Description
This document about how entrepreneurs can make the most out of business cycles.
Parry, Bryn. (2009). Riding the Rollercoaster - how entrepreneurs can make the most out oI
business-cycles?. In? International Entrepreneurship Educators ConIerence, 2nd-?th September
2009, Heriot-?att University, Edinburgh.
?ownloaded Irom http?//ssudl.solent.ac.uk/236/
Usage Guídeíínes
Píease refer to usage guídeíínes at http://ssudí.soíent.ac.uk/poíícíes.htmí or aíternatíveíy
contact ír.admín@soíent.ac.uk.
IEEC 2009
Riding the Rollercoaster
Bryn Parry
Southampton Solent University
Riding the Rollercoaster
- how entrepreneurs can make the most out of business-cycles
Aims For The Workshop
To:
* illustrate the practicalities of
positioning-for-success – using critical milestones
in the development of Rupert Murdoch's empire in the development of Rupert Murdoch's empire
* dispel the twin fallacies that the current
recession was neither predicted nor
represents typical conditions.
The Market Environment - Nick van Marken
Master Innholders conference - January 2009
Format of Workshop
* critical milestones in the development of
Rupert Murdoch's empire
* compare and contrast historical exemplar(s)
with current entrepreneurs/intrapreneurs, of with current entrepreneurs/intrapreneurs, of
interest to the audience members - debating how
they manage(d) to ride the peaks and troughs of various cycles:
- Sir John Reeves Ellerman [first baronet (1862–1933)], of Ellerman Lines
- Baron Kylsant, of Royal Mail Lines group
- General von Lettow-Vorbeck
- Darien Scheme
* review
A Strategic Approach to the
“Types of Recovery”
TYPES OF RECOVERY
- amended from Slatter (1984) in Luffman et al. (1996: 144) -
i
o
n
Non-crisis
Crisis
F
i
n
a
n
c
i
a
l
P
o
s
i
t
i
o
n
Failed turnaround
Short-term survival
Medium-term
survival
Sustained recovery
Turnaround
strategies
adopted
Insolvency
Time
Rupert Murdoch
&
NEWS CORPORATION
In the [1997] film “Tomorrow Never Dies”,
Murdoch’s `strategic focus’ is `enhanced’ to
provide the template for the villain provide the template for the villain
In the [2002] film “Black and White” Murdoch’s
desire that `right be done’ is `enhanced’ to
provide the driving force for overturning a
famous [1959] injustice
For a [2007] BBC profile of Rupert Murdoch [that mirrors what we’re discussing here] see: http://news.bbc.co.uk/1/hi/business/6925738.stm
How Does Murdoch See the World ?
Is News Corp’s geographical evolution Deliberate, Emergent or Accidental ?
Is News Corp’s business activity evolution Deliberate, Emergent or Accidental ?
World
http://www.britannica.com
Peters Projection
http://www.petersmap.com/page8.html
BALANCED SCORECARD
as revised by Kaplan & Norton (1996: 76)
Simplified version in Johnson et al. (2008: 451)
Financial
To succeed
financially
how should
we appear to
shareholders
Obj. Measures Targets Initiatives
To achieve
our Vision
how should
To satisfy
our
shareholders
and
customers
Obj. Measures Targets Initiatives Obj. Measures Targets Initiatives
Customer
Internal Business Process
Vision &
Strategy
In Week Four, we offered a simplified version of
this diagram [re: Stakeholders] and said we’d revisit it
– does it add any value to the Mintzberg original ?
Trade
unions
shareholders
Interest &
pressure
groups
Competitors
Supply
chain
partners
JV
partners
Amended from Brooks (2002: 193)
Strategic
Apex
how should
we appear to
our
customers ?
customers
what
business
processes
must we
excel at ?
To achieve
our Vision
how will we
sustain our
ability to
change and
improve ?
