Bunge Limited is successful example for the transformation of companies to globalization as the management had used a mix of strategies to move the company to another level to be in the global market in which the sequence of it had shown positive results, also product development played a major role in their business. Bunge focus on their core business and trading-off non core business and focusing on the goal to be the best integrated agribusiness and food company in the world. •Historical overview for Bunge Limited
Bunge is one of the large global companies specializing in agribusiness (grain origination, oilseed processing and international marketing) and fertilizers . Bunge was founded in 1818 by Johann Peter Bunge a German merchant who mainly focused on being closer to the supplier’s side in the provision of grain for over 150 years starting in Amsterdam, Holland moving to Antwerp, Argentina and finally Brazil. In 1980 Bunge had a diversified business in textiles, banking, insurance, paint, chemical, cement and real estate. In 1990 the company faced financial problems and a fundamental review of the group strategy came with conclusion to refocus on their core business again. •Bunge Strategy
The goal for Bunge was to become the best integrated agribusiness and food company in the world, in which they needed to make changes in the way the company was managed, measuring operations performance as they found that the most defining factor for integration is logistics. The company had seen benefit in decentralized management which had shown positive results and also created challenges being a global company as they expanded their operations to cover European markets and Americas where they had been operating for long time to achieve their goal. Operations
The company operations between agribusiness, fertilizers, food products and soy ingredients which had shown innovation and product development, also their operation expansion in countries by acquiring major industry players in the local markets giving them more strength in the business locally and globally, establishing itself again in the international market by opening a Bunge Global Markets which focused on marketing products, freight, risk management and trade finance. The company later had shown the strong need for the alignment of all the company offices together where the decentralization became challenging.
Decentralisation challenges and effects on globalization Bunge CEO Weisser was convinced about the benefits of decentralized management due to the different culture of the each of the local markets where they are present, this vision was useful in the beginning but it had shown challenges when the company shifted from being a confederation of small regional companies to be a global company, also it shown challenges when the company went public in 2001 as the profits where based regionally not as a whole company. Also decentralization in practice can affect the supply chain surplus.
Looking to Bunge operations strategy in decisions areas, performance objectives, sustainable alignment, using innovation and product development and realizing the importance of information technology and suggestions in investing having ERP systems that would have supported their goal.
Bunge had shown focus on achieving their corporate strategy and becoming a global company in agribusiness and fertilizers divisions while they still need to realize that decentralization can pull the organization backward.
Buckley, P. and Ghauri, P. (2004) ‘Globalisation, Economic Geography and the Strategy of Multinational Enterprises’, Journal of International Business Studies , Vol. 35, No. 2 (Mar., 2004), pp. 81-98 [Online]. Available from: http://www.jstor.org.ezproxy.liv.ac.uk/stable/pdfplus/3875244.pdf?acceptTC=true (Accessed January 18,2012) Randaccio, F. and Veugelers, R. (2007) ‘Multinational Knowledge Spillovers with Decentralised R&D: A Game-Theoretic Approach’, Journal of International Business Studies , Vol. 38, No. 1 (Jan., 2007), pp. 47-63 [Online]. Available from: http://www.jstor.org.ezproxy.liv.ac.uk/stable/pdfplus/4540402.pdf (Accessed January 17,2012) Slack, N. and Lewis, M. (2008) Operations Strategy (2nd ed.), Essex, Pearson Education Swanson, E. (1994) ‘Information Systems Innovation among Organizations’, Management Science , Vol. 40, No. 9 (Sep., 1994), pp. 1069-1092 [Online]. Available from: http://www.jstor.org.ezproxy.liv.ac.uk/stable/pdfplus/2661474.pdf?acceptTC=true (Accessed January 18, 2011)