Case A- GMR: diversifying for growth Case B (Sequel) – GMR: deciding future alliance strategy for airports

2016 ◽  
Vol 6 (1) ◽  
pp. 1-21
Author(s):  
Rita Dubey
Keyword(s):  
Strategic Alliances ◽  
Power Plants ◽  
Joint Venture ◽  
Operating Experience ◽  
The Philippines ◽  
Infrastructure Development ◽  
Growth Strategies ◽  
Diversification Strategy ◽  
Content Type ◽  
Airport Infrastructure

Subject area General Management/Strategy. Study level/applicability Post-graduate/MBA. Case overview Case A: Mr Grandhi Mallikarjuna Rao, founding chairman of GMR, was considering a proposal to bid for an upcoming international airport in Hyderabad, India. The strategic move would have marked GMR’s foray into the Indian airport infrastructure sector. GMR had been involved in the development and operation of power plants and had thrived on public–private partnerships for all its projects. Mr Rao is thinking: Should GMR make another major investment in infrastructure development by bidding to build the airport in Hyderabad, India? Further, how should the organization prepare itself for this strategic move? Case B: On April 4, 2013, the meeting of GMR’s Group Executive Council (GEC) was scheduled to take place. Srinivivas Bommidala, G.M. Rao’s son-in-law and Chairman of GMR’s airports business, was gearing up for the meeting. The meeting was called to discuss a proposal for bidding for an upcoming airport project in the Philippines. It had been more than a decade since GMR entered the airport infrastructure sector. The organization had built substantial airport operating expertise during that period. It adopted a joint venture (JV) model for expanding in the airport infrastructure business. Until now, the organization had always formed JVs for all its airport projects. JVs with existing airport operators were necessitated by the bid conditions that required a certain minimum airport operating experience for qualifying as a bidder for various projects. In some cases, a JV with a local player helped GMR with market knowledge for functioning in a foreign market. GMR also used JVs to access the capabilities it lacked for operating in this sector and gradually learnt from its partners for building capabilities in-house. The group now had the required operating expertise in the sector to qualify as a bidder. One of the key issues the GEC was contemplating was: Whether GMR should continue to form JV for bidding for the upcoming project or should it go solo? Further, if it had to form a JV then, in which areas should it seek a partner? Expected learning outcomes Case A: To understand the relationship between key concepts in strategic management, including diversification, capabilities and core competence. To help students understand the various factors managers consider when deciding on the diversification strategy of an organization. To create an understanding of the organizational processes required to facilitate diversification into a new segment. To teach students how to evaluate a potential market opportunity that may require a firm to take on a diversification strategy. Case B: To help students understand how companies use alliances as growth strategies. To understand the rationale for formation of various alliances. To explore various factors managers consider when deciding on alliance strategy of an organization. To understand the challenges associated with using alliances as a strategic option. To understand the pros and cons of internal development (i.e. going solo) vis-à-vis strategic alliances. Subject code CSS 11: Strategy.

Case B (Sequel) – GMR: deciding future alliance strategy for airports

2016 ◽  
Vol 6 (1) ◽  
pp. 1-25
Author(s):  
Rita Dubey
Keyword(s):  
Strategic Alliances ◽  
Joint Venture ◽  
Operating Experience ◽  
Foreign Market ◽  
Subject Area ◽  
The Philippines ◽  
Growth Strategies ◽  
Content Type ◽  
Strategic Option ◽  
Airport Infrastructure

