Strategic Management
4th Edition
ISBN: 9781259927621
Author: Frank T. Rothaermel The Nancy and Russell McDonough Chair; Professor of Strategy and Sloan Industry Studies Fellow
Publisher: McGraw-Hill Education
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Question
Chapter 10, Problem 1DQ
Summary Introduction
To explain: How a relationship changes when a multinational enterprise changes from globalization 2.0 to globalization 3.0 operations.
Expert Solution & Answer
Explanation of Solution
Changes in a relationship when a multinational enterprise changes from globalization 2.0 to globalization 3.0 operations:
The transition of moving a firm from vertical integration to dividing the integrated firm into the functional departments can be related to the transition from globalization 2.0 to globalization 3.0 operations. In globalization 2.0 the multinational enterprises were required to duplicate their operations into the overseas markets. But, this strategy resulted in the wastage of resources.
In globalization 3.0, a multinational enterprise can select the different location that will be best suited for the supply chain activities. After choosing the specific location, operations will be shifted to the particular location. Each of the major operations of a firm such as finance, marketing, operations, and human resources will be in different countries and so on. Hence, in globalization 3.0 a network kind of supply chain is created even though it means it is outside the organizational boundary.
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