International Business Management - Advanced Past Paper PDF

INTERNAZIONAL BUSINESS MANAGEMENT – ADVANCED 6 credits → october-novembre 3 credits → december Written exam + reading list → 80% exam OpenQuestions 20% Exam MultipleChoiceQuestion 13 january 16:00 3 open questions with maximum 3 sub-questions each, where theory must be merged with practical examp...

INTERNAZIONAL BUSINESS MANAGEMENT – ADVANCED 6 credits → october-novembre 3 credits → december Written exam + reading list → 80% exam OpenQuestions 20% Exam MultipleChoiceQuestion 13 january 16:00 3 open questions with maximum 3 sub-questions each, where theory must be merged with practical examples. - Original - Pertinent - Updated (not older than 2019) PAPER = Bettinelli 1. Creating Shared Value – ALE Riassunti per capire di che si parla = The paper "Creating Shared Value" by Michael E. Porter and Mark R. Kramer discusses how businesses can redefine capitalism by integrating social and economic progress. The authors argue that traditional capitalism, focused solely on profit maximization, is outdated and leads to social, environmental, and economic problems. The solution proposed is the concept of **shared value**, where companies generate economic value while addressing societal challenges. Key Points: 1. **Capitalism's Crisis**: Businesses are increasingly seen as causes of societal problems. Their focus on short-term gains undermines trust and leads to regulations that hinder growth. 2. **Shared Value Concept**: Shared value is not about corporate social responsibility (CSR) or philanthropy but involves companies addressing social issues as part of their core business strategy, creating a win-win situation. This involves: - **Reconceiving products and markets**: Developing products that meet societal needs, such as health or environmental sustainability, which also opens new markets. - **Redefining productivity in the value chain**: Reducing costs and increasing efficiency by improving societal factors such as environmental impact, worker well-being, and energy use. - **Building local clusters**: Supporting the development of local economies and industries to increase productivity and innovation. 3. **Business Examples**: Companies like GE, Nestlé, and Unilever are cited for their initiatives in creating shared value by integrating societal progress with business strategy, improving their competitiveness while contributing to social improvement. 4. **Role of Government and NGOs**: Governments and nonprofits should focus on enabling shared value by setting goals, providing infrastructure, and fostering collaboration rather than enforcing regulations that hinder innovation. 5. **The Future of Capitalism**: The shared value approach offers a path for companies to regain legitimacy and build long-term sustainable growth by aligning profit with societal progress. This paper positions shared value as a transformative strategy for businesses to drive both innovation and societal benefits, emphasizing that such an approach is essential for capitalism’s future. Riassunto dettagliato = Introduction: Porter and Kramer argue that capitalism is currently facing a crisis. Businesses are increasingly seen as major contributors to social, environmental, and economic problems, with the perception that companies profit at the expense of the broader community. This has led to diminished trust in businesses, resulting in political and regulatory actions that hinder economic growth. The authors propose that the solution lies in **"creating shared value" (CSV)**, a concept where businesses generate economic value in ways that also produce societal benefits. CSV is distinct from traditional corporate social responsibility (CSR) or philanthropy, as it seeks to integrate social progress into the core business model. Capitalism Under Siege: The traditional business model, which focuses narrowly on short-term financial performance, has failed to address societal needs. Companies optimize short-term profits but overlook critical factors such as the well-being of their customers, depletion of natural resources, and the economic health of the communities they operate in. This has led to a disconnection between business and society, contributing to a cycle of declining trust and regulatory pressures. Porter and Kramer argue that businesses must reconnect with social progress to unlock innovation and growth. The Concept of Shared Value: **Shared value** involves creating economic value in a way that also generates societal value by addressing social challenges. This approach goes beyond CSR, which often operates on the periphery of a company’s strategy and is usually driven by external pressures or reputational concerns. Shared value, on the other hand, focuses on the symbiotic relationship between company success and societal well-being. According to the authors, businesses should not only focus on profit but also consider how their operations and strategies can improve social conditions. There are three primary ways that companies can create shared value: 1. **Reconceiving Products and Markets**: Companies can innovate to meet societal needs, such as health, environmental sustainability, or financial security, creating new market opportunities. For example, products that improve nutrition, reduce environmental impact, or provide financial tools for the underserved can generate significant business and social benefits. 2. **Redefining Productivity in the Value Chain**: Businesses can increase productivity by addressing societal challenges in areas such as energy use, logistics, resource efficiency, employee health, and worker conditions. For instance, reducing packaging waste or energy consumption can lower costs and boost competitiveness while benefiting the environment. Wal-Mart's efforts to reduce packaging and reroute trucks to save fuel is an example of shared value at work, as it both reduces costs and minimizes environmental impact. 3. **Enabling Local Cluster Development**: Companies can create value by investing in the economic health of the regions where they operate. This involves building or strengthening local clusters, which are geographic concentrations of related businesses, suppliers, and infrastructure. Stronger local clusters improve company productivity and foster innovation. For example, Nestlé invested in the development of local agricultural clusters to enhance the quality and efficiency of its coffee supply chain, benefiting both the company and local farmers. Examples of Shared Value in Action: Several major companies have already begun implementing shared value strategies. - **Nestlé’s Nespresso division** is highlighted as an example of a company that redesigned its procurement processes by working directly with small coffee farmers, improving their productivity and environmental practices while securing a high-quality coffee supply for itself. - **GE’s Ecomagination initiative** is another example, focusing on the development of environmentally friendly products and services, which not only reduce environmental impact but also drive business growth. - **Vodafone’s M-PESA mobile banking service** in Kenya enabled financial inclusion for millions of underserved people, while also creating a new market for the company. The Role of Government and NGOs: Governments and NGOs also play a crucial role in enabling shared value by creating regulatory environments that encourage businesses to innovate and address social challenges. The authors argue that traditional regulations, which impose constraints on businesses, often create trade-offs between social and economic goals. Instead, regulations should focus on setting performance standards and enabling innovation, allowing businesses to develop solutions that benefit both society and the economy. Why Shared Value Matters: The shared value approach, according to Porter and Kramer, has the potential to drive the next wave of innovation and growth for businesses. It redefines the purpose of the corporation, shifting from profit maximization alone to generating profit by solving social problems. This approach legitimizes business in the eyes of the public, rebuilds trust, and fosters sustainable growth by aligning company success with societal progress. The authors believe that shared value represents a new, more sophisticated form of capitalism, one that can address many of the world's most pressing challenges while generating economic benefits for companies. They emphasize that not all social problems can be solved by businesses alone, but businesses have unique resources, expertise, and capabilities that make them essential to advancing societal progress. Conclusion: Creating shared value is a transformative concept that can reshape capitalism and redefine the role of business in society. It opens new avenues for innovation, growth, and productivity while addressing social needs. As companies integrate societal value into their core strategies, they not only enhance their competitiveness but also contribute to a broader positive impact on the world. This new model of capitalism, focused on shared value, represents the future of business, offering a path for companies to regain legitimacy and thrive in an increasingly interconnected world. In summary, Porter and Kramer advocate for a rethinking of capitalism, where businesses focus on shared value to drive long-term success and societal progress. ESEMPI = 1. **Nestlé's Nespresso and Smallholder Farmers**: Nestlé's Nespresso division redefined its procurement practices by working closely with small coffee farmers in Africa and Latin America. Instead of simply focusing on getting the cheapest coffee beans, Nestlé helped farmers improve their agricultural practices, provided access to loans, and paid premiums for higher-quality coffee. This led to increased productivity and income for the farmers, while securing a stable, high-quality coffee supply for Nespresso. This approach illustrates the principle of **enabling local cluster development** and **redefining productivity** in the value chain. 2. **GE’s Ecomagination**: GE’s Ecomagination initiative is a powerful example of **reconceiving products and markets**. GE developed products that reduce environmental impact, such as energy-efficient appliances, wind turbines, and water filtration systems. By aligning its product innovation with growing consumer and societal demands for sustainability, GE not only contributed to environmental improvement but also generated significant business growth, with sales of Ecomagination products reaching $18 billion. 3. **Walmart’s Supply Chain Efficiency**: Walmart applied shared value by focusing on improving efficiency in its supply chain. The company reduced packaging, redesigned truck routes to cut fuel consumption, and invested in more energy-efficient technologies. These actions not only helped the environment by reducing carbon emissions but also saved the company millions of dollars in operating costs. This is an example of **redefining productivity in the value chain** by addressing social and environmental issues in a way that improves business performance. 4. **Vodafone’s M-PESA in Kenya**: Vodafone's M-PESA mobile banking service in Kenya allowed millions of unbanked people, particularly in rural areas, to access financial services through mobile phones. This innovation helped individuals securely save and transfer money, improving their financial inclusion and economic mobility. At the same time, M-PESA created a new revenue stream for Vodafone by opening a previously untapped market. This is a clear example of **reconceiving markets** to serve societal needs while driving business growth. 