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Gb699 Handouts Day 1. Exercise on Personal Strategy (Handout) Day 2. Post-American World Quiz (Handout). Day 3. IACBE Capstone Exam. Day 4. McDonald’s Facts Day 5. Widely Known Facts 3TRANSCRIPT
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Gb699Corporate Strategies
Gb699 Corporate Strategies Outline
Day 1. Strategic Planning. Strategic Business Units. #2 Strategies and Performance. Definition of Performance. Classroom. Sneakers. Attitude and Skills. Compensation. Systems Analyst. Appraisal. Chilean Rescue. Shane Battier.
Day 2. #3. Strategic Decision Making. MV Braer. Intuition and Sequential Reasoning. Russian Frozen Chicken. #4. Framework for Strategies
Day 3. #5. Seek the Big Picture. Mount Everest. IBM Big Picture. Sneakers and Mr. Lee. Cook County Hospital.
Day 4. #6. Collaborate for Better Decisions. The Tipping Point. Ghosn and Nissan. Crossing the River. Shiller Downside.
Day 5. #7. Wartime and Peacetime Strategies. Hill A. “Monster” and the “Whale.” Archer Daniels CEO. Jürgen Schrempp, CEO. Federal Express. Ford and Firestone.
Day 6. TBA.
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Gb699 Handouts
Day 1. Exercise on Personal Strategy (Handout)Day 2. Post-American World Quiz (Handout).Day 3. IACBE Capstone Exam.Day 4. McDonald’s FactsDay 5. Widely Known Facts
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Day 1.Chapter 1.
Strategic Planning
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Presentation
Strategy Exercise
A strategy is an approach to achieving a goal. During the evaluation process, you can decline the goal. A tactic is an approach to achieving a goal when you cannot decline to pursue it.
Question
At this point in my career I have the following goal.
Insert behavioral objective.
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Question
Which of the following is your behaviorial goal?
A.It is what I am doing now.B.It is what I will be doing if I take make few
changes in my life.C.It is what I should be doing.
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Question
Is your objective strategic or tactical?• Strategy. An approach to achieving a
goal. During the evaluation process, you can decline the goal.
• Tactic. An approach to achieving a goal when you cannot decline to pursue it.
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Question
What is the upside of your objective?A. Boring. ____B. Appropriate. ____C. Exciting. ____D. None. ____
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Question
What is the downside of your objective?A. Financial Failure. ____B. Reputation Failure ____C. Both of the above. ____D. Neither of the above. ____
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Question
Which of the following describes your strategy? A. Price. I cost less than others with my background and skills.B. Quality. I have more energy and skills than others.C. Differentiation or Niche. Few others can do what I can do at my price.
Scoring
A. Am doing. ____B. Will be doing. ____C. Should do. ____A. Strategic. ____B. Tactical. ____C. Not clear. ____UpsideA. Boring. ____B. Appropriate. ____C. Exciting. ____D. None. ____
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DownsideA. Financial. ____B. Reputation ____C. Both ____D. Neither ____Strategy: A. I cost less. ____B. I offer more. ____C. Niche. ____
Answer
A. Am doing. __0_B. Will be doing. __5_C. Should do. _10_A. Strategic. _10_B. Tactical. __5_C. Not clear. __0_:UpsideA. Boring. __0_B. Appropriate. __5_C. Exciting. _10_D. None. __0_
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DownsideA. Financial. __5_B. Reputation __5_C. Both _ 0_D. Neither _10_Strategy: A. I cost less. __0_B. I offer more. _10_C. Niche. __5_
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Strategic Business Units
Strategic goals and objectives should be consistent with the goals and objectives of the organization as a whole. Many organizations identify strategic business units (SBUs) that conduct their own strategic and tactical market planning. The SBU can become a focal point for crafting and executing strategy.
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Boston Consulting Group Model
The Boston Consulting Group model identifies 4 quadrants that reflect 2 critical factors: Market Share. The percentage of the market
held by the firm. Growth. The likely rate of growth of the
market overall.
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Question
The four choices are star, dog, cash cow, and problem child. Which is which?
Low Market Share High Market ShareHighGrowth
LowGrowth
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Answer
Low Market Share High Market ShareHighGrowth Problem Child Star
LowGrowth Dog Cash Cow
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Question
High performance strategies are “Avoid,” “Invest,” “Milk it”, and “Invest if profitable.”
Which fits each quadrant? Dog. _______________ Star. _______________ Cash cow. _______________ Problem child. _______________
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Answer
Low Market Share High Market ShareHigh Problem Child Star Growth Invest if profitable. Invest
Low Dog Cash CowGrowth Get out. Avoid Milk it.
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General Electric’s Strategy
The GE model identifies two factors for an SBU: Business Position. Strong or weak
compared to competition. Market Attractiveness. In terms of growth
and profits.
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GE Model Strategies
The GE model identifies four high performance strategies: Invest More. Highly-attractive. Protect Current Investment. Attractive. Harvest. Short-term attractive. Maximize
profits. Divest. Unattractive. Sell.
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Which strategy matches each?
Choices: Invest, protect, harvest, divest Business Position Strong Medium WeakHigh
Medium
Low
Market Attractiveness
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Answer
Business Position Strong Medium Weak
High Invest Invest Protect
Medium Invest Protect Harvest
Low Protect Harvest Divest
Market Attractiveness
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Product-market-growth Model
This model uses two axes: Existing Versus New Markets. When
undertaking a project, the firm chooses (1) to support existing markets or (2) to develop new markets.
Existing Versus New Products. A firm decides to support (1) current products or (2) new products.
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Product-market-growth Strategies
The four high performance strategies are to sell: Market Development. More units of existing
products in new markets. Product Development. New products in
existing markets. Market Penetration. More units of existing
products in current markets. Diversification. New products in new
markets.
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What strategy fits each market?
Market development. Product development.Market penetration. Diversification. Existing Products New ProductsNewMarkets
ExistingMarkets
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Answer
Existing Products New Products
New Market Diversification
Markets Development
Existing Market ProductMarkets Penetration Development
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Presentation
Chapter 2. Strategies and Performance
Question
Organizations pay people for performance. What is the definition of performance?
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Answer (1)
Definition of performance:• Accomplishment of a task in terms of
accuracy, completeness, cost, and speed
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Answer (2)
Definition of performance:• Accomplishment of a task in terms of
accuracy, completeness, cost, and speed.• Defining a goal and achieving it with
efficiency, quality, and honesty.
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Answer (3)
Definition of performance:• Accomplishment of a task in terms of
accuracy, completeness, cost, and speed.• Defining a goal and achieving it with
efficiency, quality, and honesty.• Winning.
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Question
What is performance in a classroom for a teacher?
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Answer (1)
Performance for a teacher.• Standing in front of students and talking.
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Answer (2)
Performance for a teacher.• Standing in front of students and talking.• Providing information that the students
can read in a book.
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Answer (3)
Performance for a teacher.• Standing in front of students and talking.• Providing information that the students
can read in a book.• Taking attendance.
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Answer (4)
Performance for a teacher.• Standing in front of students and talking.• Providing information that the students
can read in a book.• Taking attendance.• Giving grades that reflect performance.
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Question
Two workers can make sneakers to the same level of quality with respect to passing inspection.
• Carlo. 8 pairs an hour.• Molly. 10 pairs an hour.Which individual is the “better worker?”
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Question
Absent other factors, the best candidate is which of the following?•100% qualified. Many years of experience. Will growth occur? Will individual have to prove anything?• 75% qualified. Room for growth.• 50% qualified. More room for growth.• 25% qualified. Big room for growing into the position.
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Question
Two candidates for a job are below. Which one would you rather hire?
#1. Good attitude, 25% skills. #2. Poor attitude, 100% skills.
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Question
Which of the following most describes your view of how an organization should pay an individual in key position for achieving organizational goals?
• A. Below market.• B. At market.• C. Above market.• D. Well above market.
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Question
A systems analyst is a job title for a highly qualified computer specialist. A programmer is less experienced and qualified.•A company paid systems analysts twice as much money as programmers.•It compared efficiency.•How much more efficient was the analyst group at completing tasks?
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Answer
The company was IBM.•The project was developing code for the IBM 360 computer.•At twice the average salary, the systems analysts produced five times as much usable code.•The IBM story was told in a book, Mythical Man-Month by Fred Brooks.