Obj. Measures Targets Initiatives
Learning & Growth
Strategy
BALANCED SCORECARD
as revised by Kaplan & Norton (1996: 76)
Simplified version in Johnson et al. (2008: 451)
Financial
To succeed
financially
how should
we appear to
shareholders
Obj. Measures Targets Initiatives
To achieve
our Vision
how should
To satisfy
our
shareholders
and
customers
Obj. Measures Targets Initiatives Obj. Measures Targets Initiatives
Customer
Internal Business Process
Vision &
Strategy
Key milestones:
1923: Sir Keith Murdoch establishes The News newspaper, Adelaide, Australia
1968: Rupert Murdoch acquires the News of the World, Britain; then The Sun, making both
brash down-market tabloids
1973 Murdoch acquires his first US newspaper
1981: Murdoch acquires the Times and the Sunday Times, Britain
1983 Murdoch explores satellite TV in Britain – Sky Television launches in 1989
BBC videoclip on Sky’s launch: http://news.bbc.co.uk/1/hi/entertainment/7860562.stm
R4 Media Show [4
th
February 2009] audioclip on Sky’s launch:
http://www.bbc.co.uk/radio4/factual/mediashow/mediashow_20090204.shtml [18:30-20:00 and 23:00-23:30]
BSB was the `official broadcaster’, Sky `were the pirates’ –originally expecting movies [not sport] to drive demand
In that first year did Sky:
- lose £2m. p.w ?
- Invest £2m. pw – `to build the greatest satellite multi-platform distribution system in the world’ ?
how should
we appear to
our
customers ?
customers
what
business
processes
must we
excel at ?
To achieve
our Vision
how will we
sustain our
ability to
change and
improve ?
Obj. Measures Targets Initiatives
Learning & Growth
Strategy
In Week Four, we offered a simplified version of
this diagram [re: Stakeholders] and said we’d revisit it
– does it add any value to the Mintzberg original ?
Trade
unions
shareholders
Interest &
pressure
groups
Competitors
Supply
chain
partners
JV
partners
Amended from Brooks (2002: 193)
Strategic
Apex
BALANCED SCORECARD
as revised by Kaplan & Norton (1996: 76)
Simplified version in Johnson et al. (2008: 451)
Financial
To succeed
financially
how should
we appear to
shareholders
Obj. Measures Targets Initiatives
To achieve
our Vision
how should
To satisfy
our
shareholders
and
customers
Obj. Measures Targets Initiatives Obj. Measures Targets Initiatives
Customer
Internal Business Process
Vision &
Strategy
Key milestones:
1984: Murdoch acquires 20
th
Century Fox film studio, U.S.A. – then Metromedia’s TV stations
1985: Murdoch becomes a US citizen – to overcome barriers to media ownership
1993 Murdoch uses sports events to drive up demand for his TV channels, U.S.A.
how should
we appear to
our
customers ?
customers
what
business
processes
must we
excel at ?
To achieve
our Vision
how will we
sustain our
ability to
change and
improve ?
Obj. Measures Targets Initiatives
Learning & Growth
Strategy
In Week Four, we offered a simplified version of
this diagram [re: Stakeholders] and said we’d revisit it
– does it add any value to the Mintzberg original ?
Trade
unions
shareholders
Interest &
pressure
groups
Competitors
Supply
chain
partners
JV
partners
Amended from Brooks (2002: 193)
Strategic
Apex
BALANCED SCORECARD
as revised by Kaplan & Norton (1996: 76)
Simplified version in Johnson et al. (2008: 451)
Financial
To succeed
financially
how should
we appear to
shareholders
Obj. Measures Targets Initiatives
To achieve
our Vision
how should
To satisfy
our
shareholders
and
customers
Obj. Measures Targets Initiatives Obj. Measures Targets Initiatives
Customer
Internal Business Process
Vision &
Strategy
Key milestones:
1993: Murdoch acquires STAR TV, based in Hong Kong, which broadcasts to India, China and
51 other countries – planned pan-Asian [English language] service proves unviable
1990s Murdoch’s move into China, fortuitously, aided by falling in love and having more children
2003 Murdoch meets strongest opposition to his seeking to impose one of his elder children
in a senior management position
how should
we appear to
our
customers ?
customers
what
business
processes
must we
excel at ?
