Download - Some Personal and Biased Thoughts Professor Avi Fiegenbaum-

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Some Personal and Biased ThoughtsProfessor Avi Fiegenbaum-

Area Head – Strategic Management & EntrepreneurshipFaculty of Industrial Engineering & Management

TechnionIPPA 2009. January 28, 2009

ניהול אסטרטגי גלובאלי להשבחת ארגונים:אתגר ליועץ הארגוני כחוליה המקשרת בין תיאוריה

לפרקטיקה

1960s 2008 2020?

IA G I

A G

G

I

A

Israel Global Competitiveness

2

Challenges for AGI 1 - Israel 2028:Global, Periphery & Traditional Industries

IG

AB. “OC” ChallengesA. “GI” Challenges D. OC-SM FutureC. “SM” Offerings

ממשלה:

שרים

2020?

יועצים

2020?

3

?2028יועץ – מה עלי לעשות לקראת

?

IG


4

Academia

(mgt)

Teaching•Degree•Non degree

Industry 1 Industry 2 Industry N

Government 1 Government 2 Government M

Levels:

A. Knowledge Creation

B. Knowledge Transformation

C. Knowledge Application

Management – OC Challenges 1:Top Down & Bottom Up

Consultants

(“Best Practices”)

“GI” Vision

2028

IG


5

Organizational Consultants Challenges 2: Bridging “AGI”

Knowledge Base

“)A(”

Themes-Methodologies

“)A(”Context (“GI”)

Traditional

OC

SM

SM

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OC SM•Individual + ?•Group + ?•Organization + ?•Industry/Environment ?

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AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings

The Strategic Challenge 1:Mid 1990s: The CEO-Chair?

Industry: High tech Divisions: 3 Performance:

Total Sales: $ 800 M Profit: $ 30 M Market value: $ 200 M

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1990 2000A. Financial Markets:

1. # of Companies NASDAQ 7 1202. Market Value $ O.5 B $ 130 B3. # of VC 2 704. VC Total Fund $ 0.1B $ 3B

B. Technological Markets1. # of Technological Incubators 0 232. # of Start Ups Few Thousands

The Strategic Challenge 2:Israeli High Tech 1990s

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The Strategic Challenge 3:Israeli 2020?

1. Why?2. Can others learn from?3. Will Israel high tech re surge?4. Who is responsible (“the invisible hand”)?

1990

2000

2015

I II III IV?

THEORETCIAL PERSPECTIVE I:STRATEGYY IS ABOUT RISK TAKING – What Reference Point?

9,000,000

P = 100%

P = 90% P = 10%

10,000,0000

9,000,000

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•Customers •Suppliers •Competitors

•Capabilities

•Vision

•Past

•Present

•Future

Internal

External

Time

Narcissist Competitive

Failure Amorphic

ExternalLow High

High

LowInternal

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THEORETCIAL PERSPECTIVE II:STRATEGY: Global Competitive Space

A. CEO-Board LEADERSHIP-ADAPTATION PERFORMANCE (B) INSIDE (A,C,D)-OUTSIDE (E,F)

B. Performance

C. SBU

D. Corporate

F. Industry

E. Alliance

A. CEO- Chair

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THEORETCIAL PERSPECTIVE III:STRATEGY: System Management

Short-Term: ROE-MS

Leader

Manager

“Fantasizer”Long-

Term: MV

B. Performance

C. SBU

D. Corporate

F. Industry

E. Alliance

A. CEO-Chair

B1. Balance Short-Long Term

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Low HighLong Term

HighShort Term

Low3. Exploration4. Failure1. Strategic2.Exploitation

B. Performance

C. SBU

D. Corporate

F. Industry

E. Alliance

A. CEO-Chair Competitive Diagnostic

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B. Performance

C. SBU

D. Corporate

F. Industry

E. Alliance

A. CEO-Chair Relative to LOCAL-------------- Global ------- - Value

A. Short Term:1. ROE ------ 1 2 3 4 52. ROE Change ------ 1 2 3 4 53. SALES ------ 1 2 3 4

54. SALES Change ------ 1 2 3 4

55. Other ------ 1 2 3 4 5

Average: 1 2 3 45

B. Long Term:1. MV ----- 1 2 3 4 52. MV Change ----- 1 2 3 4 53. Dividend ----- 1 2 3 4

54. Other ----- 1 2 3 4 5

Average: 1 2 3 45

Implementation 1

B. Performance

C. SBU

D. Corporate

F. Industry

E. Alliance

A. CEO-Chair

Cost- Leadership Differentiation

Cost –

Focus

Differentiation -

Focus

Cost Differentiation

Competitive Advantage

Scope

Narrow

Broad

1. COMPETITIVE ADVANTAGES?

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B. Performance

C. SBU

D. Corporate

F. Industry

E. Alliance


A. Cost reduction:1. Production ------ 1 2 3 4 52. Marketing ------ 1 2 3 4

53. Logistics ------ 1 2 3 4

54. Encouraged ------ 1 2 3 4 55. Other ------ 1 2 3 4 5

Average: 1 2 3 45

B. Innovation1. Production ----- 1 2 3 4 52. Marketing ----- 1 2 3 4

53. Logistics ----- 1 2 3 4

54. Encouraged ----- 1 2 3 4 5

Average: 1 2 3 45

Implementation 2

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Sales Earning EPS ROC ROEGrowth Growth Growth1. SINGLE FIRM 7.17-- 4.81-- 3.92-- 10.81-- 13.20

2. DOMINANT FIRM 7.42-- 7.34 5.14- 8.24--- 10.18---

3. RELATED DIVER. 9.62 10.39+++ 8.56+ 11.97+++ 14.11+++

4. UNRELATED DIVER. 20.64+++ 18.64+++ 9.56+++ 9.56 10.38-

D. Corporate Level Strategy:

Empirical Findings

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Global

MNE

Trans-

NationalInter-

National

Local Responsiveness

Global Synergisms

High

High

Low

Low

How?