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Question
What is the worst single word that a boss can use to describe an employee on a performance appraisal?
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Question
The pool for salary increases is 5 percent. Two individuals are star performers.
• One received 14 percent.• The other received 13 percent.• They learned about each other’s
percentage?Are they happy?
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Question
A supervisor does not believe in performance appraisals.
• For four years he gave everyone a satisfactory rating.
• After he left the company, the new boss discovered that two of the employees were a disaster to the department.
What can she do?
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Question
A company allocated a 5% average increase to each manager. It withheld another 2% to be allocated by the CEO.•The system requires no formal performance appraisal process.•The amount of the raise is the total record of the employee’s contribution.Will this work?
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Presentation
Chilean Mine Rescue
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Copiapó Mining Accident
Day 1. August 5, 2010 Copiapó, Chile. Collapse of San José copper-gold mine Trapped: 33 miners 770 meters below
ground. Did they survive?
Quick Action
Day 4. Chilean President Sebastián Piñera took
charge. Andre Sougarret, head of El Teniente mine
put in charge. Flew immediately to Copiapó. Took charge. Did they survive?
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Situation at the Mine
Day 5.Sougarret:
Found a nest of confusion with rescue workers, firefighters, police officers, volunteers and relatives.
Sent rescue workers home. Talked to escaped workers. Inspected the mine. Gathered maps.
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Gathering Information
Day 6.Findings:
Huge block of stone closed the 4-mile corkscrew shaft to the miners.
Collapse involved 700,000 tons of rock. Reopening the shaft could cause another
collapse. Nobody knew if the miners were still alive.
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Hope for the Miners
Day 7. Sougarret talked to miners who had
escaped the collapse. Learned: Maps were not up-to-date. Likely location of trapped miners. Safe room with 48-hour supply of food and
water. Also repair shop. Ventilation shaft.. Miners had a chance to be alive.
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Find the Miners.
Green. 4 drill shafts to galley near shelter.
Blue. 4 drill shafts to shelter.
2 points of collapse
Repair shop.Shelter.
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Start of Success
Day 17. The 8 drills are getting close. One drill broke through into the shaft near the
safe areas. Rescue team heard banging on the drill head. Rescue team retrieved note.
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Step 2. Prepare for the Rescue.
Days 18 to 69 Drill two 28-inch wide shafts. Send food, water, oxygen, messages,
progress reports. Monitor health conditions.
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Successful Rescue
Day 70. October 13, 2010 From midnight to 11 pm. One at a time. 33 times.
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Copiapó Situation
Copiapó was mixed risk management: Good. Local risk management. Bad. Central risk management.
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Local Risk Management
Two safety features: “Safe” room.
Stocked with provisions. Ventilation shaft.
Separate escape route.
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Central Risk Management
Weakness before the crisis: Failure to maintain safety standards in a
dangerous place. Failure to install ladders after failing a safety
inspection that closed the mine. Opportunity lost. A second collapse closed
the shaft.
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Lesson Learned
The value of risk management is not determined by the occurrence or outcome of extreme events. With no such events, risk management may
be working. Or we may just be lucky. Who knows? But we should be ready.
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Presentation
Shane Battier
Managing Performance with Statistics
We can use statistics to appraise performance. To be effective, we must:
• Count the right things.• Convert raw data into useful information.
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Player #1. Batting Statistics
In 100 at-bats, the following happened:Hit. Hit. Out. Out. Out. Out. Hit. Hit. Out. Out. Hit.
Hit. Out. Hit. Out. Out. Out. Hit. Hit. Out. Out. Out. Hit. Hit. Out. Out. Out. Hit. Out. Out. Out. Hit. Hit. Out. Out. Out. Hit. Out. Out. Out. Hit. Hit. Out. Hit. Out. Out. Hit. Out. Out. Out. Hit. Out. Out. Out. Out. Hit. Out. Out. Out. Hit. Hit. Out. Out. Out. Hit. Hit. Out. Out. Out. Hit. Hit. Out. Hit. Out. Out. Hit. Out. Hit. Out. Out. Out. Hit. Out. Out. Out. Hit. Hit. Out. Out. Out. Hit. Hit. Out. Out. Out. Hit. Hit. Out. Out. Out.
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Player #2. Batting Statistics
In 100 at-bats, the following happened:Hit. Hit. Out. Out. Out. Out. Hit. Out. Out. Out. Hit.
Hit. Out. Out. Out. Out. Hit. Out. Out. Out. Hit. Hit. Out. Out. Out. Out. Hit. Out. Out. Out. Hit. Out. Out. Out. Out. Hit. Out. Hit. Out. Hit. Hit. Hit. Out. Out. Out. Hit. Out. Out. Out. Out. Hit. Out. Out. Out. Out. Hit. Out. Out. Out. Hit. Hit. Out. Hit. Out. Out. Hit. Hit. Out. Out. Out. Hit. Hit. Out. Out. Out. Hit. Hit. Hit. Out. Out. Out. Hit. Hit. Out. Out. Out. Hit. Hit. Out. Out. Out. Hit. Out. Out. Out. Out. Hit. Hit. Out. Out. Out.
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Question
Which player is the better hitter?
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Answer (1)
Of Ty Cobb and Tony Gwynn, who is the better baseball player?
• Player #1 Player #2• Ty Cobb Tony Gwynn• Batting average 367 338
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Answer (2)
Of Ty Cobb and Tony Gwynn, who is the better baseball player?
• Ty Cobb Tony Gwynn• Batting average 367 338• Hits 4,191 3,141• Home runs 117 135• Runs batted in 1,938 1,138
Overlooking Formatted Data
When using statistics to provide evidence in support of our decisions, we must recognize when we should overlook the formatted data.
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Background of Shane Battier
His record: High School. Naismith award for best player
in the U.S. College. Duke University. His team won 131
games, the 2001 national championship, and he got another Naismith award as best college player.
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Answer
Malcolm Gladwell says statistical performance in a game in only a small part of understanding the value of an athlete: How hard does he work? Is he a good teammate? Is he resilient when faced with problems? How does he perform under pressure?
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First Team – Memphis Grizzlies
Team records: 2001-2002. 23-59. 2002-2003. 50—32. 2003-2004. Made the N.B.A. playoffs. 2004-2005. Made the N.B.A. playoffs. 2005-2006. Made the N.B.A. playoffs.
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Second Team – Houston Rockets
Before he arrived: 2005-2006. 34-48.
After he arrived: 2006-2007. 52-30 2007-2008. 55-27 (including 22 wins in a
row).
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Battier by the Numbers
In terms of basketball statistics: Points. Not many. Rebounds. Not many. Blocked Shots. Not many. Assists. Not many. Steals of the Ball. Not many.
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Why is Battier Valuable?
When he is on the court: His teammates get a lot better. His opponents get a lot worse.
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Question
What is the performance lesson?
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Answer (1)
Do organizations measure things that are important to performance or do they measure things that are easy to measure?
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Answer (2)
Should you: Take a bad shot or pass to an open
teammate? Pull down a rebound or tip it to a teammate? Guard a weak player or the other team’s best
player? Do we value individual performance or team
performance?
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Question
Professional teams keep statistics on players on opposing teams. They know: High Percentage Locations. Where many
points are scored. Low Percentage Locations. Where many
shots are missed. Directional Performance. If a player is better
going left or right.
What does this have to do with Battier?
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Answer
He forces the opposing player into low percentage positions and directions.
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Lesson Learned
Statistics have a role in measuring success and failure and other outcomes. Subjective judgment and understanding are needed to find the full answer.
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Presentation
Day 2Chapter 3. Strategic
Decision Making
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Presentation
MV Braer
Overview
Canadian Ultramar Ltd. was a worldwide operator of general purpose and medium-range product tankers:Cargoes. Hydrocarbon liquids ranging from crude oil to refined petroleum products.Voyage Routes. Worldwide.
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Question
The company formed a crisis team. Who would you recommend by title to be part of the team?
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The Team
Team Leader Systems Specialist Finance Specialist Petroleum Engineer Logistics Specialist Public Relations Manager
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Situation
The MV Braer, a refined-products tanker, was passing the Shetland Islands in January 1993.•It ran aground in a storm near Quendale with 300 year-round residents and one 40-room hotel.•Within 24 hours a crisis team arrived to contain the oil spill, which was growing by the hour.