5. **Intel and Digital Solutions for Utilities**:  Intel has worked with utilities to develop smart grid technologies that help them manage power usage more efficiently. By integrating digital intelligence into electricity distribution, utilities can reduce energy waste, lower costs, and provide more reliable services. This initiative demonstrates **reconceiving products** to meet societal demands for more efficient energy use, creating value for both the utility companies and society at large by promoting sustainability. These examples show how companies across various industries are integrating shared value principles into their core business strategies, generating both economic and social benefits. 2. New Business Models in Emerging Markets – ALE Riassunti per capire di che parla = Summary: The paper explores how multinational companies can succeed in emerging markets by developing entirely new business models rather than simply adapting existing ones. Many companies struggle in these markets because they attempt to transplant their domestic models, which often results in targeting only the wealthiest consumers, leaving the vast middle market underserved. The authors propose a three-step process for business model innovation: 1. **Identify an unmet need ("job to be done")** in the market. 2. **Create a new business model** to address this need profitably. 3. **Test and evolve** the model based on real-world insights and adjustments. Key examples include: - **Godrej’s ChotuKool**, a low-cost refrigerator designed for rural India, co-created with local consumers. It is portable, energy-efficient, and specifically designed to meet the needs of low- income households. - **Vodafone’s M-PESA**, a mobile money service in Kenya, which addresses the lack of traditional banking infrastructure by allowing users to transfer money via mobile phones. The paper emphasizes the importance of affordability and accessibility in emerging markets, with successful models integrating the customer value proposition, profit formula, key resources, and key processes. Ongoing experimentation and an open-minded approach are essential for adapting to the unique conditions of these markets. Riassunto dettagliato = The paper *"New Business Models in Emerging Markets"* by Matthew J. Eyring, Mark W. Johnson, and Hari Nair discusses how multinational companies can effectively tap into emerging markets, specifically targeting the underserved middle market. The authors argue that companies should not just replicate their domestic business models in these regions but instead develop entirely new models tailored to the unique needs of emerging markets. Key Points: 1. **Targeting the Middle Market**:  Emerging markets offer significant growth potential, with Western multinationals predicting that up to 70% of their future growth will come from these regions. However, companies often struggle in these markets by simply transplanting their existing business models and failing to engage with the large middle market. The underserved middle market, which consists of people whose needs are poorly met by low-end solutions and who cannot afford high-end alternatives, presents a vast, untapped opportunity. Companies must design new business models to better serve this middle segment profitably. 2. **A Systematic Process for Innovation**: The authors propose a systematic approach to creating new business models for emerging markets. The process consists of three steps: - **Identify an unmet need ("job to be done")**: Find an important need in the market that is not being effectively addressed. - **Blueprint a business model**: Develop a model that can fulfill this need at a price the customer is willing to pay while remaining profitable for the company. - **Implement and evolve**: Test the model, gather insights, and adjust as necessary based on market feedback. 3. **Case Study: Godrej’s ChotuKool**: The Indian company Godrej & Boyce used this approach to create the ChotuKool, a low-cost refrigerator designed for the Indian middle market. Instead of offering a stripped-down version of a traditional refrigerator, Godrej started from scratch to address the specific needs of rural and semi-urban consumers. These consumers often lived in small homes, lacked reliable electricity, and shopped for groceries daily. The ChotuKool is a small, portable, and energy- efficient cooling unit that meets the needs of these customers without the complexity and cost of a conventional refrigerator. The product was co-created with local consumers, making it highly relevant to the market and affordable. 4. **Creating Affordable and Accessible Solutions**: Companies need to rethink their value propositions to make products more affordable and accessible in emerging markets. Affordability doesn’t just mean offering a cheaper product; it means removing expensive features that the target market doesn’t need and adding those that address the specific needs of the local population. Access is another critical factor, as products and services in emerging markets are often difficult to obtain. For example, **Vodafone’s M-PESA** mobile money service in Kenya solved a key access problem for millions of unbanked people by allowing them to transfer money via mobile phones, creating a new business model tailored to the specific infrastructure challenges of Kenya. 5. **Business Model Integration**: Successful business models in emerging markets integrate four key elements: - **Customer Value Proposition (CVP)**: A compelling reason for customers to buy the product or service. - **Profit Formula**: How the company will generate profits while keeping the product affordable. - **Key Resources**: The assets, people, technology, and partnerships needed to deliver the CVP. - **Key Processes**: The activities and routines required to deliver the CVP efficiently at scale.  These elements must work together seamlessly to create a business model that is not only profitable but also sustainable in the long term. 6. **Overcoming Obstacles**: One of the major challenges for multinationals is adapting their operations to the constraints of emerging markets. For example, the ChotuKool was designed with fewer parts and no compressor, making it cheaper and more suited to unreliable power supplies. Similarly, **Village Laundry Service (VLS)** in India, co-founded by the authors’ company, created portable kiosks with washing machines that offer laundry services at affordable prices. The kiosks use independent water supplies and have small footprints, reducing costs and making them more accessible to consumers. The service was designed to meet the laundry needs of consumers who couldn't afford expensive washing machines or traditional laundry services. 7. **Testing and Experimentation**: Successful business models in emerging markets require ongoing experimentation and adjustment. The authors emphasize the importance of conducting rapid, low-cost experiments to test assumptions about the market. For instance, Vodafone's M-PESA started as a small experiment and evolved based on market feedback, becoming a widely adopted solution for mobile money transfers. Conclusion: The authors conclude that creating new business models for emerging markets requires a departure from traditional strategies. Companies must focus on serving the unmet needs of the middle market by designing affordable and accessible solutions tailored to local conditions. This process involves ongoing experimentation, co-creation with local customers, and an open mind to rethink traditional approaches. Emerging markets are not just large labs for product innovation, but unique environments that offer companies the opportunity to develop innovative business models that can be scaled for global success. ESEMPI = 1. **Mobile Banking in Remote Areas**: Imagine a company launching a mobile banking service in a remote area of Southeast Asia where traditional banking infrastructure is scarce. Similar to Vodafone's M-PESA in Kenya, this service would allow users to transfer money, pay bills, and check balances via mobile phones. The challenge lies in providing secure, affordable services that are accessible even in areas without consistent internet or electricity, addressing unmet needs in financial inclusion. 2. **Affordable Cooling Solutions for Rural Populations**: A startup in Sub-Saharan Africa develops a low-cost, solar-powered cooling device targeted at rural communities where access to electricity is limited. Following the ChotuKool model from the paper, the product is designed specifically for keeping small amounts of food fresh and cooling water, but without the heavy energy consumption of traditional refrigerators. This venture is aimed at fulfilling a basic "job to be done" for rural populations by providing a sustainable, cost-effective alternative. 3. **Localized Laundry Services in Urban Slums**: A company rolls out small, affordable laundry kiosks in the urban slums of Latin America. Based on the Village Laundry Service example, these kiosks use portable water supplies and low-energy washing machines to provide quick, hygienic washing services to families who can't afford home washing machines or expensive laundromats. The kiosks are designed to be highly accessible, offering 24-hour turnaround for a price comparable to manual washing services, addressing both affordability and convenience. 4. **Low-Cost Healthcare Services for Middle-Income Households**: A health tech company establishes a chain of clinics across rural India, offering basic medical services at affordable prices. Inspired by the concept of addressing the middle market in the paper, these clinics focus on providing essential healthcare such as vaccinations, prenatal care, and diagnostics at a fraction of the cost of traditional hospitals, leveraging telemedicine and portable diagnostic devices to lower overhead costs and increase reach. 5. **Educational Platforms for Emerging Markets**: An ed-tech firm develops a mobile-based educational platform targeting students in emerging markets who lack access to formal schooling. This platform uses low-bandwidth mobile apps to deliver educational content, particularly focusing on vocational training and digital literacy. Much like the business model innovation discussed in the paper, the company starts by understanding the "job to be done" for students in these regions—namely, gaining practical skills that lead to employment—and develops a low-cost solution accessible even to those with limited internet access. 