The paper "Global Strategy: An Organizing Framework by Sumantra Ghoshal " is an outstanding example of a business article. The article ‘ Global strategy: an organizing framework’ ’ by Sumantra Ghoshal is a fluent and well-written analysis of increasing literature on global competition. The main concern of Ghoshal is how to structure and organize the firms for competitive benefits. He argues that firms require a flexible and dynamic organizational structure that is able to face the external environment in relation to the internal components and processes. Ghoshal claims that there are three things that can bring about competitive advantage, specifically, national differences, and scope of economies and scale of economies.
He asserts that the strategic undertaking of managing internationally is to make use of all these sources of competitive benefit to enhance efficiency, risk as well as learning concurrently in a global business. Managing the connections between these different objectives is key to an effective global strategy (Ghoshal, 1987). In this article, Ghoshal suggests an organizational structure that can assist managers to formulate an international strategy with three mechanisms that he believed would make adaptation to future modifications easier.
They include management of risks, operational efficiency and development of education capacity. Efficiency can be achieved with the proper global alignment of the value chain. To effectively manage risks, MNCS needs to take into account the additional risks, such as political, macroeconomic, and resource-related among others, in their decisions. Moreover, it is critical to increasing the learning capacity of the MNCs through gaining knowledge of the different markets as well as technological spaces the MNCs operate in (Ghoshal, 1987). Ghoshal creatively discusses the primary objectives of companies operating internationally as being managing risks, achieving efficiency, innovation and learning and adaptation.
Developing and implementing approaches that optimize the attainment of these three types of objectives by the firm is key to creating the competitive advantage of the firm.
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