Global Added Value Systems, Value Creation Strategies and Global Strategic Coordination
A Blog Post by Pablo Markin.
In this article, Audronė Kvedarienė has sought to analyze the global added value system “from the global strategy management perspective” (43). Among other topics, this discussion is focused on technology transfer as a “concept tightly related to technology life cycle (TLC) theories, concentrated on technology transfer from product to process innovations” (44). As part of value creation strategies, “[i]n many countries governments [have been] supporting the effort[s] of R&D [(research and development)] in high-tech industries as well as wide array[s] of joint R&D strategic alliances, therefore the technological innovation system (TIS) concept was introduced especially for explanation of firm strategies, evaluation of their ability to develop new technologies and recommendations for innovation policies” (45).
From this conceptual perspective, Kvedarienė has approached business organizations as “open system[s] with tangible and intangible capital-inputs converting into added value outputs” (45). Thus, this study defines the notion of the value system in terms of the value chain concept, while emphasizing “the external interactions and relations with an organization and its suppliers, distribution channels and customers and the importance to manage and coordinate the synergies provided by networks” (46). Similarly, this paper defines successful organizational strategies of companies operating internationally in terms of their ability “to configure and coordinate global activities, simultaneously responding to the local changing business environment” (46).
According to this article, therefore, business strategies need to optimally “combine valuable geographical management with global integration management and with global strategic coordination to benefit from the multiple strategic approaches” (46). This is because most of the theoretical models for value-added activities posit that “the sources of competitive advantage originate from the configuration and coordination of business activities” (47). However, in view of the impact of globalization, scholarly literature indicates the existence of the “emerging international fragmentation of added value activities” (48). Thus, Kvedarienė concludes that, “[d]ue to an eclectic nature of global strategic management, there is no single approach to the methodology of the global value chain analysis, but it is a powerful analytical tool that could be used to investigate phenomena caused by interactions of various complex systems with numerous nodes like agents acting in different geographical scales” (50).
By Pablo Markin
Featured Image Credits: Latin America’s Digital Economy and Trends in International Taxation, April 12, 2019 | © Courtesy of Inter-American Dialogue/Flickr.