Ambidextrous Global Strategy in the Era of Digital Transformation

264 Pages·2022·3.723 MB·English

by  Young Won Park

Young Won Park   Editor
Ambidextrous
Global Strategy
in the Era
of Digital
Transformation
Ambidextrous Global Strategy in the Era of Digital
Transformation
Young Won Park
Editor
Ambidextrous Global
Strategy in the Era of Digital
Transformation
Editor
YoungWonPark
FacultyofEconomics,GraduateSchool
ofHumanitiesandSocialSciences
SaitamaUniversity
Saitama,Japan
ManufacturingManagementResearch
Center
UniversityofTokyo
Tokyo,Japan
ISBN 978-981-19-2626-6 ISBN 978-981-19-2627-3 (eBook)
https://doi.org/10.1007/978-981-19-2627-3
©TheEditor(s)(ifapplicable)andTheAuthor(s),underexclusivelicensetoSpringerNature
SingaporePteLtd.2022
Thisworkissubjecttocopyright.AllrightsaresolelyandexclusivelylicensedbythePublisher,whether
thewholeorpartofthematerialisconcerned,specificallytherightsoftranslation,reprinting,reuse
ofillustrations,recitation,broadcasting,reproductiononmicrofilmsorinanyotherphysicalway,and
transmissionorinformationstorageandretrieval,electronicadaptation,computersoftware,orbysimilar
ordissimilarmethodologynowknownorhereafterdeveloped.
Theuseofgeneraldescriptivenames,registerednames,trademarks,servicemarks,etc.inthispublication
doesnotimply,evenintheabsenceofaspecificstatement,thatsuchnamesareexemptfromtherelevant
protectivelawsandregulationsandthereforefreeforgeneraluse.
Thepublisher,theauthors,andtheeditorsaresafetoassumethattheadviceandinformationinthisbook
arebelievedtobetrueandaccurateatthedateofpublication.Neitherthepublishernortheauthorsor
theeditorsgiveawarranty,expressedorimplied,withrespecttothematerialcontainedhereinorforany
errorsoromissionsthatmayhavebeenmade.Thepublisherremainsneutralwithregardtojurisdictional
claimsinpublishedmapsandinstitutionalaffiliations.
ThisSpringerimprintispublishedbytheregisteredcompanySpringerNatureSingaporePteLtd.
The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721,
Singapore
Preface
Attainingcompetitiveadvantageisespeciallycrucialforinnovativefirms.Inthepast
fewyears,however,anumberofwell-knownfirmshavefailed,aswecanseedemise
ofKodakandRCA,etc.Firmsbuildtheircompetitiveadvantagebasedontheirown
corecompetenceplusastrongnetworkwithotherfirms.Aprimarysourceofcore
competence is innovation capability. This book covers a few important elements
of innovation with ambidexterity discussion. According to many previous studies
oninnovationsofar,itispointedoutthatitisimportanttobalancebothaspectsof
exploitationofexistingorganizationalcapabilitiesandexplorationofnewinnovation
possibilities.
The theme of continuing to maintain a competitive advantage without an orga-
nization facing environmental or technological changes has become an important
theme in most recent studies. In particular, themes related to dynamic capability,
ambidexterity,andparadoxhavebeendealtwithinrecentyearsasimportantissues.
Dynamic capability refers to the organizational capability of firms to rear-
rangeexistingresourcesandcapabilitiesanddiscussesachievinglong-term/dynamic
competitiveadvantage.Meanwhile,ambidexterityisrelatedtoorganizationaldesign,
whichmeansthecapabilityoffirmstoperformexploitationandexplorationatthe
sametime,andisthecapabilitytoallowfirmstoadapttotheenvironmentinthelong
term.
Thus, this book focuses on the importance of the ambidexterity in innovation
activities.Organizationalambidexterityisaconceptthatpursuesthedualityofsuch
innovation.
