Journal of Business Strategy

Chief Synergy Officer : Table of Contents

Stuart E. Jackson — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – Chief strategy officers (CSOs) or other executives in similar roles have a range of responsibilities in the organization, often including communicating corporate strategy to key stakeholders, promoting decision making that sustains change and engendering commitment to strategic plans. This paper aims to suggest that the CSO often adds the most value to the organization by identifying and helping to capture synergies from different products and services the company can provide. In essence, playing the role of chief synergy officer. Design/methodology/approach – In this paper a number of case examples of businesses that have been able to unlock new sources of value by changing the scope of how the company meets customer needs are considered. Example businesses cited in the paper include automated vending services, travel agency, financial services and social networking. The paper then draws lessons that can be applied broadly across any business seeking to increase efficiency and value by changing the scope of services offered. Findings – Executives with responsibility for strategy should not assume that the role of increasing the firm's efficiency is only the job of those with operating responsibilities. CSOs can support this objective through business synergies that come from changing the scope of what the company does. Often this can come from expansion into new activities where overlapping functions (sales, contracting, sourcing, research and development, etc.) can be shared, thereby spreading indirect costs across multiple products, customer groups, channels or parts of a vertically integrated firm. The paper also provides a number of lessons for achieving this successfully. Originality/value – Business managers that have responsibility for strategy should not think of themselves as only documenting and communicating strategic plans. Instead they should emphasize identifying ways to improve the efficiency and value of the firm by changing the scope of its activities, and capturing untapped synergies between functions and business lines

Re-energizing a product portfolio: case study of a pharmaceutical merger : Table of Contents

Sanjay K. Rao — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – In 2007 global mergers and acquisitions (M&A) activity totaled a record $4.38 trillion, up 21 percent from 2006. Despite current turbulence in the world financial markets, 44 percent of privately held businesses globally are planning to grow through acquisition in the next three years. Following a merger or an acquisition, a combined firm may need to streamline an inefficient product portfolio so as to increase revenues and profitability. The consequences of retaining inefficient portfolios can be more than internal competition and inadequate financial returns. This paper seeks to illustrate key processes, methods and the value of strategic marketing research and science in helping make critical decisions that reshape an inefficient portfolio of 12 pharmaceutical products, created as the result of a merger of two large, global pharmaceutical firms. Design/methodology/approach – Using a case study, the paper posits that taking a customer-centric, market-driven view of the value of products in a portfolio almost always results in significant insight that helps streamlining. Applying relevant tools and techniques from the disciplines of strategic marketing, market research and marketing science crystallizes insight into objective criteria that can then be used to make informed and valid decisions. Findings – Results illustrate the importance of customer-centric, market-driven constructs in influencing critical market outcomes, which, in turn, provide rational insight into structuring existing product portfolios. Product, customer and market drivers that drive product and portfolio performance are explicated and recommended for analysis and ongoing tracking. Results are presented in terms of altered customer behaviors, product and portfolio revenue and profitability. Originality/value – The paper highlights the critical role of relying on the core elements of strategic marketing and research in solving one of the most common and important business issues of our time. Key themes are stressed through focusing on insights reiterating the role of core marketing principles such as differentiation, positioning and strategy simulations. When combined with the insights provided by comparable other business functions such as financial modeling and valuation, this can only result in smart business strategy.

Obliterate knowledge management: everyone is a knowledge manager! : Table of Contents

Ajit Kambil — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – Knowledge assets are a critical basis of competition, but knowledge management (KM) often fails to deliver in effectively growing the value of these assets. This paper aims to lay out four shifts required to make knowledge management more effective. Design/methodology/approach – The paper defines four shifts likely in the evolution of KM: “Knowledge Clouds” where knowledge assets within and outside the company become permeable and interconnected in a cloud computing environment; the use of social media and ratings to co-create user generated ratings, taxonomies and collective organization of knowledge; integrating KM with learning and decision support so users are better empowered to learn, decide and do useful things with knowledge; and everybody becomes a knowledge manager and is clear about how the can contribute to the creation, projection, organization and use of knowledge of assets within and outside the walls of the company. Findings – The paper presents clear reasons KM is vital to the future of business, but probably best obliterated now. Originality/value – Much of the discussion on KM is centered on the firm. This paper pushes forth provocatively to suggest that the future of KM is best served by obliterating centralized KM to create a more social process where everyone is a knowledge manager.

