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The purpose of this paper is to provide a clustering approach to segment supply chain partners in the automobile industry and prioritize services offered by third party logistics service (3PL) providers.

In total, 98 automobile and auto‐parts manufacturers are surveyed to identify service needs, preferences, and outsourcing commitments. By applying a two‐stage clustering approach combined with Ward's minimum‐variance method and the K‐means algorithm, the logistics companies prioritize their services to better satisfy groups of customers with specific preferences.

Four distinctive groups of manufacturers are identified using the two‐stage clustering approach. The clusters separate logistic preferences and outsourcing patterns of after market parts suppliers, original equipment service parts suppliers, original equipment manufacturer parts suppliers, and tier one car makers. The paper finds that distribution and delivery services hold the highest percentage of services outsourced among the manufacturers.

This paper models logistic services as customizable services and develops a data system methodology to define the profiles of automobile manufacturers and their preferred logistic services. Through the analysis of service preferences and clustering, the paper identifies the key logistic services that can be customized for members of the automobile supply chain. A case is provided which demonstrates how a logistics company can provide customized service designs for specific target markets and customers.

The paper presents some results and conclusions of a two‐year research project encompassing ten interacting companies belonging to the Brazilian automotive supply network. The goal of the research is to explore current practices in terms of the commercial relationship between them. Specifically, the attention was focused on identifying whether there are relevant imbalances in terms of bargaining power so that the overall performance of the supply network as a whole is jeopardised. Some interesting conclusions could be drawn from this exploratory study. Perhaps the most important is the clear indication that the issue of supply network management is neglected among the analysed companies. The emphasis has almost exclusively been placed on the relationship with immediate customers and suppliers. This can run important risks for the competitiveness of the Brazilian automotive industry. Some causes of the negligence with the theme are discussed and some simple corrective measures are proposed, based on some more contemporary contributions found in the recent literature and in some practices identified in Brazil outside the automotive industry.

Competitive pressures force companies to seek solutions to eliminate wastes while improving product quality. Lean Six Sigma (LSS) has been considered one of the most effective approaches for business transformation. This article aims to present an empirical case study where LSS and Define, Measure–Analyze–Improve–Control (DMAIC) methodologies are applied to reduce defects in a car parts manufacturer.

The study follows the DMAIC methodology. Design of experiments and hypothesis testing were applied in a single case study.

The main defects and the main factors that cause defective parts were indicated for die-casting and machining processes. Solutions implemented reduced the defect incidence from a chronically high level to an acceptable one. The sigma level rose from 3.4 s to 4 s sustainably.

The study is limited to a single case study, without intention of generalizing the results to other types of industries.

This paper can be a useful guide of how to use DMAIC Six Sigma approach to defect reduction and can be applied in many sectors.

This study offers the knowledge on how to apply the Six Sigma DMAIC methodology, reducing the dependence on specialization courses.

This study describes in detail the process used in a structured improvement exercise including sigma-level calculation, factorial experiments and hypothesis tests – a set of techniques still poorly combined in the literature.

The United Nations Industrial Development Organization (UNIDO) (2017, pp. 14–15) identified that “industrialization is the seedbed for entrepreneurship, business investment, technological progress, the upgrading of skills, and the creation of decent jobs.” This placed studying different industrial sectors and their respective clusters, which are key drivers for economy, innovation, and knowledge creation (Slaper, Harmon, & Rubin, 2018), at the forefront of research. This chapter tackles the automobile industrial cluster in Egypt that possesses promising potential yet faces some challenges. It aims to provide an overview of the cluster, alongside underpinning its strengths and obstacles facing it. Moreover, the chapter displays the importance of the labor dimension in increasing the labor competitiveness of the cluster and showcases this through two cases of German automobile manufacturers that pioneered in venturing into the market through employing technical and vocational education and training. In conclusion, recommendations are provided to help in steering the cluster toward success.

This paper seeks to explore the personal motives of subsidiary CEOs in taking initiatives in multinational corporations. In essence, the paper proposes that subsidiary initiative‐taking is strongly driven by the socio‐political positioning of subsidiary CEOs, which consists of specific “social aspects” that account for the basic orientation that subsidiary CEOs maintain in initiative‐taking, as well as “political aspects” that affect the ability of subsidiary CEOs to strategize and the ways they do it in the highly politicized processes of initiative‐taking.

The paper is based on four exploratory case studies undertaken in German subsidiaries in France. Applying a matched pair approach it compares two subsidiaries run by parent country nationals (PCNs) with two subsidiaries run by host country nationals (HCNs).

The paper demonstrates that the nationality of the subsidiary CEO alone does not explain subsidiary CEOs initiative‐taking behaviour. Other factors that make up the socio‐political positioning of subsidiary CEOs, such as career aspiration, career orientation, access to resources and specific skills to form internal and local coalitions, as well as “external” coalitions with the headquarters, need to be considered as well.

