An integrative typology of global strategy and global value chains: The management and organization of cross‐border activities

• Author: Pavida Pananond,Gary Gereffi,Torben Pedersen
• Date: 01 August 2020
• Published date: 01 August 2020
• DOI: http://doi.org/10.1002/gsj.1388

SPECIAL ISSUE ARTICLE

An integrative typology of global strategy and

global value chains: The management and

organization of cross-border activities

Pavida Pananond

1

| Gary Gereffi

2

| Torben Pedersen

3

1

Department of International Business, Logistics and Transport, Thammasat Business School, Thammasat University,

Bangkok, Thailand

2

Department of Sociology & Center on Global Value Chains, Duke University, Durham, North Carolina

3

Department of Management & Technology, Bocconi University, Milan, Italy

Correspondence

Torben Pedersen, Department of

Management & Technology, Bocconi

University, Milan, Italy.

Email: torben.pedersen@unibocconi.it

Abstract

Research summary: We contend that a synthesis

between the literatures on global strategy and global

value chains (GVCs) is mutually beneficial. A typology

of four themes—managed cross-border activities, net-

work optimization, bottom-up upgrading, and strategic

coevolution—illustrates the underlying concepts and

mechanisms that these two approaches share in com-

mon. Our integrative typology provides an analytical

framework to understand the interplay between the

statics of GVC governance and the dynamics of firm

strategy. Firm-level actions are a key factor in effective

GVC-level policy making, and our framework provides

a roadmap to analyze how major disruptions, such as

digitalization and pandemics, affect the symbiotic rela-

tionships between GVCs and firm strategy.

Managerial summary: While the global strategy liter-

ature has underplayed the interdependence among

firms and other actors in global value chains (GVCs)

and highlighted the scope for firm agency, the GVC lit-

erature limits the attention to firm strategies per se but

puts more emphasis on the governance structure of

Introductory Editorial to Global Strategy Journal Special Issue: “Global Value Chains, Governance, and Globalization

Strategy”.

Received: 9 June 2020 Accepted: 9 June 2020

DOI: 10.1002/gsj.1388

Global Strategy Journal. 2020;10:421–443. wileyonlinelibrary.com/journal/gsj ©2020 Strategic Management Society 421

global industries. In their strategic decision making,

managers must take into consideration how firms are

positioned along the value chain in terms of four

themes: managed cross-border activities; network opti-

mization; bottom-up upgrading; and strategic coevolu-

tion. Integrating the GVC view adds a further impetus

to global strategy beyond the analysis of intra-firm

determinants. Conversely, integrating global strategy

into GVC analysis entails a more dynamic view on

behaviors of different actors in the value chain. Under-

standing these interactions enable managers and policy

makers to better incorporate how changes and disrup-

tions affect firm strategies within the governance

of GVCs.

KEYWORDS

global value chains, cross-border activities, network optimization,

bottom-up upgrading, strategic coevolution

1|INTRODUCTION

The global economic slowdown following the 2008–2009 crisis and shifting political sentiments

toward economic nationalism in Europe and the United States have sent shock waves through

the global economic system. The 2020 global outbreak of COVID-19 adds further to these grow-

ing uncertainties around the world. As globalization is increasingly challenged and tested

through crises and pandemics, there is an urgent call for ways to make the integration of global

activities more resilient and sustainable. Globalization can no longer be perceived as a process

of coordinated disaggregation of economic activities whose benefits are unevenly distributed

across geographical space, but a more strategic coexistence of value-adding activities whose

resilience depends on mutual interests of various stakeholders across the value chain and across

countries. This phenomenon underlines the need in academia to broaden how different streams

of literature view the changes and challenges in globalization.

We contend that a synthesis between the literatures on global strategy and global value

chains (GVCs) will be mutually beneficial. While the global strategy literature has underplayed

the interdependence among firms and other actors in the GVC and highlighted the scope for

firm agency, the literature on GVCs has left limited discretion to firms' choice of strategy while

putting more emphasis on the governance structure of global industries. By understanding how

firms are embedded in a broader value chain network, managers have to take into consider-

ation the firm's positioning along the value chain in their strategic decision making. Integrating

the GVC view adds a further impetus to global strategy beyond the analysis of intra-firm deter-

minants. Conversely, integrating the global strategy view in GVC analysis entails a more

dynamic view on different behaviors of actors in the value chain.

422 PANANOND ET AL.