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ETH1: 1.3 Tr:CorpDev&IT > 01 CorpDev Defs, Motivation, Mechanics & Psychology of Change > Flashcards

01 CorpDev Defs, Motivation, Mechanics & Psychology of Change Flashcards

1
Q

5 chg programs n projects: + Summing up to: (w 2 dims) + What to do if overfull n unaffordable?

A
  • migration - polit n legal reqs - curr projects - chg reqs out of curr biz - M&A Sum = Proj portfolio (ManYears & $) > If unaffordable, sell Co!
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2
Q

5 types of strategies:

A

1- owner strategy > is your biz optimally structured (risk n rewards) as compared to inv alternatives? 2- Corp strat > which biz are / should we be in? w what resources n alliances? 3- Biz strat > w whom n how we compete? And grow? > Porter 5 forces & generic strats 4- Config strat > how to design Value Added Engine? 5- Functional strat > principles & standards in functions

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3
Q

Biz architecture n Corp Transf: 3 stratified interacting components + Interpretation of Corp Transf n its 2 challenges

A

Strategies Processes Systems + CT = from curr to target; though immaterial n cannot be stopped

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4
Q

Change strategies (classification)

A

Radical. Evolutionary Top-down. Bold strokes. (Unusual) High involvement. (Unusual). Long marches

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5
Q

Companies usually die due to… How? 4 Sequential stages:

A

…internal reasons (unless de-privatised) 1-Strategic crisis > lack of vision 2-Earnings crisis > less investing > getting worse (3-)Banks’ pressure > restructuring (shrink to healthy core) 4-Liquidity crisis > bankruptcy

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6
Q

StG DEF enterprise, company, firm

A

A productive social system.

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7
Q

Ease of change “formula” =

A

= f ( Dissatisfaction [0…1] x ModelOfFuture x ProcessOfChg )

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8
Q

Longest lasting Cos: why

A
  • Coz congruence in identity bw CEO n Co Eg family owned biz, Church. CEOs of public listed Cos often need to be brutal > yearly results Family biz can think long term.
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9
Q

Rough process costing: (yearly total)

A

h/activity * activity/day * days/years / h/years * total_cost_of_1 employee/y

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10
Q

StG DEF mgmt / leadership

A
  1. start ~ create
  2. run / grow ~ steer
  3. change ~ develop

productive social systems, on two levels:

  • mechanical
  • psychological
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11
Q

The 3 main mgmt levels: + usual career direction

A

Top->down - normative - strategic - operational Career usually proceeds bottom up.

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12
Q

Transformation management “beer formula” =

A

= Project mgmt (general discipline, domain independent) + Process model (domain dependent: what steps?) + Change mgmt (psy… often badly w money incentives)

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13
Q

(outdated) BCG matrix for corp strat:

A

(low/high growth) x (low/high market share)

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14
Q

3 economic sectors, in order f dev, as GDP grows + correl. f 3rd + maybe next one

A

1- agriculture 2- industries 3- services ~ urbanization > deindustrialization in UK eg (4- maybe next: repair env damage)

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15
Q

3 surprising sources of increased value added:

A

1- (repair of) env damage 2- (measures against) terrorism 3- regulation => CONTROLLED VALUE ADDED

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16
Q

3 types of psychology:

A

1- analytical > focus on what’s wrong (< childhood) 2- behavioral > rituals (to improve) 3- systemic > optimize your resources (strength) w social perspective

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17
Q

4 Characteristics of adaptable Cos =

A
  • adaptable vs traditional - considers all stakeholders - perf. n leadership oriented - collaborative, low hierarchy (-> check controller’s cost center structure!)
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18
Q

4+1 big strategies of biz segmentation: (As a taxonomy)

A

(Positioning): Products + (Markets): Regions Channels Customer segments + Value Chain Functions -> CRI

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19
Q

Auto referentiality of systems n premature aging of systems =

A

Successful Co wants to conserve! -> Goes on failure path

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20
Q

B2B vs B2C n brand

A

brand B2C. love B2B. CR,services

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21
Q

4 Biggest factors of failure of (strategic) projects: (n typical scapegoats)

A

1- resistance to change from the changed (psy) 2- insufficient support from (strategic) managers 3- unrealistic expectations 4- bad project management (can’t learn as you go > project/change consulting!) + Often IT ppl are scapegoated.