BRICOland brands: the rise of the new multinationals : Table of Contents

James Bell — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – The purpose of this paper is to demonstrate to business leaders in the developed world that many powerful brands are rising in the emerging economies; to indicate how those incumbents' branding approaches will need to adapt as a result. Design/methodology/approach – This paper uses empirical findings, segmentation into three accessible categories of fast-rising brands, and third-party research on the multipolar world to show that the twenty-first century's “powerhouse” brands are as likely to come from emerging markets such as China, Turkey, Qatar, South Africa, and Brazil as from the USA, Japan and Europe. Findings – The paper states that the dominant brands of the twenty-first century are far less likely to be household names like IBM and Coca-Cola and much more likely to be brands that today are relatively unfamiliar in the West – names such as SABIC and Emaar and Ülker. The paper argues that the rise of these emerging-market brands will change the way that business leaders in the developed world will have to shape their marketing strategies over the next decade. The paper quickly establishes the range and pace of growth of emerging-market brands and points out that business leaders today must think beyond old notions of developing markets in the BRIC nations – Brazil, Russia, India, and China, to consider fast-growing companies in the “O” (for “other”) economies of eastern Europe, Latin America, the Middle East, Africa, and Asia. The paper places the so-called “BRICOland” brands in three categories: Emerging Giants – the industrial and conglomerate brands that are largely growing through acquisition to become major global players; New Champions – the brands with domestic scale which are venturing beyond their borders, leveraging cost and scale advantages to offer compelling value; and Arabian Knights – the relatively new, outward-looking brands powered by Arab sovereign wealth and characterized by magnitude of vision and rapidity of growth. Practical implications – The paper's rich examples, together with its six-step recommendations for managers of emerging brands, create a pressing case for careful planning by developing-world executives now crafting their companies' global brand strategies. Originality/value – This paper is aimed at business leaders of the emerging brands as well as “C-suite” executives from the developed world who can benefit from clearly understanding how brand battles will intensify worldwide. The paper's greatest value lies in its many illustrations of brands that are rapidly rising to prominence outside their domestic markets.

Think the thinkable : Table of Contents

Patrick Marren — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – The purpose of this paper is to emphasize the importance of anticipation rather than prediction in business strategy. Design/methodology/approach – The paper takes the form of an opinion column. Findings – This column attempts to demonstrate that supplementing standard strategy with a right-brain, inductive examination of the basic working assumptions of the organization is the best way to anticipate catastrophe. Originality/value – The paper presents an historic perspective on catastrophe and change that may be unavailable elsewhere.

The illusion of smart decision making: the past is not prologue : Table of Contents

Sydney Finkelstein, Jo Whitehead, Andrew Campbell — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – The purpose of this paper is to study the role of misleading experiences, and how decision-makers' experience can sometimes lead them to think they are right when they are really wrong. Design/methodology/approach – Literature was reviewed in neuroscience, cognitive psychology and decision theory on how people make decisions and what decision-making biases influence thinking. A total of 83 strategic decisions were studied to understand what potential biases existed and how those biases affected the quality of decision making. Findings – Decision making is more often an emotional than rational process, in large part because of how our brains are wired. This process works most of the time, but not always. As a result, it is critical to identify those red flag conditions where our decisions are most vulnerable to error, with misleading experiences being one of the most central of these red flags. The paper discusses how to identify whether misleading experiences are potentially dangerous. Research limitations/implications – While the paper relies on multiple literatures and the authors' own original empirical work, a topic as complex as how our brains make decisions clearly cannot lead to definitive conclusions. Future research might investigate more of the contingency situations where misleading experiences might be dangerous. Originality/value – This study is the first that highlights how central misleading experiences can be to mistaken decision making. It is based on significant original research, and has implications that are clearly practical for business leaders.