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Crisis Response Efforts
Within 12 to 36 hours after the spill: Tugs from London arrived with oil
containment equipment. 150 personnel arrived to clean up of oil. They would work 12 hours on and 12 hours
off. It would take 3-4 weeks to finish the job.
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Investigating Housing
The crisis team determined the following: Few local residents were willing to provide
sleeping accommodations for workers. The hotel was closed. The owner would not
open it for workers. The island had no other place to house the
workers.
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Question
What are the alternatives to solve the housing problem for the workers.
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Answer
Possibilities include: Negotiate with the hotel owner. Negotiate with homeowners. Bring in tents. Bring in a small cruise ship. Expand the search for housing to other
towns.
Question
What should the team leader do?
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Answer (1)
If you ask the wrong question, you will always get the wrong answer.
• Instead of, “What should he do,” we might ask, “What can he do?”
• Then we ask, “Does he have the authority to do it?
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Answer (2)
Actual Decision.The team leader bought the hotel.
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Question
Was the MV Braer decision sequential or intuitive?
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Answer
Both. The company:•Created a team that was capable of reacting to a crisis. •Gave full authority to do the job.
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Approaches to Decision Making
Individuals make decisions using: Intuition. The processing of data without
identifying intermediate steps and linkages. Conceptualize relationships and “feel” a course of action.
Sequential Reasoning. Process data by identifying intermediate steps and linkages, organizing information and consequences, and analyzing events.
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Question
How much of each approach to decision making is used by different managers on the next slide? The choices are: A lot. Some. Very little.
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Worksheet
Choices: A lot. Some. Very little. Intuition Sequential CEO ______ ______Marketing ______ ______Finance ______ ______Production ______ ______Technology ______ ______
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Answer
Maybe? Intuition SequentialCEO Lot SomeC-level Marketing Lot SomeC-level Finance Little A LotC-level Production Little A LotC-level Technology Little A Lot
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Presentation
Russian Frozen Chicken
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Russian Project
A company has a project to export frozen chicken from the U.S. to St. Petersburg, Russia. The company will load 60 to 80 pound boxes on pallets for the ocean voyage. Upon arrival in Russia, will be reloaded into reefer containers and be shipped by railroad from St. Petersburg to Moscow, Yekaterinburg, Omsk, and Novosibirsk.
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Question
An expropriation exposure was identified involving the Hotel Europa in St. Petersburg. In the mid-1990s, the hotel opened a foreign bank account to handle dollar transactions. Russian banking laws prohibited such accounts. What do you think happened?
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Answer
As punishment for the offense, a government agency levied a heavy fine on the hotel. The foreign partner was forced to forfeit its shares of stock to the government agency. Effectively, the government confiscated the hotel.
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Question
The U.S. company learned that it could obtain insurance to reimburse it for expropriation. The European investors in the Hotel Europe could have purchased similar political risk insurance to reimburse it for confiscation of the hotel. Do you think such insurance would cover the loss?
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Answer
A court would have to decide. The insurance company would deny payment because the loss occurred from a violation of the local law rather than from a direct expropriation. A court could rule that it was actually an expropriation.
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Question
A storage risk arises because the Port of St. Petersburg has no shore side refrigeration to allow quick unloading of an expensive reefer vessel. The company would incur significant demurrage charges if the vessel is delayed awaiting containers or railroad cars. What action should be taken to mitigate this exposure?
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Answer
With the lessons of the Hotel Europa, the company would be reluctant to build a refrigerated warehouse in the port. Instead, it could: Let the Russian partner solve the problem. Buy an old (and relatively inexpensive) reefer
vessel and use it for storage. Build a refrigeration facility on a barge.
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Question
A credit risk arises because the U.S. company does not have the capability to distribute the chicken in Russian markets. It would choose a strong and reliable Russian distribution company as a partner. One credit risk deals with the timing of the transfer of the title to the cargo. When should title, and thus ownership, be transferred?
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Answer
Title should pass from the U.S. company to a Russian partner at the Port of St. Petersburg. If any cargo is lost after that point, it would be a loss to the Russian partner who has control of the cargo.
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Question
The other part of credit risk involves steps to be taken to mitigate the risk of nonpayment after the cargo is turned over the Russian partner. How should that be handled?
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Answer
It is probably not realistic to demand payment in advance or to obtain a letter of credit to guarantee payment. The risk would be manageable if the Russian partner is required to make the payment before the company delivers the next shipment. Risk is mitigated if a stream of profits is larger than the funds from a default on payment for a single cargo.
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Question
Once the Russian partner has received the chicken in St. Petersburg, it must ship the chicken by railroad. Refrigerated containers are locked and then loaded on flat railcars. On the fifth journey, one of the containers was empty when it arrived in Moscow after the 3-day trip from St. Petersburg. What should the partner do?
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Answer
Find a risk management solution. Buying insurance will not work. Who would insure a cargo with a high chance of loss?
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Question
The risk manager proposed a risk management solution. Place containers door to door on the flatbed railcar so the doors could not be opened if the locks were broken. Did it work?
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Answer
No. Apparently someone had access to a crane on a siding when the train stopped in the middle of the night? Another container was missing on a later journey.
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Question
What else can be tried?
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Answer
An approach with an upside. Start by placing a boxcar on the back of the train. The car was fitted with heaters and cots carried guards with Kalashnikov weapons Whenever the train stopped, guards stepped out to guard the containers.
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Question
What is the upside?
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Answer
Insurance. The Russian partner, railroad, and Ingosstrakh (Russian insurer) can insure the cargoes. Losses are no longer expected. The insurance can provide profits to all three parties. This is the upside of risk.
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Presentation
Chapter 4. Framework for Strategies
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Presentation
Post-American World Quiz
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Question
The population of China is 1,350 million. Most of these people lived in poverty in 1979. How many were lifted out of poverty since then?•200 million•450 million•700 million•900 million
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Answer
The population of China is 1,350 million. Most of these people lived in poverty in 1979. How many were lifted out of poverty since then?•200 million•450 million•700 million•900 million
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Question
Many countries are making progress to improve the lives and health of their residents. How many of the world’s 192 countries are absorbing poor people into productive and growing economies?• 80•110•140•170
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Answer
Many countries are making progress to improve the lives and health of their residents. How many of the world’s 192 countries are absorbing the poor into productive and growing economies?• 80•110•140•170
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Question
Most people in the world have food, shelter, and other basic living needs. What percent of the world’s population had less than two dollars a day of additional spending money in 1984?
• 56%• 40%• 24%• 12%
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Answer
Most people in the world have food, shelter, and other basic living needs. What percent of the world’s population had less than two dollars a day of additional spending money in 1984?
• 56%• 40%• 24%• 12%
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Question
Most people in the world have food, shelter, and other basic living needs. What percent of the world’s population had less than two dollars a day of additional spending money in 2014?
• 56%• 40%• 24%• 12%
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Answer
Most people in the world have food, shelter, and other basic living needs. What percent of the world’s population had less than two dollars a day of additional spending money in 2014?
• 56%• 40%• 24%• 12%
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Question
Which of the following is defined by Alan Greenspan in the 1990s as the most important economic event of the 20th century?
Fall of the Soviet Union. Rise of the Internet. Development of the personal computer. Opening of China.
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Answer
The Fall of the Soviet Union. Central planning was totally discredited. Capitalism is the only viable approach to
organizing a country’s economy.Rise of the Internet.Development of the personal computer.Opening of China.
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Question
Which of the following would you define today as the most important economic event of the 20th century?
Fall of the Soviet Union. Rise of the Internet. Development of the personal computer. Opening of China.
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Answer
Which of the following would you define today as the most important economic event of the 20th century?
Fall of the Soviet Union. Rise of the Internet. Development of the personal computer. Opening of China.
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Question
Which of the following predictions proved to be the most accurate?
Meteorologists on the melting of polar ice caps.
Demand for electricity. Pollution of the atmosphere. 2008 global financial crisis.
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Answer
All except Buffett predictions for 15 years erred on the low side:Polar ice caps: Melting at twice predicted rates.Electricity Demand: Has outrun expectations.Air Pollution Much worse. 2008 Financial Crisis Warren Buffett predicted
it accurately in 2003.
