Saturday, November 30, 2013
Friday, November 29, 2013
Week 18: Case Study Hewlett-Packard
How can using the Change Kaleidoscope and Force-field analysis help an organisation to deliver its intended strategy?
> Change Kaleidoscope :
The concept of change kaleidoscope was first defined by Balogun and Hope Hailey in 2002. It can be used to analyse the change in context of the organisation. In order to implement any kind of strategy in the organisation, several factors of an organisation needs to be considered such as resources, power, competitive advantage e.t.c. and change kaleidoscope analysis helps in dealing with such factors of an organisation. It is always beneficial for the company and for the change leaders to investigate unique capabilities of the organisation specifically relating to the culture, stakeholders, time constrains, readiness and forces of power. (artuspoint.com, 2013).
It helps to know several factors of an organisation. It also helps to take control over and eventually monitor and fix the transition or change happening in the organisation.
The following diagram shows the change kaleidoscope in action:
image source: www.marketinginsight.ch/diverse/change-mba-and-change- kaleidoscope/&docid=xu3fkquNchvB6M&imgurl=http://www.marketinginsight.ch/wp-content/uploads/2011/09/Change_Kaleidoskop.jpg
some of the questions that might come across for the factors of change kaleidoscope:
TIME
|
How quickly is change needed?
|
SCOPE
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How much change is needed?
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PRESERVATION
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What organisational resources and characteristics need to be
maintained?
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DIVERSITY
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How homogeneous are the staffs in the organisation?
|
CAPABILITY
|
What is the managerial and personal capability to implement change?
|
CAPACITY
|
What is the degree of change resources available?
|
READINESS
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How ready are the people for the change?
|
POWER
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Do staffs have the power to resist or ignore change in need?
|
Force-Field Analysis:
Force-Field Analysis was created by Kurt Lewin in the 1940s. It is a useful decision-making technique. This analysis helps an organisation to make a right decision by analyzing the forces for and against the change.
As said by Kurt Lewin “an issue is held in balance by interaction of two opposing sets of forces- those seeking to promote change (driving forces) and those attempting to maintain the status quo (restraining forces).This analysis can be used for two purposes: to decide whwther to go ahead with the change and lead towards success or by strengthening the forces supporting change and weakening those against it. We can use the Force-field analysis tool by listing all the forces for and against the decision of change.
Add your Change Kaleidoscope diagram for Hewlett Packard (Exercise 1 – slide 21) to your Learning Journal
>
Change Kaleidoscope for Hewlett Packard:
Change Kaleidoscope for Hewlett Packard:
References:
http://artuspoint.com/change-kaleidoscope/, accessed on November, 2013
http://www.mindtools.com/pages/article/newTED_06.htm,accessed on November, 2013
http://www.kenyaplex.com/resources/7361-strategic-change-context-using-a-change-kaleidoscope-and-force-field-analysis.aspx,accessed on November, 2013
Johnson, Whittington and Scholes (2011) Exploring Strategy, 9th Edition, Pearson Education, Chapter 14
J. Balogun and V. Hope Hailey, Exploring Strategic Change, 3rd edition, Prentice Hall, 2009
Thursday, November 28, 2013
Week 17
Can you think of an organisation that has implemented a ‘high risk strategy’ that has resulted in success (why was it high risk at the time and why was it a success – was it good luck or good judgement)?
> 'High risk strategy' as the name suggests is the strategy that may put an organisation in a risky situation which might subject to potential danger or hazard but may sometimes work as a success. Various companies implement high risk strategy and some turns out to be a great success and some to be an epic fail.
According to me an organisation that has implemented a 'high risk strategy' that has resulted in success would be Apple Inc.
Apple was founded in the year 1976 in partnership by three people: Steven Gary Wozniac, Steven Paul Jobs and Ronald Gerald Wayne. By the time it incorporated on January 3rd, 1977, Wayne wrote the apple 1 manual, drifted the partnership agreement, and drew the first apple logo.(facts.randomhistory.com, 2013) Once after Apple's incorporation, it started expanding and growing at like anything. I believe it is the one company that has gained massive success in such a short period of time, making it an unbeatable company and setting a benchmark worldwide at present.
Apple has also faced series of failures over the years. After Steve Jobs was ousted from the company in the year 1985 as he lost a power struggle with board of directors, Apple was in the brink of bankruptcy.It's computers struggled to survive declining market shares and inefficient leadership. In fact, Apple was named the worst run company of 1996 by investment giant CalPERS (California Public Employees' Retirement System). However, after all this Apple brought Steve Jobs back and again things started working right.
Apple always focused on innovations and I think it's strategy of innovating new ideas was a high risk strategy in the market place but nevertheless, it's strategy extensively has proved to be a success. When Apple established itself as a company over 30 years back, it was a high risk strategy at that moment, there were no such company established similar to Apple. That was a brand new start of a brand new idea and innovation Apple did and no one knew how the response would be at the end, making it a very high risk taker.And look at it now, the High risk strategy proved to be a great success for Apple.
'Apple's success is due to significant skill and a healthy portion of good luck.'(Don Reisinger, technology columinist at CNET)
The most expensive Apple Store, 5th Avenue, Manhattan, NYC
Now, do the same for an organisation who embarked on a high risk strategy that resulted in some sort of failure (why was it high risk and why did it fail – bad luck or poor judgement?)
> The organisation who embarked on a high risk strategy that resulted in some sort of failure for me would be Halifax Bank Of Scotland plc (HBOS)
HBOS plc is the banking and insurance company in the UK, a wholly owned subsidiary of the Lloyds banking group. HBOS plc was formed in the year 2001 when Halifax plc and Bank of Scotland merged.