As O’Reilly and Tushman (2016) presented, it often seems inevitable and may
beanaturalpartofcreativedestruction.Duetoincreasedcompetition,firmsemploy
varioustypesofinnovationactivitiestopositionthemselvesagainsttheircompetitors.
Firms must remain competitive in their core markets, while also winning in new
domains. Ambidexterity and strategic agility have been found to strengthen this
position.
Furthermore,ambidextrousglobalstrategy(AGS)iscrucialforglobalfirmsin21st
globalturbulenttimes.Astheheadquartersappreciatetheactiverolesofsubsidiaries,
newpossibilitiesforemergingmarketsaretranslatedintoreality.Thisbookdefines
v
vi Preface
ambidextrous global strategy (AGS) as simultaneous achievements of global inte-
grationandlocaladaptation(responsiveness)throughutilizationofitscorefacilities
andorganizationalcapabilities.Toillustratethespecificimplementationmechanism
ofAGS,weshowaframeworkofambidextrousglobalstrategy(AGS)withglobal
marketstrategyandorganizationalcapabilityforanalysispurposeofthisbook.
Increasingly, value creation and capture require innovation across global value
chainnetworks.Yet,suchvalue-drivenbusinessmodelneedsacarefulexamination
oftransformationprocessesintheageofdigitaltransformation.Thisbookfocuses
ontheeffectiveambidextrousbusinessstrategiesfordigitaltransformationerawith
integrationofopenandclosedinnovation.Specifically,thisbookfirstpresentsfive
business strategies that survive digital transformation era and then suggests archi-
tectureanalysisusingartificialintelligence(AI).Inparticular,thisbookemphasizes
thehumanresourcessuchassystemarchitect.
Distinctivefeaturesofthebookareasfollows.
First, this book presents a framework of ambidextrous innovation (AI) and
ambidextrous global strategy (AGS), developing a framework of O’Reilly and
Tushman(2016).Thisbookdefines ambidextrous globalstrategy(AGS)assimul-
taneous achievement of global integration and local adaptation (responsiveness)
throughutilizationofitscorefacilitiesandorganizationalcapabilities.Toillustrate
thespecificimplementationmechanismofAGS,weanalyzemanyEastAsiancases
andshowaframeworkofambidextrousglobalstrategywithglobalmarketstrategy
andorganizationalcapability.
Second,thisbookanalyzesexamplesoflotsofindustriestoimplementambidex-
terity strategies. For example, we show Korean Shipbuilding Firms, Korean and
Japanese Steel Firms, construction and LCD panel flat-glass, Japan’s Trucking
Industry,AgriculturalCorporationsandJapaneseManufacturingFirms.
Finally, this book focuses on the effective ambidextrous business strategies for
digital transformation era with integration of open and closed innovation. Specifi-
cally,thisbookfirstpresentsfivebusinessstrategiesthatsurvivedigitaltransforma-
tioneraandthensuggestsarchitectureanalysisusingartificialintelligence(AI).In
particular,thisbookemphasizesthehumanresourcessuchsystemarchitect.
The target readership consists of academics, students, and practitioners in the
areasofglobalmanagement,organizationaltheoryandstrategicmanagement.This
bookclarifiesthecriticalpracticesandbusinessstrategyofinnovativeglobalfirms
intheeraofDX.
Here,weoutlinethecontentsofthebook’schapters.
InChapter1,weshowresearchFrameworkforAmbidextrousStrategyintheera
ofDigitalTransformation.
This book defines and analyzes AGS as simultaneous achievement of global
integrationandlocaladaptation(responsiveness)throughtheutilizationofitscore
facilities and organizational capabilities. In particular, this chapter shows a frame-
workofAGSwithglobalmarketstrategyandorganizationalcapability.Furthermore,
this chapter analyzes the effective ambidextrous business strategies for the digital
transformationerawithopenandclosedinnovationintegration.
Preface vii
In Chapter 2, we present Ambidextrous Global Strategy for Emerging Markets
towardResponsiveMarketCompetitiveness.
