1. I have chosen President George W. Bush, who was the 43rd President of the United States and was elected for two consecutive terms to the most powerful office in the world, between 2001 and 2009.
The key characteristic of effective strategic leaders, as has been agreed upon by most management theorists, is their ability to organize and energize resources at their disposal and enable the teams that work under them, to achieve their various objectives .
The greatest test for any leader, political or business, is when he/she is faced with a crisis that had never been experienced before. In President Bush’s case, it was undoubtedly the 9/11 attacks that required him to speak and act as a true leader to help make the nation come to terms with the incident. His response and immediate reaction, I believe were effective, since the first requirement was uniting the country and inspiring people to recover, help others, and still keep hope.
In the remaining qualities, however, I find the President to be severely lacking. The rushed, and I think, emotional and PR decision to launch a military operation against Afghanistan, and later Iraq, without complete knowledge of the facts on-the-ground, lack of communication between the government and the people as well as the non-existence of a contingency plan are all aspects of strategic leadership in which the former President was not able to deliver .
2. The original definition of ‘outsourcing’ was hiring external specialists to perform designated business functions as opposed to paying employees who are on a company’s payroll to perform the similar functions . As both geographical and trade barriers have receded over time, the concept of the world becoming a ‘free trade zone’ has emerged. In such a business dynamic, it became imperative for business organizations around the world to conduct an internal operational analysis and determine which tasks were consuming the maximum resources. The objective was minimizing costs and investing heavily in areas in which the company excelled, rather than attempting to manufacture a product, from start to finish, on its own. Therefore, in my opinion, while outsourcing does contribute to a loss in domestic employment, if the motive driving it is hiring experts from another country to improve the product/service, then the decision is justified. A better product not only will result in greater customer satisfaction for the business, but also allow it to remain profitable in the long-run.
3. The dotcom bubble of the 1990s completely changed the face of how business is conducted, as well as the extent of involvement of individual investors in start-up companies. What created this bubble was a sudden and dramatic rise in the number of people who use the Internet, and this triggered the establishment of hundreds of Internet companies. The business model was simple. The objective was to gain the maximum market share, even if it came at the expense of sacrificing profits .
Regular people, who would normally never consider investing in a business were attracted by the promise of exponential returns after the IPOs when then the stock price would begin to increase. Investors who bought immediately after the IPO at lower prices and sold their shares when the prices escalated, ended up with huge profits. However, the majority suffered since they were late in buying, when the prices were already high and then held on to their shares. The investment bankers had the safest income, as this came from the fee they charged for each IPO, regardless of how the stock performed . Managers involved in the daily operations made money if they bought early and sold early. However, for the Internet companies that failed, it left a lot of middle management personnel without jobs.
4. According to Porter’s five forces model, supplier power is very strong within the U.S airline industry, simply because there are a large number of vendors who supply the products and services that are required for an airline to operate . The buyer power has also increased significantly, as people looking to buy a ticket no longer have to depend on agents to book one for them. Now people, thanks to online ticketing options, have more freedom and choice. Since airlines in the U.S also cannot wind up operations when they want to due to regulatory pressures, the barriers to exit the industry are very high. On the competition front, since a number of -cost carriers have entered the industry after the global recession that took hold post 9/11, there is stiff competition, not just from local, but as well as international players .
5. The competitive advantage, or more precisely the Unique Selling Proposition (USP), of any brand/business is sustainable in the long-run only of it meets a basic three-factor criteria . Firstly, the USP should in fact be unique and clearly distinct from what other players in the market are offering to the target audience. Otherwise if multiple brands are offering a product with the exact same core benefit and are competing mainly on price, then if profit margins deteriorate, the competitive edge will disappear as well.
Secondly, the USP must be meaningful for the target market for which a product/service has been launched . For instance, if an on-site daycare service is established at an organization with no mothers, then the service, despite being of excellent quality, will fail.
Thirdly, the core product competency must also be relevant, given the changing tastes, consumer preferences and lifestyles. Therefore, a business that launches premium quality floppy disks today, is surely doomed for failure .