Given the qualitative research design and exploratory nature of the study there are limits to how far the findings can be generalized and applied elsewhere. More in‐depth research is needed to further develop the socio‐political perspective put forward here, especially to more closely analyze the interplay of actors' (CEOs') socio‐political positioning approaches within different contexts of subsidiary initiative‐taking.

The socio‐political perspective proposed here goes beyond and extends existing IRHM approaches, which narrowly focus on the overarching impact of nationality as a predictor of differences in the behaviour of subsidiary CEOs.

Reflect on the influence of different lifecycle stages on the strategy of a family business; evaluate the impact of family, industry and company dynamics on the evolution of a family firm; assess the impact of ownership, governance and succession considerations on the sustainability of a family firm; and develop decision-making skills to overcome specific dilemmas and secure the family business longevity.

Five industries, three generations and one family business. What started off as an entrepreneur’s ambition, Almajid Limited has proven itself to a sustainable source of revenue and a diverse portfolio of businesses for multiple generations of a Saudi Arabian family. This case study offers an exclusive opportunity to follow the tumultuous journey of a Saudi family business and analyze the different phases of its evolution over seven decades and three generations. In particular, the case aims to highlight the complexities surrounding the management of a family firm and illustrate how various lifecycle stages stemming from a number of areas (e.g. family, company, industry, ownership and governance) simultaneously influence the family business strategy. Being deeply embedded in the context of Saudi Arabia, the case unveils the unique challenges of managing a family business in a conservative cultural setting. The case study is divided into four parts, with each of them putting the emphasis on a different lifecycle area of significance for the evolution of the family business. Each part culminates with the identification of an area-relevant dilemma that needs to be addressed for the family firm to be able to move into the next stage of its development. Part A focuses on the family area or axis, the Part B on the industry axis, Part C on the company axis, while Part D is based on the sustainability axis, which embraces as many as three dilemmas in relation to the ownership, governance and succession in the family firm. Moreover, each part incorporates a timeline of critical events that contributed to the emergence of a specific dilemma and a culturally-rooted anime that helps the readers visualize the story, picture somebody else’s reality, and empathize with the key protagonists of the case to achieve optimal decision-making.

Graduate audience: Master of Business Administration or Master of Global Entrepreneurial Management.

Teaching Notes are available for educators only.

CSS 11: Strategy.

This paper aims to propose a framework that can be used for analysing services in the automotive industry.

Existing categorisation schemes for services are investigated and evaluated in terms of their applicability to services in the automotive industry.

Services categorisation schemes are grouped under eight service paradigms, expressing the understanding that various authors had about services in different times and contexts.

The remarks are limited to the automotive industry.

The paper suggests services classification schemes, which can be effectively applied to automotive services in order to generate valuable managerial insights.

This paper provides an overview over multiple services categorisation schemes existing in the literature.

Supply chain risks significantly endanger small and medium‐sized enterprise (SME‐) suppliers in different currency areas in purchasing and sales. The purpose of this paper is twofold: to describe the concept of natural hedging in supply chains, and to highlight the potentials of natural hedging as a risk prophylaxis and a supplier financing approach.

The paper uses a brief literature review and a conceptual research design, taking the financial and physical component of natural hedging (in this case between an OEM and its SME‐suppliers in the automotive industry) into consideration.

Natural hedging of currency and commodity price fluctuations can contribute to the reduction of SME‐suppliers' supply chain vulnerability, also benefiting an OEM.

This research focuses exclusively on relationships between SME‐suppliers and large OEMs in the automotive industry. Studies of other types of companies and industries, such as the capital goods industry, might reveal divergent practices.

With the natural hedging approach, the paper promotes an innovative concept for better managing risks in supply chains, especially in recessionary times. The concept is a source for supplier financing.

This research shows that a globally active focal firm – an OEM in the automotive industry, for instance – can hedge currency and commodity price risks (financial components), as well as operational supply risks (physical components), by centralizing commodity supply with its SME‐suppliers. It can serve as a basis for future research.

The purpose of this paper is to understand differences between open-book accounting (OBA) using static prices and OBA using dynamic prices. The authors identify how these differences influence various aspects of customer–supplier relationships.

This paper is based on a case study involving a builders’ merchant and a wood manufacturer in the UK. The builders’ merchant under discussion has recently outsourced part of its production to the aforementioned wood manufacturer by using OBA with dynamic prices. For this case study, the authors have conducted interviews with multiple people from both parties in the agreement. Additional illustrative cases are provided through a study of other qualitative papers on OBA.

The authors find evidence supporting that, when dynamic prices are used in OBA, risk (unpredictability) is shifted from the supplier to the customer. Also, the customer frequently focuses on the supplier’s costs, both parties often aim for a long-term relationship and the customer becomes more dependent on the supplier, causing high interdependence. Furthermore, empirical evidence suggests that the customer finds price less important, and the reallocation of activities between the customer and supplier is easier in OBA setups in which dynamic prices are used.

This paper provides the first study of how differences between dynamic and static prices in OBA influence the customer–supplier relationship. This paper adds to the developing literature on OBA, in particular, as well as to literature on pricing, in general.