David J. Collis is cochair of the Global Strategic Management program at Harvard Business School (HBS). He is the Thomas Henry Carroll Ford Foundation Adjunct Professor of Business Administration within the Strategy Unit. Here he shares his thoughts about the most pressing issues facing executives of global companies right now, and the questions–and answers–that can guide them through.
Why is a program about global strategic management needed today, given the current geo-political context and forces that seem to be pushing against globalization?
Harvard Business Review conducts a periodic survey to identify the biggest worries for executives of global companies. Global strategy has historically been fairly low on the list. But the current emergence of nationalism and the pushback against the benefits of integrated economies are moving global strategy up toward the top of that list. Add the constant challenges from new business models and disruptive technologies and you can understand why leaders are realizing that they can't just carry on doing things the way they did in the past. This is why I think a program in global strategic management is so relevant right now.
How does the program help participants address the issues they're facing?
The strength and causes of the forces affecting businesses change continuously. We provide an analytical framework in the form of four basic questions that help executives make better decisions.
First, any company competing internationally must ask, "What should our product offering look like around the world?" Companies have to decide how to localize what they make or sell by adapting to local regulations, institutional structures, and customer preferences. But it's not just a matter of the product itself: product positioning and the brand are crucial considerations.
Second, you must determine, "Where should we compete?" Firms need to decide on the countries where they want to compete and how much to concentrate or disperse their sales activities based on market share.
Third, we ask, "Where should we locate our activities?" This is actually the flip side of the second question. It might make sense to take advantage of low-cost labor in countries where that’s available, but there are trade-offs involved. Answering this question means deciding whether to manufacture in every country or to concentrate production, and whether to have multiple R&D facilities around the world.
The last question is organizational: "How should we structure our systems and processes?" A corporation with global product lines has to determine how to allocate decision rights among countries, business units, and functions.
Answers to these four fundamental questions will differentiate a globally competitive company from a purely domestic one. As businesses grow and evolve, having a decision framework to return to helps executives recognize what is going to create value in their organizations.
What specific trends you have seen in the issues facing executives who are creating global strategies?
Nationalism is growing, which means that some of the biggest issues right now have to do with where to compete and what the global footprint should look like. Companies are thinking about pulling out of certain countries and where to allocate resources. These are tough decisions.
We frame the decisions by examining global finance, global culture, team building, and diversity. Faculty from our Business, Government and the International Economy Unit lead discussions of political and macroeconomic issues. The overall objective of the course is to provide context around creating value by competing across geographies.
Who should attend this program?
It's the ideal program for senior decision-makers at large companies with a global presence–either selling or manufacturing in more than one country–or large companies considering expansion. These executives are likely facing issues related to how they compete around the world, and are thinking about how their roles fit together with other parts of the organization. We see this course as a must-attend for today's executives, given the world economy and the business climate.
What is your favorite part of teaching in this program at HBS?
I really enjoy learning about the participants' businesses. I like hearing them share their companies' problems and helping them apply our frameworks to find solutions.
At HBS, everything is grounded in a real-world problem or issue. We start there and work backward to find the methodologies, tools, and research approaches that will solve the problem. This school and this program are focused on the realities of management–the fundamental questions that keep cropping up for every company that competes internationally. I want to help leaders with that, and I can do that at HBS.