3. A Reverse-Innovation Playbook – ALE The paper by Vijay Govindarajan, "A Reverse-Innovation Playbook" (Harvard Business Review, April 2012), explores the concept of "reverse innovation." This approach focuses on developing innovations in emerging markets and then transferring them to developed markets, allowing multinational corporations to unlock new growth opportunities and overcome traditional operational limits. Case Study: Harman International Harman International serves as a prominent example of reverse innovation. Traditionally, Harman developed high-end infotainment systems for luxury vehicles. However, under the leadership of CEO Dinesh C. Paliwal, the company restructured its organization to address the specific needs of emerging markets. Harman set up a team in India and China, led by local managers, to design simpler, more affordable infotainment systems. This team adopted a unique engineering approach, focusing on scalability, simplicity, modularity, and the integration of third-party solutions, rather than relying on Harman's traditional "invented here" mindset. Key Strategies and Challenges The company’s initiative, named *Saras*, aimed to create high-quality products at a fraction of the cost of its luxury models. By prioritizing flexibility and keeping the team’s size small, Harman enabled swift adjustments and innovation. However, the team faced significant internal resistance. Western departments were skeptical of the products' quality and questioned their applicability in developed markets. To counter this resistance, Paliwal personally endorsed the project, pushed for its success, and convinced reluctant Western teams to recognize the value of the new systems. Leadership and Cultural Shift Govindarajan highlights that the success of reverse innovation at Harman depended on a two- part approach: bottom-up innovation driven by local teams, coupled with top-down support from the CEO to ensure company-wide alignment. Paliwal not only communicated a clear vision for the company’s future in emerging markets but also adjusted its corporate structure to integrate reverse innovation, shifting resources and R&D spending to regions with the greatest growth potential. Impact and Broader Implications The reverse innovation model allowed Harman to enter new segments, such as motorbike infotainment, and develop highly scalable systems suitable for diverse markets. This model reshaped the company’s engineering processes, enabling it to serve both luxury and entry- level segments more effectively. Govindarajan concludes that for many multinationals, reverse innovation represents a transformative mindset shift, encouraging them to view emerging markets as sources of innovation rather than mere targets for existing products. ESEMPI = Here are five examples of reverse innovation, inspired by the strategies and principles discussed in Vijay Govindarajan's *"A Reverse-Innovation Playbook"*: 1. GE Healthcare's Portable Ultrasound General Electric (GE) developed a portable, low-cost ultrasound machine in China to meet the needs of rural and low-income areas. The device was designed to be lightweight and user- friendly, suitable for communities with limited healthcare infrastructure. After its success in China, GE introduced this product in the U.S. and other developed markets, where it found new applications, such as in emergency rooms and for on-site diagnoses. 2. Renault-Nissan's Datsun Go Renault-Nissan developed the Datsun Go, an affordable and fuel-efficient car specifically for emerging markets like India and Indonesia. By simplifying features and focusing on essential needs, they reduced production costs significantly. After its success in these markets, Renault-Nissan considered adopting some of the Go’s cost-effective design principles for models in Europe, appealing to budget-conscious consumers. 3. Haier's Mini Washing Machine The Chinese appliance manufacturer Haier created a compact, low-cost washing machine tailored to rural Chinese customers, where washing smaller loads, like vegetables and children's clothes, was essential. This product's success led Haier to introduce it in Western markets for use in small apartments and dorm rooms, where space-saving solutions are highly valued. 4. PepsiCo's Kurkure Snack PepsiCo created *Kurkure*, a crunchy snack specifically for the Indian market, focusing on local flavors and ingredients to cater to Indian consumers’ taste preferences. Its popularity in India led PepsiCo to expand this product line to other markets, where they marketed it as an exotic, international flavor. 5. Godrej's ChotuKool Refrigerator  Indian conglomerate Godrej developed ChotuKool, a small, low-power refrigerator designed for rural areas with unreliable electricity. Lightweight and portable, this refrigerator was an affordable solution for people with limited access to cooling. The ChotuKool has since gained interest in other countries as a low-cost, environmentally friendly option for campers, small businesses, and budget-conscious consumers in developed markets. Riassunto per capire di che si parla = 4. Reverse Innovation and the Emerging-Market Growth Imperative – ANNALISA Riassunto dettagliato: 1. Introduction The article emphasizes that many companies are not shifting to sustainable environmental practices despite pressures from investors, governments, and consumers. The study explores a model for understanding and improving supply chain sustainability and applies it to two companies: Coca-Cola and Apple. The study demonstrates that eliminating waste across the supply chain increases profitability, making sustainability a competitive necessity. The central argument is that a green supply chain, which reduces waste and optimizes resources, aligns with the principles of best supply chain practices. 2. Literature Review Green Supply Chain Management (GSCM) integrates environmental thinking into supply chain processes, covering product design, material sourcing, manufacturing, distribution, and reverse logistics. Previous research shows that GSCM can reduce costs, increase efficiency, and create competitive advantages. Companies have adopted GSCM due to both external pressures, such as regulations and consumer expectations, and internal motivations, like cost-saving and operational improvements. The literature suggests that collaboration with suppliers and environmental innovation are key drivers for adopting GSCM, alongside strategies like lean manufacturing and closed-loop supply chains. 3. Methodology The study uses case studies, existing research, and sustainability reports to develop a framework for implementing green supply chain strategies. Tools like value stream mapping and lean management principles are employed to demonstrate the potential for creating sustainable supply chains. The framework includes a simple production equation: Inputs = Waste + Product, where the goal is to maximize the use of “good” inputs, eliminate waste, and optimize production. The analysis involves reviewing each stage of the supply chain, from product design to consumption and disposal, identifying potential environmental risks, and implementing best practices for waste reduction. 4. Case Study 1: Apple Product Design: Apple has focused on reducing the environmental impact of its product designs. Energy efficiency is a key goal, with the company exceeding ENERGY STAR standards for many products. It has also reduced packaging waste by making lighter, more compact designs. Suppliers and Purchasing: Apple has implemented strict environmental regulations for its suppliers, but it has faced issues with hazardous waste management. The company conducts  regular audits and provides training programs to help suppliers comply with its environmental standards. Manufacturing and Warehousing: Apple outsources much of its manufacturing and has a minimal internal inventory. It has focused on energy-efficient manufacturing processes but has room for improvement in areas like packaging waste. Transportation: Apple has made progress in reducing employee transportation emissions, but there is limited information on its product shipping practices. Consumption and Disposal: Apple has implemented recycling programs, with a focus on recovering materials from used electronics. The company has increased its recycling rate but still faces criticism for not being a leader in environmental responsibility. Profitability: Apple’s return on equity (ROE) increased significantly between 2003 and 2008, driven by improvements in operating efficiency. However, the company’s asset utilization declined during this period, indicating potential for further gains from adopting stronger sustainability practices. 5. Case Study 2: Coca-Cola Product Design: Coca-Cola has been proactive in redesigning its packaging to reduce waste and improve efficiency. The company has invested in recyclable packaging and reduced its overall material use. Suppliers and Purchasing: Coca-Cola closely monitors water and energy usage in its supply chain. It has achieved significant reductions in water and energy consumption per liter of product since implementing sustainability strategies. Manufacturing and Warehousing: Coca-Cola has optimized its manufacturing processes through heavy investment in supply chain software. However, the company’s inventory turnover ratio has decreased, suggesting inefficiencies in managing excess inventory. Transportation: The company has introduced hybrid trucks to reduce transportation emissions and energy consumption. Consumption and Disposal: Coca-Cola leads in reverse logistics, using recycled materials in its production processes. The company has developed innovative recycling programs, including reverse vending machines that make it easier for consumers to return and recycle PET bottles. Profitability: Coca-Cola’s ROE declined slightly between 2002 and 2008, but the company’s sustainability initiatives have improved asset efficiency. Challenges remain in managing inventory and maintaining profitability alongside large acquisitions. 6. Discussion The findings demonstrate that companies can improve profitability by adopting green supply chain practices. Coca-Cola has shown that sustainability can be embedded into the entire supply chain, from sourcing materials to product disposal. In contrast, Apple has made progress but still lags in several areas, particularly in proactive environmental leadership. The study suggests that focusing on waste reduction, starting in the product design phase, provides the greatest opportunities for cost savings and environmental benefits. 7. Managerial Implications Managers should view sustainability not as a cost but as an opportunity for innovation and efficiency. Green supply chain practices can reduce waste, improve resource management, and create competitive advantages. The study offers a framework that managers can use to implement GSCM, focusing on areas like lean manufacturing, waste reduction, and collaboration with suppliers. Benchmarking against companies like Coca-Cola can provide useful insights for adopting best practices in sustainability. 8. Conclusions The study concludes that a green supply chain is essential for companies to remain competitive in the long term. By reducing waste, optimizing resource use, and improving efficiency, companies can achieve profitability while meeting the growing demands of regulators and consumers. Coca-Cola’s success demonstrates that GSCM can enhance both environmental and financial performance, while Apple’s challenges show the importance of taking a proactive approach to sustainability. The study calls for further research on applying green supply chain models to smaller companies and emerging markets. 9. Recommendations for Future Research The study highlights the need for more case studies, especially from small and medium-sized enterprises (SMEs) and companies in emerging markets. It also suggests exploring how combining green supply chain practices with proven management techniques, such as Lean and Six Sigma, can drive further improvements in sustainability and profitability. Key points: 1. Green Supply Chain Management (GSCM): GSCM integrates environmental considerations into supply chain processes (e.g., purchasing, manufacturing, distribution, and reverse logistics). It’s not just about regulatory compliance but offers cost savings, increased efficiency, and competitive advantages by reducing waste and optimizing resource use. 2. Drivers of GSCM: External drivers: Regulatory pressures, rising consumer expectations, fluctuating resource prices, and brand reputation. Internal drivers: Management commitment to sustainability, operational efficiency, and cost reductions through lean and Six-Sigma practices. 3. Case Studies: Coca-Cola: A leader in sustainability, Coca-Cola focuses on water and energy efficiency, recyclable packaging, hybrid transportation, and effective reverse logistics. Despite sustainability efforts, profitability challenges arose due to inventory management and acquisitions. Apple: Slow to adopt sustainability practices but now making progress. It has improved product design and energy efficiency, implemented supplier environmental standards, and developed a recycling program. However, Apple has been more reactive than proactive in its sustainability efforts. 4. Profitability Link: GSCM can lead to enhanced profitability through waste reduction and improved resource efficiency, as demonstrated by Coca-Cola’s packaging and water use initiatives. However, companies like Apple and Coca-Cola must also manage other operational factors (e.g., inventory) to fully realize the financial benefits. 