The bank was running quite smoothly until when they started taking high risks. In 2008, it suffered from short selling and credit crunch, soon after they were indulged in controversies like links to the arms trade, Mortgage Fraud, HBOS bad loans e.t.c.
According to the Financial Services Authority (FSI), HBOS corporate division ran out an aggressive high risk growth strategy prioritized optimism over prudence and sanctioned too many big loans to a small number of borrowers. It is said the bank was too optimistic over bad debts and did not take 'reasonable care' to control its affairs. (the guardian, 9 march, 2012). HBOS set business plans that had ever increasing profit growth in the corporate arm. Thus, by the first half of 2001, the targets increased to an exceptional level as they looked up to the corporate division to make up for the under performance of the retail arm.
The main problems the bank faced were:
- They failed to take reasonable action to control and organize its affairs.
- The lending division of the corporate focused on revenues rather than on minimizing risks.
- The corporate was not able to re-evaluate its lending when the market started to deteriorate in the 2007.
- They failed to manage high value transactions.
The reasons behind HBOS plc's failure was clearly because of the poor judgement taken by them and the implementation of the high risk strategy time and again.
References:
http://www.theguardian.com/business/2012/mar/09/bank-of-scotland-fsa-serious-misconduct, accessed on November, 2013
http://facts.randomhistory.com/interesting-facts-about-apple-and-mac.html, accessed on November, 2013
http://passioncapitalists.wordpress.com/2010/06/22/69/?gclid=COu8x7Tii7sCFQcB4godZkQA0g, accessed on November, 2013
Image sources:
www.google.com.np/search?q=apple+store+5th+ave&source=lnms&tbm=isch&sa=X&ei=vqKZUondOdCqrAf65oGYDw&ved=0CAcQ_AUoAQ&biw=1366&bih=666
www.google.com.np/search?q=halifax+bank+of+scotland&source=lnms&tbm=isch&sa=X&ei=ZKOZUornKsWXrgeH_4CYDw&ved=0CAcQ_AUoAQ&biw=1366&bih=666#facrc=_&imgdii=_&imgrc=tE3Z1lwLNgoGmM%3A%3Bj7LAWBUGiQTS6M%3Bhttp%253A%252F%252Fwww.empireclaims.co.uk%252Fblog%252Fwp-content%252Fuploads%252F2012%252F10%252FHalifax-Bank-of-Scotland.jpg%3Bhttp%253A%252F%252Fwww.empireclaims.co.uk%252Fblog%252Findex.php%252Fdi
Thursday, November 14, 2013
Week 16: Case- Britvic Bar Merger
1.In your own words and using referenced quotes describe the difference between organic growth, merger & acquisition and strategic alliance.
> Organic Growth:
When a company expands it's operations with the help of the resources that they have generated internally without borrowing from other firms. This could be the day to day business of the firm or a division of the firm starting a new business from scratch.( financial-dictionary.thefreedictionary.com,2013). It is essentially a 'do it yourself' method. It is much time consuming but it has relatively low up-front costs. this kind of strategy or method is more attractive to small business owners who wants to expand their company but do not have high capital.
Merger and Acquisition:
When two companies come together and one of the corporation fully acquires the other corporation, it is called merger and acquisition. This kind of strategy is usually applied when one company is in the verge of losing its identity, they then merge with another more important company retaining it's identity eventually. Acquisition refers to the process in which a company acquires and takes a full control over another company.
Strategic Alliance:
Agreement for corporation among two or more independent firms to work together towards common objectives. (businessdictionary.com,2013). When two companies decide to work together having a same predetermined goals and using same resources for a project that is temporary, it refers to strategic alliance.
2.Give an example of a company that has grown through a) organic growth, b) merger or acquisition and c) strategic alliance
> a) Organic growth: Lego Toy Brand
b) Merger and acquisition: Sony and Ericsson(Merger) SPSS acquisition by IBM (Acquisition)
c) Strategic alliance: Nokia and Microsoft
Case Study:
3.Briefly discuss the merger between Britvic and AG Barr. What advice would you give to the new Board?
>Britvic and AG Barr, the two u.k based company merge together to form a one company. Britvic holds 63% of the share whereas AG Barr holds only 37% of the share.
1) Evaluate the case for the merger
What are the positives and benefits? What should work well?
> The positives and benefits from the merger are:
- Both AG Barr and Britvic have its own loyal customers from before when they were an individual company, now that they are combined, the customers base is also combined resulting in huge number of customer following at market place.
- The debts are distributed and the risks are diversified.
- As both belongs from the same kind of industry (soft drink), resources and technology can be shared.
- The new company will have a benefit of economy of scales.
- Both companies combined together can give strong competition to coke.
What are the negatives and potential risks? What problems might occur?
> The negatives and potential risks are:
- Britvic’s debt of £600 will be shared with AG Barr, due to which Barr may get less profit.
- When companies merge, Authority issues for top management always occurs.
- When two companies become one they need less man power resulting in loss of jobs.
- Any negative experience faced by customers from one company may hamper in the new merged company's customer because the customers might wanna shift their choice.
- If in case a company is bankrupted, another company will also be affected.
2) What advice would you give the newly formed Board?
>My advice to the newly formed board:
- Both the companies once merged should have same mission and vision plans.
- They should cut off on unnecessary expenses.
- They should have good communication flow among the staffs and work coordinating with each other.
- They should invest more to gain a good market share.
- Emphasizing on advertisements of the products may help.
References:
http://www.businessdictionary.com/definition/organic-growth.html, accessed on November, 2013
Johnson, Whittington and Scholes (2011) Exploring Strategy, 9th Edition, Pearson Education, Chapter 10
· Johnson, Whittington and Scholes (2011) Exploring Strategy, 9th Edition, Pearson Education, Chapter 6
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