• 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:
New study: How does Europe become a leading player for software and IT services?
03.04.2017 | Fraunhofer-Institut für System- und Innovationsforschung (ISI)
Reusable carbon nanotubes could be the water filter of the future, says RIT study
30.03.2017 | Rochester Institute of Technology
More and more automobile companies are focusing on body parts made of carbon fiber reinforced plastics (CFRP). However, manufacturing and repair costs must be further reduced in order to make CFRP more economical in use. Together with the Volkswagen AG and five other partners in the project HolQueSt 3D, the Laser Zentrum Hannover e.V. (LZH) has developed laser processes for the automatic trimming, drilling and repair of three-dimensional components.
Automated manufacturing processes are the basis for ultimately establishing the series production of CFRP components. In the project HolQueSt 3D, the LZH has...
Reflecting the structure of composites found in nature and the ancient world, researchers at the University of Illinois at Urbana-Champaign have synthesized thin carbon nanotube (CNT) textiles that exhibit both high electrical conductivity and a level of toughness that is about fifty times higher than copper films, currently used in electronics.
"The structural robustness of thin metal films has significant importance for the reliable operation of smart skin and flexible electronics including...
The nearby, giant radio galaxy M87 hosts a supermassive black hole (BH) and is well-known for its bright jet dominating the spectrum over ten orders of magnitude in frequency. Due to its proximity, jet prominence, and the large black hole mass, M87 is the best laboratory for investigating the formation, acceleration, and collimation of relativistic jets. A research team led by Silke Britzen from the Max Planck Institute for Radio Astronomy in Bonn, Germany, has found strong indication for turbulent processes connecting the accretion disk and the jet of that galaxy providing insights into the longstanding problem of the origin of astrophysical jets.
Supermassive black holes form some of the most enigmatic phenomena in astrophysics. Their enormous energy output is supposed to be generated by the...
The probability to find a certain number of photons inside a laser pulse usually corresponds to a classical distribution of independent events, the so-called...
Microprocessors based on atomically thin materials hold the promise of the evolution of traditional processors as well as new applications in the field of flexible electronics. Now, a TU Wien research team led by Thomas Müller has made a breakthrough in this field as part of an ongoing research project.
Two-dimensional materials, or 2D materials for short, are extremely versatile, although – or often more precisely because – they are made up of just one or a...
28.04.2017 | Event News
20.04.2017 | Event News
18.04.2017 | Event News
28.04.2017 | Medical Engineering
28.04.2017 | Earth Sciences
28.04.2017 | Life Sciences