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Contents
List of Figures and Tables x
Foreword xiii
Acknowledgements xiv
About the Authors xv
Part I A Global Framework for Managing Complexity
1 Managing Complexity in Organizations: How to ApplyOckhams Razor 3
1.1 Introducing global complexity 31.2 Complexity in a flat world 41.3 Drivers of complexity and how they create managerial dilemmas 71.4 The way to manage complexity: Ockhams Razor 9
1.5 Structure of the book 131.6 References and further reading 16
Part II Managing the Complexity ofBusiness Models and Strategy
Roadmap to Managing the Complexity of BusinessModels and Strategy 21
2 Business Models and Strategy 23
2.1 Strategic success in the BC era 232.2 Complexity drivers 242.3 Complexity simplif iers 272.4 Dealing with complexity by focusing on core strategic
principles, not hypes or fashion trends 302.5 Alignment of mental maps for humility and
readiness for adversity 322.6 Standardizing and decentralizing processes:
limiting complexity to the right place 33
2.7 Case study introduction 342.8 Case study: CANDO SA: strategy formation and
implementation in complex environments 34
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2.9 Case study discussion 402.10 References and further reading 42
3 Complexity Drivers in Sustainable Strategies 43
3.1 When will we see real progress in sustainability?
433.2 Complexity drivers 453.3 Simplif iers 483.4 Complexity case study introduction 503.5 Case study: Hindustan Lever: leaping a millennium 503.6 References and further reading 57
4 Complexity in Global Business Strategies 58
4.1 An increasingly complex perspective 58
4.2 Complexity simplif iers 634.3 Case study introduction 654.4 Case study: Lufthansa AG: going global, but how to
manage complexity? 654.5 References and further reading 77
5 Managing Risk 79
5.1 Introducing risk management and its strategy 795.2 Complexity drivers 805.3 Complexity simplif iers 845.4 Case study introduction 885.5 Case study: Jack Millers challenging risk assessment 885.6 References and further reading 96
6 Partnerships and Alliances 98
6.1 Monitoring complexity in partnerships and alliances 986.2 Complexity drivers 986.3 Complexity simplif iers 1026.4 Case study introduction 103
6.5 Case study: European Auditing andFinancial Services Inc. (EAFS): leaping forward orsliding backward? 104
6.6 References and further reading 115
Part III Complexity and the Organization
Roadmap to Complexity and the Organization 119
7 Complexity and the Organization 121
7.1 Complexity and organizational architecture 1217.2 Complexity drivers 1237.3 Complexity simplif iers 126
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7.4 Case study introduction 130 7.5 Case study: Rebuilding ABB 130 7.6 References and further reading 151
8 Corporate Governance 154
8.1 Corporate governance and its inherent complexities 154 8.2 Complexity drivers 155 8.3 Complexity simplif iers 158 8.4 Case study introduction 159 8.5 Case study: Failure of corporate governance at UBS 159 8.6 References and further reading 168
9 Subsidiary Management 170
9.1 Complexity in subsidiary management 170 9.2 Complexity drivers 171 9.3 Complexity simplif iers 172 9.4 Case study introduction 177 9.5 Case study: Pharmagroup Int. and Fluvera: when
subsidiary governance means losingcompetitive ground 177
9.6 References and further reading 186
10 Project Management 188
10.1 Project management and complexity 18610.2 Complexity drivers 18910.3 Complexity simplif iers 19110.4 Case study introduction 19510.5 Case study: Global diesel engine project: where are
the simplif iers for the overwhelming complexity? 19510.6 References and further reading 202
Part IV Business Functions and Their Inherent
Complexities
Roadmap to Complexity in Business Functions andTheir Inherent Complexities 205
11 Marketing 207
11.1 Marketing in a complex, global environment 20711.2 Complexity drivers 20811.3 Complexity simplif iers 213
11.4 Case study introduction 21611.5 Case study: Disneyland Resort Paris:Mickey goes to Europe 216
11.6 References and further reading 231
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12 Supply Chain Management: The Backbone ofComplex, Global Acting Organizations 232
12.1 Why is supply chain management so complex? 23212.2 Complexity drivers 235
12.3 Complexity simplif iers 23812.4 Case study introduction 24212.5 Case study: Sustainable agriculture in
Nestls supply chain: how to get everybodyon board? 242
12.6 References and further reading 251
13 Management of IT and Technology 253
13.1 Introducing IT and technology 253
13.2 Complexity drivers 25413.3 Complexity simplif iers 25713.4 Case study introduction 26213.5 The ONE Platform project for Chai-Bank 26213.6 References and further reading 269
14 Human Resources Management 270
14.1 Introducing human capital management 27014.2 Complexity drivers 271
14.3 Complexity simplif iers 27314.4 Case study introduction 27814.5 Case study: War for management talent in China 27814.6 References and further reading 283
15 Innovation Management 285
15.1 What is innovation management? 28515.2 Complexity drivers 28615.3 Complexity simplif iers 291
15.4 Case study introduction 29515.5 Case study: Innovation at the LEGO Group 29515.6 References and further reading 308
Part V The People Factor and Managing Crises
Roadmap to Complexity in The People Factorand Managing Crises 313
16 Leadership, despite Complexity 315
16.1 The qualities of leading in a complex world 31516.2 Leadership framework 31516.3 Case study introduction 320
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16.4 Case study: Carnival in Rio: homicide or suicide? 32016.5 References and further reading 325
17 Complexity and Stakeholders 326
17.1 Complexities in managing stakeholders 32617.2 Complexity drivers 32617.3 Complexity simplif iers 32817.4 Case study introduction 33017.5 Case study: Transforming the global fishing industry:
the Marine Stewardship Council at full sail? 33117.6 References and further reading 344
18 Complexity in a Crisis 346
18.1 Looking below the surface 34618.2 Complexity drivers 34718.3 Complexity simplif iers 35118.4 Case study introduction 35518.5 Case study: Murphys law and the crisis at
Jurassic Oil Company 35518.6 References and further reading 362
Part VI Managing Complexity, In Summary
19 Managerial Implications 365
19.1 Lessons to be learned: get the details right but take aconsistent strategic approach 365
19.2 A great idea is just not enough 36519.3 The fish starts to smell bad from the head first 36719.4 The personal dimension: what it all means for you 368
References 369
Index 382
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IA Global Framework for
Managing Complexity
Part
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1Managing Complexityin Organizations:How to ApplyOckhams Razor
1.1 Introducing global complexity
If there was any further need to prove the interconnectedness of our glo-bal economy, the biggest financial and economic crisis since the GreatDepression has delivered it. Although global economic crises have certainlyoccurred before, the speed of the political and economic changes seen inrelation to the current crisis have been unprecedented; while in previous cri-ses a variety of boundaries (in the housing, banking and industry sectors, as
well as between nations, or at least regions) conf ined and limited the impactof actions and decisions to a defined space, todays so-called flat world1allowed for a rapid spread of economic difficulties across the globe, as wellas the concerted (half-voluntary and half-involuntary) reactions of businessleaders and policy-makers alike. In this f lat world, an ever-increasing numberof players not only have access to the global economy but also interact with,
and depend upon, one another. For multinational enterprises (MNEs) ingeneral, and managers and entrepreneurs of international organizations spe-cif ically, this makes the world increasingly complex, information ambiguousand often short-lived while previous causeeffect relationships have becomereciprocal at best. Certainly these developments have not created complexityfor institutions, but they have certainly heightened it. As such, it is not sur-prising that the application of complexity theory to management topics hasgreatly increased over the last few years.