5. Conclusion: A green supply chain is crucial for staying competitive in a business environment shaped by resource constraints and increasing sustainability demands. Companies need to integrate sustainability from the product design phase and throughout the entire supply chain to ensure both environmental and financial benefits. Esempi: 1. Walmart: Reducing Packaging and Transportation Emissions Theme: Packaging and Transportation Optimization Example: Walmart has been a leader in reducing packaging waste and improving transportation efficiency. The company set a goal to achieve zero waste in its U.S. operations by 2025 and has introduced various initiatives to reduce packaging material across its supply chain. For instance, Walmart works with suppliers to use less plastic and more recyclable materials. In terms of transportation, Walmart has optimized its supply chain to reduce its carbon footprint by increasing fuel efficiency in its truck fleet and redesigning its routes. As a result, Walmart reported saving millions of dollars while reducing emissions, aligning perfectly with the theme of cost-saving through sustainability. 2. Patagonia: Closed-Loop Supply Chain and Product Lifecycle Extension Theme: Reverse Logistics and Product Design Example: Patagonia, the outdoor apparel company, has implemented several initiatives to minimize its environmental impact and promote a circular economy. The company’s Worn Wear program encourages customers to repair, reuse, and recycle their products rather than buying new ones. Patagonia takes back worn products for recycling and refurbishing, which it then resells at discounted prices. This closed-loop approach directly aligns with reverse logistics and extending product lifecycles, a key point in the article about minimizing waste in the supply chain. 3. IKEA: Sustainable Sourcing and Supplier Auditing Theme: Sustainable Sourcing and Supplier Management Example: IKEA has focused heavily on sustainable sourcing of raw materials, particularly wood, cotton, and plastics. By 2030, IKEA aims to only use renewable or recycled materials in its products. The company audits its suppliers to ensure they meet strict environmental and social standards, which has not only improved its sustainability metrics but also enhanced its brand reputation. IKEA also collaborates with the Forest Stewardship Council (FSC) to ensure that the wood it sources comes from sustainably managed forests. This mirrors the article’s emphasis on integrating green practices in supplier management. 4. Unilever: Reducing Water and Energy Consumption Theme: Resource Optimization in Manufacturing Example: Unilever has made significant strides in reducing water usage and energy consumption across its global manufacturing sites. Through its Sustainable Living Plan,  Unilever reduced CO2 emissions from energy by 65% and cut its water consumption per ton of product by 44% between 2008 and 2020. For example, its factories in India have implemented rainwater harvesting and water recycling systems. These initiatives reflect the importance of reducing resource usage in manufacturing, as discussed in the article, leading to both environmental and cost benefits. 5. Tesla: Vertical Integration and Renewable Energy Use Theme: Green Product Design and Supply Chain Integration Example: Tesla is known for its vertical integration, where it controls much of its supply chain, from raw material sourcing to manufacturing and retail. Tesla’s Gigafactories use renewable energy, such as solar and wind, to power the production of electric vehicles (EVs) and battery packs, aligning with its mission to promote sustainability. Additionally, Tesla designs its products (like batteries and cars) with the goal of minimizing waste through innovation, such as enabling battery recycling and reusing EV components. This closely aligns with the article’s discussion of optimizing product design and reducing waste across the supply chain. 5. Governance for Sustainability – ANNALISA Riassunto dettagliato: Some Context The article begins by explaining how corporate governance is evolving to intersect with broader societal issues like business ethics, human rights, and environmental sustainability. The author recounts a disagreement in 2000 with a corporate governance expert who did not believe governance would overlap with corporate social responsibility (CSR) and sustainability. Over time, these themes have merged, and governance now increasingly involves managing social and environmental concerns. The Triple Bottom Line The concept of the triple bottom line (TBL), introduced in 1994 by the author, emphasizes that companies must create value in three dimensions: economic, social, and environmental. The TBL agenda moves beyond just profit to include societal and environmental impacts. As businesses increasingly recognize these aspects, corporate governance becomes central to managing this broader value creation. The better the governance system, the more likely companies can support sustainable capitalism. The article also notes that many TBL advocates haven’t focused enough on boards of directors, though this is a critical area for future action. Three Pressure Waves The article identifies three major waves of societal pressure that have shaped the environmental and sustainability agendas: 1. The Limits Wave (1960s-1970s): Triggered by concerns about environmental degradation, particularly highlighted by the 1972 Limits to Growth report and subsequent legislation across the OECD. 2. The Green Wave (1980s-1990s): Fueled by issues like climate change, biodiversity loss, and the rise of green consumerism. High-profile incidents like the Exxon Valdez oil spill and controversies around corporate behavior pushed sustainability to the forefront.  3. The Globalization Wave (1999-present): Protests against institutions like the WTO and IMF emphasized the role of public institutions in sustainable development. The 2002 UN World Summit on Sustainable Development further focused attention on governance. Davos 2006 – and Beyond The 2006 World Economic Forum in Davos underscored the growing importance of sustainability. Former U.S. President Bill Clinton identified climate change, inequality, and cultural divides as critical global challenges. Discussions at Davos revealed a shift in corporate attitudes, with sustainability becoming a key theme for many CEOs. The article notes that companies like GE and Walmart are examples of businesses leading the way with their sustainability initiatives, such as GE’s Ecomagination and Walmart’s focus on renewable energy and zero waste. Inflection Points At Davos, several speakers, including Mukesh Ambani of Reliance Industries, highlighted that issues like climate change and resource scarcity are at an “inflection point.” The article emphasizes that the world is transitioning from an era of limited growth to one defined by resource constraints and disruptions. How businesses and governments manage these challenges will determine whether we move toward or away from sustainability. Telescope with Four Lenses The author introduces a framework called the Davos PLOT, represented by four animal symbols, each embodying different strategies for businesses to navigate sustainability challenges: 1. Penguin: Represents companies that cluster together for survival, relying on voluntary associations or industry federations. However, they risk failure if the environment (market or climate) changes rapidly. 2. Lungfish: Symbolizes businesses or countries that cocoon themselves, withdrawing from competition or challenges. This strategy represents denial but also comes with high risks, as isolation can lead to collapse. 3. Owl: Represents innovators and entrepreneurs who thrive in difficult conditions, identifying opportunities in a resource-constrained world. These companies are pioneers of new sustainable markets. 4. Termite: Symbolizes a collective, constructive response to challenges. Termites represent megacities and large-scale innovation focused on symbiosis and resource efficiency. Quantum Jumps The article concludes by discussing the need for significant leaps in sustainability efforts—what the author calls quantum jumps. These transformations are essential for moving from the current unsustainable world to a more sustainable future. The author points to examples like Chinese eco- cities as models for how rapid and large-scale change can occur. The convergence between corporate governance and sustainability is accelerating, pushing businesses to embrace sustainable development as a competitive advantage. Key points: Some Context  Corporate governance is increasingly intersecting with broader societal concerns like ethics, human rights, and climate change. The convergence of corporate governance and sustainability has become a significant focus of business strategy. The Triple Bottom Line The triple bottom line (TBL) framework urges companies to create value in three areas: economic, social, and environmental. Corporate governance plays a crucial role in integrating these dimensions into business decision-making, aiming for sustainable capitalism. Three Pressure Waves 1. Limits Wave (1960s-1970s): Environmental concerns led to regulatory actions, such as the Limits to Growth report and subsequent environmental laws. 2. Green Wave (1980s-1990s): Issues like climate change and green consumerism brought sustainability into corporate strategies. 3. Globalization Wave (1999-present): Protests against global institutions like the WTO emphasized the need for governance in sustainable development. Davos 2006 – and Beyond At the 2006 World Economic Forum, sustainability became a central theme, with companies like GE and Walmart leading with initiatives in renewable energy and zero waste. There was recognition that sustainability is no longer just an ethical issue but a business imperative. Inflection Points Climate change, resource scarcity, and inequality are reaching a critical “inflection point,” pushing businesses to adapt to avoid unsustainable practices. Telescope with Four Lenses (PLOT) 1. Penguin: Companies that cluster for survival but may fail if the environment changes. 2. Lungfish: Businesses that cocoon themselves, avoiding risks but at a high cost. 3. Owl: Innovators and entrepreneurs that find opportunities in challenging conditions. 4. Termite: Collective strategies, especially in large-scale urban areas, focusing on resource efficiency. Quantum Jumps Significant leaps are needed to transition from an unsustainable world to one that prioritizes sustainability. The convergence of corporate governance and sustainability is accelerating, demanding that businesses adopt sustainable practices for long-term success. Esempi: 1. Triple Bottom Line (TBL) in Practice: Unilever Theme: Economic, Social, and Environmental Value Creation Example: Unilever’s Sustainable Living Plan integrates the TBL framework by setting targets for improving health and well-being, reducing environmental impact, and enhancing livelihoods. They aim to halve the environmental footprint of their products by 2030 while improving the social conditions of their suppliers and employees. Unilever’s commitment to sustainability has positively influenced its profitability and brand reputation. 2. Governance for Climate Change: Microsoft Theme: Corporate Governance and Climate Action Example: Microsoft has integrated sustainability into its governance framework, aiming to be carbon negative by 2030. The company uses its board of directors to oversee environmental impact strategies and sets ambitious goals for carbon reduction across its operations and supply chain. It also imposes a carbon fee internally to hold divisions accountable for their emissions, aligning governance with sustainability goals. 