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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
Chg strats n culture: Nations n what matters
BS \< Us,Uk,LatAm,China LM \< DE,Jp,Scandi but (international) Co culture trumps!
26
Co life: Span Death Typical longest good spell
- 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
27
Combining dims: best n worst quadrants: run vs chg biz n mechanical vs psy
best is mech chg only, w already adaptive co culture; worst is when psy chg is needed b4 all else
28
Common segmentation vs variants
(local) variants are fine if they add value, otherwise kill them
29
Company culture =
= norms, (unquestioned) beliefs
30
corp strat nowadays: 1. old, why? 2. one big, yielding billions 3. 4.
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
cost leader strat = goal, when it works?
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
cultural fit bw individual n co in time
Co needs to evolve w world: there is no right to stability!
33
Degree of vertical integration: -def - trend n conseq in econ cycle
= 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
Distribution of VA:
5 directions: - investment (sustains n keeps alive Co) - salaries - boni - dividends / interest - taxes
35
Excellent Cos n Entrepreneurs w strategic crises: (strat n psy)
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
GDP: def. rel w econ policies
Sum VA All national economic policies aim to increase GDP.
37
How BS / LM chg strats combine w mechanical / psy:
BS. LM Mech. Mech transf. Incr. improv. Eg 6 sigmas Psy. Replace mgmt team leadership program.
38
Investment:
Recycling VA into projects. It's a vital cycle.
39
IT n standardization
standardization should precede IT implementation eg f ERP, as IT does not standardize
40
key to strat SWOT analysis
summarizing to key SWOTs
41
Normative mngrs provide: what 2 things otherwise...
- provide energy n identification otherwise ppl leave the system
42
Operational level creates...
... the current VA.
43
Operational mngr does what? goals Development in time psy
- manage against deviation - towards targets, revised up bw cycles - depressive fear-driven job
44
Phases f globalization:
1- world trade of products n raw materials 2- global sourcing incl labour \< unions dislike!
45
Process view for biz design:
TO DO from slide 26 of part 1b
46
Product view for biz design (Taxonomy w 4 main branches)
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
product x market biz strat advice: (2)
(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
Measure unit of Productivity of 1- countries 2- Cos
1- GDP per capita 2- VA per employee High in (inv) banking, pharma... down to pizzerias!
49
Project: What's career decisive?
Implementing strategies (more career decisive than knowing good ones) Thus changing the operational VA setup
50
(3 Reasons for consolidation)
- increase growth - exit market where not competitive - overcapacity \> decreasing price
51
Return On Equity = (Decomposed into 3 factors, on which you can separately act) -measures what?
= 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
Segmentation: def + 4 things you can segment:
"language" to analyze things + Biz, finance, HR, IT
53
St Gallen def of Business Model: + where most capex goes
Triangle Value Proposition Products CUSTOMER SEGMENTS Earning mechanism. Value Chain config. \< capex!
54
Stovepipe model = + Consequently.
each product line in a division (Maybe coming from M&A) + causes desynchronization f efforts \> projects fail
55
Strategic mngr does: task challenge psy
- change op through projects - designer/designed problem: the designed push against change - also psy draining
56
SWOT St Gallen way:
Inside view (SW) x Outside view (OT) = (SO=winning the princess, ST, WO, WT=killing the dragon) strats
57
Taxonomy of product differentiation:
Diff 1- brand -\> psy! 2- product 2.1 function 2.2 design ~ look n feel 3- client relationship INTERACTION = CRI
58
Technological innovation: - goal - 3 dimensions
- 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
The 3 MKTS of an economy:
1- products n services 2- capital market 3- labour market regulated by Gov to let them function as a precondition.
60
To whom do div n int go? generally n conspicuously
To us the ppl. Households. Pension funds.
61
Today's 4 (5) big transformation forces:
1- globalization 2- technology 3- customer-orientation 4- Government (5- M&A)
62
Transformation vs implementation: (Typical) directions
Top down vs bottom up
63
Types of technology + correl n conseq f 2nd
1- product tech 2- process tech ~ phase 2 globalization -\> integrated supply chains
64
Typical change pattern in 3 phases:
1- mechanical bold stroke 2- behavior/psy long March w leadership program 3- process improvement long March (and it overlaps w previous cycle)
65
Unions goal:
Increase salary
66
Value added:
Output (revenue) - input (all you source; but no salaries!) Value may be just availability! \> added by commerce
67
What happens to whom in a price war? (for each f 2 generic competitive strats & then both)
- 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
What psy characteristics in a startup?
Belief, identification, energy
69
Why important to have independent board members?
Coz so they can shut down (sell) biz PROJECTED to be unprofitable.
70
Why prod function trends to less important?
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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