At IMD, Europes top-ranked business school, this topic was a major ini-
tiative for the Thought Leadership Research Cluster, which led to variouspublications, cases and articles all based on the research and programme-participant feedback. It became clear throughout the discussions that managersand graduate students that had some work experience could easily relate to the
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concept of managerial complexity and apply its core elements (such as the driv-ers and simplifiers of complexity that will be discussed later) to their real-lifeissues and dilemmas.
Another observation was noted repeatedly, both in the discussions at IMD
and in our studies of a number of companies: Some businesses and manag-ers have become overwhelmed by this increased complexity, while others find
ways of identifying the relevant complexity drivers in their particular businessenvironments, manage them and, finally, outperform the market. What we alsodiscovered in our research, unfortunately, is that there is no panacea for thosedetermined to overcome complexity. Some managers and businesses had simplygot lucky, not really knowing what they had done right to contribute to theirsuccess. However, most successful business managers had worked rigorously tounderstand the factors shaping their business: they defined clear strategies with
the companys values in mind and that could be understood by everyone in thefirm, executed their must-win battles2and, when required, had taken the boldsteps necessary.
Most likely, this recipe for success sounds very familiar to you. You mayfeel that youve heard all of the relevant phrases any number of times expressions such as succeeding in globalizing economies, winning in aflattening world or the right strategies for the internationalization of yourcompany that continue to appear in business books, making them seem rel-evant, current and interesting. Its true that this book is no exception in thismatter, since we believe that a certain level of general learning is necessary,true and relevant for the reader. However, what we believe makes this bookboth distinct and useful in a similar way to our previous book, CorporateGovernance: How to Add Value3 is the documentation of the conceptualframeworks made relevant for managers and applied to different businessfunctions, as well as the successfully utilized case studies which are includedin each chapter. As such, all of the generic complexity drivers and simplif iersaddressed later in this introduction are discussed and elabourated upon inthe various book chapters and can be tested, discussed and applied in theiraccompanying case studies.
Hence, this book is particularly targeted to an audience interested in learn-ing about managing complexity within different business functions issuesthat are illustrated with relevant case studies such as graduate and ExecutiveMaster of Business Administration (EMBA) students, programme participantsat leading business schools and managers who read management books for theirown edification. Our intention is to help readers understand what it takes tocomprehend, and analyze, complexities in their respective f ields and then comeup with the necessary strategies to successfully manage the complexity.
1.2 Complexity in a flat world
Again, to reiterate the bottom line about complexity: Complexity cannot justbe made simple and it will not disappear in the near future.4As such, it is
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necessary to understand what complexity is, as well as what drives it. Knowingthat the concept of complexity is, in itself, complex and that there are differentclassifications of complexity is important.
Complexity is a frequently used, abstract and multidimensional term in
todays parlance. The term complexity originated in the field of natural sci-ences.5Due to the interdisciplinary investigation of the phenomenon, there isneither a universally accepted definition nor any prevalent opinion about whatconstitutes complexity.6
The interpretation of the phenomenon complexity tends to be rather sub-jective, making the process of consideration and the context of the examinedsystem crucial.7Particularly in the context of the contemplator, his or her pointof view and his or her perception are important and determine the understand-ing and definition of complexity.8Therefore, it is essential to thoroughly set the
parameters in which the term complexity is used.9
The following section pro-vides an overview about different approaches to define and characterize com-plexity in the context of business science.
There is a large spectrum of definitions and models for specifying complex-ity. In Anglo-Saxon regions the approaches to complexity are closely relatedto the works of Anthony Stafford Beer in 1959.10The origins of complexity-related organization and management research in the German-speaking worldcan be traced back to Hans Ulrichs St Gallener Schule and Werner KirschsMnchener Schule11in the late 1980s and early 1990s. They discussed ques-tions of how to cope with complexity, system-evolutionary management andcomplex adaptive systems.12
In line with Beers system-theoretic approach, E. F. Yatesdefined (in 1978)five attributes of complexity: Significant interaction, great number of parts,nonlinearity, broken symmetry and non-holonomic13constraints, from whichone or more have to interact to create a complex system.14
Other interpretations of complexity range from heterogeneity and diver-sity by Lawrence and Lorsch (1967), Thompson (1967) and Dess and Beard(1984), effect uncertainty by Milliken (1987), analyzability by Daft and Weick(1984) and usefulness of information for decision-making by Duncan (1972)
to geographic concentration and changes of market shares by Sharfman andDean (1991).15
Woodward (1993) defines complexity of system by three central dimensions:diversity, ambiguity and turbulence (DAT). He developed his DAT model inthree rounds of expert panel discussion.16
Backlund (2002) defines a complex organization as an organization whosebehaviour is complex, or whose inner structures are complex, or whose proc-esses are complex. He concretizes that an organizational structure is com-plex if one or several of the following characteristics can be found within the
organization:
The organization consists of many components or subsystems. These components or subsystems are miscellaneous.
