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Book Review
Global Strategy
Mike W Peng
ISBN: 0-324316-49-6 2006 Thomson South-Western
Stephane Tywoniak
School of Management, Queensland University of Technology, QLD
This textbook comprises just under 600 pages and is organised in 3 parts, containing 4 chapters each: Foundations of Global Strategy, Business-Level Strategies, and Corporate-Level Strategies. Each chapter features case examples, case studies and review questions, and each part concludes with a case studies section, including video cases and integrative case studies.
Considering the proliferation of management textbooks covering strategy and international/global issues, is there a need for yet another 'Global Strategy' volume? Peng provides three arguments to justify his opus. First, he proposes that it is restrictive to consider global strategy from the exclusive perspective of the Multi-National Enterprise (MNE) and that a 'strategy around the globe' perspective is more appropriate because it also covers the strategies of smaller, local firms. Second, he claims to provide an innovative coverage of the topic through two devices: the reference to key research questions laid out in the early 1990s by Teece, Rumelt and Schendel, and the consistent reference to three leading perspectives on strategy: the industry-, resource- and institution-based views. Third, the author advocates a strong grounding in contemporary research and the systematic presentation of critical research debates.
Part I: Foundations of Global Strategy introduces the book and presents the three theoretical perspectives which are used to shed light on issues in Parts II and III.
Part II: Business-Level Strategies starts with Chapter 5 -Growing and Internationalizing the Entrepreneurial Firm. The chapter presents the concept of entrepreneurship, models of entrepreneurial strategies, the internationalisation of entrepreneurial firms, and discusses the influence of national institutions on entrepreneurial dynamism. Chapter 6 -Entering Foreign Markets- broaches the 'where', 'when' and 'how' of international market entry, contrasting the contexts of developed versus emerging economies and conventional versus web-based internationalisation. Chapter 7 -Making Strategic Alliances and Networks Work- analyses strategic alliances, from contractual arrangements to equity-based Joint-Ventures, the alliance formation process, and issues in managing the growth and performance of alliances. Chapter 8 -Managing Global Competitive Dynamics- introduces frameworks derived from game theory to model competitive moves by small and large firms, patterns of cooperative and aggressive behaviors, and the influence of national institutions, in particular anti-trust and antidumping arrangements.
Part III: Corporate-Level Strategies opens with Chapter 9 -Diversifying, Acquiring, and Restructuring, which discusses the scope of the firm, the relationship between relatedness and performance, acquisition and restructuring strategies. Chapter 10 -Structuring, Learning, and Innovating Multinationally- sheds the spotlight on the strategy-structure relationship, the types of international structures MNEs adopt, and how knowledge and innovation are managed in these. Chapter 11 - Governing the Corporation Around the World- is concerned with issues, models, and mechanisms of corporate governance, contrasting the dilemmas of principal-agent and principal-principal situations, the influence of national institutions, and processes of institutional convergence and divergence at a global level. Chapter 12 -Strategizing with Corporate Social Responsibility- concludes with a theoretical discussion of the stakeholder model and corporate social responsibility in a global context.
How successful is Peng with regards to the three ambitions stated earlier? The 'strategy around the globe' perspective is a qualified success. The coverage of the strategies of small and entrepreneurial firms, the abundance and diversity of cases and examples, encompassing a broad range of industries and firm sizes, on all continents, is clearly a strong feature of Global Strategy. However, despite the strong institutional flavour of the text, a discussion and typology of the various 'players' and of their strategies is missing. Japanese keiretsu, Overseas-Chinese conglomerates in South East Asia, 'Oligarch' firms in Russia, to name but a few examples, are products of local and historical circumstances and have distinctive characteristics and behaviors which merit discussion to provide a comprehensive view of strategy around the world.
The solid grounding of the text in contemporary research and analysis, with abundant references to more than 1,000 books and journal articles is arguably a strength of Global Strategy, and Peng must be commended for this scholarly accomplishment. However, the book may also be in part weakened by this strong focus on research: the figure of the manager tends to recede in the background, overshadowed by theoretical presentations. Readers looking for practical recommendations on strategy implementation, for example on acquisition integration, management of change, or leadership in a global context would not be satisfied with this volume.
In spite of some limitations noted previously, the inclusion of the institutional perspective provides a rich, and often well-articulated discussion. Clearly, this is where Peng is most comfortable. The integration with the more traditional strategic management perspectives, drawn from IO Economics and Resource-Based Theories (RBT) is less successful. The presentation of these frameworks in chapters 2 and 3 is adequate, but the discussion of the relationships and articulations between the three theoretical perspectives is clearly missing from Part I. Peng would have gained by starting with institutional theory, arguably the more 'macro' of the three views, and showing how institutions influence the structuration of industries and the resource-deployment strategies of firms. Similarly, a stronger articulation between IO and RBT -perhaps via the Value Chain and/or generic strategies would have been welcome.
Authors have to make choices and are always criticised for it. If the structure of Part I of the book is well-justified and articulated, the expositional choices of Parts II and III are less clear. The question of the growth of the firm cuts across Chapters 5 (entrepreneurial firms), 7 (alliances) and 9 (acquisitions). Perhaps grouping those three in one Part would have made sense, providing the opportunity to discuss intrapreneurship in a global context, and to compare the respective advantages and disadvantages of the three paths to growth (organic development, alliances, acquisitions). The other structural weakness of the book is the conceptual disconnect between Chapters 11 and 12: agency theory and stakeholder theory are mutually incompatible models of corporate governance, but this is a debate, for once, which Peng chooses to ignore. A stronger connection with his Chapter 4 and a discussion of the evolution of societal expectations about firms and capitalism since the 1950s could have provided an elegant way to remedy this, in a section that would have mirrored the historical perspective he provides on globalisation in the opening chapter.
Should the book be recommended and to whom? Despite its weaknesses, the strengths of the book still shine through and Global Strategy is a more than adequate reference text for students in international business and/or strategic management. In particular, its strong scholarly focus makes it an excellent choice for research students.
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