Shananigans Case

Part 1

1. Define arbitrage factor costs.

2. "Today's challenge is to build transnational organizations that can sense an emerging consumer trend in one country, link it to a new technology or capability it has in another, develop a creative new product or service in a third, then diffuse that innovation rapidly around the world". With this in mind, identify a company who has demonstrated this ability including a brief description of each step they took. (see pages 408 and 409 as a starting point)

3. Describe the center-for-global innovation model.

In the center-for-global innovation model, new opportunities are usually sensed in the home country; centralized resources and capabilities of the parent company are brought in to create a new product or process through the main R&D center, and implementation involved subsidiaries whose rule is to introduce the new product or innovation to their local market.

4. Describe the local-for-local innovation model.

In the local-for-local innovation, innovation relies on subsidiary-based local knowledge development. For example, responding to perceived opportunities, subsidiaries use their resources and capabilities to create innovative responses that are then implemented in the local market.

5. From what you have learned from your Team Term Project, how would you describe what Zara is doing in terms of the models in 3 and 4 above?

6. Define the center-for-global process. (page 410)

7. Discuss how Matsushita makes central innovation effective. (see pages 410 to 413)

8. What are the two requirements that must be met to create an effective interdependent organization? Explain each. (see pages 415 and 416)

In order to create an effective and interdependent organization, the company must first develop a configuration of resources that is neither centralized nor decentralized but is both dispersed and specialized. To ensure this, a company must configure its integrated mode of operations. Secondly, it must build inter-unit integration mechanisms to ensure that task interdependencies lead to the benefits of synergy rather than the paralysis of conflict.

8. List and explain the three flows that managers need to develop a coordination

system.

Part II

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