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Question
Who mostly can take credit for winning the Second World War? United States. Russia. China. United Kingdom and France.
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Answer
Russia. 75% of Germans fought on the eastern front
where Germany incurred 70% of its casualties and 30 million people died.
The European front was almost a sideshow, yet it receives all the attention in the West.
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Question
World affairs from 2000 to 2008 were linked mostly to a warlike area with dry and hot desert conditions and a foreign accent when speaking English. Was it?•The Middle East.•Pakistan and Afghanistan.•Egypt and Tunisia.•Someplace else.
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Answer
World affairs from 2000 to 2008 were linked mostly to a warlike area with dry and hot desert conditions and a foreign accent when speaking English. Was it?•The Middle East.•Pakistan and Afghanistan.•Egypt and Tunisia.•Texas. (The Bush Years)
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Question
World affairs from 2009 to 2014 were linked mostly to a society in chaos as a result of a non-functioning government. Was it? •The Middle East.•Pakistan and Afghanistan.•Egypt and Tunisia.•Someplace else.
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Answer
World affairs from 2009 to 2014 were linked mostly to a society in chaos as a result of a non-functioning government. Was it? •The Middle East.•Pakistan and Afghanistan.•Egypt and Tunisia.•Washington, D.C.
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Bonus Questions
In what country in 2012 will you find the following?
Tallest building. ________ Richest person. ________ Largest public company. ________ Largest investment fund. ________ Largest Ferris wheel. ________ Largest casino. ________ Largest swimming pool ________
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Answer
Country in 2012: Tallest building. UAE (Dubai) Richest person. __________
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Answer
Country in 2012: Tallest building. UAE (Dubai) Richest person. U.S. (Gates) Largest public company. __________
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Answer
Country in 2012: Tallest building. UAE (Dubai) Richest person. U.S. (Gates) Largest public company. China Largest investment fund. __________
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Answer
Country in 2012: Tallest building. UAE (Dubai) Richest person. U.S. (Gates) Largest public company. China Largest investment fund. Norway Largest movie industry.
__________
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Answer
Country in 2012: Tallest building. UAE (Dubai) Richest person. U.S. (Gates) Largest public company. China Largest investment fund. Norway Largest movie industry. India Largest casino. __________
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Answer
Country in 2012: Tallest building. UAE (Dubai) Richest person. U.S. (Gates) Largest public company. China Largest investment fund. Norway Largest Movie Industry India Largest casino. China (Macao) Largest swimming pool __________
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Answer
Country in 2014: Tallest building. UAE (Dubai) Richest person. U.S. (Gates) Largest public company. China Largest investment fund. Norway Largest Movie Industry India Largest casino. China (Macao) Largest swimming pool Chile
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Question
West strove for labor efficiency while the East considered manpower to be cheap.•Yangtze Delta and English farmland in 1800.•Comparable in output.•Average farm size?
England. ____ acres or ____ hectares. Yangtze. ____ acres or ____ hectares.
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Answer
Average farm size: England. 150 acres or 53 hectares. Yangtze. One acre or .4047 hectares.
China versus West in 1400s
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Answer
The result: China stopped global exploration and
languished. The West made ocean voyages self-
sustaining commercial ventures. The western voyages contributed mightily to
growth and the creation of wealth.
Question
What are the five most important countries in the world?
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Answer
Where is China on your list? Largest country in population. Fastest growing economy. Largest manufacturer. Second largest consumer. Largest saver. Second largest military spender.
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Presentation
Day 3Chapter 5.
Seek the Big Picture
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Presentation
Do you want to ClimbMount Everest?
159
Looking for a New Adventure?
60 million years of geological history.
Be part of the 1,200 elite to have climbed the tallest mountain on the planet.
Be the first on your block to touch the heavens.
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Climb Mt. Everest
World's highest peak:
29,035 feet! 20 Empire State
Buildings.
Himalaya Mountains, along the border of Nepal and Tibet!
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The Trek
60-80 days March – May5 camps: Base Camp – 17,500ft Camp 1 - 20,000ft Camp 2 - 21,300ft Camp 3 - 24,000ft Camp 4 - 26,000ft Summit - 29,035ft
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Climbing Requirements
Experience should include: Ascents of 22,000
or more feet. 3-5 years of
technical climbing Crevasse rescue
practice and rock and ice climbing.
Basic First-Aid and CPR certifications
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Here’s what you will need
Climbing Gear Extreme
Outerwear Camping Gear Boil-in-the-bag
meals Oxygen Canisters Sunscreen Water
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Facing the Elements
Extreme conditions!
Freezing temperatures: Low’s: Minus 100°F
Highs: 15°F Wind: 50-177mph Snow: 10+ feet Icefalls Avalanches Falling Rocks
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What are the risks?
Rapid breathing Fast pulse rate Poor digestion Loss of appetite Insomnia Difficulty
concentrating Frost bite Cerebral Edema Pulmonary Edema Death
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What are your Odds?
People who:Attempted: 11,000
Were successful: 3,000 (and possibly you)
Died Trying: 240 (this will not be you)
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Deaths since 1921-2013
• Fall 65• Avalanche 48• Exhaustion 18• Altitude Sickness 24• Ground collapse 24• Exposure 26• Other 35• Total 240
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Successful Climbs
Successful climbers in each year by different routes to the top.Year Nepal China Other Success1990 40 20 12 18%2000 85 55 5 24%2012 409 138 0 56%
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May 19, 2012
Hillary Step: 40-foot rock wall.Hillary Step Delay 2 hoursReached the Top: 234 climbers.Died: 4 climbers.
2014 Khumbu Icefall
18 April 06:45. Avalanche at 5,800 meters (19,000 ft).25 men buried.Mostly Sherpa guides.16 died.
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Carry On
First post-avalanche ascent.23 May 2014. Chinese businesswoman Wang Jing.She bypassed Khumbu Icefall by helicopter.Tamding Sherpa accused her of "cheating.”
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What are the risks?
You can do all of this for: 65 easy installments $1,000 each! Not counting the helicopter.
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Famous Last Words
"Strong motivation is the most important factor in getting you to the top."- Edmund Hillary"Everest is the physical and symbolic manifestation of a dream." - Tom Whittaker"Because it is there”. — George Mallory (1886-1924). Body discovered 1 May 1999 close to summit.
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More Famous last words
”It's only a mountain." Junko Tabei"Feeling Wasted? Climb Everest before you Die!" Nepalvist.com
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Still interested?
Question
Risk and decisions are shaped by people’s attitudes. What happened to David Sharp and Lincoln Hall while climbing Mount Everest in 2006?
Answer (1)
David Sharp. o 34 years of age.o Froze to death under a rocky overhang just
below the peak.
Answer (2)
David Sharp. o 34 years of age.o Froze to death under a rocky overhang just
below the peak. o 40 climbers walked past him while he was
still alive.
Answer (3)
Lincoln Hall. o 50 years of age, o Left for dead by his climbing party.o Survived the night.
Answer (4)
Lincoln Hall. o 50 years of age, o Left for dead by his climbing party.o Survived the night. o The next morning, Dan Mazur abandoned
his own climb to help rescue Mr. Hall.
Answer (5)
John Delaney, founder and CEO of Intrade, a prediction market which allows individuals to take positions (‘trade 'contracts') on whether future events will or will not occur. Did you hear about what happened to him?
Answer (6)
John Delaney died while trying to climb Mt. Everest in May 2011:
He was 50 meters from the top. He was 42 It was his second attempt to climb
Everest. He never heard that his wife had just
given birth to a baby daughter, Hope.
IBM Big Picture
Thomas Watson, Sr. (1914-1956) • Personal Grooming. Ties and dark suits.• High Energy. Promote company pride and
loyalty.• Customer Service. The buyer came first.
Satisfy the users of IBM machines.• Employee Rewards. Salaries above market
and often well above market.
Watson Sr. resisted electronic computers.
183
Question
Watson Jr. changed the strategy. Big Picture for the Customer:•The IBM 360 was coming.•It was expensive to change.•It was risky for long-term purchase.What should be done?
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Answer
Lease the machines.• Cost. Leasing lowered the upfront costs.• Flexibility. No penalty to switch.
185
Question
What was the big picture for IBM?
