Examining the Impact of Strategic Learning on Strategic Agility

Business environments experienced rapid transformation and have had positive and negative effects on business organizations according to their responsiveness, adaptation and competitive capabilities. This information raised two vital questions: Firstly, why do some organizations have the ability to succeed and transcend its competitors while others fail? Secondly, what distinguishes responsive and adaptive organizations (agile) from organizations that fail to respond quickly and adapt to rapid changes in the business environment?

Organizations that experienced success realized that continuity and sustainability of said success in the long term depends on strategic agility and the need to achieve entrepreneurship and excellence in the field. Once achieved, the organizations learn and benefit from their experiences and continual improvement to capitalize on market opportunities. Knowledge allows the seizing of those opportunities; relying on Strategic Agility to form the basis of organizational success and sustainability in enhancing, reconfiguring value through penetrating new markets, adoption of new business models, and achieving innovation compared with competitors.

Contemporary ideological developments in the strategic management field urge organizations to break the siege and bring what is new and unique. One of those goals of Strategic Learning aims to change the knowledge base of the organization, improve their capabilities and activate relationships with its environment through adapting with internal and external variables. In the same context, Strategic Learning is a fundamental pillar that has its impacts on the Strategic Agility of business organizations as a strategic solution to address the challenges faced by organizations in the business environment. Accordingly, the current research modestly contributed to aid the organizations wishing to achieve strategic successes.

These developments have become an urgent need for organizations that operate in an environment characterized by rapid changes and intense competition witnessed by the markets. Ability to survive depends on superiority over competitors through reinforcement of their capabilities and core competencies, becoming a pioneer in its field in terms of identifying the customer’s needs and desires and inventing new ways of doing business. These activities need Strategic Agility to be implemented. As a result of the above, the current study came to focus on the nature of Elba House Company dealing with those changes and determining the level of strategic learning contribution in the Elba House Company in achieving Strategic Agility and presenting recommendations that can enhance organizational performance.

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(Author: Wael Mohamad Subhi Idris, Methaq Taher Kadhim AL-Rubaie

Published by Sciedu Press)

The Servitization of Manufacturing: An Empirical Case Study of IBM Corporation

Servitization is one of the most key strategic choices for manufacturing firms in developed economies. Today, manufacturing firms, especially high-tech industries are under massive pressure and realize the difficulties to achieve desired profit from only selling goods, which forces them to respond by moving up value chain, seeking to innovate and create more sophisticated products and services so that they do not have to compete on the basis of cost alone (Porter and Ketels, 2003). In these circumstances, many leading companies, such as GE, IBM, Rolls Royce, Fujitsu, Siemens, and so on have already started to sustain themselves on the basis of value delivered by shifting their market share from manufacturing to more product-service-oriented systems. This value chain concept, first introduced by Vandermerwe and Rada in the late 1980s, is now widely recognized as the process of creating value by adding services to products (servitization). But, servitization is not an easy strategic choice that a manufacturer needs to carefully design its services. In order to succeed with servitization, manufacturer is likely to need some new and alternative organizational principles,

structures, and processes. Wise and Baumgartner (1999), Oliva and Kallenberg (2003), and Weeks (2009) claimed that to implement a servitization strategy successfully, organizations are required to change their strategies, operations and value chains, technologies, peoples for supporting cultural shifts in the organizational blueprint, and system integration capabilities. However, commentators have strongly recommended that companies need to maintain a constant flow of innovation, not only in terms of what is offered to the customer, but also in how products and services are designed, produced, delivered, and marketed (Bititci and Martinez, 2003; Martinez and Bastl, 2010). Therefore, when engineers design products try to design services, they encounter difficulties such as a lack of organizational resources. Thus, the transition from a product-centric vision to a product-service-centric or customer-centric vision is still poorly understood and remains a new and complex concept.

In this paper, we have discussed the general concept of servitization and provided an idea of process transition how a pure manufacturing company can engage in product- service operations even there is no actual journey process for achieving those opportunities. However, there are many literatures and theoretical discussion available in the general field of strategic organizational change, but there are no models specific to the issue of servitization as a change process.

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(Author: Zahir Ahamed, Takehiro Inohara, Akira Kamoshida

Published by Sciedu Press)

Market Orientation, Government Regulation, Competitive Advantage and Internationalization of SMEs: A Study in Malaysia

The degree of prominence when it comes to SMEs in the economic growth of a country has projected them as a pivotal factor within the recent policy making of each and every country. (Ale Ebrahim et al., 2010). The internationalization of SMEs from developing countries and transition economies has drawn an ever- increasing attention within this contemporary era. (Ibeh & Kasem, 2010). Significantly, manufacturing SMEs are playing an undeniable role in the world markets and Some of the aforementioned SMEs are generating revenues within the international markets which is more than the earning in their domestic market (Chelliah et al., 2010).