3. Collective Action on Sustainability: RE100 Theme: Collective Governance and Corporate Responsibility Example: The RE100 initiative is a global corporate leadership group committed to sourcing 100% renewable electricity. Companies like Apple, IKEA, and Google are part of this collective action, working together to meet climate targets. This collaboration mirrors the article’s “Termite” strategy, where businesses collectively work toward sustainable solutions on a global scale. 4. Global Supply Chain and Sustainability: IKEA Theme: Supply Chain Sustainability and Governance Example: IKEA’s governance model focuses on sustainable sourcing. By 2030, IKEA plans to use only renewable or recycled materials in its products. It is also committed to responsible forestry, sourcing 98% of its wood from certified sustainable sources. This aligns with the article’s emphasis on sustainability governance extending across entire supply chains. 5. Innovation in Sustainable Markets: Tesla Theme: Innovation and Corporate Responsibility Example: Tesla exemplifies the Owl strategy, where companies innovate to find new opportunities in sustainability. Tesla’s leadership in electric vehicles (EVs) has reshaped the automotive industry, pushing for cleaner energy solutions. The company’s governance focuses on advancing EV technology and building a sustainable future through renewable energy products like solar panels and batteries. 6. Addressing Resource Constraints: Nestlé Theme: Resource Scarcity and Corporate Adaptation Example: Nestlé has faced scrutiny for its water usage, especially in drought-prone areas. In response, the company implemented stronger governance over its water management practices. Nestlé launched its Water Stewardship Program, aiming to reduce water  consumption, improve efficiency, and restore water ecosystems. This initiative reflects the article’s focus on resource constraints driving changes in corporate governance. 7. Corporate Governance and Social Responsibility: Patagonia Theme: Governance and Social Entrepreneurship Example: Patagonia is known for its leadership in sustainability and social responsibility. The company’s governance model includes prioritizing environmental impact over short-term profit. Patagonia donates 1% of sales to environmental causes and encourages other companies to adopt sustainable practices through its 1% for the Planet initiative. This is an example of how social entrepreneurship is integrated into corporate governance, in line with the article’s themes. 6. A green supply chain is a requirement for profitability – ANNALISA Riassunto dettagliato: The article "Reverse Innovation and the Emerging-Market Growth Imperative" by Chris Trimble delves into the rising significance of reverse innovation for multinational companies. Reverse innovation refers to innovations that are created for and first adopted in developing countries before migrating to developed markets. This concept shifts the traditional innovation paradigm, where new technologies and products usually flowed "downhill" from the rich world to emerging markets. 1. Definition of Reverse Innovation Reverse innovation occurs when innovations are first launched in emerging markets rather than in wealthier countries. It is not defined by where the product is invented but by where the customers are. The article stresses that this phenomenon challenges the long-held belief that innovations start in rich countries and gradually trickle down to developing nations as costs decrease and incomes rise. 2. The Emerging Market Challenge Global corporations, especially those from developed countries, often rely on exporting products with minor adaptations to developing markets. However, this strategy is increasingly failing in today’s global economy. For decades, multinational companies would first innovate for their home markets, then export these innovations to other rich countries. This worked when most export markets were wealthy, but now, emerging markets are where the highest growth potential exists. Firms must shift from this export-focused mindset to a model that centers on innovating directly for emerging markets. 3. The Case of Logitech in China The article provides a real-world example involving Logitech, a global leader in computer peripherals. In 2009, Logitech was surprised when its wireless mouse sales in China lagged, even though the company dominated other markets. A Chinese company, Rapoo, had created a wireless mouse that better suited local preferences, particularly for using a mouse as a remote control to navigate online video on PCs connected to televisions. Rapoo offered a product with similar technological features but at a lower price than Logitech’s, by stripping out non-essential functions. This caught Logitech off- guard, highlighting the company’s failure to understand that Chinese consumers had distinct needs and were not just price-sensitive but also required specific functionalities that differed from those in wealthier markets. Logitech quickly formed a special team and responded by designing a product that better met the needs of Chinese consumers. 4. The Five Needs Gaps Between Developed and Emerging Markets Trimble identifies five critical gaps that separate the needs of customers in the rich world from those in developing markets. These gaps must be addressed for reverse innovations to succeed: Performance Gap: Emerging markets require products that perform well enough but are available at significantly lower price points. Developing world consumers may be willing to sacrifice performance, but only up to a point. The standard approach of reducing performance by 10-20% for a slightly lower price doesn’t work; companies need to redesign products from scratch to meet a radically lower price point, often aiming for 10-20% of the original price with acceptable performance. Infrastructure Gap: Many emerging markets lack the fully developed infrastructure that companies in the rich world take for granted. Products must be designed to work in environments where electricity is unreliable, transportation is limited, or telecommunication networks are underdeveloped. For example, General Electric (GE) designed a low-cost, portable EKG machine for rural India with a long battery life because power outages are common. Sustainability Gap: Environmental and sustainability challenges are often more acute in developing nations. In some cases, these nations are leading in adopting green technologies due to severe local conditions, such as China’s leadership in electric vehicles to combat pollution in major cities. Companies must recognize that sustainability requirements in emerging markets are different and can often drive innovation. Regulatory Gap: Developing markets often have less stringent regulatory environments compared to developed countries, making them more favorable for rapid innovation. For example, products designed to meet rich world regulations may be unnecessarily complex and expensive for emerging markets. Preferences Gap: Cultural and lifestyle differences often require companies to rethink their offerings completely. For example, PepsiCo developed lentil-based chips for the Indian market, understanding that corn, the traditional base for snack foods in the U.S., is less common in India. 5. Rethinking Product and Organizational Design Addressing these needs gaps requires not just product innovation but also organizational innovation. Multinational companies need to create **Local Growth Teams (LGTs)**—dedicated teams in emerging markets that operate independently from headquarters and are tasked with developing new products tailored to local needs. These teams should be made up of local talent who understand the market and are unencumbered by the biases of the parent company. The example of Deere & Company (John Deere) illustrates this approach well. When developing a tractor for the Indian market, Deere did not simply modify its existing U.S. models. Instead, the company conducted extensive research to understand how Indian farmers used tractors differently from U.S. farmers. For instance, in India, tractors are often used both for farming and as personal vehicles. Deere designed a new tractor from the ground up to meet these specific needs, rather than relying on existing designs. 6. Innovation Migrating “Uphill” One of the most intriguing aspects of reverse innovation is how innovations designed for emerging markets can eventually find success in developed markets. As technologies improve and customer needs evolve, innovations that start as "good enough" for developing markets can later become attractive to customers in rich countries. For example, a product initially designed with reduced features to meet the price-sensitive demands of an emerging market can later improve in quality and find an audience in wealthier nations. This dynamic is referred to as innovation migrating “uphill”—moving from the developing world to the developed world. A striking example provided is how chicken tikka masala, a dish adapted from Indian cuisine, became the most popular fast food in the United Kingdom. Similarly, innovations designed to meet sustainability challenges in the developing world, such as electric cars, can later be adopted in developed countries. 7. Managerial Takeaways The article closes with an important warning for multinational companies. Many firms discount the need to innovate when entering emerging markets, viewing these regions as less lucrative due to lower income levels. However, ignoring the specific needs of these markets and relying solely on exports from rich-world product lines can backfire. Not only do companies risk losing out on significant growth opportunities in emerging markets, but they may also find themselves at a competitive disadvantage when reverse innovations from these markets make their way into developed economies. In conclusion, reverse innovation is not just a strategy for success in emerging markets—it’s a strategy for survival in the global economy. Multinational corporations that fail to embrace this approach risk falling behind both abroad and at home. Key points: 1. Definition of Reverse Innovation: Innovations are first developed and adopted in emerging markets before migrating to developed countries. It is defined by where the customers are, not where the product originates. 2. Challenges for Multinationals: Traditional export strategies no longer work in emerging markets, where innovation needs to be tailored to local conditions. Companies must innovate specifically for emerging markets, rather than exporting slightly modified versions of products designed for wealthy countries. 3. Case of Logitech: Logitech failed to recognize Chinese consumer preferences for wireless mice that double as remote controls. A Chinese competitor, Rapoo, met these needs better by offering similar technology at a lower price, forcing Logitech to innovate locally. 4. Five Critical Gaps in Emerging Markets: Performance Gap: Developing markets require lower-cost products with sufficient performance, not watered-down versions of rich-world offerings. Infrastructure Gap: Products must function in environments where infrastructure, like power and communication, is underdeveloped. Sustainability Gap: Environmental challenges in emerging markets can drive innovation (e.g., China’s focus on electric vehicles). Regulatory Gap: Lax regulations in developing countries can accelerate innovation.  Preferences Gap: Cultural and lifestyle differences demand product adaptations specific to local markets (e.g., PepsiCo’s lentil-based chips in India). 5. Organizational Innovation: Companies need to form **Local Growth Teams (LGTs)** in emerging markets that operate independently, free from biases of headquarters, to develop products suited for local needs. 6. Innovation Flowing "Uphill”: Innovations developed for emerging markets often improve over time and can migrate to developed countries, becoming successful products in wealthier economies. 