To achieve
our Vision
how will we
sustain our
ability to
change and
improve ?
Obj. Measures Targets Initiatives
Learning & Growth
Strategy
In Week Four, we offered a simplified version of
this diagram [re: Stakeholders] and said we’d revisit it
– does it add any value to the Mintzberg original ?
Trade
unions
shareholders
Interest &
pressure
groups
Competitors
Supply
chain
partners
JV
partners
Amended from Brooks (2002: 193)
Strategic
Apex
Points you might like to consider:
is News Corp [as a TNC] reacting to its environment or taking charge of it ?
is the strategy we see Deliberate, Planned, Emergent, or just luck ?
is there any sense of overall Purpose to News Corp and its actions ?
Is there a series of `steps’ to News Corp’s development, each determining the next,
does Rupert Murdoch just ‘want to rule the world’, or is he just `very lucky’ ?
BALANCED SCORECARD
as revised by Kaplan & Norton (1996: 76)
Simplified version in Johnson et al. (2008: 451)
Financial
To succeed
financially
how should
we appear to
shareholders
Obj. Measures Targets Initiatives
To achieve
our Vision
how should
To satisfy
our
shareholders
and
customers
Obj. Measures Targets Initiatives Obj. Measures Targets Initiatives
Customer
Internal Business Process
Vision &
Strategy how should
we appear to
our
customers ?
customers
what
business
processes
must we
excel at ?
To achieve
our Vision
how will we
sustain our
ability to
change and
improve ?
Obj. Measures Targets Initiatives
Learning & Growth
Strategy
In Week Four, we offered a simplified version of
this diagram [re: Stakeholders] and said we’d revisit it
– does it add any value to the Mintzberg original ?
Trade
unions
shareholders
Interest &
pressure
groups
Competitors
Supply
chain
partners
JV
partners
Amended from Brooks (2002: 193)
Strategic
Apex
Murdoch, Operation Dolphin,
Stability, Today & Tomorrow
Financial Times - February 7
th
2009:
http://www.ft.com/cms/s/0/ea03300a-f4b8-11dd-8e76-0000779fd2ac.html?nclick_check=1
“The economic crisis facing the
company was the worst in its more
Johnson & Scholes (1999: 786-790)
• 1990: Citibank negotiated a
refinancing[Operation Dolphin] of News
Corporation’s debt
company was the worst in its more
than 50 year history, Mr Murdoch
stated bluntly. In 1990, the company
came within hours of bankruptcy,
after heavy investments in Sky …
This time, however, Mr Murdoch was
eager to convey that the company
had learned its lesson … “we have
the reserves on hand to cover over
seven years of upcoming debt
repayments”.”
Corporation’s debt - the largest and most
geographically-diverse corporate restructuring then seen, it
almost foundered when a small US bank wanted to call in a
$10m. loan.
• “The banks faced a dilemma.
Theoretically, they could push
TNC to repay all its debts.
However, with the exception of
a small amount in Australia,
none of the company’s loans
was secured on individual
assets.”
Components of the Discipline of
Turnaround Management
- Slatter & Lovett (1999) in Moore (2001: 304) -
Rebuild Stakeholder
Support
Take Control
Holistic approach
Resolve Future
Funding
Support
Fix The Business
Holistic approach
requires ALL
FOUR components
- not just short-term
cost-reduction
Components of the Discipline of
Turnaround Management
- Slatter & Lovett (1999) in Moore (2001: 304) -
A Strategic Approach to the
“Components of Turnaround”
News Corporation seems
to gain advantage from:
Resolve Future
Funding
Financial restructuring
Rebuild Stakeholder
Support
Stakeholder Management
Take Control
Crisis stabilization
Leadership
Fix The Business
Strategic focus
Organizational change
Critical process improvements
• always covering as much of this
as possible, each and every day
- just leaving `Fix the Business’
• seeing `recovery’ when others
only see `failure’
• tipping the balance, at critical
times, so that competitors end in
failure - was the loss of stakeholder
support for the ITV merger really just
`one of those things’ ?