Cost

Differences

1.GLOBAL STRATEGY SUCCESS?

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Local Responsiveness

(Differentiation

Global Integration

(Cost)

1. Division

2. Division

3. Division

2. DIFFERENTIAED ORGANIZATION?

B. MNE:Performance

C. Business

D. Corporate

F. Industry

E. Alliance

A. CEO-Chair

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B. Performance

C. SBU

D. Corporate

F. Industry

E. Alliance


A. Tangible Synergism1. Production ------ 1 2 3 4 52. Marketing ------ 1 2 3 4

53. Logistics ------ 1 2 3 4


Average: 1 2 3 45

B. Intangible Synergism 1. Production ----- 1 2 3 4 52. Marketing ----- 1 2 3 4

53. Logistics ----- 1 2 3 4

54. Encouraged ----- 1 2 3 4 5

Average: 1 2 3 45

Implementation 3

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3 years agoNow )2003(

R&D2[ 0..30]8[ 0..100]

Marketing18[ 0..250]38[ 0..400]

Logistics2[ 0..12]4[ 0..50]

Number of Alliances:

B. MNE:Performance

C. Business

D. Corporate

F. Industry

E. Alliance

A. CEO-Chair

STRUCTURAL EVOLUTION

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Pros:•Information•High Cost of Entry•Risk Reduction•Quick Entry•Quick Exit•Standards

B. Performance

C. Business

D. Corporate

F. Industry

E. Alliance

A. CEO-Chair

WHY STRATEGIC ALLIANCES?

Cons:•Coordination•Changing Goals•“Hollow Organization”

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Managing Network Synergisms

Low HighRelational Efficiency

HighStructuralEfficiency

Low

3. Myopic4. Failure1. Strategic2. Amorphic

B. Performance

C. Business

D. Corporate

F. Industry

E. Alliance

A. CEO-Chair

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B. Performance

C. SBU

D. Corporate

F. Industry

E. Alliance


A. Tangible Synergism1. Production ------ 1 2 3 4 52. Marketing ------ 1 2 3 4

53. Logistics ------ 1 2 3 4


Average: 1 2 3 45

B. Intangible Synergism 1. Production ----- 1 2 3 4 52. Marketing ----- 1 2 3 4

53. Logistics ----- 1 2 3 4

54. Encouraged ----- 1 2 3 4 5

Average: 1 2 3 45

Implementation 4

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Demand: Total size Growth rate Segmentations

Competition: Buyers Suppliers Threat of new entrants Threat of substitute products Rivalry among existing companies

INDUSTRY ATTRACTIVNESS

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Industry Attractiveness

High LowCompetition

HighDemand

Low3. Efficiency4. Failure1. Strategic2. Growth

B. Performance

C. Business

D. Corporate

F. Industry

E. Alliance

A. CEO-Chair

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B. Performance

C. SBU

D. Corporate

F. Industry

E. Alliance


A. Competition1. Customers ------ 1 2 3 4 52. Suppliers ------ 1 2 3 4

53. New entrants ------ 1 2 3 4 54. Product substitute ------ 1 2 3 4

55. Rivalry ------ 1 2 3 4

5Average: 1 2 3 4

5

B. Demand 1. Size ----- 1 2 3 4 52. Growth rate ----- 1 2 3 4 53. Segmentation ----- 1 2 3 4 5

Average: 1 2 3 45

Implementation 5

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1 2 3 45

Not at all Agree

1. Has a global & strategic model to enhance MV 1 2 3 45

2. Gets the right information with out asking 1 2 3 4 5

3. Affects the company strategy 1 2 3 4 5

4. Affects short term performance (ROE) 1 2 3 45

5. Affects long term performance (MV) 1 2 3 4 5

6. In sum, I am happy with the chairman-BOD

Contribution to the company 1 2 3 4 5

CEO-CHIAR: GLOBAL STRATEGIC EVLAUTION

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CEO- Chair: Global Strategic Management Model to Enhance Market Value

0

1

2

3

4

5

0 1 2 3 4 5

Long Term

Shor

t Ter

m 0

1

2

3

4

5

0 1 2 3 4 5

vision

obje

ctiv

e &

goal

s

0

1

2

3

4

5

0 1 2 3 4 5

Local Responsivness

Glo

bal S

yner

gies

0

1

2

3

4

5

0 1 2 3 4 5

Relational EfficiencySt

ruct

ural

Effi

cien

cy

0

1

2

3

4

5

0 1 2 3 4 5

Demand

Riva

lry

0

1

2

3

4

5

0 1 2 3 4 5

Leader

Adap

tive

0

1

2

3

4

5

0 1 2 3 4 5

Cost

Scop

e

C1

C1

C1

C1

C1

C1 C1

C2

C2

C2

C2

C2

C2C2

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2020: Co Evolution:Traditional Industries & High Tech?

Traditional Industries

1960s 2008 2020?

Israel Global Competitiveness

Traditional Industries

High Tech

High Tech40K

17K

10K

Innovation•Social Capital,•Entrepreneurship

IG


Shoot to the moon, even if you miss, you still will be

among, stars …Thank You

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