Exam Questions Flashcards
Continental Case:
Describe the continental’s change path in the period 1991 - 2001.
change process:
- change from centralistic mass producer to decentralize system supplier
- restructure from functional areas to business units
- changing targets from sales to profit
- own R&D instead of buying companies for it
- promote internal competition
- from brand to market orientation
- achieve transparency and shut down inefficient production entities
- from bureaucratic to entrepreneurial culture
- parallel project teams to speed up processes and improve results
- responsibility for implementation by innovators/ concept creators
- using balance score card for better handing of divisions
Continental Case:
What do you consider as major barriers to change faced by von Grünberg during his tenure (Amtszeit) at Continental?
- cultural resistance:
from a consensus culture towards a performance/ competitive culture - psychological resistance:
the decentralization caused fear and delays, even to the point von Grünberg had to fire several managers. They were moving away from routine. - political resistance:
board members & managers feared they could lose their power. - system lock-in:
they were using special machinery for their current products. they might be useless for the new strategy idea. - stakeholder lock-in:
buyer, suppliers, union’s interest somehow stayed as they changed. - competence lock-in:
engineers were against some process being changed because they had fear of not being able to master the change from parts supplier to system supplier.
Continental Case:
what might have happened of von Grünberg had chosen to turn continental around either according to discontinuous or continuous renewal perspective?
continuous renewal:
- change not fast enough, urgency to change was given because of making loses, and aggressive competitors as threat
discontinuous renewal:
- an abrupt change bears a lot of risks of losing competences, key employees, managers (brain drain effect) and lots of conflicts would arise with key managers due to the radical change of the whole system optimization.
Continental Case:
What would you recommend to the new CEO, Dr. Kessel to achieve further strategic renewal at continental. a more revolutionary or a more evolutionary approach? Explain why.
After this intensive change there is no current need for another extreme radical change and also the total change process is not fully done.
So I would recommend a combination of both. Apply revolutionary change (re-engineering) when disruptive change comes from environment but stick to constant smaller change to stay in an on going state (evolutionary –> Kaizen Style)
Honda Case:
What are the major strategy tensions/ dichotomies that Honda has attempted to reconcile over the past 50 years?
- planning (deliberateness) vs. learning (emergence)
- revolution (big reform) vs evolution (gradual change) –> Honda combined both
- markets (market positioning e.g. engines) vs resources (developing areas)
- responsiveness vs. synergy - first: individualism vs. groupism; later: individual BU vs. group potential
- cooperation (partnership) vs. competition with supplier (vertical integration)
- globalisation (western style) vs. localization (Japanese management style)
further strategy tensions/ dichotomies
- logic vs creativity
rational reasoning vs generative reasoning - compliance vs choice
industry dynamics vs industry leadership - control vs chaos
organizational leadership vs org. dynamics - profitability vs responsibility
shareholder value vs stakeholder value
Honda Case:
Do Honda managers view these tensions/dichotomies as puzzles, dilemmas, trade-offs or paradoxes?
They see them as PARADOXES were you should try to get the best out of both worlds. Overcome paradoxes by innovative ways, bridge the two opposites to achieve comp. adv.
PUZZLES: find the best, one optimal solution point
TRADE-OFF: strike balance, meeting one demand is at expense of meeting the other demand, one optimal solution line.
DILEMMA: make a choice, either or solution, opposites mutually exclusive
Honda Case: What types of organization and mind-set do you think are needed to reconcile (ausgleichen) strategy tensions/dichotomies in the way Honda has?
a creative, innovative, flexible mind-set. A learning flat organization. Rational thinking would be very analytical and would like to see problems as puzzles, dilemmas and trade-offs. But Honda instead uses some generative reasoning because of innovation used. However, we can’t say Japanese managers were not just following a “cognitive map” when they reconcile the tensions getting the best of both worlds.
- mind-sets: open for new ideas, flexible, create a learning environment, proactive, creative, entrepreneurial spirit market orientation, challenging assumption, keep the roots
- But: uncompromising with the status quo or with a trade off.
If judged by the magnitude (scope and amplitude) and pace (timing and speed),
how would you characterize the strategic renewal process of continental: revolutionary or evolutionary?
Magnitude:
Amplitude - was high, big changes took place affecting culture, business, structure,…
scope - was broad, the changes took place in the whole company affecting many areas at the same time.
Pace:
Timing - was constant change, but some major changes were not constant (i.e. change of business)
speed - in general it was slow because it tool +/- 5 years . it was fast (i.e. for some decentralization issue).
renewal process rather revolutionary change path especially at the beginning and over time becoming more evolutionary parts.