Compare that with BA/BAA and Terminal 5
Group Exercise
Using these two models & the factboxes, compare & contrast these
historical exemplars with modern entrepreneurs of interest
General von Lettow-Vorbeck Sir John Reeves Ellerman
TYPES OF RECOVERY
- amended from Slatter (1984) in Luffman et al. (1996: 144) -
Non-crisis
Crisis
F
i
n
a
n
c
i
a
l
P
o
s
i
t
i
o
n
Failed turnaround
Short-term survival
Medium-term
survival
Sustained recovery
Turnaround
strategies
adopted
Insolvency
Time
Components of the Discipline of
Turnaround Management
- Slatter & Lovett (1999) in Moore (2001: 304) -
Resolve Future
Funding
Financial restructuring
Rebuild Stakeholder
Support
Stakeholder Management
Take Control
Crisis stabilization
Leadership
Fix The Business
Strategic focus
Organizational change
Critical process improvements
General von Lettow-Vorbeck
[1] http://www.amazon.co.uk/Tip-Run-Untold-Tragedy-Africa/dp/0753823497/ref=sr_1_1?ie=UTF8&s=books&qid=1252849327&sr=8-1
[2] http://www.dtic.mil/cgi-bin/GetTRDoc?AD=ADA392278&Location=U2&doc=GetTRDoc.pdf
[3] http://archive.timesonline.co.uk/tol/archive/
Sir John Reeves Ellerman
[1] http://www.oxforddnb.com/index.jsp
[2] http://archive.timesonline.co.uk/tol/archive/
Baron Kylsant
[1] http://www.oxforddnb.com/index.jsp
[2] http://archive.timesonline.co.uk/tol/archive/
Darien Scheme
[1]
http://www.rbs.co.uk/Group_Information/Memory_Bank/Our_Teaching_Resources/The_Teaching_Resources/The_Darien_Adventure/National_Curriculum/illust
_hist.htm
[2] http://archive.timesonline.co.uk/tol/archive/
Reality Check
De Geus (1997: 7-19)
Long-lived companies are:
* sensitive to their environments;
* cohesive, with a strong sense of identity;
* tolerant - decentralised;
* conservative in their financing.
Long-lived companies do not rely on:
* returning investment to shareholders;
* profitability;
* material assets.
For an extract of the book’s Prologue: http://www.businessweek.com/chapter/degeus.htm
F.
Summary Of Workshop
We have:
* illustrated the practicalities of
positioning-for-success – using critical milestones
in the development of Rupert Murdoch's empire in the development of Rupert Murdoch's empire
* dispelled the twin fallacies that the current
recession was neither predicted nor
represents typical conditions.
References
Brooks, I. 2002 “Organisational Behaviour”, 2
nd
Ed., Harlow, FT / Prentice Hall.
De Geus, A., 1997 “The Living Company”, London, Nicholas Brealey;
Johnson, G. 1999 “Exploring Corporate Strategy: text and
& Scholes, K., cases”, 5
th
Ed., Harlow, FT / Prentice Hall.
Johnson, G. 2008 “Exploring Corporate Strategy: text and
Scholes, K., cases”, 8
th
Ed., Harlow, FT / Prentice Hall.
& Whittington, R.
Kaplan, R.S., 1993 “Putting the Balanced Scorecard to Work”,
& Norton, D.P., Harvard Business Review, Sept-Oct, & Norton, D.P., Harvard Business Review, Sept-Oct,
pp. 134-148;
Kaplan, R.S., 1996 “Using the Balanced Scorecard as a Strategic
& Norton, D.P., Management System”, Harvard Business Review, Jan-
Feb, pp.75-86.
Luffman, G. et al., 1996 “Strategic Management”, 3rd Ed., Oxford, Blackwell;
Slatter, S. 1984 “Corporate Recovery”, London, Penguin;
Slatter, S. 1999 “Corporate Turnaround”, Revised edition,
& Lovett, D., London, Penguin.
doc_415101533.pdf
This document about how entrepreneurs can make the most out of business cycles.
