Effective global strategy implementation: structural and process choices facilitating global integration and coordination.

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RESEARCH ARTICLE

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Effective global strategy implementation: structural and process choices facilitating global integration and coordination.

Abstract:

* This article offers a contingency framework of global strategy implementation effectiveness on firm performance. The research question we seek to address is what the structural and process requirements are for MNEs to successfully implement global strategy through increased efficiency and effectiveness of integration and coordination across world markets.

* Our central premise is that MNEs' capabilities in establishing supporting structural and process mechanisms will enhance the effectiveness and efficiency of implementing their global strategies which would, in turn, lead to better firm performance.

Keywords: Integration and coordination * Global strategy * Firm performance * Contingency framework

Introduction

The globalization of the world economy and markets has given rise to the growth of multinational enterprises (MNEs). With the expanded geographical scope and dispersed operations across national borders, managing MNEs effectively has become a challenging task for managers. As such, numerous studies have been conducted to understand what contributes to the success of MNEs in the global market. Many studies have adopted the resource-based view (RBV) of the firm as the theoretical basis of such an exploration, arguing that the competitive advantage of MNEs is sourced primarily in their ability to access and acquire rare and inimitable resources that create better value for customers around the world (e.g. Peng et al. 2008). These resources are considered indicators of firm performance levels in the global market (Lu et al. 2010; Peng et al. 2008).

While RBV has been instrumental in explaining the performance differences among MNEs, arguments have been advanced that the mere possession of resources is insufficient to generate superior performance (Sirmon et al. 2007). For instance, Barney and Arikan (2006) state that assuming appropriate strategic action will automatically follow from the recognition of valuable resources within the firm is an intellectually naive assumption. Specifically, how resources can be used through strategic actions to create superior value to create a competitive advantage for the...

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