186
Answer
Switching to another vendor was prohibitive.• Obsolescence. All new software.• Capabilities. Less from manufacturers who
lagged IBM’s huge R&D. • Operations. Training as IBM operated the
computer and ancillary equipment.• Unknown Costs. All expenses covered in
IBM lease payments.
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Presentation
Sneakers and Mr. Lee
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Question
The most important technological application in the 1980s became a key component of the modern post-American world. What was it? What did it do?
190
Answer
The fax machine. It changed long distance communication from oral (telephone) or tedious (Telex machine) to written and simple for complex messages.
191
Question
What were the elements of the convergence of technology and opportunity in Taiwan in the 1980s that allowed Mr. Lee to become a global manufacturer of sneakers?
192
Answer
Low labor costs in Taiwan. Taiwanese government encouragement of
industrialization. Increasing consumer demand for sneakers. Invention of the fax machine.
193
Question
How did Mr. Lee take advantage of the new opportunity and technology?
194
Answer
He took orders to outsource sneaker manufacturing. Example:
Sears in Chicago. Order for one million sneakers.
Mr. Lee in Taiwan. 25 page fax with sizes, design, colors.
Mr. Lee’s neighbor. 3 page fax with sizes, design, colors.
195
Question
Mr. Lee and others became partners with Sears and others. Assume that Mr. Lee was producing 3 million pairs of sneakers in 1987. Revenues were $35 million.
What was the total number of full-time positions in his company.
The U.S. dollar value of capital assets.
196
Answer
Personnel. (10) Mr. Lee. Wife, Mother, Two children,
Grandmother (on father’s side), Four neighbors.
Capital Assets. $100,000 Office in owned building, Telephone, Fax
Machine. Minor equipment.
197
Question
What are the names in Mr. Lee’s organization?
?
Lee??
??
198
Answer
Fill in any Chinese names. Mr. Lee farmed out production.
Chu
LeeChangChin
SunYang
199
Question
What did vice presidents do in industrial age organizations?
200
Answer
Duties may include: Relay policies from the CEO and senior
executives to lower-level employees. Establish goals for employees in their units. Appraise subordinates. Prepare reports for senior executives. Read the Wall Street journal at their desks. Dictate memos to secretaries. Attend committee meetings.
201
Question
What did middle managers do in industrial age organizations?
202
Answer
The same thing as vice presidents, often redundant functions.
203
Question
What did secretaries do in industrial age organizations?
204
Answer
Duties may include: Greet visitors. Answer the telephone. Type and file documents. Schedule appointments and meetings. Other.
205
Question
What has happened to vice presidents, middle managers, and secretaries since 1980?
206
Answer
Technology has replaced many of their duties and the need for their positions:
Vice presidents do different things. Middle managers have dropped in numbers
as a percentage of employees. Secretaries have disappeared.
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Question
We might observe that the real impact of Mr. Lee had to do with risk factors that would change the industrial age organization. What changes did the new structure pose with respect to global borders?
208
Answer
Global borders can be crossed by electronic means without interference:
Products and services were likely to follow. Borders would decline in importance. Many borders would disappear.
209
Question
What changes did the new structure pose with respect to language?
210
Answer
English was likely to become the global language:
If Mr. Lee or a family member knew English, Mr. Lee would be able to understand the language of the world’s dominant economic power.
All other countries would be lining up in the race to understand the most important language in the world.
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Question
What changes did the new structure pose with respect to productivity?
212
Answer
Aside from lower costs of the workforces in developing countries:
Companies could pay for output rather than time.
This was likely to increase efficiency and change the employment practices of organizations.
213
Question
What changes did the new structure pose with respect to the industrial age hierarchy and culture?
214
Answer
Pressure would exist to: Eliminate redundant middle management
positions. Causes individuals to recognize that they
could not climb a clear hierarchy in their careers.
Create new organizational forms and relationships.
215
Question
What changes did the new structure pose with respect to long-term relationships?
216
Answer
Partnerships might be replacing business units;
Production might not be a line and staff function.
A firm might sell products produced by partners like Mr. Lee who had their own organization.
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Presentation
Cook County Hospital
218
Question
In 1996 Dr. Brendan Reilly went to Cook County Hospital and discovered 30 people a day came to the emergency with chest pains. Diagnosing whether it was a heart attack was a long and elaborate process. What was being done?
219
Answer
Diagnosing a heart attack involved: Taking blood pressure. Listening for fluid in lungs. Asking about prior health history, exercise,
cholesterol, drugs, diabetes, and more. Giving an electrocardiogram (ECG).
220
Question
What did Dr. Reilly discover when he researched the results of the efforts to diagnose a heart attack?
221
Answer
Dr. Reilly discovered the results were inconclusive: ECGs can be wrong. Answers to questions can be misleading. Doctors finally have to make a guess. Doctors believed they were making reasoned
judgments.
222
Question
Reilly uncovered the research of Dr. Lee Goldman. He developed an algorithm for diagnosing heart attacks recommending four actions. What do you think they were?
223
Answer
The four actions were: Read the ECG. Ask about chest pain. Check for fluid in lungs. Check for blood pressure.
224
Question
Goldman’s algorithm for sending patients to cardiology unit, regular hospital room, or home was based on various combinations of the information. What was his goal by using it instead of the more elaborate procedure at Cook County Hospital?
225
Answer
Goldman’s algorithm greatly shortened the time to reach a decision on how to treat the patient. This can be critical: For medical reasons to start treatment quickly
for those who need it. For efficiency reasons in a busy hospital.
226
Question
Reilly began an experiment: For several months, doctors used the lengthy
process to evaluate patients. Subsequently, for several months the hospital
used Goldman’s algorithm. The process was reversed over two years. The data was compared.
Was greater accuracy obtained by the doctors or the algorithm?
227
Answer
The algorithm was: 70% better at making the diagnosis of
acute, mild, or no heart attack. Doctors were correct on acute diagnosis
75 to 89 percent of the time. Algorithm was correct 95% of the time.
228
Question
A man complains of chest pain. He has no symptoms on Goldman’s algorithm. He is: 62 years old. A hard-charging executive. Under constant pressure. Going through a divorce. A smoker who does not exercise.
Is he having a heart attack?
229
Answer
Not likely according to Goldman’s algorithm. Less is more. Still: This is not to say that doctors should ignore
valid information. It just means health care facilities should seek
less costly procedures that produce the same or better outcomes that more elaborate activities.
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Presentation
Day 4Chapter 6.
Collaborate for Better Decisions.
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Presentation
The Tipping Point
232
Three Premises of Tipping Point
A tipping point is a moment in time when an unstoppable change (an epidemic) is about to occur. Three characteristics are: Contagiousness. Circumstances create a
rapidly-spreading influence that excites the emotions.
Impact. Little causes have big effects. Speed. Changes happens in one dramatic
moment.
233
Question
What were the dates of the following? Sale of the first low-cost fax machine. Tipping Point for the fax.
First cell phone call. Tipping Point for the cell phone.
234
Answer
Sale of the first low-cost fax machine. 1984. Sharp. 80,000 units.
Tipping Point for the fax.1987. One million units.
First cell phone call. 1973. Motorola.
Tipping Point for the cell phone.1998. Everybody was about to get one.
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80/20 Principle
Proposes that 20% of people are responsible for 80% of activity: 20% of workers account for 80% of success. 20% of customers provide 80% of profits. 20% of criminal commit 80% of crimes. 20% of motorists cause 80% of accidents.
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Three Rules of the Tipping Point
Malcolm Gladwell maintains that an epidemic is started by fewer than 20%. He has three rules that cause the start of an epidemic: Law of the Few. A tiny percentage of people
build momentum. Stickiness Factor. A message makes a
memorable impact. Power of Context. Human beings are highly
sensitive to the things around them.
237
Question
Gladwell claims that word of mouth appeals are the only kind of persuasion that can generate a tipping point. Do you agree?
238
Answer
Maybe in the days before mass media. When was the last time a tsunami was created by the following? A newspaper. TV commercial. Direct mail solicitation. Mass email.Ask the same about Facebook, Twitter,
YouTube.
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Categories of the Few
An epidemic depends upon a few word-of-mouth people in three categories: Connectors. People with a special gift for
bring the world together. Mavens. Information specialists who pay
close attention to details and want to help others.
Salesmen. Individuals with the skills to persuade skeptical people.