Globalfirmsincreasinglyimplementsimultaneousintegrationanddispersionof
theglobalfirmresources(i.e.,ambidextrousglobalstrategy).Thischapterexamines
howtotranslatesuchambidextrousstrategyinoperationalandbusinessunitlevels
inemergingeconomies.Theliteraturereviewidentifiescurrentstreamsofambidex-
terityresearchinthecontextsofemergingmarkets.Afterpresentingaresearchmodel
definingambidextrousglobalstrategyandimplementationmechanism,wepresent
thecasestudyofUV,aJapaneseglobalfirm.Thiscaseanalysisincludesexecutive
interviews,fieldvisits,financialstatements,andotherinternaldataanalyses.
In Chapter 3, we present Global Ambidextrous Spill-over Strategy through A
CaseStudyofKoreanFirms.
Thischapterdescribesthesuccessfactorsofaneffectivelocalizationstrategy.We
presentaresearchmodelthatdepictsalocalizationstrategyanditsvitalprocesses.
To illustrate our research model, we present case studies on two LG Electronics
divisions—LGIndiaandLGPoland.
InChapter4,wediscussIntegrationandDispersionofInnovationandMarketing
CapabilitiesthroughCaseStudiesofJapaneseGlobalFirmsinKorea.
This chapter presents a dynamic model showing the evolving relationships
betweenparentcompaniesandtheirforeignsubsidiaries.
InChapter5,weshowAmbidextrousKnowledgeTrasferStrategyintheeraof
DigitalTransformation.
Thischapterfocusesoncorehumanresourcesinambidextrousknowledgetransfer
(AKT), which cosists of (1) vertical knowledge transfer process between HQ and
subsidiariesand(2)horizontalknowledgetransferprocessbetweensubsidiariesin
different countries. To address this question, we conducted an in-depth case study
comparingtwosubsidiariesofFirm-OH,aJapanesefirmandidentifiedsignificant
differencesamongstthesubsidiariesintermsofemployeeefficiencylevel.
InChapter6,weshowAmbidextrousOffshoringandReshoringStrategythrough
CaseIllustrationsofJapaneseManufacturingFirms.
This chapter suggests an ambidextrous sourcing strategy, which is a similar
concept of right-shoring. Although the COVID-19 pandemic has accelerated
reshoring strategy, Japanese manufacturing firms will continue to follow the basic
strategyofseekingtheambidextroussourcingstrategy(right-shoring),focusingon
costandproximitytothemarket.
In Chapter 7, we suggest knowledge exploration and exploitation within multi-
national corporations through international assignments, focusing on the role of
expatriatesandrepatriates.
This chapter aims to consider the knowledge transfer/reverse transfer process
oftheexpatriation/repatriationphaseofinternationalassignmentsinthecontextof
ambidextrous strategy and management. Expatriates and repatriates contribute to
knowledgetransferredandsharedwithinmultinationalcorporations(MNCs).
InChapter8,wediscussAmbidextrous ProductDevelopment Strategythrough
CaseStudyofKoreanShipbuildingFirms.
viii Preface
Thisstudyexamineswhyshipbuildingfirmsusebothstandardizedandcustomized
design and analyzes the impact of design architecture choices on competitiveness.
CasestudyfindingssuggestthatHyundaiHeavyIndustryCorporation(HHIC)adopts
package unit development strategy for cost competitiveness. Meanwhile, “major”
Japaneseshipbuildersfocusingonhigh-value-addedcategorieshavelosttheirmarket
positiontoKoreanrivals,butsomeJapanesecompaniesarestillsuccessful.
InChapter9,weanalyzeAmbidextrousSupplyChainStrategywithComparison
ofKoreanandJapaneseSteelFirms.
