• According to a new study by Roland Berger Strategy Consultants and ESCP Europe Business School Berlin, coordinating international development, production and marketing activities are key to success in the automotive industry
• Development, production and marketing are taking place more and more at a global level
• This means that corporate culture and internal corporate networks are playing an increasingly important role
• Corporate culture must reflect the balance between globalization and localization
Increasing globalization in the automotive sector is forcing companies to spread their core competencies in development, production and marketing across borders. Comprehensive coordination of international value chains is therefore becoming a critical success factor for the industry. This is the finding of a study entitled "How automotive companies successfully coordinate their activities across borders". Conducted by Roland Berger Strategy Consultants together with ESCP Europe Business School Berlin, the survey looked at 95 automotive manufacturers and suppliers.
"The international competition in the automotive industry is getting tougher every day. Companies are therefore faced with the major challenge of optimizing their global value chains," explains Wolfgang Bernhart, Partner at Roland Berger Strategy Consultants and co-author of the study. The study analyzed six methods of successfully coordinating international activities: centralizing/decentralizing decision-making processes, direct personal control, formal coordination, output control, social networks and informal communication. "Automotive companies that wish to implement successful strategies abroad should carefully consider all of these alternatives," advises Professor Stefan Schmid, Chair of International Management and Strategic Management at ESCP Europe Business School Berlin and co-author of the study. "Companies must find the appropriate combination of these methods in order to function smoothly and be globally competitive."
The successful coordination mix
The optimal coordination mixes for the individual functional areas ultimately require applying all six methods to some degree. However, the company sets a specific focus for each area. For example, the optimal mix in production focuses on formal coordination and output control. In contrast, the ideal coordination of marketing activities emphasizes direct personal management and output control. In development, output control is given priority. However, the study also showed that along with these function-specific approaches, corporate culture and internal networks also play key roles in the coordination mix.
Fostering corporate culture and networks
"To achieve success internationally, a strong corporate culture among the employees is indispensable," explains Bernhart. "A major part of this is formed by internal company networks, as they make it possible for employees to share information and opinions independent of their functions."
Companies can foster this communication outside the established hierarchies and across all divisions and departments by setting up cross-functional teams, for example. This means that employees from different departments work together on certain projects. Regularly rotating managers through various departments and locations would also contribute to efficient networking in the company. In this way, automotive companies can develop a corporate culture shared by all employees: shared values, visions or mission statements are of particular importance here.
Corporate culture – global and local
"International automotive companies are faced with an enormous task: on the one hand, they have to develop an understanding of the local markets to be successful there. On the other hand, they have to retain a global perspective and create a culture that unifies the company worldwide," says Philipp Grosche, Research Assistant at ESCP Europe Business School Berlin and co-author of the study.
In other words, the goal is not to export the parent company's culture to its affiliates or subsidiaries around the world (ethnocentric approach). Nor is it to allow each local subsidiary its own corporate culture (polycentric approach). Instead, each country's cultural features should be blended into a common corporate culture, accepted and practiced by all employees (geocentric approach). For example, corporate goals can be formulated jointly and communicated to the units around the world using various channels, such as newsletters, reports or a website. Similarly, internal promotional campaigns and incentives can help employees spread the corporate values and goals within the company.
Download the study for free at: http://www.rolandberger.com/pressreleases or http://www.escpeurope.de/imsmYou can subscribe to our free newsletter here:
ESCP Europe was founded in Paris in 1819 and, since then, has educated generations of leaders, contributing to the fine reputation it enjoys today. With five campuses in Paris, Berlin, London, Madrid and Turin, ESCP Europe is the European School of Management. Each year, our business school welcomes 4,000 students and a similar number of top-level executives from around the world. The school offers them a model of management which prepares them for the future in the respect of such humanist European values as creativity, history, culture and diversity. The quality of ESCP Europe Business School is widely recognised and shown through the Triple Crown accreditation (AACSB, EFMD (EQUIS), AMBA) and top ranking positions (e.g. Top European Business Schools, Financial Times Ranking).For more information, please contact:
Win-win strategies for climate and food security
02.10.2017 | International Institute for Applied Systems Analysis (IIASA)
The personality factor: How to foster the sharing of research data
06.09.2017 | ZBW – Leibniz-Informationszentrum Wirtschaft
University of Maryland researchers contribute to historic detection of gravitational waves and light created by event
On August 17, 2017, at 12:41:04 UTC, scientists made the first direct observation of a merger between two neutron stars--the dense, collapsed cores that remain...
Seven new papers describe the first-ever detection of light from a gravitational wave source. The event, caused by two neutron stars colliding and merging together, was dubbed GW170817 because it sent ripples through space-time that reached Earth on 2017 August 17. Around the world, hundreds of excited astronomers mobilized quickly and were able to observe the event using numerous telescopes, providing a wealth of new data.
Previous detections of gravitational waves have all involved the merger of two black holes, a feat that won the 2017 Nobel Prize in Physics earlier this month....
Material defects in end products can quickly result in failures in many areas of industry, and have a massive impact on the safe use of their products. This is why, in the field of quality assurance, intelligent, nondestructive sensor systems play a key role. They allow testing components and parts in a rapid and cost-efficient manner without destroying the actual product or changing its surface. Experts from the Fraunhofer IZFP in Saarbrücken will be presenting two exhibits at the Blechexpo in Stuttgart from 7–10 November 2017 that allow fast, reliable, and automated characterization of materials and detection of defects (Hall 5, Booth 5306).
When quality testing uses time-consuming destructive test methods, it can result in enormous costs due to damaging or destroying the products. And given that...
Using a new cooling technique MPQ scientists succeed at observing collisions in a dense beam of cold and slow dipolar molecules.
How do chemical reactions proceed at extremely low temperatures? The answer requires the investigation of molecular samples that are cold, dense, and slow at...
Scientists from the Max Planck Institute of Quantum Optics, using high precision laser spectroscopy of atomic hydrogen, confirm the surprisingly small value of the proton radius determined from muonic hydrogen.
It was one of the breakthroughs of the year 2010: Laser spectroscopy of muonic hydrogen resulted in a value for the proton charge radius that was significantly...
17.10.2017 | Event News
10.10.2017 | Event News
10.10.2017 | Event News
17.10.2017 | Life Sciences
17.10.2017 | Life Sciences
17.10.2017 | Earth Sciences