While many researchers have focused on understanding the influential factors in internationalization of SMEs (Majocchi et al., 2005; Javajgi & Todd, 2011; Masca, 2012) there is less research addressing the role of the market orientation, competitive advantage and government regulation in the internationalization of SMEs (Mtigwe, 2005; Liu et al., 2011). This study focuses on filling this gap by developing a conceptual framework based on literature review.

The purpose of this research is to extend the literature which addresses the relationship between those influential factors that mentioned and internationalization of SMEs. This article also focuses on competitive advantage that affects the internationalization of SMEs as mediating role between market orientation and government regulation with internationalization of SMEs within the manufacturing sector by conducting a comprehensive review of literature and via survey from CEOs of manufacturing SMEs which are located in the Klang Valley of Malaysia.

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(Author: Akbar Afsharghasemi, Mohamed Zain, Murali Sambasivan, Serene Ng Siew Imm Published by Sciedu Press)

Sustainable Enterprises: Crisis Management and Culture Transformation for BP

This paper will examine sustainability as applied to BP. It will look at BP’s past practices and likely future practices based on concerns of responsibility and organizational longevity. The primary question is how sustainable is BP. The paper will initially examine issues of trust and the treatment of stakeholders. Next it will consider if BP is a broken organization in light of the oil spill in the Gulf of Mexico and previous BP accidents. Finally, efforts by BP to manage crisis and organizational transformation towards a more sustainable organization will be considered. The value of this paper is in applying the question of sustainability to a case study. BP has not had just one accident but many and yet the organization survives and thrives. As such one must ask how sustainability is viewed and implemented.

A corporation best pursues its moral purposes, when all its stakeholders are well served and well treated (Karakowsky, Archie & Buchholtz, 2005). Like Sen, we believe that the basis of this treatment is a matter of trust. Stakeholders relate to the company through mutual trust, in the belief that each will be treated fairly, decently and honestly – in essence the good treatment of all stakeholders (Sen, 2004). This is a tenuous concept of trust, easily granted and easily shattered (Putnam, 2000).

This good treatment of stakeholders includes, but is not limited to, moral management and moral contracts, focus on a triple bottom line, work-life balance within the company, effective and proactive risk management, transparency in all decision-making and policy guidance, shared risks and benefits, good leadership including fulfilled fiduciary responsibilities and shared decision-making, avoiding moral hazard, and protection – financial and physical – of all the vulnerable and powerless stakeholders. Executives recognize the importance of such corporate activities. In 2005, a study by the Economist Intelligence Unit reported that 88 per cent of executives believe consideration of Corporate Social Responsibility (CSR) is central and important in business decisions and are linked to better financial results for an organization. CSR is a management approach that is built on trust and stakeholder respect.

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(Author: Diane Huberman Arnold, Ruth McKay. Published by Sciedu Press)

Bank Risk Measurement: A Critical Evaluation at a European Bank

The Basel Committee on Banking Supervision’s second Basel Accord (Basel II) recommends risk measurement guidelines that banks can use to set their minimum capital requirements. In the European Union, Basel II is implemented by Directives 2006/48/EC and 2006/49/EC. These Directives were adopted in 2006 and came into force on 1 January 2007. The main difference between Basel II and its predecessor, Basel I, is that Basel II encourages bank officers to take risk measurement into consideration in their daily operational decisions. The incentive for banks to use risk measurement is that, under Basel II, they may be able to reduce their capital reserves. With more capital available for investment, banks may thus increase their investment yield (ceteris paribus). (Note 1) Nevertheless, serious doubts have been raised about the regulation of banks and their use of risk measurement (Beck, 1992; Mikes, 2009; 2011; McGoun, 1992; 1995; Power, 2004; 2007; 2009). These doubts are discussed in the literature review below.

Today the four listed banks in the European country of this study have implemented risk measurement systems for use in daily decision-making. Despite its very advanced risk measurement system, one of these banks, Viking Bank, (Note 2) nearly failed following the collapse of Lehman Brothers in 2008. However, Viking Bank’s use of risk measurement information in the crisis has not been thoroughly examined. In this context, this article addresses three issues: first, the accounting management issue (Note 3) related to how bank managers react to the imposition of international regulations; second, the management issue of whether bank managers trust the risk management information they receive; and third, the personnel issue of career opportunities for risk measurement specialists.