240
Question
We can identify two types of connections with others: Strong Connections. As with our family,
friends, co-workers, and neighbors. Weak Connections. As with associates,
casual acquaintances, vendors, and service providers.
Which form of connection occurs with tipping points?
241
Answer
According to Gladwell, effective connections occur when connectors, mavens, and salesmen use their vast networks of weak connections: Our friends and other strong connections
occupy our world. They know what you know. Acquaintances occupy other worlds. They
can be a source of social power. We rely on them for opportunities outside our vision.
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Presentation
Ghosn and Nissan
243
Question
In 1999, Nissan was a corporation with a traditional Japanese culture. It had a net loss in 1999 of $5.7 billion. What should the board of directors do?
244
Answer
Bring in a Frenchman?
In June 1999, Carlos Ghosn was appointed chief executive officer.
Question
The Renault and Nissan nameplates traditionally had respected and positive images. What did Ghosn do about the Nissan brand?
245
Answer
He made many friends among his Japanese managers when he chose to retain the Nissan brand. Step #1 in collaboration
246
Question
Ghosn recognized the sharp cultural differences among managers and workers in France and Japan. How was this handled?
247
Answer
Ghosn pointed out complimentary strengths in Renault and Nissan.
• He directed both companies to find synergies working together to correct weaknesses in production and marketing.
• These efforts strengthened the mutual respect between the managers in both companies.
248
Question
How did Ghosn implement his strategy?
249
Answer
The company:• Aggressively eliminated unprofitable
markets.• Sped up development of new vehicles.• Improved quality.• Reduced manufacturing platforms.• Shared power trains and technology
between France and Japan.
250
Question
French and Japanese companies have cross-cultural barriers to collaboration. Did Ghosn address them?
251
Answer
His effort is a study of best practices in collaboration.
• Ghosn identified workers who knew changes had to be made and empowered managers to make them.
• He augmented their numbers with French executives in cross-cultural teams, demanding problem solving and revised compensation and promotion.
252
Question
What about communications?
253
Answer
Ghosn encouraged extensive interaction and actively participated himself.
• Employees at all levels shared goals and strategies with consumers, dealers, shareholders, and each other.
• He forced managers to recognize the difference in Japanese and French communication styles and accept the best parts of both.
254
Question
The Japanese culture seeks consensus when major decisions are made. The Western model involves the CEO inviting inputs from interested parties and then making a decision. How did Ghosn handle key decisions?
255
Answer
Ghosn knew collaboration was not compromise and consensus.
• French: “We need to close a plant.”• Japanese: “Yes.”• French: “Jobs will be lost.”• Japanese: “Yes.”• French: “It must be done.”• Japanese “Yes.”
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Collaboration Strategy
Acknowledge serious problems.Share goals, strategies, plans, and actions with consumers, employees, and shareholders.Recognize difference in Japanese and French communications.
258
Presentation
Crossing the River
259
Question
A man approaches a river. He has to decide whether to swim upstream or downstream. What decision criteria should he use?
260
Answer
What is the purpose of the swim? For exercise, upstream. For distance, downstream. For crossing the river, find a bridge.
261
Question
A man approaches a river. He has to decide what to do next. What is the largest risk if he takes each of the following actions? Swims across the river. Swims upstream or downstream. Does not enter the water.
262
Answer
Swims across the river. Hit by a boat. Shot by border guards. Eaten
by piranhas.
Swims upstream or downstream. Get lost. Drown because he gets too tired to
stay afloat. Go over Niagara Falls.
Does not enter the water. Miss a chance to cool down. Get captured by
the chasing police.
263
Question
What is the decision-making trap from the previous questions?
264
Answer
If we do not broaden our horizon when making decisions, we fall for the business as usual trap. We are not looking for something out of the box that can open new doors.
265
Answer
Most creative? Build a bridge. Build condos. Dam up the river and generate electricity. Poison the river. Buy a boat and offer dinner cruises. Water ski. Ice skate.
Shiller Downside to Collaboration
Robert Shiller, Yale economist, 2013 Nobel Prize in economics.
• Saw the U.S. housing bubble that led to the 2008 financial crisis.
• Was in a position to help avoid it. • Served on an advisory panel for the
Federal Reserve.• Agency could have raised interest rates.
266
Question
Did Shiller warn the Federal Reserve Bank about the impending housing bubble?
267
Answer
Yes. Sort of. Shiller was quoted:"I felt the need to use restraint. The
consensus . . . was that there was no bubble and no need to raise interest rates. To suggest otherwise was distinctly uncomfortable. I [made my point] very gently, and felt vulnerable expressing such quirky views."
268
Question
What happened with Shiller’s warning?
269
Answer
Nothing."Deviating too far from consensus leaves
one feeling potentially ostracized from the group, with the risk that one may be terminated."
“Groupthink” is the downside of
collaboration even for a Noble Prize economist.
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Presentation
Widely Known Facts
Question
272
1. What is the color of the “box” collect from an airplane after a crash?
A. Red.B. Orange.C. Blue.D. Black.
Answer
273
1. What is the color of the “box” collect from an airplane after a crash?
A. Red.B. Orange.C. Blue.D. Black.
Question
2. Which of the following is the most innovative country in the world according to Bloomberg?
A.South Korea.B. United States.C. China.D. Hong Kong.
274
Answer
2. Which of the following is the most innovative country in the world according to Bloomberg?
A.South Korea.B. United States.C. China.D. Hong Kong.
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Question
276
3. What is the only man-made object visible from the Moon?
A. Boeing factory, Everett, Wash.B. Dubai International Airport.C. Great Wall of China.D. None of the above.
Answer
277
3. What is the only man-made object visible from the Moon?
A. Boeing factory, Everett, Wash.B. Dubai International Airport.C. Great Wall of China.D. None of the above.
Question
278
4. Which of the following countries has the largest volume of proven oil reserves?
A. Saudi Arabia. B. Venezuela. C. Canada D. None of the above.
Answer
279
4. Which of the following countries has the largest volume of proven oil reserves?
A. Saudi Arabia. B. Venezuela. C. Canada D. None of the above.
Question
280
5. Who made the statement, "I can see Russia from my house?”
A.Joan Rivers.B.Sarah Palin.C.Tina Fey.D. None of the above.
Answer
281
5. Who made the statement, "I can see Russia from my house?”
A.Joan Rivers.B.Sarah Palin.C.Tina Fey.D. None of the above.
Question
282
6. Which city has the largest airport in the world in terms of the number of annual passengers?
A. Dubai. . B. London. C. Chicago D. Tokyo.
Answer
283
6. Which city has the largest airport in the world in terms of the number of annual passengers?
A. Dubai. . B. London. C. Chicago D. Tokyo.
Question
284
7. Who brought pasta from China to Italy?
A. Greeks in ancient times.B. Romans in ancient times.C. Arabs in the 7th century. D. Marco Polo in 1300.
Answer
285
7. Who brought pasta from China to Italy?
A. Greeks in ancient times.B. Romans in ancient times.C. Arabs in the 7th century. D. Marco Polo in 1300.
Question
286
8. Which of the following colors will enrage a bull?
A.Red.B. Black.C. Purple.D. None of the above.
Answer
287
8. Which of the following colors will enrage a bull?
A.Red.B. Black.C. Purple.D. None of the above.
Question
288
9. When did Europeans learn that the earth was not flat?
A. Since ancient Greece.B. Since Roman times.C. Since 7th century monasteries.D. After 1492.
Answer
289
9. When did Europeans learn that the earth was not flat?
A. Since ancient Greece.B. Since Roman times.C. Since 7th century monasteries.D. After 1492.
Question
290
10. Who invented the light bulb?A.Humphry Davy in 1800.B.Sir Joseph Wilson Swan in 1860.C. Charles Francis Brush in 1878.D. Thomas Alva Edison in 1879.
Answer
291
10. Who invented the light bulb?A.Humphry Davy in 1800.B. Sir Joseph Wilson Swan in 1860.C. Charles Francis Brush in 1878.D. Thomas Alva Edison in 1879.
Question
11.What percent of the the moon (dark side) never receives sunlight?
A. Zero.B. 25%C. 40%.D. 60%.
292
Answer
11.What percent of the the moon (dark side) never receives sunlight?
A. Zero.B. 25%C. 40%.D. 60%.
293
Question
12. Which is the percent of the brain that we use every day?
A.10%.B.25%C.50%.D.100%.