7. Managerial Takeaway: Companies that fail to innovate for emerging markets risk losing both abroad and at home. Reverse innovation is essential not only for growth in developing markets but also for long-term competitiveness globally. Esempi: 1. GE’s Portable Ultrasound Machine (Performance and Infrastructure Gaps) Context: General Electric (GE) developed a portable ultrasound machine for rural India, where access to hospitals and medical equipment was limited. Reverse Innovation: Traditional ultrasound machines cost $100,000 and were impractical for many rural areas. GE created a handheld version priced at $15,000, with long battery life and rugged design to address the local infrastructure challenges. Global Impact: This portable ultrasound machine was later introduced in developed markets like the U.S., where it found use in emergency rooms and ambulances due to its portability and lower cost. 2. Tata Nano (Performance and Preferences Gaps) Context: Tata Motors launched the Tata Nano, the world’s cheapest car, designed to be affordable for low-income consumers in India. Reverse Innovation: The car was developed from scratch to reduce costs, providing basic functionality for Indian consumers who couldn’t afford traditional cars. Global Impact: Although the Nano itself didn’t gain traction globally, the lessons learned from creating ultra-affordable vehicles influenced carmakers worldwide in developing low-cost models and helped Tata Motors gain international recognition. 3. Haier’s Compact Washing Machines (Preferences and Infrastructure Gaps) Context: Chinese appliance maker Haier developed a compact washing machine designed for rural China, where consumers washed vegetables as well as clothes in the same machine. Reverse Innovation: By observing rural Chinese consumer habits, Haier tailored its washing machines to accommodate this dual purpose, which led to significant market share in China. Global Impact: Haier’s innovation in emerging markets built its reputation, allowing the company to expand internationally and eventually become one of the largest appliance makers globally. 4. Nestlé’s Maggi Noodles in India (Preferences Gap)  Context: Nestlé adapted its Maggi noodle recipe to suit Indian tastes by adjusting the spice mix and introducing local flavors like “Masala.” Reverse Innovation: Understanding the strong preference for spicy food and quick meals in India, Nestlé created a product that resonated deeply with the local market. Global Impact: The success in India led to further market adaptations in other countries with similar cultural preferences, demonstrating how reverse innovation can work by customizing products to local needs. 5. PepsiCo’s Lentil Chips in India (Preferences Gap) Context: PepsiCo introduced lentil-based chips in India, recognizing that lentils were more popular than corn (which is used in most Western snack foods). Reverse Innovation: PepsiCo adapted its product line to Indian preferences by using local ingredients, which boosted its appeal among Indian consumers. Global Impact: This approach of using locally preferred ingredients has been replicated in other regions, where PepsiCo continues to innovate with products based on regional dietary preferences. 7. Being the Boss in Brussels, Boston, and Bejing: If You Want to Succeed, You’ll Need to Adapt – ELISA "Being the Boss in Brussels, Boston, and Beijing" by Erin Meyer It discusses the challenges that managers face when leading teams in different cultural contexts. The key message is that leadership styles vary significantly across cultures, primarily in two dimensions: authority and decision-making. Understanding these differences is crucial for effective global leadership. Key Concepts: 1. Authority and Decision-Making Styles: Leadership cultures differ in attitudes toward authority (hierarchical vs. egalitarian) and decision-making (top-down vs. consensual). For example, while the U.S. tends to have egalitarian attitudes towards authority, decision- making is often top-down. In contrast, Japan has a hierarchical structure with consensual decision-making. 2. Cultural Misunderstandings: Leaders often fail to distinguish between authority and decision-making styles (they don’t necessarily coincide), leading to miscommunication. For instance, Americans perceive themselves as egalitarian but may appear autocratic to more hierarchical cultures like Japan due to their decision-making approach. 3. Examples of Cross-Cultural Miscommunication: The document highlights cases where U.S. companies like "Chill Factor" struggled with their Chinese employees, who didn’t show initiative in a way Americans expected due to different cultural expectations of authority.  Another example is a merger between Japanese and American companies, where differences in decision-making styles (Japan’s consensus-based vs. America’s individual authority) created misunderstandings. 4. Four Leadership Cultures: Meyer categorizes cultures into four quadrants based on these two dimensions: Top-down, hierarchical (e.g., China, Russia) Top-down, egalitarian (e.g., U.S., U.K.) Consensual, hierarchical (e.g., Japan, Germany) Consensual, egalitarian (e.g., Sweden, Denmark) 5. Adapting Leadership Styles: To succeed internationally, leaders must adapt their leadership approach based on the cultural context. This involves recognizing how authority is perceived and how decisions are made in different regions. 6. Practical Recommendations: Meyer provides tips for operating in different leadership cultures, such as being more specific in giving directions in hierarchical cultures or involving more stakeholders in consensual cultures. The overarching theme is that global leadership requires flexibility and an ability to navigate diverse cultural expectations regarding both authority and decision-making. Success depends on understanding and adapting to the cultural norms of the team or region you are leading. EXAMPLES 1. General Electric (GE) in Japan Scenario: General Electric (GE), a U.S.-based multinational, encountered difficulties managing their Japanese subsidiary. GE's U.S. leadership style was highly egalitarian— managers encouraged open dialogue, first-name basis communication, and quick decision- making. Challenge: In Japan, GE's American managers were perceived as autocratic despite their attempts to appear egalitarian. Japanese employees, used to hierarchical structures, found it uncomfortable to openly disagree with their bosses and expected clear directives from higher-ups. Adaptation: GE’s leadership adjusted by respecting Japan’s hierarchical norms, giving more structured guidance and allowing for nemawashi—a consensus-building process where decisions are discussed informally before being formally presented. This adaptation helped reduce misunderstandings and fostered smoother decision-making in Japan. 2. Daimler-Benz and Chrysler Merger Scenario: The merger between Daimler-Benz (Germany) and Chrysler (U.S.) is a well- known case of cross-cultural leadership clash. Daimler-Benz’s leadership style was more hierarchical and consensual, while Chrysler's leadership, typical of the American business environment, was more top-down and flexible.  Challenge: The German side expected more group discussions and thorough deliberation before decisions, while the Americans were used to faster, top-down decision-making. This difference led to misaligned expectations and frustrations, with each side viewing the other’s approach as inefficient or overbearing. Adaptation: The merger ultimately failed, but it highlighted the importance of understanding cultural differences in decision-making. The need for consensus in Germany clashed with the rapid, authoritative style of the U.S., creating a case study in cross-cultural leadership. 3. Google in China Scenario: Google, a U.S.-based tech giant known for its open, egalitarian culture, struggled when it entered the Chinese market. In the U.S., Google encourages employees to challenge ideas and contribute openly, regardless of rank, and decision-making is relatively decentralized. Challenge: In China, Google’s leadership style clashed with the hierarchical, top-down culture that Chinese employees were accustomed to. Chinese workers were hesitant to challenge authority or openly question decisions, making it hard for Google to implement its usual innovative culture. Adaptation: Google had to adapt by respecting local expectations of authority and adjusting its management style. While the company tried to maintain its open culture, it had to be more explicit in giving directions and respecting the local decision-making structure. 4. IKEA’s Operations in Russia Scenario: Swedish furniture giant IKEA is known for its egalitarian culture, where managers work closely with employees and decision-making is often collaborative. However, when expanding into Russia, IKEA faced a very different business culture, where hierarchy and formal authority are highly respected. Challenge: Russian employees were uncomfortable with IKEA’s flat hierarchy and informal decision-making processes. They were more accustomed to a top-down management style and expected clear, authoritative direction from their leaders. Adaptation: IKEA adapted by allowing for more formal authority and hierarchy within its Russian operations. Leaders in Russia took a more structured approach to decision-making and communication, while still trying to maintain IKEA’s core values. This adjustment helped IKEA manage its workforce effectively in a different cultural environment. 5. McDonald's Global Leadership (France vs. the U.S.) Scenario: McDonald’s, the global fast-food chain, is known for its highly standardized operations. In the U.S., McDonald’s managers tend to follow a top-down approach to decision-making, with quick decisions made at the corporate level and passed down for implementation. Challenge: In France, McDonald’s encountered a more consensual culture where employees and managers expected greater involvement in decisions. French employees felt  frustrated by the rapid, top-down decisions typical in American operations, which they saw as ignoring their input. Adaptation: McDonald’s adapted by allowing for more local decision-making autonomy in France and giving employees more of a voice in the process. The company integrated feedback loops and more group discussions to align with France’s consensual expectations, helping to balance the corporate-driven strategy with local sensitivities. 8. The myth of the stay-at-home family firm: How family-managed SMEs can overcome their internationalization limitations – ELISA “The Myth of the Stay-at-Home Family Firm" The text "The Myth of the Stay-at-Home Family Firm" explores the internationalization of family- managed small and medium-sized enterprises (SMEs), challenging the belief that family firms are less likely to expand abroad due to limited managerial talent and financial resources. The authors propose that these limitations can be mitigated if family firms adopt global niche business models, allowing them to compete internationally without requiring substantial external management or capital. Key Concepts: 1. Family Firms' Reluctance to Internationalize: Family-managed SMEs tend to avoid hiring external managers with international expertise or seeking external funding, fearing loss of control. As a result, they often remain domestic- focused. Family firms usually prefer internal management by family members, which can limit international expansion if family members lack the necessary skills. 2. Global Niche Business Model: Family firms can overcome internationalization barriers by focusing on global niche markets, selling high-quality, specialized products. Niche products, such as luxury or specialized goods, do not require extensive local adaptation, large-scale marketing, or foreign production facilities, making them ideal for export-driven internationalization. These products target specific, globally dispersed customer bases, reducing the need for country-specific modifications. 