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Long Range Planning

34/3 June 2001

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Charles Tennant and Paul Roberts Hoshin Kanri: Implementing the Catchball Process charles.tennant@warwick.ac.uk

    Western organisations have traditionally had difficulty integrating top management´s goals into daily operational life. Japanese companies however have been successfully employing a process called Hoshin Kanri for some time which involves employees across the organisation in strategic planning. The link between strategy and planning that this demands requires a process called "catchball" whereby an idea is thrown from person to person. In this paper the authors describe how they successfully implemented the "catchball" process at Rover Group, the UK-based automotive company, which resulted in a quality strategy which was accepted across the company at all levels and in place for nearly ten years.

Bowon Kim and Yookseok Lee Global Expansion Strategies: Lessons Learned from Two Korean Car Makers BowonKim@kgsm.kaist.ac.kr

    On the face of it Daewoo and Hyundai appeared to be very similar. Both were South Korean carmakers, and both belonged to larger industrial groups, known as chaebols. However, the globalisation path employed by each was very different. Hyundai, the market leader, sought out the developed markets of North America, while Daewoo, the newcomer, hoped for capacity expansion in eastern Europe and Asia-Pacific. In this paper the authors describe how each company formulated and pursued its globalisation strategy, and describe the relative success and failures of each.

Michael Stephan and Eric Pfaffmann How Germany Wins Out in the Battle for Foreign Direct Investment: Strategies of Multinational Suppliers in the Car Industry stephanm@uni-hohenheim.de

    The car industry in Germany has defied all expectations that such a mature industry would follow the trend of relocating to low-cost countries. Indeed, in the ten years between 1987-97 some $14 billion was invested by non-German car parts makers in Germany. This paper finds that cost factors play a relatively unimportant role for suppliers to the German car industry. Of more importance are technological innovation, helped by locating plant near the big car makers and establishing a relatinship with them. The trend has been driven by changes in the sourcing behaviour of German original equipment manufacturers. Increasingly, these carmakers have sought to procure complete systems and modules. To satisfy this, a supplier must integrate knowledge of the different parts that make up a system and module, which has manifested itself in takeover activity. Moreover, the investments are likely to be in greenfield locations, close to the production and assembly plants of the carmakers. The authors assembled data from 20 of the 50 largest non-German suppliers worldwide to assess their investment activities in German, assessing in particular which product areas attracted investment, as well as the geographical locations. The authors believe the study could be transferred to other mature industries, such as aerospace, computer and rail. They point out that an early, carefully developed strategy of how to act when customers start to redesign their supplier chains is a key factor to success.

Werner H. Hoffmann and Roman Schlosser Success Factors in Small and Medium-sized Enterprises - An Empirical Survey werner.hoffmann@oeci.at

    More than 90 per cent of European companies are SMEs, yet the question of how they can forge successful alliances that will allow them to compete in an increasingly globalised environment has not to date been adequately addressed. This paper reports on the results of a questionnaire sent to SMEs in Austria with successful and unsuccessful experience of alliances. The inquiry drew from four different theories: transaction-cost, resource-based, knowledge-based and sociological approach. These provided independent variables which the SMEs graded in importance. The findings reveal the wieght that companies with successful alliances gave to certain efforts, compared with the relative importance to the variables attached by unsuccessful companies. Indeed the contrast between how unsuccessful companies underestimated certain factors compared with how successful companies perceived them is striking. The results also show that while "hard" factors such as strategic compatibility and appropriate corporate governance are important for alliance success, alliances should also take account of "soft" factors such as trust. This comparison of critical success factors reveals the importance of the early stages of an alliance´s evolution. It also highlights the factors which while not critical to alliance success, are nevertheless significant to its smooth running. The authors conclude that the unique situation of SMEs in Europe has largely been overlooked and more tools are needed to be developed to allow this sector to gain every benefit from today´s turbulent environment.

Alexander Dehaene, Veerle De Vuyst and Herbert Ooghe Corporate Performance and Board Structure in Belgian Companies hubert.ooghe@rug.ac.be

    Corporate governance has for some time been a buzzword in the Anglo-Saxon business world, sharpening debate on what should be the optimal composition of a company´s board of directors. For those countries where businesses do not follow the Anglo-Saxon model, however, there has until now been little investigation into whether the same ideas would be effective in their domestic companies. In this paper the authors undertake a study of the boards of 122 Belgian companies and discover a positive relationship between the number of external directors and the return on equity. They also found that where the roles of chief executive and chairman were combined, the return on assets was significantly higher than where a "two-tier" board operated.

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