Parry, Bryn. (2009). Riding the Rollercoaster - how entrepreneurs can make the most out oI
business-cycles?. In? International Entrepreneurship Educators ConIerence, 2nd-?th September
2009, Heriot-?att University, Edinburgh.
?ownloaded Irom http?//ssudl.solent.ac.uk/236/
Usage Guídeíínes
Píease refer to usage guídeíínes at http://ssudí.soíent.ac.uk/poíícíes.htmí or aíternatíveíy
contact ír.admín@soíent.ac.uk.
IEEC 2009
Riding the Rollercoaster
Bryn Parry
Southampton Solent University
Riding the Rollercoaster
- how entrepreneurs can make the most out of business-cycles
Aims For The Workshop
To:
* illustrate the practicalities of
positioning-for-success – using critical milestones
in the development of Rupert Murdoch's empire in the development of Rupert Murdoch's empire
* dispel the twin fallacies that the current
recession was neither predicted nor
represents typical conditions.
The Market Environment - Nick van Marken
Master Innholders conference - January 2009
Format of Workshop
* critical milestones in the development of
Rupert Murdoch's empire
* compare and contrast historical exemplar(s)
with current entrepreneurs/intrapreneurs, of with current entrepreneurs/intrapreneurs, of
interest to the audience members - debating how
they manage(d) to ride the peaks and troughs of various cycles:
- Sir John Reeves Ellerman [first baronet (1862–1933)], of Ellerman Lines
- Baron Kylsant, of Royal Mail Lines group
- General von Lettow-Vorbeck
- Darien Scheme
* review
A Strategic Approach to the
“Types of Recovery”
TYPES OF RECOVERY
- amended from Slatter (1984) in Luffman et al. (1996: 144) -
i
o
n
Non-crisis
Crisis
F
i
n
a
n
c
i
a
l
P
o
s
i
t
i
o
n
Failed turnaround
Short-term survival
Medium-term
survival
Sustained recovery
Turnaround
strategies
adopted
Insolvency
Time
Rupert Murdoch
&
NEWS CORPORATION
In the [1997] film “Tomorrow Never Dies”,
Murdoch’s `strategic focus’ is `enhanced’ to
provide the template for the villain provide the template for the villain
In the [2002] film “Black and White” Murdoch’s
desire that `right be done’ is `enhanced’ to
provide the driving force for overturning a
famous [1959] injustice
For a [2007] BBC profile of Rupert Murdoch [that mirrors what we’re discussing here] see: http://news.bbc.co.uk/1/hi/business/6925738.stm
How Does Murdoch See the World ?
Is News Corp’s geographical evolution Deliberate, Emergent or Accidental ?
Is News Corp’s business activity evolution Deliberate, Emergent or Accidental ?
World
http://www.britannica.com
Peters Projection
http://www.petersmap.com/page8.html
BALANCED SCORECARD
as revised by Kaplan & Norton (1996: 76)
Simplified version in Johnson et al. (2008: 451)
Financial
To succeed
financially
how should
we appear to
shareholders
Obj. Measures Targets Initiatives
To achieve
our Vision
how should
To satisfy
our
shareholders
and
customers
Obj. Measures Targets Initiatives Obj. Measures Targets Initiatives
Customer
Internal Business Process
Vision &
Strategy
In Week Four, we offered a simplified version of
this diagram [re: Stakeholders] and said we’d revisit it
– does it add any value to the Mintzberg original ?
Trade
unions
shareholders
Interest &
pressure
groups
Competitors
Supply
chain
partners
JV
partners
Amended from Brooks (2002: 193)
Strategic
Apex
how should
we appear to
our
customers ?
customers
what
business
processes
must we
excel at ?
To achieve
our Vision
how will we
sustain our
ability to
change and
improve ?