294
Answer
12. Which is the percent of the brain that we use every day?
A.10%.B.25%C.50%.D.100%.
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Presentation
Day 5Chapter 7.
Wartime andPeacetime Strategies
Three Decision-making Styles
• Authoritarian. Quick decision making. The leader dictates goals and strategies and controls activities.
• Participative. Leader describes the goal and encourages others to help achieve it.
• Laissez-faire. Group members to make the decision. IGenerally the slowest form of decision making.
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Two Leadership Styles
Leadership can be portrayed in two categories:•Wartime Leader. Action trumps planning.•Peacetime Leader. Planning trumps action.
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Wartime Leader
• Goal. What are we trying to do?• Strategy. What might work?• Action. Go for it.
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Peacetime Leader
• Goal. Should we make changes?• Options. What alternatives do we have?• Strategy. What is our best choice?• Information. What else do we need to
know?• Planning. How will we proceed?• Action. When should we start?
300
Question
Dwight D. Eisenhower was the Supreme Allied Commander in the European Theater in World War II. Was he a peacetime or wartime leader?
301
Answer (1)
Compare him to George S. Patton.
302
Answer (2)
Who believes the following?•Plans are nothing.•Budgets are nothing.•Planning and flexible budgeting are everything.
303
Answer (3)
Wartime and peacetime leaders. Eisenhower quote:•In a 1957 speech he said, "Plans are worthless, but planning is everything.”
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305
Presentation
Hill A
306
Strategy
A commander has a goal to capture hill A, a dominant terrain feature on a battlefield. •The initial plan is to capture hills B and C first.•The two smaller flanking hills are occupied by enemy soldiers.•After taking hills B and C, all forces will attack hill A.
307
Tactic
The commander has three infantry companies and an artillery battery to provide support. The tactic is:•Send one attack unit to hill B.•Send another attack unit to hill C.•Keep one attack unit in reserve.•Use artillery to soften up hills B and C.
308
Implementation
The battle is underway.•Unit #1 attacks hill B and clears it of enemy soldiers.•Unit #2 attacks hill C but bogs down. The attacking force is pinned down by intense fire 300 meters below the enemy ridgeline on hill C.
Question: What do you do now?
309
The Plan
Hill A
Hill B Hill C
Unit #1 Unit #2
Unit #3
310
Move, Shoot, Communicate
Hill A ? Hill B Hill C ?
Unit #1 Unit #2
Unit #3
311
Answer (1)
What is the basis for your answer? Fact. Belief. Feelings. Opinion. Assumption. Bias.
312
Answer (2)
In military settings, the most common philosophy is to continue on and commit units #1 and #3 to take Hill A.
The slogan is “Exploit success, not failure.”
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Presentation
“Monster” and the “Whale”
314
JPMorgan
Commercial bank and investment bank.• Goal was to protect capital.• New goal to generate profits from
derivatives.• Use assets of $2.25 trillion.
315
The Problem at JPMorgan
• It sold insurance against a decline in a credit-default index.
• Even if parties suffered no loss, JPMorgan would have to pay for the decline.
• It hedged its position.• Or so it thought.
316
Hedging Strategy
Offsetting indexes:•Guarantee #1. Maturities in 2017.•Guarantee #2. Maturities in 2012.•Belief. One goes up. One goes down.•Profits. From the fees.
Bruno Iksil
• JPMorgan trader.• Took large risks for large profits.• Nickname “The London Whale.”
317
Boaz Weinstein
Mr. Weinstein:•New York trader.•Ruthlessly attacked market weaknesses.•Nickname the “Monster.”•Spotted a weakness in the JPMorgan strategy.•Started buying.
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Outcome
November 2011 to May 2012:•Iksil sold.•Weinstein bought•Weinstein was losing at first.•Weinstein told others of the weakness.•JPMorgan could not get out.•$2 billion loss announced.
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Presentation
Archer Daniels CEO
Question
In 29 years at Chevron, Patricia Woertz rose to executive vice president managing 30,000 employees in 180 countries.
In 2006 Archer Daniels hired her as CEO.Some analysts were surprised as the oil
business was dominated by “alpha” males.
Was it risky for Chevron to bring Ms. Woertz into an alpha male environment?
321
Answer
Possibly but it worked out.• By 2012 Archer Daniels had grown to $90
billion in revenues from $36 billion in 2006.
• Ms. Woertz was still CEO in 2013.• Since 2006 she had received many
awards and recognition.
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323
Presentation
Jürgen Schrempp, CEO
324
Question
What is the difference between strategic and situational decision making?
325
Answer
Strategic decisions manage people, resources, and behavior to solve problems and make correct decisions. They pursue a clearly-defined goal. They evaluate resources and skills.
Situational decision making occurs when action matches a situation. The decision is shaped by current realities. Action trumps strategy.
Question (1)
Jürgen Schrempp, CEO, led Daimler Benz to acquire Chrysler for $37 billion in 1998.
2007. Daimler sold 80% of Chrysler to Cerberus for $7 billion.
1998. Schrempp described the union as "a merger of equals, a merger of growth, and a merger of unprecedented strength.”
2000. Schrempp told a German newspaper that he always intended Chrysler to be a subsidiary of DaimlerChrysler.
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Question (2)
Is Mr. Schrempp an example of the failure of strategic leadership, the failure of situational leadership, or neither?
327
Answer
Both. Failure of strategic leadership. Bad
acquisition Failure of situational leadership. Statement to
the German newspaper.
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329
Presentation
Federal Express
330
Philosophy
The philosophy of Fed Ex is to “move, communicate, and shoot.”
• Start the package toward its destination (Move).
• Make its position known to the receiver (Communicate).
• Deliver it (Shoot).
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Fed Ex Statistics
Information flows of FedEx: Packages a day 9 million Hubs 42 Countries 220 Airplanes 687 Vehicles 90,000 Employees 290,000
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Question
In recent years FedEx spent over $1 billion on information technology.
• Customers can track any individual FedEx shipment using the Internet.
• What happens if the customer does not know the tracking number?
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Answer
A tracking number is not needed. A FedEx product called Insight allows a customer to see every inbound package.
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Question
Why does a customer even need to track a package?
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Answer
Many examples including:• A laboratory wants to know what it bone-
marrow shipments will be received today to prepare for testing the samples.
• A sample has a useful life span of 24 hours.• By tracking every inbound shipment early in
the day, the company can be sure to have enough people available to test all samples.
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Question
The world view of Fed Ex is expansive.• Rob Carter was the chief information
officer of FedEx.• He was asked the question “What
business are you in?• How do you think he answered?
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Answer
FedEx engineers time. As the world shrinks and changes, FedEx offers solutions to allow customers to make things happen on time schedules that otherwise would be impossible.
Side Story
Fred Smith was the founder of Fed Ex.• He is a graduate of Yale University.• At Yale he wrote a paper outlining
overnight delivery service.• He received the grade of “C.”.• The professor did not believe the idea was
feasible to compete with the U.S. Post Office.
338
Question
Do you think the professor ever changed the grade?
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340
Presentation
Firestone and Ford
Question
In 2000, blowouts of Firestone tires caused a series of accidents on Ford vehicles.
• Ford and Firestone fought bitterly in the press.
• Each denied fault and blamed the other.• The failure to respond quickly created bad
images of both companies.Was the situation with Ford and Firestone a
decision-making issue?341
Answer
Yes on three counts. • Strategic Decisions. Neither company
had a structure to respond to a crisis.• Situational Decisions. There was no way
to win a slugfest in the media.• Risk Management Decisions. Time was
wasted with strategy sessions at high levels to formulate a course of action for the crisis.
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Presentation
Chapter 8. Violence in International Business
Actual Conflicts
Business leaders in developed countries are often surprised when they discover that many areas of the world are physically not safe: Examples are:
Wars. Serious between armies. Politicide. Harmful actions to individuals or
groups of people, often from their own governments.
Communal or Tribal Clashes. Sustained horror stories of small groups.
