When reviewing business performance, cross-border enterprises often revisit the quality of their strategic judgments, including choices of direction, risk assessments, and market assumptions. In the practical experience of Taiwan–Japan enterprises, however, performance gaps tend to have limited correlation with the merits of the strategy itself. They more frequently emerge during the phase in which strategy enters organizational operations, particularly in the processes of transmission and handover.
At the parent-company level, most strategies are built upon relatively comprehensive analytical foundations. Considerations such as market positioning, resource allocation, and governance are typically addressed during the decision-making stage. Once these strategies are passed down to subsidiaries, however, they are often translated into progress requirements, performance indicators, or isolated tasks. Over time, the underlying assumptions and conditions that originally supported the strategy gradually fade within day-to-day operations.
Where Strategy Gradually Breaks Down
In Taiwan–Japan cross-border organizations, strategic gaps tend to emerge most clearly at the interface between parent companies and their subsidiaries. Once internal consensus is reached, Japanese headquarters often expect strategies to move forward smoothly through existing organizational structures. Taiwanese subsidiaries, meanwhile, often recognize during execution that adjustments are required to accommodate local regulatory frameworks, operational processes, and resource constraints. When these adjustments are not clearly embedded into organizational responsibilities and feedback channels, strategies gradually lose a stable basis for execution as they circulate between the two sides.
In such situations, headquarters primarily receive updates on progress and outcomes, while subsidiaries operate under continued pressure to align with predefined targets. The strategy itself remains formally intact, yet its practical role at the execution level becomes increasingly unclear, eventually settling into a state that is difficult to translate into concrete action.
When execution gaps become apparent, many organizations respond by strengthening formal systems—adding reporting requirements, extending review procedures, or increasing reporting frequency. In practice, these measures often deliver limited improvement, as institutional frameworks tend to emphasize post-hoc results rather than the judgments and adjustments made during execution. When critical information is consolidated only after outcomes materialize, deviations that arise along the way are difficult to detect in real time.
Cross-border operations inherently involve differences in timing and institutional environments. Without structures capable of absorbing strategic adjustments, the room for correction narrows as operations proceed. From a governance perspective, these execution gaps reflect limitations in how strategic handover mechanisms are designed. When the interpretation, adjustment, and feedback of strategy across different institutional contexts are not formally embedded within governance structures, strategy tends to be expressed primarily through directives or performance metrics, with its function as a guide for action gradually weakening.
In such situations, headquarters primarily receive updates on progress and outcomes, while subsidiaries operate under continued pressure to align with predefined targets. The strategy itself remains formally intact, yet its practical role at the execution level becomes increasingly unclear, eventually settling into a state that is difficult to translate into concrete action.
When execution gaps become apparent, many organizations respond by strengthening formal systems—adding reporting requirements, extending review procedures, or increasing reporting frequency. In practice, these measures often deliver limited improvement, as institutional frameworks tend to emphasize post-hoc results rather than the judgments and adjustments made during execution. When critical information is consolidated only after outcomes materialize, deviations that arise along the way are difficult to detect in real time.
Cross-border operations inherently involve differences in timing and institutional environments. Without structures capable of absorbing strategic adjustments, the room for correction narrows as operations proceed. From a governance perspective, these execution gaps reflect limitations in how strategic handover mechanisms are designed. When the interpretation, adjustment, and feedback of strategy across different institutional contexts are not formally embedded within governance structures, strategy tends to be expressed primarily through directives or performance metrics, with its function as a guide for action gradually weakening.
How Can Strategy Avoid Being Eroded Along the Way?
Against this backdrop, a strategy’s ability to remain executable in cross-border operations is closely tied to the configuration of organizational structures. Once a strategy enters the execution phase, enterprises continuously encounter practical conditions such as institutional differences, information gaps, and resource constraints. For this reason, at least several key dimensions need to be clearly addressed in order for strategy to move smoothly into actual operations.
- Strategy Must First Be Recognizable Within Institutional Systems: When a strategy cannot be recognized by institutional systems, judgments made during execution tend to rely on individual experience. The types of information that institutions are able to absorb usually take a describable form, such as underlying conditions, risk assumptions, and decision criteria. Once a strategy is translated into such information, organizations are able to track its evolution within existing management and internal control frameworks.
In practice, strategies entering subsidiary operations often require adjustments related to market scale, regulatory constraints, or workforce allocation. When these adjustments remain limited to immediate operational responses and are not incorporated into institutional records, gaps between strategy and actual conditions become difficult to feed back to the decision-making level. The function of institutional systems lies in transforming these gaps into information that can be understood and reviewed, rather than leaving them as isolated explanations.
- Clear Responsibility for Strategic Handover Within the Organization: Deviations that arise during strategy execution need to be organized, interpreted, and fed back into the organization. This process involves understanding the original assumptions behind the strategy as well as assessing on-the-ground conditions, and it often spans multiple departments. When responsibility for strategic handover is not clearly defined, relevant information tends to be dispersed across different organizational levels, making integration difficult.
