Flexible footprints: Reconfiguring MNCs for new value opportunities

California Management Review

Volumn 54, Issue 2, 2012, Pages 92-117

  Maitland, Elizabeth ^a,b   Sammartino, Andre ^c  

^a UNIVERSITY OF NEW SOUTH WALES   (Australia)

^b NANJING UNIVERSITY   (China)

^c UNIVERSITY OF MELBOURNE   (Australia)

Author keywords

Corporate strategy; Decision making; Foreign investment; Foreign subsidiaries; International business; Multinational corporations; Reorganization; Strategic planning

Indexed keywords

EID: 84863485043     PISSN: 00081256     EISSN: None     Source Type: Journal    
DOI: 10.1525/cmr.2012.54.2.92     Document Type: Review

References (36)

1. P. Ghemawat and P. del Sol, "Commitment vs. Flexibility," California Management Review, 40/4 (Summer 1998): 26-42. A firm-specific asset would have lower value to another firm. A use-specific asset would have lower value in any other use. A location-specific asset would have lower value in any other locale.
2. M.A. Hitt, B.W. Keats, and S.M. DeMarie, "Navigating in the New Competitive Landscape: Building Strategic Flexibility and Competitive Advantage in the 21st Century," Academy of Management Executive, 12/4 (November 1998): 22-42, at p. 22. (Pubitemid 128669086)
3. Other prominent contributions to the strategic flexibility discussion include H.W. Volberda, Building the Flexible Firm: How to Remain Competitive (Oxford: Oxford University Press, 1999);
4. M.A. Hitt and K. Shimizu, "Strategic Flexibility: Organizational Preparedness to Reverse Ineffective Strategic Decisions," Academy of Management Executive, 18/4 (November 2004): 44-59. Calls for "organizational ambidexterity" argue very similar points. (Pubitemid 40046257)
5. See M.L. Tushman and C.A. O'Reilly, "Ambidextrous Organizations: Managing Evolutionary and Revolutionary Change," California Management Review, 38/4 (Summer 1996): 8-30;
6. C.B. Gibson and J. Birkinshaw, "The Antecedents, Consequences, and Mediating Role of Organizational Ambidexterity," Academy of Management Journal, 47/2 (April 2004): 209-226. (Pubitemid 38845937)
7. There is an intersecting literature, mainly in operations management, which distinguishes "strategic, ""tactical," and "operational" flexibility. The distinctions typically lie in the speed, frequency, locus, and substantiveness of the flexibility. Strategic flexibility is thus defined by Upton, as "the ability to make one-way, long-term changes that involve significant change, commitment or capital and which occur infrequently, say every few years or so." Tactical flexibility often occurs at the product or plant level, is more reversible, faster and more frequent. Operational flexibility "is the ability to change day to day, or within a day as a matter of course.[for example] a flexible transfer line on which changeover time is minimal." See D.M. Upton, "The Management of Manufacturing Flexibility," California Management Review, 36/2 (Winter 1994): 72-89, at p. 79.
8. This work represents an attempt to delineate further the flexibility arguments initially put forward by Ansoff and by Aaker and Mascarenhas. See H.I. Ansoff, Corporate Strategy (New York, NY: McGraw Hill, 1965);
9. D.A. Aaker and B. Mascarenhas, "The Need for Strategic Flexibility," Journal of Business Strategy, 5/2 (Fall 1984): 74-82. We view operational and tactical flexibility as precursors orsubsets of strategic flexibility. An MNC's capacity to act in a strategically flexible fashion will build upon its capacity to also make operational and tactical decisions.
10. Hitt, Keats, and DeMarie, op. cit., p. 30.
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15. See, for example, L.G. Franko, The European Multinationals (Stamford, CT: Greylock, 1976);
16. S. Humes, Managing the Multinational: Confronting the Global-Local Dilemma (New York, NY: Prentice Hall, 1993).
17. As quoted in "That Sinking Feeling," The Economist, November 21, 2005.
18. Saab had been unprofitable since 2001 and accounted for less than one percent of GM's production output. See V. Fuhrmans, "GM to Shut Saab Unit, Quirky Icon of the Road," Wall Street Journal, December 19, 2009.
19. These decision trees and questions could be considered as simple (yet powerful) strategic rules, in a similar vein to those identified by K.M. Eisenhardt and D.N. Sull, "Strategy as Simple Rules," Harvard Business Review, 79/1 (January 2001): 106-116.
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21. For more on Continental Lite, see R. Doganis, The Airline Business,2nd edition (New York, NY: Routledge, 2006), p. 156.
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23. Violence and militia activity forced the mining giant Rio Tinto to abandon its copper operations in Bougainville in 1989, while BHP was embroiled in years of legal dispute with the PNG Government over its Ok Tedi operations. C. Ballard and G. Banks, "Resource Wars: The Anthropology of Mining," Annual Review of Anthropology, 32 (2003): 287-313. (Pubitemid 38653275)
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26. J. Birkinshaw, C. Bouquet, andT.C. Ambos, "Managing Executive Attention in the Global Company," MIT Sloan Management Review, 48/4 (Summer 2007): 39-45.
27. In addition to the references in the above note, see G.R. Benito, "Divestment and International Business Strategy," Journal of Economic Geography, 5/2 (April 2005): 235-251; (Pubitemid 40549452)
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32. See, T.P. Murtha, S.A. Lenway, and R.P. Bagozzi, "Global Mind-Sets and Cognitive Shift in a Complex Multinational Corporation," Strategic Management Journal, 19/2 (February 1998): 97-114. (Pubitemid 128469404)
33. See, for example, B.M. Staw and H. Hoang, "Sunk Costs in the NBA: Why Draft Order Affects Playing Time and Survival in Professional Basketball," Administrative Science Quarterly, 40/3 (September 1995): 474-494; (Pubitemid 126000891)
34. C. Camerer and D. Lovallo, "Overconfidence and Excess Entry: An Experimental Approach," American Economic Review, 89/1 (March 1999): 306-318;
35. R.G. McGrath, "Falling Forward: Real Options Reasoning and Entrepreneurial Failure," Academy of Management Review, 24/1 (January 1999): 13-30.
36. M.A. Carpenter and J.W. Fredrickson, "Top Management Teams, Global Strategic Posture, and the Moderating Role of Uncertainty," Academy of Management Journal, 44/3 (June 2001): 533-545. (Pubitemid 33388141)