• 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:
Amputees can learn to control a robotic arm with their minds
28.11.2017 | University of Chicago Medical Center
The importance of biodiversity in forests could increase due to climate change
17.11.2017 | Deutsches Zentrum für integrative Biodiversitätsforschung (iDiv) Halle-Jena-Leipzig
DNA molecules that follow specific instructions could offer more precise molecular control of synthetic chemical systems, a discovery that opens the door for engineers to create molecular machines with new and complex behaviors.
Researchers have created chemical amplifiers and a chemical oscillator using a systematic method that has the potential to embed sophisticated circuit...
MPQ scientists achieve long storage times for photonic quantum bits which break the lower bound for direct teleportation in a global quantum network.
Concerning the development of quantum memories for the realization of global quantum networks, scientists of the Quantum Dynamics Division led by Professor...
Researchers have developed a water cloaking concept based on electromagnetic forces that could eliminate an object's wake, greatly reducing its drag while...
Tiny pores at a cell's entryway act as miniature bouncers, letting in some electrically charged atoms--ions--but blocking others. Operating as exquisitely sensitive filters, these "ion channels" play a critical role in biological functions such as muscle contraction and the firing of brain cells.
To rapidly transport the right ions through the cell membrane, the tiny channels rely on a complex interplay between the ions and surrounding molecules,...
The miniaturization of the current technology of storage media is hindered by fundamental limits of quantum mechanics. A new approach consists in using so-called spin-crossover molecules as the smallest possible storage unit. Similar to normal hard drives, these special molecules can save information via their magnetic state. A research team from Kiel University has now managed to successfully place a new class of spin-crossover molecules onto a surface and to improve the molecule’s storage capacity. The storage density of conventional hard drives could therefore theoretically be increased by more than one hundred fold. The study has been published in the scientific journal Nano Letters.
Over the past few years, the building blocks of storage media have gotten ever smaller. But further miniaturization of the current technology is hindered by...
11.12.2017 | Event News
08.12.2017 | Event News
07.12.2017 | Event News
15.12.2017 | Trade Fair News
15.12.2017 | Physics and Astronomy
15.12.2017 | Information Technology