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22
Q

Bw 4 salary quartiles of mngrs, who will boards hire? N therefore?

A

-> Q2 (choose best ones but avoid press n malpractice accusation) -> Q2 salaries go up

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23
Q

Challenge for Cos by large sing. Mkts:

A

Be there! In each country

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24
Q

Character = Character Dev. =

A

= sum of your unquestioned beliefs; shows under pressure; Character Dev. = Revising beliefs; leaders (should) have more

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25
Q

Chg strats n culture: Nations n what matters

A

BS < Us,Uk,LatAm,China LM < DE,Jp,Scandi but (international) Co culture trumps!

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26
Q

Co life: Span Death Typical longest good spell

A
  • short n decreasing (avg 14y in CH) based on registered name change - typically die by being bought (otherwise bad for board members) - rarely more than 12y spell w good VA
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27
Q

Combining dims: best n worst quadrants: run vs chg biz n mechanical vs psy

A

best is mech chg only, w already adaptive co culture; worst is when psy chg is needed b4 all else

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28
Q

Common segmentation vs variants

A

(local) variants are fine if they add value, otherwise kill them

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29
Q

Company culture =

A

= norms, (unquestioned) beliefs

30
Q

corp strat nowadays: 1. old, why? 2. one big, yielding billions 3. 4.

A
  1. portfolio mgmt > diversify thru acquisitions w/o merging… today useful only for familiy offices, coz fin mkts are so efficient today 2. restructuring biz > eg GS: buy sick biz, infuse it w knowledge & industry veterans, then resell it 3. transfer skills in value chain activities > eg GE: let bizs f Co learn from each others, based on similarities 4. (most common today) “sharing activities in VC” > share HR, R&D, … shrink bizs as much as possible
31
Q

cost leader strat = goal, when it works?

A

try to use your deep pockets to starve your competitors… re-raise prices when you have become dominant enough (but not so much as antitrust!) > Works in consolidating markets.

32
Q

cultural fit bw individual n co in time

A

Co needs to evolve w world: there is no right to stability!

33
Q

Degree of vertical integration: -def - trend n conseq in econ cycle

A

= VA / REVENUE = (REV - SOURCE) / REV Trend: decreasing due to integrated supply chains -> makes it more difficult to survive economic cycle downturns coz always interacting w suppliers

34
Q

Distribution of VA:

A

5 directions: - investment (sustains n keeps alive Co) - salaries - boni - dividends / interest - taxes

35
Q

Excellent Cos n Entrepreneurs w strategic crises: (strat n psy)

A

They anticipate crises cognitively, expecting deterioration upon stagnation. Entrepreneurs live in t future: Change when you are at the best, coz then you can afford it!

36
Q

GDP: def. rel w econ policies

A

Sum VA All national economic policies aim to increase GDP.

37
Q

How BS / LM chg strats combine w mechanical / psy:

A

BS. LM Mech. Mech transf. Incr. improv. Eg 6 sigmas Psy. Replace mgmt team leadership program.

38
Q

Investment:

A

Recycling VA into projects. It’s a vital cycle.

39
Q

IT n standardization

A

standardization should precede IT implementation eg f ERP, as IT does not standardize

40
Q

key to strat SWOT analysis

A

summarizing to key SWOTs

41
Q

Normative mngrs provide: what 2 things otherwise…

A
  • provide energy n identification otherwise ppl leave the system
42
Q

Operational level creates…

A

… the current VA.

43
Q

Operational mngr does what? goals Development in time psy

A
  • manage against deviation - towards targets, revised up bw cycles - depressive fear-driven job
44
Q

Phases f globalization:

A

1- world trade of products n raw materials 2- global sourcing incl labour < unions dislike!