It has been claimed that in the financial crisis following the failure of Lehman Brothers in
2008, management accounting has not been received the criticism it may deserve. As an example, the U.S.

Congressional reports on the financial crisis (The Financial Crisis Inquiry Report. 2011, Wall Street and the Financial Crisis, 2011) do not address the management accounting issue. Rather, they conclude that the crisis was an avoidable management crisis. However, because management accounting is the source of essential information, senior bank managers cannot afford to neglect it. The information provided by management accounting may help management avoid such crises.

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(Author: Gunnar Wahlström. Published by Sciedu Press)

 

 

Reducing Biases in Cross-Cultural Top Management Team Decision-Making Processes

Cross-cultural top-management-teams (cc-TMTs) are typically comprised of rational individuals. Yet cc-TMTs featuring uniformly wise and experienced executives often make irrational decisions (i.e., choices incompatible with reason or logic). Even most executives acknowledge this is true. Behavioral economics suggests a primary reason why is that iterative combinations of cultural and cognitive biases invariably arise and interact in cc-TMT settings. As they arise, these biases often undermine the rationality of decision-making processes used inside teams. The impact of such biases surely intensifies if they remain unacknowledged – and thus unmanaged.

From an example of Sino and Anglo cc-TMT interactions, six guidelines intended to reduce bias are developed. These approaches, and the analysis preceding them, explain the nature and scope of these cultural and cognitive biases, how and why they arise, and what actions executives might initiate to negate these biases’ potentially irrational influence on decision-making processes by consolidating divergent biases to secure mutual gain within cc-TMT settings. Cultural and cognitive biases hardly explain everything, but they explain enough of what happens inside cc-TMTs that ignoring their influence is foolish.

To succeed, cc-TMT executives must accurately interpret relevant external environments and pursue all reasonable (i.e., affordable) clarity regarding the current status of customers, suppliers, partners, competitors, regulations, etc. Executives also must assess and predict future trends associated with various factors that influence strategic choice. Pattern recognition, obviously, is crucial to success. But success becomes less likely if the interpretative process is confounded by misaligned and unaccounted for cultural biases.

Successful decision-making processes in cc-TMTs require coordinated management of uncertainty, risk, complexity and change. Such factors loom would large in the intrinsically dynamic decision-making processes executed inside cc-TMTs. Again, deep structures associated with their divergent cultural orientations may propel Sino and Anglo executives to approach the interpretation and management of these factors with differing biases in place. Stability biases, unchecked, would leave executives more or less likely to depart from the status quo even when rationality or logic suggests they should shift strategically in one or another direction.

Cultural biases hardly explain everything, but they explain enough in today’s world that ignoring their effects is foolish. When biases infect a cc-TMT, executives overly embedded in their own cultural biases too often irrationally ignore or reject good ideas produced by cultural outsiders. During an era when many executive teams are taking real-time, high-stakes tests on how well they can manage diverse cultural biases, the need to learn how to negate and/or leverage the legacy power of these unavoidable biases is more pressing than ever. The rules provide useful insights regarding how the irrational decision-making processes often provoked by cultural and cognitive biases interacting inside cc-TMTs may be improved.

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(Author: David Strutton, William Carter. Published by Sciedu Press)

TSX Stock Repurchase Announcements and the Impact of TSX Disclosure Requirements

This study examines the market reaction to repurchase announcements by TSX firms. These announcements result in a significant market reaction as evaluated by abnormal return and volume tests. Further analysis indicates that firms that have followed through on past repurchase announcements and have cash on hand experienced greater announcement returns. However, most reasons provided by TSX firms for their repurchase programs were not found to be informative. These results provide little support for the TSX requirement for firms to disclose a reason for their repurchase programs. The results do support the TSX requirement to disclose repurchases since these disclosures appear to provide investors with useful information when interpreting subsequent repurchase announcements.

 

The findings of this study may be of interest to regulators in other jurisdictions. U.S. exchanges are currently contemplating increased disclosures for stock repurchases. The TSX may wish to consider the findings of this study in the course of reviewing their own regulations. This study contributes to the literature on reputation by examining whether management’s follow-through on previous repurchase announcements affects the market reaction to subsequent announcements. This study contributes to the literature on stock repurchases by examining whether the additional information provided by TSX firms (timely reports, disclosure of the reason for the repurchase program) is useful to the market. Finally, this study contributes to the repurchases literature by introducing volume testing into the study of repurchase announcements, applying Cready and Hurtt’s (2002) finding that volume tests are more powerful than return tests when investigating investor response to an information event.

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(Author: James Matthew Moore. Published by Sciedu Press)