Subject area General management/strategy. Case overview Case B: On April 4, 2013, the meeting of GMR’s Group Executive Council (GEC) was scheduled to take place. Srinivas Bommidala, G.M. Rao’s son-in-law and Chairman of GMR’s airports business, was gearing up for the meeting. The meeting was called to discuss a proposal for bidding for an upcoming airport project in the Philippines. It had been more than a decade since GMR entered the airport infrastructure sector. The organization had built substantial airport operating expertise during that period. It adopted a joint venture (JV) model for expanding into the airport infrastructure business. Until now the organization had always formed JVs for all its airport projects. JVs, with existing airport operators, were necessitated by the bid conditions that required a certain minimum airport operating experience for qualifying as a bidder for various projects. In some cases, JV with a local player helped GMR with market knowledge for functioning in a foreign market. GMR also used JVs to access the capabilities it lacked for operating in this sector and gradually learnt from its partners for building capabilities in-house. The group now had the required operating expertise in the sector to qualify as a bidder. One of the key issues the GEC was contemplating was: Whether GMR should continue to form JV for bidding for the upcoming project or should it go solo? Further, if it had to form a JV then, in which areas should it seek a partner? Expected learning outcomes Case B: To help students understand how companies use alliances as growth strategies; to understand the rationale for formation of various alliances; to explore various factors managers consider when deciding on alliance strategy of an organization; to understand the challenges associated with using alliances as a strategic option; and to understand the pros and cons of internal development (i.e. going solo) vis-à-vis strategic alliances. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email [email protected] to request teaching notes. Subject code CSS 11: Strategy.

Board political experience and firm internationalization strategy

2017 ◽  
Vol 10 (4) ◽  
pp. 401-416 ◽  
Author(s):  
Earl Yarbrough Jr ◽  
Michael Abebe ◽  
Hazel Dadanlar
Keyword(s):  
Firm Performance ◽  
Strategic Alliances ◽  
Joint Venture ◽  
Corporate Strategy ◽  
Strong Support ◽  
Political Activity ◽  
Content Type ◽  
Political Experience ◽  
Firm Internationalization ◽  
Internationalization Strategy

Purpose The purpose of this paper is to empirically examine the link between board of director composition and firm performance. Specifically, the paper argues that board political experience influences the firm’s internationalization strategy as directors with significant political experience provide guidance, resources, and network access that enhance the firm’s international presence. The authors also posit that board political connections would be more helpful for firms operating in high-regulation industries. Design/methodology/approach The authors tested the predictions using data from 156 large US firms. Data on directors’ background were gathered from SEC proxy filings, while data pertaining to internationalization were obtained from Compustat and Mergent Online databases. Hierarchical moderated regression analysis was employed to empirically test the hypothesized relationships. Findings The findings provide strong support for the positive relationship between board political experience and the degree of firm internationalization. Contrary to the authors’ predictions, the level of industry regulation does not seem to significantly affect this relationship. Research limitations/implications Firms aggressively pursuing international strategy could benefit from having directors on their board with robust political experience. One of the limitations of the study is that the types of international activities for firms is not specified in the study as it might be in the form of joint-venture capacity, strategic alliances or for firms that might be born-global. Originality/value This study makes original contribution to the on-going research on board political activity and firm performance through internationalization strategy. The findings suggest that having directors’ with political experience is an important asset in influencing firm’s corporate strategy.

Role of context and contest in the structuring of alliance governance

2014 ◽  
Vol 7 (2) ◽  
pp. 172-192 ◽  
Author(s):  
Senthil Kumar Muthusamy
Keyword(s):  
Strategic Alliances ◽  
Resource Dependence ◽  
Joint Venture ◽  
Task Complexity ◽  
Multinomial Logistic Regression ◽  
Balance Of Power ◽  
Governance Structure ◽  
Empirical Examination ◽  
Content Type ◽  
Alliance Governance