6. Despite the fact that a substantial number of entrepreneurial enterprises have emerged and become successful over time, it is still the large corporations that continue to dominate the corporate sector in terms of revenues generated, directly tied-in to the number of people who purchase their product and service offerings. Therefore, the top-down management style, despite its many critics, is still very relevant today in terms of how an organization’s culture is shaped, as well as how its day to day operations are managed . Microscopic focus on quality, right from the procurement of ingredients stage until the final delivery of the product is a mindset that can only create when there are stringent quality assurance standards that every department has to comply with. In addition to this, while having quality guidelines is crucial on the one hand, it is equally important to allow employees a certain degree of latitude. This autonomy will encourage them to come up with innovative ideas, the insight for which often comes from their direct interactions with the customers and the feedback received.
7. I agree with the oft-quoted opinion that if successful businesses grant licensees to players in the international market to use its technology, the very asset that led to the success of the business, then this strategy will have negative consequences for the licensor . Proprietary technology is defined as “a process, tool, system or similar item that is the property of a business or an individual and provides some sort of benefit or advantage to the owner”. Therefore, if a technology-based business enters into a licensing agreement, not only will it be divulging its most crucial USP, but there is also the very probable risk of losing its current, as well as potential market share .
For instance, if a company like Microsoft or Apple were to license the technologies that it used to create the iPhone or Microsoft Office, while it may result in immediate profits, in the long run, both giants would have given up its most crucial USP that others can now easily duplicate.
8. The greatest incentive that prompts businesses to consider exploring international markets is that the search for untapped market potential in new markets . It is also triggered by the realization that no matter how much the quality of a product/service has been maintained, the domestic market will get saturated in terms with demand.
When the question of venturing into global markets arises, there are three strategies that are the most commonly employed; the selection depends mainly on the business ideology of the top management in terms of how much control they are willing to give up, balanced against potential profits to be earned .
The easiest to implement in terms of investing resources, is exporting. This is simply when a business decides on selling its goods beyond its borders. The greatest advantage is that the company retains complete control over what and how it develops its product, without sharing knowledge or profits with a third party. However, the disadvantage here is that exporters often end up encountering entry barriers as well as legal issues in foreign countries that might hurt their business interests.
More involved methods of entry include licensing (the pros and cons of which have already been highlighted earlier) as well as FDI. In both cases, the greatest drawback is sharing proprietary knowledge, which is almost equivalent to creating competition.
9. The most commonly outsourced value-creation functions include relocating the manufacturing operations of a business to a country where the labor, utility and other costs of doing business are very low compared to the home country . It was when E-Commerce became an actual influencing factor in the global business environment that some of the world’s largest production companies decided that if they want to continue sustainable operations, then relocating operations was the only viable option. However, while reduced costs and often, access to cheap labor are the greatest incentives, there is also the other side to the picture that businesses often overlook.
Of the many risks that businesses assume in shifting the base of their operations to a new country, the greatest is ensuring that the similar level of Quality Control would be implemented consistently at the off-shore site . While the labor is cheap, the people may not share the parent company’s values of delivering excellent quality. If below-par products are made, it will damage the brand’s reputation, equity and eventually, its customer base.
10. My university, being a large organization with many departments, is organized in the conventional, often-criticized, top-down management hierarchical structure. Given its extensive customer base, that is the number of students enrolled in its various academic programs, the number of daily operational activities that are required for its smooth running, as well as the extensive personnel that is employed, the structure is completely appropriate .
If a more autonomous organizational structure were in place, while it may make a certain section of the workforce happier, since they would have greater control over the regular tasks and assignments, however, it would completely erode all efficiency as well as effectiveness. Managing the daily class schedule, factoring in cancellations as they sometimes do occur, arranging for substitute teachers in case one instructor has taken a leave of absence, more so in case of unplanned absences, are all tasks that require a centralized authority to make timely decisions that are then implemented across campus by members of different business functions.
References
Dixit, A. (1991). Thinking Strategically. New York: W. W. Norton & Company.
Dranove, B. (1996). Economics of Strategy. New York: John Wiley & Sons.