ThischapterexaminesdeterminantsofarangeofSCIandsuggestsSCIcapability
building(SCICB)asanambidextrousSCIcapability(ASCIC).BycomparingSCI
strategiesofKoreanandJapanesesteelfirms,thechaptershowsthatSCIshouldbe
evaluatedconsideringsupplychainflexibilityanduncertainty.Additionally,although
SCIwithcustomershelpsdiminishdemanduncertainty,itcanalsobringinflexibility,
namely,acustomer“lock-in.”
In Chapter 10, we discuss Ambidextrous Process Architecture Strategy with A
comparativeStudyofconstructionandLCDpanelflat-glass.
Thischapteraimstoprovideaframeworkforanambidextrousinnovationstream
from an architecture analysis perspective, based on a comparative analysis of
constructionandLCDpanelflat-glass.Asarchitecturechanges,sodoorganizations
andprocesses.
InChapter11,weshowAmbidextrousNetworkBuildingStrategythroughacase
studyofYamatoHoldings.
This chapter presents strategies of ambidextrous network building at Yamato
Holdings from the viewpoint of transaction methods and overseas expansion,
focusing on Yamato Holdings among the leading companies in Japan’s trucking
industry.
InChapter12,wediscussAmbidextrousOrganizationinEastAsianTraditional
IndustrieswithAnEmpiricalAnalysisofJapaneseAgriculturalCorporations.
This chapter discusses ambidextrous global strategy in traditional industries in
EastAsia.Specifically,ambidexteritymanagementinJapaneseagriculturalcorpo-
rations is investigated as an example of traditional industries in East Asia. The
resultsshowastrong“successtrap”intheambidexteritymanagementofJapanese
agriculturalcorporations.
InChapter13,wediscussPerceptionofCrisisandAmbidexterityforInnovation
withMultipleCaseStudyAnalysisofJapaneseFirms.
Thischapteranalyzesthecurrentstatusoftheinnovationprojectsofglobalfirms
that are promoting innovations and simultaneously the leadership behaviors that
encouragesuchinnovationactivities,focusingonthefactorsthathinderthem.
InChapter14,weconcludewithanoutlookfortheAmbidextrousGlobalStrategy
intheeraofdigitaltransformation.
Inthischapter,wesuggesttheambidextrousinnovationandglobalstrategyinthe
eraofDigitalTransformation.Wealsoassertthatsupplychainintegrationcapability
building(SCICB)asanambidextrousSupplyChainIntegrationcapability(ASCIC)
isakeyforglobalfirmstoacquiresustainablecompetitiveadvantage.
Preface ix
ThisworkwassupportedbyTheResearchCenterforSustainableDevelopmentin
EastAsian(SU-RCSDEA)andtheJapanSocietyforthePromotionofScience(JSPS)
KAKENHI(Grant-in-AidforScientificResearch)withGrantNumbersJP19K01856
andGrantNumbersJP20H01525a.
Saitama,Japan YoungWonPark,Ph.D.
Contents
1 ResearchFramework:AmbidextrousStrategyintheEra
ofDigitalTransformation ...................................... 1
YoungWonPark
2 Ambidextrous Global Strategy for Emerging Markets:
TowardResponsiveMarketCompetitiveness ..................... 23
YoungWonPark
3 Global Ambidextrous Spillover Strategy: A Case Study
ofKoreanFirms .............................................. 35
YoungWonPark
4 Integration andDispersion ofInnovation andMarketing
Capabilities:CaseStudiesofJapaneseGlobalFirmsinKorea ..... 51
YoungWonPark
5 Ambidextrous Knowledge Transfer Strategy in the Era
ofDigitalTransformation ...................................... 63
YoungWonPark
6 Ambidextrous Offshoring and Reshoring Strategy: Case
IllustrationsofJapaneseManufacturingFirms .................. 83
YoungWonPark
7 Knowledge Exploration and Exploitation Within
Multinational Corporations Through International
Assignments:TheRoleofExpatriatesandRepatriates ............ 101
RuihongGaoandYoungWonPark
8 AmbidextrousProductDevelopmentStrategy:CaseStudy
ofKoreanShipbuildingFirms .................................. 131
YoungWonPark
xi