Obj. Measures Targets Initiatives
Learning & Growth
Strategy
BALANCED SCORECARD
as revised by Kaplan & Norton (1996: 76)
Simplified version in Johnson et al. (2008: 451)
Financial
To succeed
financially
how should
we appear to
shareholders
Obj. Measures Targets Initiatives
To achieve
our Vision
how should
To satisfy
our
shareholders
and
customers
Obj. Measures Targets Initiatives Obj. Measures Targets Initiatives
Customer
Internal Business Process
Vision &
Strategy
Key milestones:
1923: Sir Keith Murdoch establishes The News newspaper, Adelaide, Australia
1968: Rupert Murdoch acquires the News of the World, Britain; then The Sun, making both
brash down-market tabloids
1973 Murdoch acquires his first US newspaper
1981: Murdoch acquires the Times and the Sunday Times, Britain
1983 Murdoch explores satellite TV in Britain – Sky Television launches in 1989
BBC videoclip on Sky’s launch: http://news.bbc.co.uk/1/hi/entertainment/7860562.stm
R4 Media Show [4
th
February 2009] audioclip on Sky’s launch:
http://www.bbc.co.uk/radio4/factual/mediashow/mediashow_20090204.shtml [18:30-20:00 and 23:00-23:30]
BSB was the `official broadcaster’, Sky `were the pirates’ –originally expecting movies [not sport] to drive demand
In that first year did Sky:
- lose £2m. p.w ?
- Invest £2m. pw – `to build the greatest satellite multi-platform distribution system in the world’ ?
how should
we appear to
our
customers ?
customers
what
business
processes
must we
excel at ?
To achieve
our Vision
how will we
sustain our
ability to
change and
improve ?
Obj. Measures Targets Initiatives
Learning & Growth
Strategy
In Week Four, we offered a simplified version of
this diagram [re: Stakeholders] and said we’d revisit it
– does it add any value to the Mintzberg original ?
Trade
unions
shareholders
Interest &
pressure
groups
Competitors
Supply
chain
partners
JV
partners
Amended from Brooks (2002: 193)
Strategic
Apex
BALANCED SCORECARD
as revised by Kaplan & Norton (1996: 76)
Simplified version in Johnson et al. (2008: 451)
Financial
To succeed
financially
how should
we appear to
shareholders
Obj. Measures Targets Initiatives
To achieve
our Vision
how should
To satisfy
our
shareholders
and
customers
Obj. Measures Targets Initiatives Obj. Measures Targets Initiatives
Customer
Internal Business Process
Vision &
Strategy
Key milestones:
1984: Murdoch acquires 20
th
Century Fox film studio, U.S.A. – then Metromedia’s TV stations
1985: Murdoch becomes a US citizen – to overcome barriers to media ownership
1993 Murdoch uses sports events to drive up demand for his TV channels, U.S.A.
how should
we appear to
our
customers ?
customers
what
business
processes
must we
excel at ?
To achieve
our Vision
how will we
sustain our
ability to
change and
improve ?
Obj. Measures Targets Initiatives
Learning & Growth
Strategy
In Week Four, we offered a simplified version of
this diagram [re: Stakeholders] and said we’d revisit it
– does it add any value to the Mintzberg original ?
Trade
unions
shareholders
Interest &
pressure
groups
Competitors
Supply
chain
partners
JV
partners
Amended from Brooks (2002: 193)
Strategic
Apex
BALANCED SCORECARD
as revised by Kaplan & Norton (1996: 76)
Simplified version in Johnson et al. (2008: 451)
Financial
To succeed
financially
how should
we appear to
shareholders
Obj. Measures Targets Initiatives
To achieve
our Vision
how should
To satisfy
our
shareholders
and
customers
Obj. Measures Targets Initiatives Obj. Measures Targets Initiatives
Customer
Internal Business Process
Vision &
Strategy
Key milestones:
1993: Murdoch acquires STAR TV, based in Hong Kong, which broadcasts to India, China and
51 other countries – planned pan-Asian [English language] service proves unviable
1990s Murdoch’s move into China, fortuitously, aided by falling in love and having more children
2003 Murdoch meets strongest opposition to his seeking to impose one of his elder children
in a senior management position
how should
we appear to
our
customers ?
customers
what
business
processes
must we
excel at ?
