MANAGING GLOBAL VALUE CHAINS
In the past few decades, many companies have undertaken rapid transformations that are changing the way products and services are produced. Thanks to reduced communication and transportation costs, they have abandoned the practice of producing goods and services themselves in a single country. Through offshoring and outsourcing, they have sliced up their value chains and dispersed production activities across the globe, creating global value chains (GVCs. !ombardier"s Global #$press aircraft is a good e$ample of a product made with a GVC. Its production involves do%ens of companies that are located in several countries around the world. The fuselage comes in part from the !ombardier plant in !elfast and another part of its &apanese partner. The fuel system is produced in #urope, the wings are made in &apan, and the tail is made in Canada. 'll maor components are shipped to the !ombardier plant in the vicinity of )ontr*al for final assembly. The Global #$press is hardly an isolated case, but rather part of a larger trend. Currently, trade in intermediate inputs has grown to account for roughly two+thirds of international trade (&ohnson (&ohnson and oguera, oguera, -/-. 'nd a new dataset on trade in value added (TiV' (TiV' compiled by the 0#C1 and 2T0 provides evidence that the share of foreign value added embodied in a country"s e$ports has increased for virtually all countries around the world b etween /334 and -//. In this course, we will analy%e what the economic rationale is for companies to slice up their value chains and disperse activities across multiple regions. 2e will will investigate the following 5uestions6 2hy is it now easier for companies to disperse value chain activities geographically7 • 2hich type of value chain tasks are best to offshore and where should they be located7 • 2hat are the hidden costs related to orchestrating o rchestrating a global value chain7 • 2hat are the implications for a firm"s competitive strategy7 • This course complements other courses and disciplines related to strategic management and the global environment of business (trade, finance, law, etc.. In Building Global Value Chains our focus will be on cost arbitrage in an international conte$t. PEDAGOGICAL APPROACH:
The course uses a mi$ of lectures, case studies and class discussions. Considering the format, it is obvious that students need to keep up with their lecture material and re5uired readings at all times. 8ou should should read re5uir re5uired ed materi materials als before before class class to be ready ready to ask 5uestion 5uestionss and engage engage in discussions. Class attendance is neither useful nor desirable if the cases have not been prepared and the readings have not been completed . EVALUAION:
This module has 9 sessions based on readings and cases. 8our 8our grade will be determined as follows6 • • •
Individual :articipation Intermediate
- ; = ; - ;
>inal
= ;
The contribution to learning (before labelled ?participation@ grade is based on attendance and the significance of in+class contributions. Atudents are not e$pected to have all the right answers in every case, nor are they e$pected to dominate the discussion in every class. Bowever, they are re5uired to be prepared and contribute regularly to the classroom discussion. The evaluation scheme is designed to encourage participation by udging both the 5uality and 5uantity of participation. Classroom participation should demonstrate6 (/ #vidence of careful preparation of cases and readings (- Clarity and conciseness of recommendations (= Atrong and convincing analysis to support recommendations. The 5uality of the discussion in class will depend on how well students have prepared and how willing they are to share their analysis with the class. It is not possible to get a high participation grade (within the D'E range in particular solely on the fre5uency of participation. In addition, simple attendance in classFeven to all classesFwithout active participation will yield a participation grade not higher than the minimum passing grade for graduate studies. )issing more than two classes without ustification will result in a fail grade. Indi(idual Re)o"! #*%&'
Atudents should prepare an individual report on a trending topic in the news that will be assigned at the end of session =. The write+up should be no more than / typed pages in length (double+spaced, /- pt font, / inch or -.4 cm margin all around, including graphs and bibliography and is due a! !he beginning o+ session , (two weeks after session =.
Case )"esen!a!ion #in !ea-s o+ ./0' #$%&'
#ach student will be asked to present, in groups of five or si$ students, one of the four assigned cases in sessions =+9. The goal of the presentation is to introduce the topic of the session and to stimulate discussion before we head into the theory. 8ou are not solving the case ' team will have /4 minutes to present the case, followed by a H' period of the same length. 1inal Re)o"! #,%&'
Atudents should prepare an individual report on a trending topic in the news that will be assigned at the end of session 4. The topic will be related to a subect treated in the last three sessions. The write+up should be no more than / typed pages in length (double+spaced, /- pt font, / inch or -.4 cm margin all around, including graphs and bibliography and is due on !he da2 !ha! !he +inal e3a- is s4heduled .
ORGANI5AION O1 HE COURSE
/JAM
/KJ-
Aession /6
Aession =6
Introduction
Exploiting the system
Aession -6
PM
MMMMMMMM
=J=
/J=
Aession L6
Aession 96
Race to the Bottom?
MMMMMMMM
Spotting and responding to cost differences Assign-en! s
-LJ-
Redesigning the chain
Aession 46 Navigating the Maze
Intermediate report assignment
Final report assignment
DEAILED COURSE DESCRIPION:
SESSION 6: INRODUCION
Nerr, 2illiam (-/9. Barnessing the !est of Globali%ation. MI Sloan Management Revie!"
SESSION $: SPOING AND RESPONDING
O COS DI11ERENCES
actor 'dvantages.E Chapter = in Elements of Multinational Strategy# Apringer, =3+4=.
•
:orter, ).
SESSION *:
E7PLOIING HE GLOBAL S8SEM
Case6 1e Aimone, P. Boopes, &. Pester, <. )elvin, A. (-/9. #tsy6 Neeping it
•
Bead, N. (-K DInternational Ta$ation.E Chapter /- in Elements of Multinational Strategy# Apringer, /Q3+-/. >o$, &ustin (-/L . The Conversation 2e Ahould !e Baving 'bout Corporate Ta$es. $arvard Business Revie!.
SESSION ,: Ra4e !o !he Bo!!o-9
Case6 Bau, Pee )elvin, Aheila (-/4. #verything is Connected6 ' ew #ra of Austainability at Pi >ung. Atanford Graduate Achool of !usiness Case.
Apar, 1. Pa )ure, P. (-=. The power of activism6 'ssessing the impact of G0s on global business. %alifornia Management Revie! L4(=, KQ+//.
•
1istelhorst, Greg (-/9. Can Pean )anufacturing :ut an #nd to Aweatshops7 Barvard !usiness
SESSION .: Na(iga!ing !he Mae
Case6 Pee, Bau Ailverman, '. (-Q.
Bead, N. (-K. Trade
Session 0: Redesigning !he Chain
Case6 Oni5lo6 ' Aupply Chain Going Global BN/Q4+:1>+#G
•
:isano, G. Ahih, 2. -3.