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There are many relations and/or interactions between the components orsubsystems.
The relations are not symmetric. The arrangement of the components and/or subsystems is not symmetric.
The components, subsystems and relationships change over time.17
Vesterby (2008) argues that six basic quantities define the complexity oforganizations:18
The number of components.The number of different kinds of components.The number of elements of each kind.The number of relations.
The number of different relations. The number of each kind of relation.
Vesterby (2008) is in line with Keuper (2004), Grossmann (1992) and Schlange(1994) who define complexity by two dimensions: First, the structure of a sys-tem given by the elements and, second, the links and the change of these ele-ments and links in the course of time.19
During the last 16 years a general consensus in the literature that the numberand diversity of the elements and their relationships, as well as system-inherentdynamics, constitute complexity was established.20This different definition wereadvanced and improved upon by Lane et al. (2006) and Steger et al. (2007).
Recognizing the various classifications of complexity is a good place to start,although identifying them is not necessarily self-evident, especially given thestress and time pressure with which most executives have to cope and which canlead to unnecessary confusion. The basic complexity types are:
Apparent complexity: The situation appears complex but is really based ona simple pattern.Detail complexity: The situation is confusing due to the large number of
variables.Dynamic complexity: There are a large number of interconnectionsbetween the variables. The impacts of multi-causal relationships are not eas-ily discernible.Inherent complexity: The situation is extremely complicated. There is a greatdiversity of variables and a great number of interconnections that interact in arapidly changing environment. Interpretations are largely ambiguous.
It is the last complexity type inherent complexity that constitutes a leaders
decision-making landscape in an MNE and on which we want to focus thereaders attention. In the flat world one cannot avoid being connected to theglobal economy, no matter how high or low profile a managers or companysleadership position may be. Therefore, it is crucial to learn to function and
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succeed with inherent complexity. Whether companies (or divisions or teams)become entangled in too many problems, battling shifting markets, drowningin competing demands from within the company, governments, local commu-nities and employees, the leader is the one standing in the middle of the centrif-
ugal forces that pull away at resources and energy. His or her perceptions, andhow he or she chooses to act upon them, are critical to the way an organizationunderstands and manages complexity.
1.3 Drivers of complexity and how they createmanagerial dilemmas
The old paradigm of cause and effect deduction no longer holds true sinceresults or impacts have become increasingly unpredictable. Indeed, solving one
problem often leads to another one and variables are interlocked in a dance ofreciprocal causality. Soon management feels trapped in a vicious circle of forcesfrom which it seems impossible to disengage. The question is: what are the typi-cal dilemmas that complexity creates? From our research of the literature (seeabove), and our own experience, we have identified four fundamental dilem-mas that we believe to be the most relevant to a broad variety of industries:diversity, interdependence, ambiguity and fast flux (using the acronym DIAFcan be useful in remembering the complexity drivers). They will be described,in general, over the next pages and in more detail for every business function inthe respective chapters. It is important to note in advance that while all driversof complexity are often, by themselves, difficult to manage, they are all inter-related and almost always have to be understood and managed as a total entity,
which is what makes it so complex!
Diversity
Organizations, and especially MNEs, are confronted with a diverse set of chal-lenges from both within and without the organization. Diversity, defined as aplurality of elements, covers two major aspects of complexity: The number of
elements (multiplicity) and the dissimilarity of the elements (variety). Startingwith the different stakeholders, like employees, customers, suppliers, investors,competitors and other organizations with interests in the companys opera-tions (such as non-governmental organizations(NGOs) or regulators), man-agers need to find the balance between the different, and mostly opposing,interests of these different stakeholders (multiplicity) and between the samestakeholders groups, such as customers in different markets (variety). As such,managers have become responsible and accountable to a diversity of deliverables financial goals, quality goals, environmental goals, social goals, etc. Below (see
Table 1.1) are some examples of internal and external drivers of diversity inglobal organizations.
To deal with, and manage, multiplicity and variety is not at all trivial. Clearly,the ease of storing and analyzing information has helped to deal with the existing
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diversity but, at the same time, the vast amounts of information available to
managers has also increased both multiplicity and variety on the one hand,due to the availability of information and on the other, due to the possibility ofcreating new information through various forms of media (some of which willbe discussed in Chapter 13 on the management of IT and technology).
As such, the diversity must be constantly monitored and the strategy adaptedaccordingly in order not to miss opportunities or, in a worst-case scenario, befeatured on a breaking newscast, accused of wrongdoing (whether the allega-tions are true or not).
InterdependenceInterdependencies are caused by common access to scarce resources like capital,labour, technological or management know-how and, as a result, can createdilemmas.21Similarly, the supply-side competition (getting the resources fromsuppliers) and the demand-side (getting your products and services to the cus-tomers) leads to a one- or multi-sided dependency concerning amount, qualityand the timeliness of transferring intermediate and finished products. For exam-ple, if a competitor increases the production of a product that is also offered byanother company, competition for the resources necessary to make the product
increases (raw materials, workers, etc.). This can lead to price increases on thesupply side while at the same time, due to a limited customer demand, the priceson the demand side may also, simultaneously, be affected. Such interdependen-cies can also be observed internally, where two or more units are competingfor project resources and the decision to go ahead with one project affects theother departments as well. As such, actions in one unit, or area, have direct, orindirect, effects in one or more other units this can be understood as inter-dependence. However, cause and effect are often blurred and can be reciprocal.For managers (and all others alike) it is, therefore, often diff icult to understand
the results of certain actions or the causes of certain reactions. In many cases,managers need to be the firemen for unintended consequences. Nevertheless,the acknowledgement and cognition of interdependencies is the prerequisite forcoordination between the different units and stakeholders.
