices such as total quality environmental management and environmental reporting are motivated more strongly by the potential for gaining competitive advantage and improving relations with stakeholders.     

Developing new avenues for growth: Challenges presented by five trends in the global environment

This paper documents five major trends in the global environment, and examines the impact of each on the corporate strategies of multinational firms striving for higher rates of growth in corporate earnings. The five trends documented are: 1. shifts in economic activity and growth between and within regions of the world; 2. increasing demand for goods and services among the very poor in emerging markets; 3. a faster pace and wider locus of technological innovation; 4. Increasingly global labor markets; and 5. increasingly ubiquitous and inexpensive access to information and knowledge.Each of these trends presents multinational firms with a potentially new avenue for growth, or an avenue down which they should consider moving further and/or faster. These potentially new avenues for growth are encouraging managers of multinational firms to challenge the current corporate strategies of their firms, and examine the need to reorient or renew them. The paper discusses the strategic challenges associated with these new avenues for growth, and the need for more research on the concept of country risk, on the concepts of the transnational strategy and organizational structure, and on the challenges of very limited sustainable capacity to consume among the very poor.     

International new ventures and governance structures—are international entrepreneurs strategic or entrepreneurial?

Born Global firms have attracted significant research interest over the past decade and one of the recurring research questions is how Born Global firms are able to overcome resource limitations to establish effective international sales and marketing channels so rapidly. Several qualitative studies have been performed in order to investigate this question and most conclude that Born Global firms do it by using entrepreneurial hybrid structures to govern their international activities. This study offers a quantitative analysis on whether there are significant differences between the international activities of small international firms and seeks to determine whether Born Global firms are more ‘entrepreneurial’ in terms of governance of their international activities and resources than other small international firms. The study adopts Aspelund and Moen’s (2005) classification of small international firms according to their time to internationalization and share of foreign sales and investigates differences in characteristics and governance of international activities. As expected, the study found differences in a broad range of characteristics between the firms that had adopted the different internationalization strategies. More surprisingly, the study fails to identify any differences between the firms on international governance structures for international operations. This a very intriguing result as it opposes a lot of qualitative work over the past decade and it also implies that Born Global firms are strategic in deciding their governance structures for international marketing activities regardless of their resource situation. Implications of the findings are discussed and alternative venues for further research are proposed.     

Local, regional, or global? Geographic orientation and relative financial performance of emerging market multinational enterprises

We extend the regional/global strategies literature by analyzing the relative performance of emerging market (EM) multinational enterprises (MNEs) based on their geographic orientation. We develop a framework showing that firms adopt three geographic orientations—local, regional, and global—and test our framework with the market penetration strategies (sales) of 701 MNEs from 28 EMs during 2000–2006. Our analysis shows that distinguishing among these three geographic segments is important, as not all of these geographic segments enhance firms’ financial performance relative to their industry: a combination of local and global orientations enhances while regional orientation reduces the relative financial performance of EM MNEs.     

The use of scenarios in corporate planning—eight case histories

In response to an increasingly turbulent environment, many firms are attempting to develop means to assess proposed strategies in the light of plausible alternative futures. Probably the most widely adopted technique for this purpose is multiple scenario analysis (MSA). The extent of MSA adoption among corporations varies considerably depending upon respective planning experience and top management's involvement and interest in MSA itself. The gamut of MSA adoption is examined among eight representative large U.S. corporations. It is clear that, while corporate interest is high, current formal scenario generating methodology is too complex or academic for practical corporate use. Instead, planners are using their own informal approaches to scenario generation.     

The public affairs function in American corporations: Development and relations with corporate planning

The increase of social and political turbulence has led to the development of new organizational response mechanisms. Public affairs units are among the most widely adopted forms in U.S. companies. This paper reports findings from a major research study of the public affairs function in American corporations. Analysis of the public affairs function in several hundred firms strongly suggests that a critical stage in the organization's response to environmental change involves the integration of the corporate planning and public affairs perspective. This paper reviews data from the study and discusses the planning/public affairs relationship in terms of survey and case research data.     

Similarity,Isomorphism or Duality? Recent Survey Evidence on the Human Resource Management Policies of Multinational Corporations

There is considerable debate as to the determinants of the human resource policies of human resource management: do they reflect national institutional or cultural realities, emerging common global practices, parent country effects or the dual effects of transnational and national realities? We use an extensive international database to explore these differences, assessing variations in a range of human resource practices. We find new evidence of national differences in the manner in which indigenous firms manage their people, but also evidence of a similarity in practice amongst multinational corporations. In other words, multinational corporations tend to manage their human resources in ways that are distinct from those of their host country; at the same time, country of origin effects seem relatively weak. Whilst there is some evidence of common global practices, sufficient diversity in practice persists to suggest that duality theories may provide the most appropriate explanation.     

Hazardous Factories: Nigerian Evidence

The past 15 years have seen an increasing governmental and corporate concern for the environment worldwide. For governments, information about the environmental performance of the industrial sector is required to inform macro-level decisions about environmental targets such as those required to meet UN directives. However, in many African, Asian, and Latin American countries, researching and reporting company environmental performance is limited. This article serves as a contribution to filling the gap by presenting evidence of physical and chemical risk in Nigerian factories. One hundred and three factories with a total of 5,021 workers were studied. One hundred and twenty physical and chemical hazards were identified and the result shows a high number of workers exposed to such hazards. The study also reveals that workers' awareness level of chemical hazards was high. Yet the danger was perceived in behavioral terms, especially by manufacturing firms, which tend to see environmental investment in an increasingly global economy as detrimental to profitability.