45
Q

Process view for biz design:

A

TO DO from slide 26 of part 1b

46
Q

Product view for biz design (Taxonomy w 4 main branches)

A

product 1- range > produces complexity – breadth – depth = variants 2- modularization > fights complexity – component structure n standardization – product data mgmt structure 3- degree f vert integration (aka manufacturing depth) < outsource based on competencies f suppliers 4- Differentiation

47
Q

product x market biz strat advice: (2)

A

(old,new prod) x (old,new mkt) = (penetration, prod dev, mkt dev, diversification) 1> go to boring high VA biz! the grass is NOT greener where you don’t know 2> diversify only reusing core skills (don’t go too far from your core)

48
Q

Measure unit of Productivity of 1- countries 2- Cos

A

1- GDP per capita 2- VA per employee High in (inv) banking, pharma… down to pizzerias!

49
Q

Project: What’s career decisive?

A

Implementing strategies (more career decisive than knowing good ones) Thus changing the operational VA setup

50
Q

(3 Reasons for consolidation)

A
  • increase growth - exit market where not competitive - overcapacity > decreasing price
51
Q

Return On Equity = (Decomposed into 3 factors, on which you can separately act) -measures what?

A

= profit/sales (profit margin) * sales/totAssets (capital turnover) < e.g. pay late, cash early * totAssets/shareholderEq (financial leverage) > Lehman profits SALES TOT.ASSETS capital -measures financial success.

52
Q

Segmentation: def + 4 things you can segment:

A

“language” to analyze things + Biz, finance, HR, IT

53
Q

St Gallen def of Business Model: + where most capex goes

A

Triangle Value Proposition Products CUSTOMER SEGMENTS Earning mechanism. Value Chain config. < capex!

54
Q

Stovepipe model = + Consequently.

A

each product line in a division (Maybe coming from M&A) + causes desynchronization f efforts > projects fail

55
Q

Strategic mngr does: task challenge psy

A
  • change op through projects - designer/designed problem: the designed push against change - also psy draining
56
Q

SWOT St Gallen way:

A

Inside view (SW) x Outside view (OT) = (SO=winning the princess, ST, WO, WT=killing the dragon) strats

57
Q

Taxonomy of product differentiation:

A

Diff 1- brand -> psy! 2- product 2.1 function 2.2 design ~ look n feel 3- client relationship INTERACTION = CRI

58
Q

Technological innovation: - goal - 3 dimensions

A
  • increase Value Added - Dim1: product vs process - Dim2: internal vs external in:function,efficiency vs ex:design,effectiveness - Dim3: incremental vs radical (All 8 combinations! Give examples!)
59
Q

The 3 MKTS of an economy:

A

1- products n services 2- capital market 3- labour market regulated by Gov to let them function as a precondition.

60
Q

To whom do div n int go? generally n conspicuously

A

To us the ppl. Households. Pension funds.

61
Q

Today’s 4 (5) big transformation forces:

A

1- globalization 2- technology 3- customer-orientation 4- Government (5- M&A)

62
Q

Transformation vs implementation: (Typical) directions

A

Top down vs bottom up

63
Q

Types of technology + correl n conseq f 2nd

A

1- product tech 2- process tech ~ phase 2 globalization -> integrated supply chains

64
Q

Typical change pattern in 3 phases:

A

1- mechanical bold stroke 2- behavior/psy long March w leadership program 3- process improvement long March (and it overlaps w previous cycle)

65
Q

Unions goal:

A

Increase salary

66
Q

Value added:

A

Output (revenue) - input (all you source; but no salaries!) Value may be just availability! > added by commerce

67
Q

What happens to whom in a price war? (for each f 2 generic competitive strats & then both)

A
  • Cost leaders win - Differentiators suffer coz f pathologically high cost structure (high fixed costs) - All forced to participate even doing bad biz (=low profit) just to cover fixed costs (need enough revenue)
68
Q

What psy characteristics in a startup?

A

Belief, identification, energy

69
Q

Why important to have independent board members?

A

Coz so they can shut down (sell) biz PROJECTED to be unprofitable.

70
Q

Why prod function trends to less important?

A

Coz globalization phase II n integrated supply chains make all products functionally homogeneous

ETH1: 1.3 Tr:CorpDev&IT (9 decks)

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