Table 1.1 Examples of Diversity
Diversity from within the organization Diversity from outside the organization
Human resource pool Stakeholders (investors, customers, suppliers)
Organizational structures RegulationsSystems and structures (IT, compensation, risk, etc.) Competitors
Key performance indicators (KPI) Cultures
Personal preferences
Leadership styles
Products
Business models
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Ambiguity
Ambiguity evolves from the necessity to cope with incomplete or incorrectinformation. The concept covers issues like the richness, predictability, accuracyand availability of information. Clearly, the availability and wealth of informa-
tion has increased even more lately, due to mobile communication. But, at thesame time, the accuracy and predictability of that information has decreased,making it increasingly more difficult to interpret and apply insights.
Ambiguity can be external when the available business environment infor-mation is unclear (which is generally the case) and it can also be internal, espe-cially when there is a lack of standardization (such as accounting standards).Both external and internal ambiguity is often created purposefully, usually forcompetitive and political reasons a competitor might release misleading dataor a colleague may attempt to steer clear of responsibility by avoiding giving
out any clear information. Ambiguity can arise, at the same time, due to a lackof standardization, as well as from different interests that can lead to biases,making the interpretation of information dependent on the person lookingat the data. Furthermore, ambiguity makes it difficult for managers to deter-mine cause-and-effect relationships. What, for example, are the value driversof your business? Are they price, service, image, relationships, adaptability,something totally different or all of these factors combined?
Fast flux
Long-range planning under rapidly changing conditions, especially underconditions that change or may change at any moment under the impact ofnew commodities and technologies, is like shooting at a target that is not onlyindistinct and hard to see but is moving, and moving jerkily at that. Doesthat sound familiar? Although it may sound au courant, Joseph Schumpeter
wrote it in 1942 in his seminal book Capitalism, Socialism and Democracy.22He called the dynamics in the economy creative destruction those that con-stantly destroy any equilibrium (an equilibrium that is never reached in the firstplace). As a result, managers need to be aware of the changes in dynamics thatoccur at all levels of the firm, internally and externally. Fast flux makes all of thesolutions in managing the previously described complexity drivers temporary,at best; often, todays solutions are outdated by tomorrow.
1.4 The way to manage complexity: Ockhams Razor
In all decisions about how to deal with an MNEs complexity regarding dif-ferent organizational and functional issues good judgement is always neces-sary. This is true because, ultimately, there is no available rule or model due
to the ambiguities that already exist. Managers must take great care whenanalyzing the situation due to the fact that almost all of their decisions arebiased; for example, by previous experiences, personal interests, stereotypesand the like.
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We need, nevertheless, to deal with complexity and not necessarily by apply-ing Ashbys Law of Requisite Variety that states that organizations must be ascomplex as their environments, because this can overwhelm them. Rather, we
want to look at a different philosopher (and friar) the Englishman William of
Ockham. In the 14th century, William of Ockham developed the law of parsi-mony which says that entities should not be multiplied unnecessarily or, simi-larly, that plurality should not be posited without necessity.23At the beginningof the 18th century, the Austrian physicist and philosopher Ernst Mach appliedOckhams Razor to economics by what he called the principle of economy:Scientists must use the simplest means of arriving at their results and excludeeverything not perceived by the senses.24Applied to managers dealing withcomplexity, this implies that they need to understand their complex internaland external environments and find ways to manage them by simplifying the
complexity to a manageable level, in order to reach their goals and targets. Or,in the words of Albert Einstein, Everything should be made as simple as pos-sible, but not simpler.25
In our research we have identified four key issues that should help manag-ers deal with complexity that are called complexity simplifiers: alignment ofcommon goals and behaviours; focus; decentralization; and standardization ofcore processes. Again, over the next pages, these simplif iers will be described ingeneral, while the remaining chapters analyze them in detail for the respectivefunctions.
Alignment of common goals and behaviours
Certainly you have read about the importance of a framework for prioritizinggoals or the concept of must-win battles they are mentioned in almost everybusiness book.26Again, this book is no exception. A set of goals and behav-iours, which is understandable and applicable to your business, helps not onlyto manage in simple and stable environments but more importantly, can serveas a kind of guiding star in complex and turbulent environments. Every man-ager in the company should be able to clearly understand what really drives the
business, what the fundamentals of the business profitability and sustainabilityare and why the company is in business in the f irst place. The values the busi-nesss shoulds and oughts help managers determine priorities, especially inbusiness dilemmas; they also help focus actions and give both external businesspartners and employees a feeling of consistency.
Those companies that are the most successful in dealing with complexitiesrarely have more than four core values values that are never compromised and
which support the business logic. Having more core values by trying to codifyand regulate all possibilities and eventualities is more like having a laundry list,
which leads to confusion or even chaos, especially in crisis situations. The clearlydefined and accepted set of core values, as well as fixed behavioural values,should allow for certain flexibility and, therefore, account for the diversity atthe periphery by empowering local adaptation, learning and experimentation.
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Focus
Everyone is probably tired of the buzzwords outsourcing and focusing oncore activities, which have been around for a long time. Nevertheless, theyare part of managing the complexity. As such, focus can be described as know
what you can do, know what you can learn and, most importantly, know whatyou cant do.
The key to focus, as we see it, is keeping and expanding, or shrinking, yourbusiness within a previously defined mission and vision (that is, where do you
want the company to be in the future and what do you want it to achieve?). If,for example, a new business opportunity fits into this framework and makessense from a business perspective, taking the risk is well worth considering.
Yet, if the situation is just a business opportunity that creates a nice, short-termrevenue stream but not one that you are able to fit into your overall corporate
vision, you might be well advised to stay clear and let it pass. Or, to use thewords of management guru Peter Drucker: If what looks like an opportunitydoes not advance the strategic goal of the institution, it is not an opportunity.It is a distraction.27
Focus can also be applied on the personal level (as long as Peters Plateauhas not been reached).28Employees and managers should focus their work onthe things they can learn and do, not on what they cannot do but may actuallydesire. Not every top-notch engineer can teach others to be excellent engineersor even good ones; often, the excellent engineer is, in reality, an inferior team
leader (also refer to Chapter 14 on human resources management).