Finance is everything: advice from turnaround managers : Table of Contents

Herbert Kierulff, Henry L. Petersen — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – There are many reasons why companies drift – or plunge – into financial disaster. Factors such as market share loss, excess debt, management problems, technology changes or credit fluctuations can all play roles. In fact, the number of risks facing corporate officers is enormous today and simply keeping abreast of it all is a colossal task. As a result, not all managers and firms can cope, often resulting in a turnaround situation. The purpose of this paper is to highlight what sets successful turnarounds apart from failures and the most frequent underlying causes of the problems faced by companies in turnaround situations. Design/methodology/approach – This paper makes use of previous literature and work with clients to identify a relevant top ten list of management practices for keeping companies out of trouble. Findings – The academic and professional literature on turnarounds leaves many unanswered questions with respect to what sets successful turnarounds apart from failures. This paper describes ten basic lessons the authors have learned in turning around companies that managements can use to keep their companies healthy. Originality/value – This paper sets the stage for identifying fundamental, but often overlooked, management practices that lead to financial crisis. Given the disparity in the literature on turnaround success-rates, the authors suggest that this paper contributes to this literature and also provides unique and timely advice for practitioners.

Brain drain: why top management bolts after M&As : Table of Contents

Jeffrey A. Krug — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – This paper aims to analyzes merger, firm, and country characteristics that may explain the root causes of long-term executive instability in target company top management teams. Design/methodology/approach – Mergers involve two different groups of executives – executives in place at the time of the acquisition (“incumbents”) and those brought into the target after the acquisition (“new-hires”). In order to understand why many target companies experience long-term instability in their top management teams, patterns of turnover in these two distinct groups were analyzed over a 17-year period in 730 target companies. Findings – Analysis of the data revealed that a range of factors create conditions in target companies that lead to prolonged leadership instability. Different deal types such as tender offers, hostile takeovers, divestitures, and leveraged buyouts, the nature of merger negotiations, growth and profitability of the target company, headquarters location of the acquirer–whether foreign or domestic, and foreign investment experience of the acquirer all lead to significantly higher turnover rates for both incumbent and new-hire executives. These effects may continue for ten or more years after the acquisition. Practical implications – Acquisitions create instability within target company top management teams. This instability can be traced back to conditions that existed at the time of the merger. Organizations involved in mergers and acquisitions (M&As) might leverage these new insights to more effectively deal with leadership issues early in the post-merger integration process. This may be an important first step in reestablishing long-term leadership continuity in acquired firms. Originality/value – This research is the first to provide insight into the root causes of long-term leadership instability in target companies. It is also the first to examine the effects of M&As on executives who join a company several years after its acquisition. Future research by the author will report on the relationship between leadership stability and long-term performance in target companies. A deeper understanding of this relationship may provide new insights into why so many M&As fail.

Engaging China: strategies for the small internationalizing firm : Table of Contents

Rolf D. Cremer, Bala Ramasamy — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – To date, more than 400 of the Fortune 500 companies have already established their presence in China. Like their larger counterparts, smaller multinationals are also attracted by the huge potential market and cheap resources that China has to offer. Thus, the purpose of this paper to examine key strategies that small internationalizing firms (SIFs) need to focus on for a successful China engagement. Design/methodology/approach – The findings of this study are based on a year-long research of New Zealand firms in China. The study involved a survey of senior managers of New Zealand companies at home as well as a focus group discussion among executives in China. Findings – The study identifies three dimensions of strategy that SIFs need to pay particular attention – the attributes of the China bound manager, the business focus of the enterprise, and the guanxi building capabilities. Originality/value – This paper is based on the premise that the SIF cannot mirror the exact strategies of larger multinationals. Previous literature tends not to distinguish the size of the firm when discussing the China engagement. The paper emphasizes a carefully designed effort to choose the right general to lead the assault on the world's largest market.