Strategic Management for Global Firms: A Conceptual Discussion

Abstract

Global organizations have to proceed with a global and strategic perspective in order to be effective. This is in contrast to domestically or regionally focused organizations. Global organizations would benefit from simultaneously pursuing: (a) led by headquarters (HQ) selectively-fostered integrative, global and strategic approaches, and, (b) decentralized foreign subsid­iary tactical and operational initiatives. The simultaneous pursuits of the two divergent approaches require capable management teams at both levels: (a) the global HQ, as well as, (b) the foreign subsidiary units. The unique task environments of each foreign subsidiary make it compelling for the HQ to delegate the operational decision making to the foreign subsidiary. For the combined and well-coordinated global vision, choices, goals and strategy, the HQ must take the strategic leadership role.

The partnership and collaborative efforts among the HQ and foreign subsidiaries’ executives will foster a together-ness feeling and better ownership of the responsibility among the foreign subsidiaries’ executives. The hierarchical, top-down approach would then be replaced by a joint, information-sharing approach that would engender an era of trust and mutual respect. There would be closer to power equality rather than disproportionate distribution of power. Power would then be posited to where most information and direct skills reside.