Decentralization
Decentralization means that decision-making authority is delegated locallyor functionally and, as such, decentralization ideally empowers the managers
where the action takes place. At headquarters, the decisions should be takenconcerning the general strategy the direction in which the company is head-ing. The core values are also established at headquarters. Meanwhile, the execu-tion of the strategy and the decisions about how to execute them can, and often
should, be where the appropriate expertise lies; that should, in turn, increaseboth speed and flexibility. For example, a product manager in the headquartersof a global food group based in Switzerland will not interfere with the distribu-tion strategy in India. He might be informed and be able to veto the strategy (ifhe feels it violates the companys basic values); decisions, however, are usuallymade by those managers in closer proximity to the customers.
The right level of decentralization is dependent upon the industry and thelevel of diversification in the MNE. The higher the degree of diversificationand the more varied markets and customers are (as is the case, for example, in
the fast-moving consumer goods(FMCG)industry; less so in machinery orsteel), the more empowered local managers should be, working with a higherdegree of decentralization. One key element that makes decentralization pos-sible is standardization.
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Standardization of core processes
In order to standardize core processes, it is first important to understand thatcore processes are those processes that are common and used across the com-pany. They vary from business to business (also depending upon the degree of
diversif ication) and may include activities such as accounting, human resources(HR) or information technology (IT). IT itself is an important simplifier instandardizing core processes on which competitive advantages can be built(please note that IT can also be a cause for increased complexity if managedincorrectly). We will elaborate on some of the possibilities of using informationtechnology to standardize core processes (refer to Chapter 13 on the manage-ment of IT and technology). If taken too far, however, standardization can alsoimpede flexibility by creating unnecessary complexity. A small subsidiary of alarge MNE will not need the same decision processes or risk-management sys-
tems as its parent. Again, standardization needs to be done within boundariesand with good judgement. In general, standardized processes help to establishtransparency and accountability across the company two important elementsfor taking responsibility.
In this regard, we disagree again with Ashbys Law of Requisite Varietybecause we believe that a reduction of complexity, especially the internal com-plexity where no value is added, promises to be more successful. Nevertheless,even when core processes can be standardized, complexity will still have to bemanaged.
Embracing complexity
These four generic strategies represent the essence of how to simplify in situ-ations of pressing complexity. Common goals and behaviours, focus, decen-tralization and standardization of core processes represent not just promisingbut tested and proven ways to cope with complexity as we outline in this book.They work in both the short- and mid-term to deal with overwhelming diver-sity, interdependence, ambiguity and flux.
In taking a holistic approach, however, companies, managers and leaders are
strongly advised to enhance their capability to deal with complexity via additionalpathways, beyond the dominant way of simplification. Over time, two addi-tional directions of capability development should be consciously approached.On the one hand, key thinkers working in a corporate setting should embracecomplexity. Gone are the days where states of stability allowed for frictionlessdevelopment and implementation of strategies and projects. Management andleadership now morph into a constant management of challenges and crises. Theissue is not whether a crisis will come but when it does that it cannot be inter-preted as the impotence, or incompetence, of company executives. Rather, man-
agement should expect, anticipate and prepare for adversity (see also Chapter 18which deals with complexity in a corporate crisis). Flux is so tremendous thatsteering the ship in stormy waters will not only be challenging but will beoverwhelming to many. Recruiting and developing the types of managers and
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leaders that understand that crises are the norm, and not the exception, will bekey to future success. This, however, also has its consequences. Experts and highperformers (with integrity) are needed, not only to design and implement solu-tions but also to embrace the right attitudes about complexity. Furthermore,
there are implications beyond HR selection and development issues. When itcomes to organization, establishing fire-fighter and rapid-response teams, as
well as additional f inancial resource buffers, becomes essential. Thus, embrac-ing complexity refers to preparing mindsets and organizational set-ups proac-tively. It clearly includes building up capabilities to match complexity demandsover time and with the right mindset and organizational solutions.
Next to simplifying and embracing complexity, a final way of dealing withcomplexity is to consciously relocate it. There are two areas where this makesparticular sense. Relocating complexity can take place when there is above-
average customer value created, leading to tangible rents for companies. Themoment of truth is, thereby, the actual perceived value created, as always,through the eyes of the customer and not just the salesperson. This mustentail the willingness to pay more than would otherwise be the case. Onlyif it all leads to a better business case, can relocating complexity make sense.Of course, there are different business models that may unfold their full logiconly over time. Some companies have opted for conquering markets f irst, kill-ing off competition or building brands in the short term. In times of fast f lux,shortening lifecycles and black swans29entailing unforeseen events as we willoutline in this book one cannot count on certainty when unfolding a multi-
year business strategy. Next to relocating complexity to areas where customerscan experience a unique value, relocating complexity to parts of the organiza-tion where the latter has rare benefits leads to a compelling logic. This refersto gaining a unique information endowment, singular access to resources anda one-of-a-kind practice in certain f ields. Again, the financial bottom line willbe the jury.
In this book, the particular emphasis is on how to simplify this is wherewe see that there are substantial needs in MNEs today. The concepts above whether they are embracing and relocating or even intentionally increasing
complexity should be included in modern approaches to managing complexityfor actual, sustainable success in todays challenging environment.