To achieve
our Vision
how will we
sustain our
ability to
change and
improve ?
Obj. Measures Targets Initiatives
Learning & Growth
Strategy
In Week Four, we offered a simplified version of
this diagram [re: Stakeholders] and said we’d revisit it
– does it add any value to the Mintzberg original ?
Trade
unions
shareholders
Interest &
pressure
groups
Competitors
Supply
chain
partners
JV
partners
Amended from Brooks (2002: 193)
Strategic
Apex
Points you might like to consider:
is News Corp [as a TNC] reacting to its environment or taking charge of it ?
is the strategy we see Deliberate, Planned, Emergent, or just luck ?
is there any sense of overall Purpose to News Corp and its actions ?
Is there a series of `steps’ to News Corp’s development, each determining the next,
does Rupert Murdoch just ‘want to rule the world’, or is he just `very lucky’ ?
BALANCED SCORECARD
as revised by Kaplan & Norton (1996: 76)
Simplified version in Johnson et al. (2008: 451)
Financial
To succeed
financially
how should
we appear to
shareholders
Obj. Measures Targets Initiatives
To achieve
our Vision
how should
To satisfy
our
shareholders
and
customers
Obj. Measures Targets Initiatives Obj. Measures Targets Initiatives
Customer
Internal Business Process
Vision &
Strategy how should
we appear to
our
customers ?
customers
what
business
processes
must we
excel at ?
To achieve
our Vision
how will we
sustain our
ability to
change and
improve ?
Obj. Measures Targets Initiatives
Learning & Growth
Strategy
In Week Four, we offered a simplified version of
this diagram [re: Stakeholders] and said we’d revisit it
– does it add any value to the Mintzberg original ?
Trade
unions
shareholders
Interest &
pressure
groups
Competitors
Supply
chain
partners
JV
partners
Amended from Brooks (2002: 193)
Strategic
Apex
Murdoch, Operation Dolphin,
Stability, Today & Tomorrow
Financial Times - February 7
th
2009:
http://www.ft.com/cms/s/0/ea03300a-f4b8-11dd-8e76-0000779fd2ac.html?nclick_check=1
“The economic crisis facing the
company was the worst in its more
Johnson & Scholes (1999: 786-790)
• 1990: Citibank negotiated a
refinancing[Operation Dolphin] of News
Corporation’s debt
company was the worst in its more
than 50 year history, Mr Murdoch
stated bluntly. In 1990, the company
came within hours of bankruptcy,
after heavy investments in Sky …
This time, however, Mr Murdoch was
eager to convey that the company
had learned its lesson … “we have
the reserves on hand to cover over
seven years of upcoming debt
repayments”.”
Corporation’s debt - the largest and most
geographically-diverse corporate restructuring then seen, it
almost foundered when a small US bank wanted to call in a
$10m. loan.
• “The banks faced a dilemma.
Theoretically, they could push
TNC to repay all its debts.
However, with the exception of
a small amount in Australia,
none of the company’s loans
was secured on individual
assets.”
Components of the Discipline of
Turnaround Management
- Slatter & Lovett (1999) in Moore (2001: 304) -
Rebuild Stakeholder
Support
Take Control
Holistic approach
Resolve Future
Funding
Support
Fix The Business
Holistic approach
requires ALL
FOUR components
- not just short-term
cost-reduction
Components of the Discipline of
Turnaround Management
- Slatter & Lovett (1999) in Moore (2001: 304) -
A Strategic Approach to the
“Components of Turnaround”
News Corporation seems
to gain advantage from:
Resolve Future
Funding
Financial restructuring
Rebuild Stakeholder
Support
Stakeholder Management
Take Control
Crisis stabilization
Leadership
Fix The Business
Strategic focus
Organizational change
Critical process improvements
• always covering as much of this
as possible, each and every day
- just leaving `Fix the Business’
• seeing `recovery’ when others
only see `failure’
• tipping the balance, at critical
times, so that competitors end in
failure - was the loss of stakeholder
support for the ITV merger really just
`one of those things’ ?