In cross-border organizations, this handover function does not necessarily correspond to a single job title, but its scope of responsibility needs to be institutionally defined. For example, organizations need clarity on which execution gaps should be escalated to the governance level and which can be addressed through operational adjustments. When these boundaries are not clearly articulated, strategic deviations are often absorbed independently at different points in the organization, which over time weakens strategic coherence.
- Institutional Systems Need to Engage with the Process of Execution: Most institutional systems are designed with a focus on consolidating and presenting results, while placing relatively limited emphasis on judgments made during execution. In practice, strategic adjustments often occur at the moment of day-to-day decision-making, such as reallocating resources, revising timelines, or updating risk assessments. When these judgments remain confined to immediate operational handling, the surrounding context becomes difficult to fully reconstruct during subsequent reviews.
When institutional systems incorporate such judgments into their scope of record-keeping, changes in strategy during execution can be continuously traced. The purpose of these records is to preserve essential decision context, allowing strategic continuity to be maintained despite the passage of time or changes in personnel, while also supporting later review and adjustment.
The Role of Accountants in Supporting Strategic Handover
Within the structure outlined above, the role of accounting firms is primarily focused on helping enterprises establish information formats that can be understood and absorbed by governance systems. Once a strategy enters the execution phase, assumptions, risk assessments, and decision criteria that were originally embedded in decision-making tend to become dispersed across operational processes. Without appropriate consolidation and documentation, such information becomes difficult to consistently identify within the organization.
Through an accounting and internal control perspective, strategy-related judgments can be translated into traceable information items. For example, resource reallocations, timeline adjustments, or changes in cost structures that arise during execution can be presented alongside the original strategic assumptions. This allows organizations to better understand the nature of these adjustments and their scope of impact. Such structuring helps transform fragmented execution experiences into knowledge that governance systems can absorb.
In cross-border operating environments, this type of information structure becomes particularly important. Execution differences arising from distinct institutional contexts are often difficult to assess when presented only through outcomes, as it may be unclear whether they reflect operational-level variations or adjustments to underlying strategic assumptions. When such differences are articulated through institutionalized mechanisms, organizations are better positioned to evaluate and respond at the appropriate level.
In this process, the function of accounting firms is not to intervene in business decision-making, but to support the establishment of an information foundation capable of accommodating strategic adjustments. Through the design of reporting structures, internal control systems, and documentation practices, strategy can be continuously reviewed within cross-border operations, and its adjustment trajectory can be understood and traced over time.
Through an accounting and internal control perspective, strategy-related judgments can be translated into traceable information items. For example, resource reallocations, timeline adjustments, or changes in cost structures that arise during execution can be presented alongside the original strategic assumptions. This allows organizations to better understand the nature of these adjustments and their scope of impact. Such structuring helps transform fragmented execution experiences into knowledge that governance systems can absorb.
In cross-border operating environments, this type of information structure becomes particularly important. Execution differences arising from distinct institutional contexts are often difficult to assess when presented only through outcomes, as it may be unclear whether they reflect operational-level variations or adjustments to underlying strategic assumptions. When such differences are articulated through institutionalized mechanisms, organizations are better positioned to evaluate and respond at the appropriate level.
In this process, the function of accounting firms is not to intervene in business decision-making, but to support the establishment of an information foundation capable of accommodating strategic adjustments. Through the design of reporting structures, internal control systems, and documentation practices, strategy can be continuously reviewed within cross-border operations, and its adjustment trajectory can be understood and traced over time.
Allowing Strategy to Remain Active Within the Organization
When a strategy is supported by appropriate handover conditions, its role within the organization extends beyond serving as a decision document and becomes part of ongoing operations. The development of such capability is typically the result of long-term institutional arrangements and accumulated practical experience, and it influences the operational stability of cross-border enterprises operating in complex environments.
In practice, the challenges faced by strategy often arise from the interaction of institutional differences, resource constraints, and changing external conditions. These factors lead to continuous adjustments during execution, and the organization’s ability to retain the context surrounding those adjustments affects the quality of subsequent judgments. When strategic adjustments are understood as a continuous process rather than as isolated outcomes, organizations gain a clearer grasp of their operational conditions. In highly uncertain business environments, organizational stability is often built upon these ongoing and routine institutional arrangements. Whether strategy can continue to function effectively over time is shaped not only by the completeness of decisions at the outset, but also by the organization’s capacity to absorb, document, and adjust strategy as operations evolve. Such capacity is typically accumulated through sustained practice and becomes a foundation for maintaining coherence in cross-border operations.
In practice, the challenges faced by strategy often arise from the interaction of institutional differences, resource constraints, and changing external conditions. These factors lead to continuous adjustments during execution, and the organization’s ability to retain the context surrounding those adjustments affects the quality of subsequent judgments. When strategic adjustments are understood as a continuous process rather than as isolated outcomes, organizations gain a clearer grasp of their operational conditions. In highly uncertain business environments, organizational stability is often built upon these ongoing and routine institutional arrangements. Whether strategy can continue to function effectively over time is shaped not only by the completeness of decisions at the outset, but also by the organization’s capacity to absorb, document, and adjust strategy as operations evolve. Such capacity is typically accumulated through sustained practice and becomes a foundation for maintaining coherence in cross-border operations.