Purpose – The alliance governance – whether equity or non-equity based – through which an alliance is governed serves as a mechanism to protect a firm from partner's opportunistic behavior, manage resource dependence and facilitate knowledge sharing. Alliance governance structure also reflects the risk, reward and control that partners perceive in a relationship. In light of the conflicts and instabilities reported in strategic alliances, the purpose of this paper is to examine the interorganizational domain that affects the endurance and continuity of collaboration and explain how the alliance interface contexts determines the structuring of alliance governance. Design/methodology/approach – An empirical examination of 179 strategic alliances, using survey and archival data conducted to test the hypothesized relationship between the choice of governance structure and the complexity of alliance task, balance of power and competitive scope between partners. Findings – A multinomial logistic regression of the hypothesized variables revealed that the complexity of alliance task, balance of power, and competitive scope between partners are significantly related to the mode of alliance governance – whether non-equity, minority-equity, or joint venture. Originality/value – This study makes a significant contribution to the understanding of the relationships between the contextual factors such as the alliance task, power dynamics, and competitive scope that shape the collaboration and structuring of appropriate alliance governance mode. Results of the study provide strong evidence for the hypotheses that the greater the task complexity, and greater the balance of power and scope of competition between partners, the alliance governance tends to be equity or joint venture based. Consistent with recommendations of several organizational scholars that the theory of alliance governance and performance must shift from individual partner firm to interaction domain and interface contexts (Luo, 2002; Gray and Wood, 1991; Oxley and Sampson, 2004), this study integrally examined the dyadic issues such as balance of power, task complexity, and the competitive scope and the dynamic role they play in decisions pertaining to alliance governance. While many extant studies on the choice of alliance governance structure have employed secondary data sources, the study employed data from survey measures (Gulati, 1995; Teng and Das, 2008; Oxley and Sampson, 2004) enhancing the validity of the results.

Philippine tax reforms will need compromise

2016 ◽  
Keyword(s):  
Tax Avoidance ◽  
Petroleum Products ◽  
The Philippines ◽  
Income Taxes ◽  
Infrastructure Development ◽  
Tax Reforms ◽  
Middle Income ◽  
Content Type ◽  
Development Goals ◽  
Finance Department

Subject Tax reform efforts in the Philippines. Significance Taxation reform is an aim of President Rodrigo Duterte's administration, but the first batch of measures that the finance department has submitted to congress have caused controversy: one representative on October 8, adding to others' criticisms, said that a mulled increase in vehicle taxes and prices would hit low- and middle-income households disproportionately. Impacts Tax cuts will be popular, but Duterte could lose support from those facing higher taxes. An increased tax take would support government infrastructure development goals. Lowering personal income taxes would see top-up taxes elsewhere, such as on petroleum products, increasing business costs. New taxes on alcohol, tobacco and other 'sin' items, sugary products, luxury items and the auto sector could be coming. Tax avoidance and evasion will not end quickly; sustained regulatory attention will be needed.

AIIB may not close ASEAN infrastucture gap

2015 ◽  
Keyword(s):  
Free Trade Area ◽  
The Philippines ◽  
Rapid Expansion ◽  
Infrastructure Investment ◽  
Infrastructure Development ◽  
Investment Bank ◽  
Content Type ◽  
Asian Infrastructure Investment Bank ◽  
Trade Area ◽  
Asean Countries

Subject ASEAN core countries and the Asian Infrastructure Investment Bank. Significance The Asian Infrastructure Investment Bank (AIIB) plans to begin lending in early 2016. Three ASEAN countries -- Malaysia, Thailand and the Philippines -- have not signed the bank's articles of agreement, despite their infrastructure development needs. These needs will grow as ASEAN integrates, for instance via the ASEAN Economic Community (AEC) free trade area from end-2015. Impacts Should Manila reject the AIIB, this will create an opening for further Japanese support of Philippines infrastructure. Early credibility among lenders could lead to the AIIB's rapid expansion in Asia. Until then, established development lenders will dominate -- the AIIB is untested.

Philippines tilts towards Russia and China carry risk

2016 ◽  
Keyword(s):  
Foreign Policy ◽  
The Philippines ◽  
Infrastructure Development ◽  
Content Type ◽  
Military Aid ◽  
Us Military ◽  
The Us ◽  
Development Plans

Significance This is part of his desire for an 'independent' foreign policy, which includes Manila distancing itself from Washington and seeking closer economic and military ties with China and Russia. Impacts Philippine purchases of Chinese and Russian arms will probably grow. Future US military aid to the Philippines may be curtailed or cancelled. China will provide more financing support for the Duterte administration's infrastructure development plans. Closer ties with Beijing and Moscow may reduce Manila's interest in joining the US-led Trans-Pacific Partnership. The mid-November APEC Summit in Peru provides further opportunity for Duterte to meet Russian and Chinese leaders.