Compare that with BA/BAA and Terminal 5
Group Exercise
Using these two models & the factboxes, compare & contrast these
historical exemplars with modern entrepreneurs of interest
General von Lettow-Vorbeck Sir John Reeves Ellerman
TYPES OF RECOVERY
- amended from Slatter (1984) in Luffman et al. (1996: 144) -
Non-crisis
Crisis
F
i
n
a
n
c
i
a
l
P
o
s
i
t
i
o
n
Failed turnaround
Short-term survival
Medium-term
survival
Sustained recovery
Turnaround
strategies
adopted
Insolvency
Time
Components of the Discipline of
Turnaround Management
- Slatter & Lovett (1999) in Moore (2001: 304) -
Resolve Future
Funding
Financial restructuring
Rebuild Stakeholder
Support
Stakeholder Management
Take Control
Crisis stabilization
Leadership
Fix The Business
Strategic focus
Organizational change
Critical process improvements
General von Lettow-Vorbeck
[1] http://www.amazon.co.uk/Tip-Run-Untold-Tragedy-Africa/dp/0753823497/ref=sr_1_1?ie=UTF8&s=books&qid=1252849327&sr=8-1
[2] http://www.dtic.mil/cgi-bin/GetTRDoc?AD=ADA392278&Location=U2&doc=GetTRDoc.pdf
[3] http://archive.timesonline.co.uk/tol/archive/
Sir John Reeves Ellerman
[1] http://www.oxforddnb.com/index.jsp
[2] http://archive.timesonline.co.uk/tol/archive/
Baron Kylsant
[1] http://www.oxforddnb.com/index.jsp
[2] http://archive.timesonline.co.uk/tol/archive/
Darien Scheme
[1]
http://www.rbs.co.uk/Group_Information/Memory_Bank/Our_Teaching_Resources/The_Teaching_Resources/The_Darien_Adventure/National_Curriculum/illust
_hist.htm
[2] http://archive.timesonline.co.uk/tol/archive/
Reality Check
De Geus (1997: 7-19)
Long-lived companies are:
* sensitive to their environments;
* cohesive, with a strong sense of identity;
* tolerant - decentralised;
* conservative in their financing.
Long-lived companies do not rely on:
* returning investment to shareholders;
* profitability;
* material assets.
For an extract of the book’s Prologue: http://www.businessweek.com/chapter/degeus.htm
F.
Summary Of Workshop
We have:
* illustrated the practicalities of
positioning-for-success – using critical milestones
in the development of Rupert Murdoch's empire in the development of Rupert Murdoch's empire
* dispelled the twin fallacies that the current
recession was neither predicted nor
represents typical conditions.
References
Brooks, I. 2002 “Organisational Behaviour”, 2
nd
Ed., Harlow, FT / Prentice Hall.
De Geus, A., 1997 “The Living Company”, London, Nicholas Brealey;
Johnson, G. 1999 “Exploring Corporate Strategy: text and
& Scholes, K., cases”, 5
th
Ed., Harlow, FT / Prentice Hall.
Johnson, G. 2008 “Exploring Corporate Strategy: text and
Scholes, K., cases”, 8
th
Ed., Harlow, FT / Prentice Hall.
& Whittington, R.
Kaplan, R.S., 1993 “Putting the Balanced Scorecard to Work”,
& Norton, D.P., Harvard Business Review, Sept-Oct, & Norton, D.P., Harvard Business Review, Sept-Oct,
pp. 134-148;
Kaplan, R.S., 1996 “Using the Balanced Scorecard as a Strategic
& Norton, D.P., Management System”, Harvard Business Review, Jan-
Feb, pp.75-86.
Luffman, G. et al., 1996 “Strategic Management”, 3rd Ed., Oxford, Blackwell;
Slatter, S. 1984 “Corporate Recovery”, London, Penguin;
Slatter, S. 1999 “Corporate Turnaround”, Revised edition,
& Lovett, D., London, Penguin.
doc_415101533.pdf