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Charles Baden-Fuller Editorial
I am delighted to introduce four articles that deal with
different aspects of executing strategic decisions. The first, by Susan Miller,
David Wilson and David Hickson, tracks 55 strategic decisions over 20 years.
Typically researchers, consultants and executives come to organisations and
have to reconstruct history to make sense of the present. This article presents
the rare opportunity to examine decisions over a long time period. It also
examines decisions that went far beyond business as usual and extended activities
often into the unknown. Helpful advice is here for both the executive and
the academic.
Our second piece is by Christopher Ibbott and Robert O’Keefe,
and tracks the Vodafone/Ericsson relationship. Making alliances work well
is always a challenge, and it is an even greater challenge for large organisations
that have different ways of working. This detailed case study explains what
worked well for one major partnership using the internet particularly successfully.
Our third piece by Duncan Angwin, Philip Stern and Sarah
Bradley deals with the topical question of CEO behaviour in the corporate
takeover market. They point out that the role of the board and CEO as agent
does not always sit easily with their role as steward; sometimes they are
in opposition and some times they are in congruence. The authors examine the
pressures on and the actions taken by Rick Haythornwaite, CEO of Blue Circle,
in response to Lafarge’s takeover ambitions, to show how these ideas
map out in practice. This is a must read for those interested in corporate
control and takeover behaviour as well as those interested in boards.
Our last piece by Jay van Wyk, William Dahmer and Mary Custy
examines Risk Management in South Africa. Their perspective is mainly that
of the foreign investor. Currently, South Africa occupies a pivotal position
in the continent, both economically and politically, and in the sense of being
a leader of trends. This piece will help all those who are interested in FDI
in this continent.
Christopher Ibbott & Robert O’Keefe
Transforming the Vodafone/Ericsson Relationship R.Okeefe@surrey.ac.uk
The business world is a global one, we are often told, and
the Internet will enable information exchange across national boundaries,
globalise supply chain management and facilitate access to international markets.
But how are such transformations handled in actuality?
This article tells how two major players in the mobile phone business successfully
established a joint structure to govern their global relationship on a virtual
basis. Based on the detailed understanding of one of the authors – the
senior Vodafone manager involved in the transformation – the article
details how this transformation proceeded via an improvised journey approach
with no fixed destination or project plan, only a shared acceptance of asymmetric
benefits. Showing how information sharing, communication, virtual teams, competence
development, horizontal organisational relationships and control of product
elements are managed via an inter-organisational information system now called
the eRelationship, the authors concludes that, while evaluation remains unresolved
to an extent, strong leadership on the improvisational journey, high levels
of trust between partners, a positive relationship and shared or mutually
respected motivation have provided the bases for success.
Susan J. Miller, David C. Wilson and David J. Hickson Beyond
Planning: Strategies for Successfully Implementing Strategic Decisions David.Wilson@wbs.ac.uk
Which decisions turn out to have been the successful ones – and how
were the successes achieved? This article demonstrates empirically that what
managers do, and the kind of organization they lead, matter most.
The authors track 150 strategic decisions previously studied by them back
to the 1980s and examine 55 decisions which turned out well to isolate relevant
variables. They find that neither decision process nor type, sector or size
of firm are correlated with success, while failure may be associated with
decisions which are irreversible when things go wrong, are too big a leap
in the dark, or take too little account of the firm’s social and political
context. As far as success is concerned, they find that while managerial planning
is no guarantee, organizational context is crucial, especially where the decision
may lead the firm beyond ‘plan-ability’. Two major strands of
organizational context variables may provide the background for success: either
sound relevant experience or wholehearted readiness for change. They present
illustrative case studies for each circumstance, as well as pointing to the
importance of prioritising decisions, of ensuring their political acceptability,
of avoiding unnecessarily organisational change, and of realising that each
decision must be analysed on its merits: success in one decision does not
guarantee success in the next.
Jay van Wyk, William Dahmer & Mary C. Custy Risk Management
and the Business Environment in South Africa meerkat@nm.net
South Africa is one of the world’s 10 leading emerging
markets, generating 45% of the continent’s GDP. The sweeping post-Apartheid
political and economic transformation has led to increases in competitiveness,
international trade and inward-bound investments and the establishment of
a sophisticated business environment. However an emerging market is a ‘work
in progress’, and still presents risks which heighten uncertainty and
threaten investor confidence. This article outlines a risk management framework
which the authors argue has potential application in other emerging markets.
Their framework consists of three inter-related elements: identification of
risk-types (including political, economic, financial and operational risks
- notably lack of transparency, law-enforcement problems, government intervention,
volatile currency, regional contagion and the HIV/Aids pandemic), illustrations
of risk impact on business operations (such as increases in uncertainty, government
regulations and costs, redistribution of wealth and labour rigidities) and
analysis of possible managerial risk-mitigation options, for example matching
mode of entry with risk tolerance, superior intelligence about societal changes
and effective lobbying to influence new laws and regulations, non-tolerance
for corruption, selection of appropriate financial instruments and balancing
value for shareholders with active support for black economic empowerment.
Duncan Angwin, Philip Stern and Sarah Bradley Agent or Steward:
The Target CEO in a Hostile Takeover. Can a Condemned Agent be Redeemed? Duncan.Angwin@warwick.ac.uk
This article tells the story of how Blue Circle’s CEO
beat off Lafarge’s hostile January 2000 take-over bid - the first all
cash bid for a FTSE 100 company to fail for fifteen years – and then
sold the company to the same bidder barely a year later. The authors examine
the actions of the, until then, relatively obscure Rick Haythornthwaite from
the perspectives of an agency and stewardship theories, concluding that as
time and contexts move on, a CEO condemned as an example of agency problem
may redeem himself through his actions as a successful steward for his company
and its stakeholders. The article follows the development of the bid and the
target company’s options for a successful defence, and for dealing with
the resultant situation of having a major competitor owning virtually a third
of its shares - a solution which led to its fêted CEO losing his job.
Examining questions of remuneration and reputation, it reveals the relationship
between the agency and stewardship theories to be more complex than one of
simple opposition, and highlights the importance of boards understanding how
CEOs manage differential stakeholder pressures over time.
This issue is available in full on-line at www.sciencedirect.com
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