Philippines infrastructure needs more private money

2017 ◽  
Keyword(s):  
The Philippines ◽  
Infrastructure Development ◽  
Internal Security ◽  
Content Type ◽  
Price Increases ◽  
Emergency Powers ◽  
Infrastructure Policy ◽  
Private Money ◽  
Metro Manila ◽  
Bidding Process

Subject Infrastructure policy under the Duterte administration in the Philippines. Significance President Rodrigo Duterte’s economic team met their Japanese counterparts in Tokyo on March 27-28 to discuss infrastructure cooperation. Duterte is planning greater fiscal spending, seeking official development assistance and accepting unsolicited private sector proposals for infrastructure development. Meanwhile, he wants emergency powers to expedite the bidding process in Metro Manila and, ambitiously, to tackle simultaneously the different infrastructure problems of the Mega Manila area and the rest of the country. Impacts Congress will probably rebuff the executive push for emergency powers. Construction-related labour and supply shortages, and price increases are likely. Chinese construction on Scarborough Shoal could derail China-Philippine infrastructure cooperation. Land rights and access issues will bedevil Duterte’s infrastructure push. Internal security dangers in the south, including terrorism and guerrillas, could hit infrastructure projects.

Anti-mining protests impede Philippine energy targets

2015 ◽  
Keyword(s):  
Civil Society ◽  
Private Sector ◽  
Coal Mine ◽  
Power Plants ◽  
The Philippines ◽  
Content Type ◽  
Energy Projects ◽  
National Power ◽  
Power Shortages

Subject Local discontent over energy projects in the Philippines. Significance During his July 27 State of the Nation Address, President Benigno 'Noynoy' Aquino underlined his administration's efforts to expand electrification and other infrastructure. Manila and the private sector see new coal-fired power plants as the most effective way to address looming national power shortages. Yet intensifying civil society opposition, communist rebel activities and repeated coal mine closures are undermining coal's central role. Impacts Pressure on local administrations to respond will see frictions with (and within) the Manila government. Delayed power projects will constrain manufacturing. Other forms of mining will be affected by local dissent.

Philippines election will shift infrastructure focus

2016 ◽  
Keyword(s):  
Development Policy ◽  
Public Spending ◽  
The Philippines ◽  
Public Works ◽  
Infrastructure Development ◽  
Infrastructure Projects ◽  
Content Type ◽  
Urban Rail ◽  
Infrastructure Policy ◽  
Manufacturing Activity

Subject Post-election infrastructure policy priorities. Significance On January 14, the transportation and communications department listed 13 public-private partnership (PPP) programmes that will avoid election-related public spending restrictions on infrastructure and public works. Infrastructure development has been a key Aquino administration initiative, but elections on May 9 will bring a new president, and with it a new focus on infrastructure and development policy. Impacts The next presidential administration may review or cancel some Aquino-era infrastructure projects. Competition between China and Japan will provide the Philippines with additional infrastructure funding. If the next government cannot improve road and energy infrastructure, manufacturing activity, mostly in Luzon, will suffer. Post-election infrastructure projects may emphasise ports, inter-city roads and perhaps urban rail.

Political standoff risks East Timor’s economic future

2019 ◽  
Keyword(s):  
Joint Venture ◽  
Prime Minister ◽  
Political Instability ◽  
East Timor ◽  
Infrastructure Development ◽  
Gas Field ◽  
Content Type ◽  
The Government ◽  
Economic Future ◽  
Economic Outlook

Subject East Timor's political and economic outlook. Significance Tension between President Francisco Guterres and Prime Minister Taur Matan Ruak over the filling of ministerial positions is paralysing policymaking. Meanwhile, East Timor is set to step up planning with joint venture partners for the development of the Greater Sunrise gas field that lies largely in its waters. Impacts The lack of ministers in the government will reduce state capacity. Political instability and overdependence on its Petroleum Fund will frustrate East Timor’s attempts to join ASEAN. Major infrastructure development will require increased Chinese lending.

Sign in / Sign up

Export Citation Format

Share Document