3. Advantages of Family Firms in Niche Markets: Family-managed firms often have a long-term orientation, strong social capital, and a focus on high product quality—factors that are beneficial in niche markets. The reputation of family firms, often tied to their name, and their commitment to customer relationships can provide competitive advantages. 4. Research Findings: Family-managed SMEs generally have lower foreign sales than non-family firms. However, when they adopt global niche strategies, they can bridge the gap and even outperform in international markets. The study used a gravity model to analyze a large sample of European SMEs, confirming that niche-focused family firms can overcome the typical internationalization challenges faced by family firms. Important Takeaways: Niche strategy allows family firms to leverage their strengths (long-term focus, reputation, and quality) while mitigating their weaknesses (limited managerial expertise and capital).  This business model helps family firms internationalize by focusing on quality products that appeal to a global market without requiring the resources typically needed for mass-market internationalization. EXAMPLES 1. Illycaffè (Italy) Industry: Coffee Scenario: Illycaffè, founded in 1933 by Francesco Illy, is a family-managed company based in Trieste, Italy, known for producing high-quality espresso coffee. Despite being family- run, Illy expanded internationally without the typical need for external managers or large capital investments required for mass-market products. Strategy: Illy focused on a global niche strategy, targeting high-end coffee drinkers worldwide who appreciate artisanal coffee. Instead of competing with mass-market coffee brands like Nestlé or Starbucks, Illy built its reputation around quality, innovation (such as the creation of the modern espresso machine), and exclusivity. Outcome: Illy successfully expanded into over 140 countries by maintaining control within the family and focusing on high-end hotels, restaurants, and direct consumer sales. The family’s commitment to product quality and heritage played a significant role in its global growth. 2. Hermès (France) Industry: Luxury Goods Scenario: Hermès, founded in 1837, remains a family-owned business and is one of the world’s leading luxury brands. Hermès produces high-quality, artisanal leather goods, clothing, and accessories, known for their exclusivity and craftsmanship. Strategy: Instead of expanding through mass-market channels, Hermès adopted a global niche approach, focusing on high-end, ultra-premium consumers. By maintaining control over production and quality, the Dumas family, which runs the company, limited external financial and managerial influence, keeping the brand exclusive and highly desirable globally. Outcome: Hermès has successfully penetrated global luxury markets in Asia, Europe, and the Americas while keeping ownership and management within the family. The focus on niche markets allowed Hermès to become a global luxury leader without compromising its values or need for mass-market adaptation. 3. Ferrero (Italy) Industry: Confectionery Scenario: Ferrero, the maker of iconic brands like Nutella and Ferrero Rocher, was founded in 1946 and remains family-owned. Michele Ferrero transformed the company into a global player in the confectionery industry while avoiding public listing and outside shareholders. Strategy: Ferrero targeted niche markets for premium confectionery products rather than mass-market candy. Ferrero’s reputation for quality, innovation, and branding helped it penetrate international markets without diluting family control. Its products, such as Nutella and Ferrero Rocher, are positioned as high-quality, premium goods.  Outcome: Ferrero became the world’s third-largest confectionery company by successfully expanding into over 170 countries while maintaining tight family control. The family’s long-term vision and product focus allowed it to internationalize without the usual need for external capital or managers. 4. Patagonia (United States) Industry: Outdoor Apparel Scenario: Patagonia, founded by Yvon Chouinard in 1973, is a family-managed company that produces high-quality outdoor clothing and gear. The company is known for its environmental activism and commitment to sustainability. Strategy: Patagonia adopted a global niche strategy, focusing on environmentally conscious consumers who are willing to pay a premium for ethically sourced and sustainable products. The family’s values of long-term sustainability and quality aligned with a niche market of outdoor enthusiasts around the world. Outcome: Patagonia successfully expanded internationally, building a strong global brand in Europe, Asia, and the Americas, while keeping the business closely tied to the Chouinard family’s vision and values. The company remains private, and its family ownership allows it to maintain a unique brand identity in a crowded global market. 5. LEGO (Denmark) Industry: Toys Scenario: LEGO, founded in 1932 by Ole Kirk Christiansen, remains family-owned and managed. Initially a small local toy manufacturer, LEGO expanded into one of the most recognized global brands for building toys and creativity. Strategy: Rather than competing with mass-market toy manufacturers, LEGO focused on creating a niche market of educational, creative toys for children and adults. They maintained control over product development and innovation, focusing on high-quality, durable, and innovative products like LEGO bricks, which resonate with consumers worldwide. Outcome: LEGO expanded globally into over 130 countries, becoming a leader in the premium toy industry while maintaining strong family involvement in the company’s strategic direction. By focusing on quality and innovation, LEGO avoided the pitfalls of mass-market competition and built a loyal global customer base. 9. The impact of family involvement on the investments of Italian small-medium enterprises in psychically distant countries – ELISA "The Impact of Family Involvement on the Investments of Italian Small-Medium Enterprises in Psychically Distant Countries" The study titled "The Impact of Family Involvement on the Investments of Italian Small-Medium Enterprises in Psychically Distant Countries" examines how family involvement affects the internationalization decisions of family-owned small-to-medium-sized enterprises (SMEs) in Italy, specifically when investing in psychically distant countries (those perceived as culturally or geographically far). The key findings and concepts from the paper are as follows: Key Concepts: 1. Psychic Distance (PD): Refers to the perceived differences between a firm’s domestic environment and a foreign country in terms of culture, language, economy, and other factors. Psychic distance influences international investment decisions, particularly in family businesses that prioritize long-term stability and lower risk. 2. Family Involvement: Family involvement in ownership and management plays a significant role in shaping strategic decisions. High family involvement tends to reduce the propensity to invest in psychically distant countries due to factors such as risk aversion, preservation of socio- emotional wealth, and managerial control. 3. Foreign Direct Investment (FDI): The study focuses on more committed forms of internationalization, like FDI, as opposed to exporting. The degree of family involvement is a crucial factor influencing how and where these investments are made. 4. Socio-emotional Wealth (SEW): Family firms prioritize non-economic goals, such as maintaining family control and legacy, which can lead to lower risk-taking and slower internationalization, especially in younger firms with high family involvement. 5. Firm Age as a Moderator: The study found that the age of a family firm moderates the relationship between family involvement and international investment. In younger firms, higher family involvement hinders investment in distant markets, while in older firms, the effect is less pronounced or even reversed. Key Findings: Negative Impact of Family Involvement: Family-owned SMEs with high family involvement in ownership and management tend to invest less in psychically distant countries. This is primarily due to concerns over risk, control, and resource constraints. Firm Age Effect: Younger firms with high family involvement are less likely to invest in distant countries, while older firms with more experience and possibly new generations in leadership may increase their international footprint in psychically distant markets. Internationalization and Risk: Family firms tend to pursue incremental internationalization, favoring less risky, closer markets initially. High family involvement often leads to a reluctance to take on the greater uncertainties associated with psychically distant countries. Implications: For family firms, understanding the dynamics of family involvement is critical to shaping successful internationalization strategies. Younger firms, particularly those with significant family control, may need to consider bringing in external expertise or loosening family involvement to overcome the challenges of investing in distant markets. This research highlights the complexity of internationalization in family-owned businesses and the importance of considering both family dynamics and firm age when making investment decisions. EXAMPLES 1. Luxottica Group Industry: Eyewear Manufacturing Age: Established in 1961 (63 years) Ownership: Originally family-owned, founded by Leonardo Del Vecchio Internationalization: Expanded globally, with major investments in psychically distant markets like China and the U.S. Application to the Study: Luxottica, although now a public company, started as a family-owned business and expanded internationally under the strong leadership of its founder, Leonardo Del Vecchio. Initially, like many family firms, Luxottica focused on nearby European markets. However, as the company grew older and diversified its management structure, it became more aggressive in entering psychically distant markets such as China and the United States. This aligns with the study’s findings that as family firms mature, they are more likely to invest in psychically distant countries. 2. Eataly Industry: Food and Retail Age: Founded in 2004 (20 years) Ownership: Founded by Oscar Farinetti, family-owned Internationalization: Expanded into countries like the U.S., Japan, and the UAE Application to the Study: Eataly is a younger family-owned firm that rapidly expanded into psychically distant markets like Japan and the United Arab Emirates. This may seem to contrast with the study’s findings that younger family firms with high involvement tend to be more risk-averse. However, Eataly’s international expansion was driven by external partnerships and investments (e.g., B&B Hospitality Group), which diluted family control and allowed the firm to navigate the complexities of distant markets. This supports the study's insight that lower family involvement or openness to external management can facilitate entry into psychically distant countries. 3. Ferrero Group Industry: Confectionery Age: Founded in 1946 (78 years) Ownership: Family-owned, founded by Pietro Ferrero, and now managed by the Ferrero family Internationalization: Strong presence in Europe, U.S., and emerging markets like India and China Application to the Study: Ferrero has remained a highly family-involved company, with key family members like Giovanni Ferrero leading its internationalization efforts. Initially focusing on European markets, Ferrero gradually expanded into psychically distant markets such as India and China. This aligns with the study's findings that older family firms, with generations of leadership, are more likely to take on the challenges of psychically distant markets. The presence of the second and third generations of the Ferrero family has been crucial in guiding the company’s international strategy, supporting the idea that younger generations are more open to international opportunities. 