This working paper offers a longitudinal and descriptive analysis of the strategies of multinationals from developed countries in developing countries. The central argument is that strategies were shaped by the trade-off between opportunity and risk. Three broad environmental factors determined the trade-off. The first was the prevailing political economy, including the policies of both host and home governments, and the international legal framework. The second was the market and resources of the host country. The third factor was competition from local firms. The impact of these factors on corporate strategies is explored, as shown in Fig. 1, during the three eras in the modern history of globalization from the nineteenth century until the present day. The performance of specific multinationals depended on the extent to which their internal capabilities enabled them to respond to these external opportunities and threats.
International Business and the study of Multinational Corporations is perceived as one of the areas where business historians have made significant contributions. Indeed, the late John Dunning, one of the major contributors to the area, was supportive of using longitudinal and multi-sourced approach to better understand the motivations to pursue foreign owned, value adding activities by firms (or groups of firms). Geoff Jones has also made important contributions to the area as well as documenting the role of entrepreneurs in Latin America. This piece is interesting and welcomed as a way to bring both strands together, although more could be done to portray the issue from the view point of host economies.
By Robert S. Kaplan (Harvard Business School, Accounting and Management Unit)
David Norton and I introduced the Balanced Scorecard in a 1992 Harvard Business Review article (Kaplan & Norton, 1992). The article was based on a multi-company research project to study performance measurement in companies whose intangible assets played a central role in value creation (Nolan Norton Institute, 1991). Norton and I believed that if companies were to improve the management of their intangible assets, they had to integrate the measurement of intangible assets into their management systems. After publication of the 1992 HBR article, several companies quickly adopted the Balanced Scorecard giving us deeper and broader insights into its power and potential. During the next 15 years, as it was adopted by thousands of private, public, and nonprofit enterprises around the world, we extended and broadened the concept into a management tool for describing, communicating and implementing strategy. This paper describes the roots and motivation for the original Balanced Scorecard article as well as the subsequent innovations that connected it to a larger management literature.
It seems an important number of key academics whose ideas helped to shape business and management thought at the end of the 20th century are coming close to retirement age. “Luminaries” such as Russell Ackoff, Peter Drucker and Alfred Chandler were productive very much until they passed away. We celebrated their life through special editions and “life’s work” edited books. But as the above paper suggests, it seem some are happy to comment on their own work (see also a auto-bio from Eugene Fama at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1553244). This self assessment is interesting as there is really no tradition in mainstream studies in business and management, to devote a space for reflection on the different aspects of evolution of business, business practice, management and management thought. This is surprising given that for some authoritative sources, more history in the teaching of business and management is the way forward (see http://www.economist.com/businessfinance/displaystory.cfm?story_id=14493183).