1.5 Structure of the book
As previously mentioned, the complexity drivers and simplifiers just described aregeneric and are applicable to all functions, processes and organizational struc-tures and will be elaborated on in more detail in each of the books chapters.Following this introduction, A Global Framework for Managing Complexity
(Part I), the book is structured top-down (as outlined in Table 1.2). Part II,Managing the Complexity of Business Models and Strategy, includes chapterson the following topics: Business Models and Strategy, Complexity Drivers inSustainable Strategies, Complexity in Global Business Strategies, Managing Risk
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14
Table 1.2 Overview of Featured Case Studies
Part/topic Chapter Name of case study (and case number,where applicable)
Industry
Part II:Managing the
Complexity of
the Business
Models and
Strategy
2 BusinessModels and
Strategy
CANDO SE: Strategy Formation andImplementation in Complex Environments
(Authors: Alexander Schwandt, Christoph
Nedopil and Ulrich Steger)
Retail
3 Complexity
Drivers in
Sustainable
Strategies
Hindustan Lever: Leaping a Millennium
(Authors: Wolfgang Amann, Aileen Ionescu-
Somers and Ulrich Steger)
Abridged from Case Numbers: IMD 3-1073,
IMD-2-0122, IMD-2-0123, IMD-2-0124
Consumer
goods
4 Complexity
in GlobalBusiness
Strategies
Lufthansa AG: Going Global, but How to
Manage Complexity? (Authors: Simon Tywuschik, Christoph
Nedopil, Ulrich Steger)
Abridged from Case Number: IMD-3-1746
Airline
5 Managing Risk Jack Millers Challenging Risk Assessment
(Authors: Christoph Nedopil, Ulrich Steger)
Abridged from Case Number: IMD-3-1803
Retail
6 Partnerships
and Alliances
European Auditing and Financial Services,
Inc. (EAFS): Leaping Forward or Sliding
Backward? (Authors: Wolfgang Amann,
Jochen Brellochs, Ulrich Steger)
Case Number: IMD-3-1552
Accounting
and financial
services
Part III:
Complexity
and the
Organization
7 Complexity
and the
Organization
Rebuilding ABB
(Authors: Tatiana Zalan, Vladimir Pucik)
Case Number: IMD-3-1797
Equipment
8 Corporate
Governance
The Failure of Corporate Governance at
UBS
(Authors: Christoph Nedopil, Ulrich Steger)
Case Number: IMD-3-2003
Banking
9 Subsidiary
Management
Pharmamed and Fluvera: When Subsidiary
Management Gets out of Control
(Authors: Jochen Brellochs, Christoph
Nedopil, Ulrich Steger)
Case Number: Abridged from IMD-3-1706
Pharmaceutical
10 Project
Management
Global Diesel Engine Project: Where Are
the Simplifiers for the Overwhelming
Complexity?
(Authors: Christoph Nedopil, Wolfgang
Amann, Ulrich Steger)
Case Number: IMD-3-1742
Automotive
Part IV:
Business
Functions and
Their Inherent
Complexities
11 Marketing in
a Complex,
Global
Environment
Disneyland Resort Paris: Mickey Goes to
Europe
(Authors: Karsten Jonsen, Martha Maznevski)
Case Number: IMD-4-0280
Entertainment
continued
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HOW TO APPLY OCKHAMS RAZOR 15
Table 1.2 continued
Part/topic Chapter Name of case study (and case number,where applicable)
Industry
12 Supply ChainManagement:
The Backbone
of Complex,
Global-Acting
Organizations
Sustainable Agriculture in Nestls SupplyChain (Authors: Heike Leitschuh-Fecht,
Ulrich Steger and Aileen Ionescu-Somers)
Case Number: IMD-2-0106
Food
13 Management
of IT and
Technology
The ONE Platform Project for Chai-Bank
(Authors: Christoph Nedopil, Ulrich Steger)
Banking
14 Human
ResourcesManagement
The War for Management Talent in China
(Authors: Rebecca Chang, William Fischer)Case Number: IMD-3-1876
General
15 Innovation
Management
Innovation at the LEGO Group
(Authors: Rob Crawford, David Robertson)
Case Number: IMD-3-1978
Toys
Part V:
The People
Factor and
Managing
Crises
16 Leadership,
despite
Complexity
Carnival in Rio: Homicide or Suicide?
(Authors: Christoph Nedopil, Ulrich Steger)
Automotive
17 Complexity
and
Stakeholders
Transforming the Global Fishing Industry :
The Marine Stewardship Council at Full Sail
(Authors: Alexander Nick, Oliver Salzmann,Ulrich Steger, Aileen Ionescu-Somers)
Case Number: IMD-2-0083
NGO
18 Complexity in
a Crisis
Murphys Law and the Crisis at Jurassic Oil
Company
(Authors: Richard M. McEarlean Jr, Ulrich
Steger)
Case Number: IMD-2-0076
Oil
and Partnerships and Alliances. Part III, Complexity and the Organization looksat different organizational functions, such as the organization (co-authored with
Alexander Schwandt), corporate governance, subsidiary management and projectmanagement. Part IV, Business Functions and Their Inherent Complexitiesaddresses managing the complexity of different business functions, such as mar-keting and supply chain management: The Backbone of Complex, Global-ActingOrganizations (co-authored with Alexander Schwandt and Thomas Rappl),Management of IT and Technology, Human Resources Management (co-authored
with Karsten Jonsen) and Innovation Management (co-authored with SebastianGlende). Then, in Part V, The People Factor and Managing Crises, the chaptersare concerned with: Leadership, despite Complexity, Complexity and Stakeholdersand Complexity in a Crisis. Managing Complexity, In Summary, Part VI of thebook, reviews the authors findings and provides some personal insights into man-agerial implications, which the reader can take away and put to use.
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16 MANAGING COMPLEXITY IN ORGANIZATIONS
The book chapters are all structured in a similar pattern. First, there is ananalysis of what is driving the complexity, since we believe that it is importantto create a common understanding about what propels complexity (most likelythe reader will already have a sense that the respective business function is com-
plex). Next, is an explanation about how its possible to deal with the complex-ity by elaborating on different complexity simplifiers. Each chapter includes areal case study30that is introduced and discussed according to the previouslydescribed complexity drivers and simplifiers and provides ideas about how toanalyze the case in a management discussion or classroom setting. Table 1.2provides an overview of the case studies used throughout the book.
At this point, the reader may have already noted that the purpose of the bookis not to interpret the various structures, functions and process of an enterprisein detail. Numerous other books written by much more savvy writers, business-
men and academics with expertise in all of these topics have done that (we doprovide some ideas for further reading about every function at the end of eachchapter). Instead, we want to help the reader understand the complex relation-ships between the various structures, functions and processes. Most impor-tantly, we wish to provide the manager/leader with the tools to successfullymanage the complexity relevant to his or her work arena.
