There are various strategies that an organization can adopt for innovation. The innovation strategies discussed in this text include: ‘invent it ourselves,’ globally networked internal model (transnational model), connect and develop innovation model and outsourcing innovation. The ‘invent it ourselves’ is the model where the company comes up with new ideas itself without making any consultations. The company develops its ideas and develops them to improve its performance. One of its disadvantages is that the strategy has become outdated. The strategy is no longer relevant in the current business environment. Also, it is inefficient, costly, and does not allow the organization to utilize new talents and technologies. However, the model has an advantage in that the organization can use it to achieve its production objective.
The next innovation strategy is the transnational model. This is where the organization operates globally, and its innovation is based on global business. The firm innovates depending on the global market requirements. The model has an advantage in that the organization will be in a better position to expand its operations globally and increase its revenues. The model increases the chances of organizational success. However, it can only be used by multinationals, and it is expensive.
‘Connect and develop’ innovation is where the organization finds out what is required in the market and develops it. The model is advantageous since the organization can increase consumer satisfaction. It increases the success chances of the organization. However, it is time-consuming and relatively costly. Finally, there is ‘open innovation.’ This is the strategy that suggests that organizations need to utilize both internal and external ideas for innovation. One of its advantages is that the model is relatively cheap. It also enables the organization to improve its productivity, as well as market development. Disadvantages are that it is complex, and it exposes the organization to the possibility of losing its competitive advantage.
Merger, acquisition, and alliances
A merger occurs when two or more companies come together and combine to do business as one completely new company. In most cases, merging companies are equal in size. In most cases, mergers are formed to increase the performance of the companies and reduce operational costs. For instance, in the global environment, two companies from different countries can merge to reduce their costs of transport and production, at the same time increasing their competitive advantages in the respective countries.
Acquisition, on the other hand, is where one company purchases another company and becomes its owner. The acquired company continues to exist independently, but the acquiring company owns it. Reasons for acquisition include survival, diversification, and the development of new capabilities. There are times when a company may be faced with the threat of closing operations. The acquisition can be an alternative to survive this threat. The company can diversify its technology, economics, as well as competitive advantages to increase the chances of success.
An alliance occurs where two or more companies agree to do business together. The companies are independent of each other. It is like a friendship between the companies involved. The main reason that motivates most companies to form alliances is to reduce operation costs, as well as improve the level of services provided to customers.
The conflict faced by the country manager
A country manager represents the multinational organization in the host company. He is the one who is supposed to make the company’s decision at the national level. The decisions have to be in line with the multinational’s goals and objectives. Among the major conflicts that the country manager is expected to deal with include ensuring the company stays competitive at the global level. The manager is also mandated with ensuring that the company sustains its market position and ensuring that the company meets all the requirements by the host government. The manager also deals with consumer demands in that he is supposed to make sure that the local customers are satisfied with the company’s products and services. Finally, the manager also makes sure that the brand image of the company stays strong at the national level.
The global business environment is highly competitive. There are many companies that are striving to secure a large share of the market. This is a challenge that the country manager is supposed to deal with to ensure that the company remains competitive and that its market position is maintained. This is also effective in maintaining the company’s brand image. The host government may have requirements that are different from those of the home government. It is the mandate of the country manager to make sure that the organization complies with these requirements. The host nation consumers may have special demands that might be influenced by their culture, among other factors. The country manager needs to deal with these conflicts, as well.
Transactional MNE and a responsive MNE
A transactional MNE is a multinational that abides by the labor laws in the host nation. MNEs are known to be very strong to the extent that they can influence a nation’s executive and judicial processes. This means that MNEs can decide not to abide by the labor laws in the host nation. An MNE that adheres to such laws does not oppress its employees. It also ensures that its employees work in good and favorable conditions. An example of a transactional MNE is the Coca-Cola Company. This is one of the largest MNEs in the world and operates in almost all countries. Coca-Cola is transactional since it allows the host country’s folks to work in it. The company always abides with the laws in the host nation and does not oppress employees. This is one of the reasons why Coca-Cola has been able to expand in very many countries.
A responsive MNE, on the other hand, is one that takes the responsibility of the economic, as well as the social responsibility of the host nation. Social responsibility is a strategy that helps the company to sustain its development in the host nation. Such a firm is more law-abiding and contributes to the well-being of the citizens. An example of a responsive MNE is the Adidas Group. The company is a major sports sponsor in various nations worldwide. It is also known for its fair wages to local citizens. Adidas is transparent and provides a good work-life balance to all its workers worldwide.
It is against the law to hire children at the age of 17 years and below. Most companies also have policies that prohibit child labor. In the given case, the visiting manager should not allow the local manager to continue violating the company’s policies. In the spirit of corporate social responsibility, the visiting manager should urge the local manager to support the child’s education using the company’s resources. The company should also support the child in all other aspects until he comes of age to be eligible for employment.