EDITORIAL

Volume 11, Issue 4, GSM Colloquium

Colloquium

The IPMA journal is different this time. Instead of papers from a number of individual authors, we have a colloquium under the tutorship of Professor K C Chan. This consists of eight papers, each about one aspect of global strategic management (GSM). The title of the colloquium is “Reinventing Global Strategic Management after 25 Years.” The eight papers have in common that they look at developments in GSM between 1990 and 2015. There was some study of strategy before 1990, but the focus on GSM began to take hold during the 1990s, and since then the developments have been colossal.

Effective strategy requires a helicopter view of the whole of the business, so that it all fits together. With the vast global companies of today, fitting everything with everything else is a horrendously complex task. The colloquium looks at eight different types of fit, each paper concentrating on one of those types. These are:

• Cultural fit
• Strategic fit
• Leadership fit
• Organisational Development fit
• Structural fit
• Communication fit
• Capability fit
• Technology fit

In an ideal world, each of these will fit with each of the others. There has never been a greater need for a holistic (wholistic) approach. Professor K C Chan has developed the delta matrix, which is a way of looking at interconnections. It is a three by three matrix, which gives eight interconnections (three horizontal, three vertical, and two diagonal). This framework helps in checking that plans and actions in one area are likely to be in harmony with what is happening in another. This framework is explored throughout the colloquium.

The authors are students of Professor K C Chan, who has developed a wholistic model that tackles complex issues up to global level. This is a uniting theme of the eight papers.

1. Cultural fit

Diversity is good. Universal agreement brings stagnation. Disagreement, as long as it’s constructive, is food and drink for new ideas. Bringing different cultures together should therefore be an opportunity for cross-fertilisation and new development, but often there are underlying differences that make mutual opposition likely.

Hofstede (1980) has categorised these into cultural dimensions. Putting events, attitudes, beliefs, etc. into categories can be limiting, but also gives an opportunity for an overview that shows where the differences are and where these could be blended with a third, mutually acceptable, culture. With globalisation, blending is going to be more and more necessary.

2. Strategic fit

An organisation may be filled with hard-working people but still achieve little, if their work does not move in alignment with the work of others, and with the overall aims of the organisation. In other words, there has to be a strategic fit within the organisation. There also has to be an external fit, which is increasingly difficult in a fast changing world. This paper looks at three multi-national companies with different aims. IBM wants to keep ahead in IT with constant revolutionary solutions; IKEA wants to reduce waste, cost and prices; Toyota wants to provide quality at affordable prices. They have in common with each other, and with other successful companies, that they need to create coherent internal and external strategy.

3. Leadership fit

Some features of strong leadership are universal whatever the nature of the business. Leaders need to inspire confidence, especially in times of rapid change. They need to be seen to be authentic, true to their purpose and vision. This paper looks at three leaders of multi-national companies with very different aims. PepsiCo is shifting its focus from a fun beverage to a healthier outlook. IKEA seeks innovative ways to reduce waste, thereby cutting its own costs and prices for the customers. IBM seeks revolutionary solutions to problems, not as a one-off, but as a continuous process of revolution. All three companies have in common that they are highly successful in the international market.

4. Organisational development fit

The technological changes of the last few decades have brought globalisation, and globalisation has created more change. Technology and knowledge is not just more advanced, it is more accessible, so there is increasingly intense competition, including from developing countries. At the same time there are more restraints due to ecological concerns. Organisations need to attend to their development from the inside out, from individual competence to coherent strategy. There are different overall drivers to guide strategy, and this paper looks at three corporations with three different main drivers. Microsoft is customer-driven and strives to provide high speed. Apple is market-driven and strives to create the best products. Google is process driven, and strives to make “the world’s information available at one click.”

5. Structural fit

A changing world demands changing companies, which means constant realignment to keep pace. Even the underlying structure may become inappropriate, along with the strategy. Structure and strategy are inextricably linked. To implement the strategy, there must be a structure that supports it. Just as each bone in the skeleton has its purpose, and needs the other bones to interconnect as well, each small piece of the organisation should perform its own role, and be able to rely on the other parts to perform theirs too. There need be effective lines of communication that coordinate tasks and procedures and provide motivation for the workforce to achieve the goals. This sometimes takes fundamental change, such as stripping away old methods that served a purpose in the past but have become outdated bureaucracy. Chandler (1962) summed this up by saying, “Structure follows Strategy.”

6. Communication fit

Globalisation brings diversity, and exponentially increases the need for good communication. This paper cites five major shifts that affect communication. Technology shift has increased the forms of communication available, but no matter how easy it is technically, human rules, like empathy, are even more important in a diverse world. Knowledge shift comes from easy technology, giving mountains of information easily, but it takes communication and collaboration to extract and consolidate useful knowledge. There is a power shift as emerging economies grow stronger, and a political shift as countries like China have more influence. There is also a job shift as people are working longer, so there is more diversity of age, and at the same time younger workers are being sought in emerging markets. At micro and macro level, communication has always been, and will continue to be, vital in our changing world.

7. Capability fit

It is a prime essential that a company knows its capabilities, from its internal processes, to external stakeholders, up to a global scale. Now communication is easy, at least in a technical sense, there is a great deal of economic integration in most parts of the world. This makes for fierce competition, and the need to be fully aware of what can be achieved, both with existing resources, and the potential. Customer feedback is one area of vital information about whether companies are moving in the right direction. Potential can be described as future capability, and needs to be considered in forward planning. Efforts need also to be focused and aligned, to prevent hard work going nowhere, even if the work itself is excellent. Questions that need to be asked are What, Why, Where, When, Who, How, and How much. This paper considers these factors for three companies, Volkswagen, Samsung, and Singapore Airlines.

8. Technology fit

Technology is overreaching, no longer simply affecting specialist machines, but also the very underpinnings of business - flow of information, sending messages quickly, to as many people as required, handling big data, accessibility through cloud systems, and so on. It makes it easier for employees at all levels to communicate top-down and bottom up. This enables collaboration within the company, and for the same reason collaboration becomes possible across companies, and across nations. Customers can be more discerning as they can find out quickly what is available how good the service is. Advancing technology also means they can ask for more in terms of customisation, which is both a challenge and an opportunity for business. Technology has made vast expansion possible, and looking from the other direction, making sure the organisation’s technology fits with the strategy has become essential.