4. Benetton Group Industry: Fashion and Retail Age: Founded in 1965 (59 years) Ownership: Family-owned, founded by Luciano Benetton and his siblings Internationalization: Expanded into countries such as India, China, and Russia Application to the Study: Benetton Group, under the leadership of the Benetton family, expanded aggressively into psychically distant markets like China and India. The company’s internationalization journey began in Europe but later ventured into Asia and Latin America. This supports the study’s finding that as family firms age, they become more willing to enter psychically distant markets. Additionally, the Benetton family brought in professional managers to assist with this global expansion, showcasing how reduced family involvement in operational decisions can facilitate international growth. 5. Barilla Group Industry: Food Production (Pasta and Bakery) Age: Founded in 1877 (147 years) Ownership: Family-owned, founded by Pietro Barilla Internationalization: Expanded into North America, China, and Russia Application to the Study: Barilla, one of Italy's most famous family-owned businesses, is an excellent example of a firm that initially focused on closer European markets before expanding into psychically distant regions like North America, China, and Russia. Today, the fourth generation of the Barilla family is leading the company, with a more diversified management team that includes external professionals. The study’s findings are reflected in Barilla’s journey: as the company matured and diversified its management, it became more comfortable entering markets with greater psychic distance. 10. Will the COVID19 Pandemic Really Change the Governance of Global Value Chains? GAIA Summary: The paper "Will the COVID-19 Pandemic Really Change the Governance of Global Value Chains?" by Alain Verbeke explores the potential effects of the COVID-19 pandemic on the governance of global value chains (GVCs). The pandemic, described as an exogenous shock of great magnitude, has raised concerns about its long-term impact on international business (IB) activities, specifically how multinational enterprises (MNEs) manage their global supply chains. Key Points: Global Value Chains and Economic Efficiency: GVCs have long been the preferred method for organizing international business because they promote economic efficiency. Some believe that the pandemic will prompt a radical restructuring of GVCs due to supply chain disruptions and calls for "economic self-reliance." However, the core principles of GVC governance— focused on economic efficiency—are expected to remain stable. Exogenous Shocks and Institutional Changes: The paper compares the pandemic's impact to other historical exogenous shocks (e.g., the fall of the Berlin Wall) and emphasizes that while it will create cascading effects, the fundamental governance structure of GVCs is likely to persist due to their flexibility and ability to adapt.  Shifts in Public Policy and National Autonomy: Governments worldwide have pushed for a reduction in international outsourcing to enhance the resilience of supply chains. India, Japan, the European Union, and the U.S. are adopting policies aimed at repatriating production and achieving strategic autonomy, which might affect GVC configurations. Agility and Resilience of GVCs: Despite these shifts, the paper argues that GVCs are agile and capable of responding to crises like the pandemic. Advances in digital tools, activity-based accounting, and modularization enable firms to maintain operational efficiency and adapt to disruptions. Key Research Areas and Hypotheses: The pandemic is expected to stimulate new research in four areas: 1. Investments in Intelligence and Contracting Safeguards: To reduce uncertainties, MNEs may invest more in governance mechanisms to manage risk. 2. Irreversible Investments Abroad: Firms may reduce foreign investments in assets that are vulnerable to government policy shifts or unexpected shutdowns. 3. Relational Contracting with Key Partners: Firms may shift towards more relational and detailed contracting with key supply chain partners to ensure reliability in an unpredictable global environment. 4. Diversification: Some firms may diversify their products and industries to spread risk, ensuring that a future crisis does not jeopardize their core business. The paper concludes that while the pandemic may prompt adaptations in GVC management, particularly in contracting and investment strategies, the foundational logic of GVC governance—driven by efficiency—will likely persist. GVCs, with their inherent flexibility and modularity, are well-equipped to handle such exogenous shocks, ensuring continued global economic connectivity even in times of crisis. Examples of real firms: Apple: Diversification and Micro-Modularization What the paper suggests: The paper highlights that firms might engage in "micro- modularization" to diversify their supply chains, allowing them to substitute one part of the chain for another in times of crisis. Example: Apple, long dependent on Chinese manufacturing, accelerated its efforts to diversify its production across other countries, such as India and Vietnam, to reduce over-reliance on a single location. This shift was driven in part by COVID-19-related factory shutdowns in China and supply chain bottlenecks, as well as broader geopolitical tensions Unilever: Diversification and Digitalization What the paper suggests: The paper mentioned that firms might diversify into industries less vulnerable to crises and invest in digital tools for better coordination. Example: Unilever expanded its product portfolio by increasing its focus on hygiene and health- related products during the pandemic. It also accelerated its digital transformation by investing in e-commerce and digital platforms, which allowed the company to respond swiftly to changing consumer behavior. This diversification into more resilient sectors and leveraging digital tools reflects how firms can adapt to exogenous shocks Amazon: E-commerce and Logistics Expansion What the paper suggests: The pandemic would lead firms to diversify their operations into resilient sectors, and companies that were already involved in e-commerce would thrive Example: Amazon experienced massive growth during the pandemic due to its dominant position in e- commerce. The company further expanded its logistics network and diversified its offerings in cloud computing (Amazon Web Services), which was also in high demand due to the shift to remote work. Amazon’s ability to pivot to crisis-proof sectors and leverage its global supply chain reflects the diversification and agility discussed in the paper Fakoussa 1. What is really different about emerging market multinationals? -- GAIA Summary: The article by Ravi Ramamurti, "What Is Really Different About Emerging Market Multinationals?", focuses on the characteristics and internationalization strategies of emerging market multinational enterprises (EMNEs) and their differences from developed market MNEs (DMNEs). It addresses whether existing theories of multinationalization, mostly developed from studying DMNEs, can adequately explain the behavior of EMNEs or whether new theories are needed. Introduction The rise of EMNEs has created a need to rethink international business (IB) theory, which has been primarily developed from the study of DMNEs. While some scholars argue that EMNEs can be understood through existing frameworks like the OLI model (ownership, location, and internalization), others suggest EMNEs are fundamentally different, requiring new theoretical models. Puzzle 1 Multinationals Without Ownership Advantage? One of the most puzzling questions is how EMNEs are able to expand globally despite appearing to lack the traditional ownership advantages (such as technology or strong brands) that DMNEs possess. Traditional IB theory suggests that firms need these advantages to compete abroad successfully, yet EMNEs often seem to defy this logic. Unsatisfying Explanations: One explanation is that EMNEs internationalize based on home country comparative advantages (like cheap labor), but this doesn’t explain their long-term competitiveness, as these location advantages are available to all firms in the same country. The "springboard theory" posits that EMNEs internationalize to acquire ownership advantages (technology, brands), but this challenges the OLI model’s principle that firms need these advantages before expanding abroad. Promising Explanations: Ramamurti suggests that EMNEs may possess ownership advantages, just not the ones traditionally recognized. These might include a deep understanding of emerging markets, the ability to function in difficult environments, or cost-efficient business models. Over time, EMNEs may also develop the traditional advantages that DMNEs have. Puzzle 2 Multinationals that Internationalize in ‘Wrong’ Ways? Another puzzle is that EMNEs often internationalize in ways that contradict established theories like the stages model of internationalization or the product cycle hypothesis. According to these theories, firms internationalize gradually, starting in countries similar to their own before expanding to more distant markets. However, EMNEs often expand rapidly, invest in developed countries before other emerging markets, and rely heavily on mergers and acquisitions (M&A) instead of low-risk entry modes. Unsatisfying Explanations: Some explanations focus on EMNEs’ need to “catch up” with DMNEs quickly, but Ramamurti suggests that attributing this behavior solely to EMNEs' emerging market origins might be too simplistic. Promising Explanations: A more likely explanation is that the global context has changed, making it easier for firms to internationalize rapidly. Industries have become more deverticalized, and firms from both developed and emerging markets are speeding up their internationalization processes. EMNEs may also be following strategies of exploiting differences between countries, such as labor cost arbitrage, or investing in developed countries to acquire advanced technologies for use in their home markets. Conclusions Ownership Advantages: The notion that firms must have ownership advantages before internationalizing holds up well, but EMNEs may have different, less traditional forms of ownership advantages. These advantages are particularly valuable in emerging markets, which are becoming the engines of global growth. Contextual Factors: It is important not to attribute all EMNE behavior to their emerging market roots. Factors like the global business environment, the stage of MNE development, and industry-specific dynamics play significant roles in shaping internationalization strategies. Theoretical Implications: The article argues that studying EMNEs provides an opportunity to refine existing theories of internationalization. Current models like the stages model and product cycle hypothesis, developed from the experiences of DMNEs, need to be updated to account for the different pathways of EMNEs. In summary, the article advocates for a more nuanced understanding of EMNEs, acknowledging their distinct ownership advantages and strategic behavior while also recognizing the broader global context in which they operate. It calls for the development of more comprehensive theories to explain the internationalization of all types of MNEs, particularly in light of the ongoing rise of EMNEs. Examples of real firms: Haier (China): EMNEs not possessing traditional ownership advantages upfront, but building them through strategic acquisitions and adaptation Haier,