1.6 References and further reading
Appelhans, 1998; Ashmoset al., 2000; Backlund, 2002; Bandte, 2007; Beer,
1959; Bliss, 2000; Beinhocker, 1997; Boydand Fulk, 1996; Cannonand St JohnCaron, 2007; Chisumand Truvey, 2006; Cilliers, 1998; Daft and Weick, 1984;Dess and Beard, 1984; Drucker, 2001; Duncan, 1972; Encyclopedia Brittanica,2009; Flckiger and Rautenberg, 1995; Friedman, 2005; Grossmann, 1992;Heywood et al., 2007; Keuper, 2004; Killing, 2005; Kirsch, 1998; Kirsch andKnyphausen, 1991; Knyphausen-Aufse, 1995; Krieger, 2001; Lane et al., 2006;Lawrence and Lorsch, 1967; Milliken, 1987; Mintzberg, 1977; Moldoveanuet al., 2004; Peter and Hull, 1969; Richardson and Cilliers, 2001; Robertson,2004; Schlange, 1994; Schumpeter, 1942 (2008); Sharfman and Dean, 1991;
Steger and Amann, 2008; Steger et al., 2007; Stttgen, 1999; Taleb, 2008;Thompson, 1967; Ulrich, 1984; Ulrich and Probst, 1988; Vesterby, 2008;
Woodward, 1993; Yates, 1978.
Notes
1. Cf. Friedman, 2005. 2. K illing et al., 2005. 3. Steger et al., 2008. 4. Steger et al., 2007. 5. Cf. D. A. Robertson, 2004, p. 72. 6. Cf. Ibid.; M. Stttgen, 1999, p. 16 et seq.; D. Appelhans, 1998, p. 103; H. Bandte,
2007, p. 77; H. Mintzberg, 1977, p. 327; D. z. Knyphausen-Aufse, 1995, p. 327;D. P. Ashmos et al., 2000, p. 592.
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HOW TO APPLY OCKHAMS RAZOR 17
7. Cf. M. Flckiger and M. Rautenberg, 1995, p. 4. 8. D. z. Knyphausen-Aufse, 1995, p. 327. 9. Cf. M. Flckiger and M. Rautenberg, 1995, p. 4.10. Cf. S. Beer, 1959, p. 32 et seq.11. Cf. W. Kirsch and D. z. Knyphausen, 1991; H. Ulrich and G. J. B. Probst, 1988;
H. Ulrich, 1984.12. Cf. M. Stttgen, 1999, p. 13.13. A non-holonomic constraint is defined as constraint that cannot be described by
a function of influencing elements. Thus, the constraint not only depends on thedeterminants of a system and time but also on other non-system-inherent factors.
14. Cf. F. E. Yates, 1978, p. 201; K. A. Richardson and P. Cilliers, 2001, p. 8; V.Vesterby, 2008, p. 91.
15. Cf. B. Boyd and J. Fulk, 1996, p. 3; M. P. Sharfman and J. W. Dean, 1991,p. 700.
16. D. Woodward, 1993, p. 5.
17. Cf. A. Backlund, 2002, p. 3; P. Cilliers, 1998, p. 119 et seq.18. Cf. V. Vesterby, 2008, p. 91.19. Cf. F. Keuper, 2004, p. 16 et seq.; C. Grossmann, 1992, p. 17; L. E. Schlange,
1994, p. 2 et seq.20. Cf. H. Ulrich and G. J. B. Probst, 1988, p. 58; D. Appelhans, 1998, p. 102 et
seq.; W. Kirsch, 1998, p. 205; U. Steger et al., 2007, p. 5; C. Bliss, 2000, p. 34;D. Woodward, 1993, p. 7.
21. Dilemmas occur when there are two or more conflicting legitimate goals that can-not be simultaneously achieved with the given resources.
22. Schumpeter, 1942 (2008); Schumpeter in this quote was referring to financial
planning. When looking at the rest of his writing though, it seems pretty certainthat he had a similar view on long-range planning in general.
23. The Latin original is Pluralitas non est ponenda sine necessitate; Cf. EncyclopediaBritannica, 2009.
24. Cf. Chisum and Truvey, 2006.25. Cf. Krieger, 2001.26. Killing et al. (2005).27. Drucker, 2001.28. Peters Plateau is the level of personal incompetence that, according to the Peter
Principle, every employee in a hierarchy tends to reach at some point (Peter and
Hull, 1969).29. Cf. Taleb, 2008.30. The cases were all successfully tested in IMD executive education programmes
and selected according to their usefulness for the respective topic from the IMDcase database (also see www.ecch.com). All cases reflect real business situations,although some of the cases needed to be disguised since the topics were too criticaland sensitive to be published in their original form. Also, the case studies selectedfor the book vary in length and depth, to better reflect the complexity of thedifferent topics.
