MANAGEMENT PRINCIPLES

Management Principles

Project Management, assignment 1: Management principles

Introduction

During the last half of the twentieth century, many barriers to international trade fell and a wave of firms began pursuing global strategies to gain a competitive advantage. However, some industries benefit more from globalisation than does others, and some nations have a comparative advantage over other nations in certain industries. To create a successful global strategy, managers first must understand the nature of global industries and the dynamics of global competition.

Strategic Management

"Strategic management is the process of decision making which have high medium term to long term impact on activities of the organization including the implementation of those decisions to create value for customers and key stakeholders and to outperform the competitors"((Rosenzweig, Singh, 1991, pp.340).

Strategic management has three elements such as strategic analysis, strategic choice and strategic implementation. Strategic analysis gives the idea to understand the strategic position of the organization. It is an ongoing activity of organization. Strategic analysis gives the clear picture of the changes in the environment and how these changes affecting the organization and its activities. It gives idea about the resources and competencies present and their contribution to competitive advantage and development of new opportunities. Also it produces the idea about the people and groups such as manager, shareholders, union, stakeholder etc. associated with organization and their contribution for the development of organization(Tallman, 1992, pp.455-72).

Basically strategic analysis develops the relationship between different forces influencing the organization and its choice of strategies. These forces are environment, resource and competences etc.

Global Strategic Management

The globalization of business has become so rapid that a new field called "Global Strategic Management" has now emerged. This new field is a blend of strategic management and international business that develops worldwide strategies for global corporations. Whereas most studies in this field focus on ordinary business conditions, the revolutionary events of the past few years make it clear that the present is not ordinary. Such epoch-shattering events as the collapse of communism, the unification of Europe, the information revolution, the arrival of an environmental ethic, and other remarkable new developments signal that a new era is emerging in global affairs. This article describes a broader approach to global strategic management that encompasses these revolutionary changes. Global strategic management is the application of strategic management in global markets, most often through the organizational form of multinational enterprises (MNEs) (Teece, Pisano, Shuen, 1997, pp.509-33).

An effective global strategy is essential to a geographically widespread MNE facing equally multinational competitors in a globalizing industry. Globalization has become one of the identifying concepts of the post-industrial economy, describing the increasing integration of national and regional economics and the domination of the world economy by massive MNEs. The term also describes the convergence of individual tastes at the expense of local cultures, worldwide political domination by a small number of industrialized states and the international non-governmental organizations (NGOs) that are seen as their tools, the integration of capital markets, the increasing ubiquity of communication and information around the world, ...