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345
Question
How many extrastate, intrastate, or internal wars were underway in 2010? (do not count politicide or communal conflicts)
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Answer (1)
Thirty four “wars” in the world.Algeria. Insurgency. 1992Angola. Cabinda. 1975-2006Burma. Insurgency. 1950China. Senkaku Islands . 1968China. Spratly Islands . 1988China. Uighur . 1996Colombia. Insurgencies. 1970sCongo (Zaire) . Congo War. 1998Georgia . Civil War. 1991India. Assam. 1985India. Kashmir. 1970sIndia. Naxalite Uprising. 1967
Ivory Coast. Civil War. 2002Korea. Korean War. 1953Kyrgyzstan. Civil Unrest. 2010Laos. Hmong Insurgency. 2000Mexico. Drug War. 2006Namibia. Caprivi Strip. 1966Nepal. Maoists. 1996-2006 Nigeria. Civil Disturbances. 1997Pakistan. Baluchistan. 2004Pakistan. Pashtun Jihad. 2001Palestine. Civil War. 2007Peru. Shining Path. 1970s
Answer (2)
Philippines. Moro Uprising. 1970sRussia. North Caucasus Insurgency. 1992Somalia. Civil War. 1991Spain. Basque Uprising. 1970sThailand. Islamic Rebels. 2001Turkey. Kurdistan. 1984United States. Afghanistan. 1980United States. Djibouti. 2001United States. Iraq. 1990United States. Philippines. 1898Uzbekistan. Civil Disturbances. 2005Yemen. Sheik al-Houti. 2004http://www.globalsecurity.org/military/world/war/index.html. .
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348
Question
Estimate the following numbers: Major wars since World War II
_____ People killed in those wars _____ Civilian percent of casualties ___% Women & children percent: ___% Child soldiers in the world today _____
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Answer
Numbers are: Major wars since World War II 250 People killed in those wars 23 million Civilian percent of casualties 90% Women & children percent: 75% Child soldiers in the world today 300000
www.worldrevolution.org
2010 “Wars”
Start Name Estimated Deaths1967 Indian Naxalite-Maoist Insurgency 6,0001978 Afghanistan Civil War 1,000,000+1991 Somali Civil War 400,0002003 Iraq War 1,000,0002004 War in Northwest Pakistan 30,0002006 Mexican Drug War 20,0002009 Sudanese Tribal Conflicts 3,000
350
Question (1)
Ajmal Kasab grew up in a small town in Pakistan with factories, farmland, and a major paved road.•He was neither poor nor highly religious.•He moved to Rawalpindi seeking employment after attending government schools.
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Question (2)
In the early 1990s. Afghanistan had defeated the Soviets and radical Islamic clerics were calling for Jihad (holy war).•Ajmal Kasab could not find employment.•He decided to rob houses.•He went to a bazaar to buy a gun and met someone who told him about a secret training camp.•Seeking excitement, he signed up for training.
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Question (3)
By joining a militant group and undergoing terrorist training, a young man develops skills and a sense of purpose.•He becomes physically stronger and knows how to use weapons and explosives.•He achieves a new status among his friends and neighbors.How does the story end?
353
Answer
The story ends in 2008 when Ajmal Kasab became a murderer in the horrific attack on 10 sites in Mumbai.•He was the sole surviving member of terrorist group that killed 173 individuals.
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Robbery and Piracy
Maritime piracy is the act of seizing vessels at sea. Key Terms:
Robbery. The crime of seizing property through violence or intimidation.
Piracy. Robbery committed at sea. Intent, Old Definition. Permanently deprive
the owner of the ship and contents. Intent, New Definition. Return the property
after paying a ransom.
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Modern Piracy
Seaborne piracy against transport vessels: Annual Losses: $15 billion. Attack Areas. Indonesian waters, the Strait
of Malacca, and off Somali coast, and many others.
Robbery. Small motorboats with 4 to 10 armed attackers seek personal belongings of the crew and contents of the ship's safe,
Ransom. Larger boats capture vessels for ransom.
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Somalia Piracy 2010 Statistics
440 attacks 601 hostages on 25 ships (Jan 2010) 7 mother ships.
Range of Somali Piracy
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359
Question
Is there any legal or regulatory authority that can address modern piracy?
360
Answer
The International Maritime Organization, created by the U.N. and based in London, nominally oversees maritime law.•It has no enforcement power.•Someone has enforcement power.
361
Question
The UN Convention of the Law of the Sea states incidents of piracy in the territorial sea are crimes against the state and subject to its national laws. Under what conditions does the Convention permit hot pursuit of a pirate vessel?
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Answer
The Convention states: Hot pursuit is permitted when the foreign ship
is within the internal waters or contiguous zone of the pursuing State.
Pursuit may continue if it has not been interrupted.
Once broken off, it cannot be resumed. It ceases when the pursued ship enters the
territorial sea of another State.
363
Question
Do we have any recent historical examples of successfully capturing and prosecuting piracy?
364
Answer
Prior to 2004, pirates plagued the Straits of Malacca.
Malaysia, Singapore, and Indonesia warships patrolled the straits together and actively prosecuted captured pirates.
Attacks plummeted.
365
Question
Why is it difficult to gain a guilty conviction for piracy?
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Answer
Coordination of the prosecution effort is complex:
Ship Owner. Great Britain. Witnesses. Taiwanese crew. Accused Pirates. Various nationalities. Jurisdiction. Singapore? India? Kenya?
367
Question
In 2008, U.S. Navy ships patrolled waters off Somalia while the U.N. considered a resolution authorizing nations to chase Somali pirates from international waters onto land so they could be captured and prosecuted. Would such a plan reduce piracy?
368
Answer
Not likely. Somalia has not been able to form a central
government that controls Mogadishu, much less the rest of the country.
The country has more than 15 militias commanded by “warlords” who have military control over regions with armed forces loyal to the warlord and not to the central government.
Some warlords are engaged in piracy.
369
Question
In 2008, the Royal Danish Navy intercepted two Somali fishing boats in the Gulf of Aden and arrested 10 suspected pirates. The men had assault weapons and handwritten notebooks outlining how to split spoils from piracy with Somali warlords. What action did the Danish government take with the suspected pirates?
370
Answer
They held them for six days aboard a Danish warship. Then, they released them from custody.
371
Question
What does the British Royal Navy do with suspected pirates it captures off the east coast of Africa?
372
Answer
The British Royal Navy turns over suspected pirates to Kenya, a country willing to prosecute them.
This recognizes no international jurisdiction for prosecuting piracy.
If pirates are caught storming or holding a ship, guilt can be proved.
If captured with automatic weapons, piracy plans, and stolen property, it is difficult to determined the jurisdiction and prove a crime in most courts.
Question
Kidnapping in Lima, Peru, became big business not too many years ago. What do the kidnappers do with their victims after carrying out the abduction?
373
Answer
Kidnappers did one of two things: Some held the victim until a ransom was paid. Others took the victim to an ATM and forced
him to withdraw money. At the same time, other members of the kidnapping party used credit and debit cards to make purchases. When done, the kidnappers usually released the victim.
374
Question
John Sidel identifies “three enduring aspects of Philippine democracy.” What do you think they are:
375
Answer
According to Sidel, the three enduring aspects of Philippine democracy are:
Elected Politicians. They are quite entrenched.
Economic Domination. The politicians are quite rich.
Corruption. Politicians engage in fraud, buying of votes, and violence against opponents and their supporters.
376
Question
The Philippines has powerful bosses. Is the situation the same in Thailand?
377
Answer
Not at all. Thailand has warlords. While they act as “bosses” with many of the same goals as are found in the Philippines, the situation is quite a bit less violent.
378
Question
William Nessen, a free lance reporter, travelled for 6 weeks with guerrillas fighting the Indonesian army.•It was a resistance movement that killed 15,000 people over a 30-year period.•After returning home, he read about the end of the guerrilla movement in 2005 when a tsunami devastated Aceh, killing 170,000 people.•What happened afterwards?
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Answer
By 2009, a Dutchman set up Aceh Explorer.•20 former guerillas gave trekking tours to foreigners.•They walked the secret trails of the guerillas.
One guerilla said, "We remember the old days… It was tough in the mountains. I prefer my job now.
Each guide received $20 a day plus free shoes, a backpack, and a uniform.
380
Question
In June 2009 a Roman Catholic priest and two seminary students were murdered in Mexico.•No local resident would identify the bodies.•An archbishop told friends the most wanted criminal boss lived nearby.•He said "everybody knows it except the authorities.”•What happened when the comment was made public?
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Answer
When the comment was made public, the archbishop denied the statement.
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