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382
Index
ABB 125, 126, 130, 170
AD after the disaster 23
added value 205, 233
Aircraf t on Ground (AOG) 237
Aldi 210
Alignment of Common Goals and
Behaviors complexity simplif ier 10, 119, 205Alliance of Independent Auditing and
Financial Services Firms (EAFS) 103
Amaras Law 257
Ambiguity complexity driver 5, 7, 9, 27, 41,
47, 62, 74, 80, 82, 100, 124, 147, 157, 185,
190, 202, 211, 236, 255, 277, 288, 328
Ashbys Law of Requisite Variety 10, 12, 85,
98, 126
Bandwagon effect 182, 257, 327
BC before the crisis 23, 30, 32, 79
bell curve 85, 289
below the line marketing
Birthday Present Syndrome, the 256
Black Swan Theory, the 13, 84, 87
burnout, burnout zone 68, 87
business level strategies 27
business models 105, 111, 112
C-levels (chiefs, such as CEO, COO, etc.) 103
channel length 209, 210
chief information off icer (CIO) 258
Cirque du Soleil 29
Cloud computing 261
Collaborative Planning, Forecasting and
Replenishment (CPFR) 241
collateralized debt obligations (CDOs) 163
collective intelligence 254
Common Goals and Behaviours complexitysimplif ier 10, 12, 119, 191, 205, 214, 258,
275, 313
Complexity Drivers: Diversity,
Interdependence, Ambiguity, Fast
Flux 130, 188, 313
Complexity Simplifiers: Alignment of
Common Goals and Behaviours, Focus,
Decentralization and Standardization of
Core Processes 10, 238, 313
complexity, market-driven 126, 152, 313
complexity, organization-driven 127, 151
complexity, types of: Apparent, Detail,Dynamic, Inherent 6
compound annual growth (CAGR) 196
contract manufacturing organizations
(CMOs) 92
contract research companies (CSOs) 91
core competencies 41, 92, 99, 121
core functions 260
core processes 10, 12
corporate social responsibility (CSR) 48, 49, 50
corporate sustainabil ity (CS) 22, 45
cost leadership 27, 38, 45
cost structure 70, 111, 262
costbenefit analyses 272
costbenefit ratio 210
cost-driven 28
cost-efficient 239
countercyclical 354
creative destruction 9, 21, 29
cross-border 58, 115
cross-business 195
cross-functional 175
cross-geographic 195
cross-shareholding 99
customer relationship management systems
(CRM) 253
cybernetics 98
DAT model (three central dimensions of
complexity, by Woodward in 1993) 5Decentralization 10, 11, 12, 49, 64, 76, 87,
96, 103, 128, 174, 193, 215, 260
Decentralization and Standardization of Core
Processes complexity simplif ier 10, 12
Deregulation 65, 133
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INDEX 383
DIAF acronym for complexity drivers of
Diversity, Interdependence, Ambiguity and
Fast Flux 205, 313, 316, 347Diversity complexity driver 5, 7, 24, 40, 59,
73, 80, 98, 112, 123, 147, 155, 171, 189,
202, 208
earnings before interest and taxes
(EBIT) 138, 141
easyJet 26, 66
effective strategy, keys to: appropriateness,
desirability and feasibility 25, 66
Electronic Data Interchange (EDI) 241
end products 288
enterprise resource planning (ERP) 253
Equator Principles 327, 344
European Medicines Evaluation Agency(EMEA) 92
European Union (EU) 92, 211
Fast Flux complexity driver 7, 9, 13, 28, 33,
47, 62, 75, 101, 125, 150, 168, 191, 205
Fast Moving Consumer Goods Industry
(FMCG) 236
fat tails 85, 86
firefighting pattern (seen in bureaucratic
organizations) 367
Five Forces (see alsoPorters Five Forces)24, 85
flag carriers 67
Focus complexity simplif ier 6, 11, 39, 84,
103, 129Food and Agriculture Organization, United
Nations (FAO) 332
Food and Drug Administration, United States
(FDA) 92, 182
Gardner Curve of Innovations 44
Goldfish Bowl, global 346global strategies 21, 58, 61
globalization 58, 62, 66
GlobeGround 99
Gmail 33, 99
governance archetypes, in IT: business monarchy,
IT monarchy, feudal, federal and anarchy 260
Grameen Bank Initiative 52
greenfield investments 170
greenwashing 47, 329
gross national product (GNP) 67, 329
heat maps (for risk) 87, 329
heavy tail 86
HERMES method 193
heterarchy 74, 75
Hindustan Levers (HLL) Project
Millennium 50
hub and spoke model 67, 73human capital 270
human resource management (HRM) 270
human resources (HR) 12, 82
information and communication technologies
(ICT) 291
information technology (IT) 12, 64, 79
interdependence complexity driver 8, 25,
41, 62, 82, 99, 124, 157, 209, 230
International Accounting Standards 107, 235
International Air Transport Association
(IATA) 65
International Monetary Fund (IMF) 280
International Organization forStandardization (ISO) 326
Interoperability 288
just-in-sequence 237, 239
just-in-time 349
Key Performance Indicator (KPI) 8, 87
key processes 174, 259
key resources 24, 259
knowledge management systems 259, 272
lapdogs 105, 272
lead users 289, 292
lead-time 236
leadership, six core competencies: TakingAuthority, Cooperat ion, Inner Strength,
Making Connections, Engaging Followers
and Authenticity 313, 315, 317
LEGO 295
life cycle 82, 99, 101, 290
line organization 193, 290
long tail 86, 290long-haul 73, 76
low cost 76, 211, 286
Lufthansa 65
mail order 35
Marine Stewardship Council (MSC) 331
market pull 287
market segmentation 208
market-driven 29, 126
mash-up 253
McKinseys 7-S Framework model 26media network business 219
merger and acquisitions (M&As) 81, 219
micro-credit 50
micro-finance 52
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384 INDEX
Mintzberg, Henry 84, 85
Moores Law 256
multidomestic strategies 122
multinational enterprise (MNE) 3, 6, 7, 9, 11, 13
multipoint pricing strategy 211
Must-Win Battle concept 4, 10, 87Mutually Aided Cooperative and Thrift
Societies (MACTs) 54
Nestl 145, 173
9/11 76, 84, 141
nine sigma events 86
no frills 26, 66
non-captive bank 265
non-core competencies 233
non-governmental organizat ion (NGO)
242, 314North American Free Trade Agreement
(NAFTA) 321
Ockham, Wil liam of 3, 5, 7, 9
Ockhams Razor 9, 10, 11
Open Innovation 287
Open Sky Agreement 75, 287
Organisation for Economic Co-operation and
Development (OECD) 247
organization-driven 127, 151
organization, line 193organization, project-based 193
organizational architecture 121
Organizational Commitment Questionnaire
(OCQ) 102
Organizational Conflict of Interest(OCI) 102
Organizational Culture Assessment
Questionnaire (OCAQ) 102
original equipment manufacturers
(OEMs) 139, 197
over-the-counter drugs (OTCs) 93
parsimony, law of 10, 92
pay for performance 76, 92
payback 51, 92
peer-to-peer networking 254
Peoples Republic of China (PRC) 28, 280
PESTEL (Political, Economic, Social,
Technological, Ecological and Legal
forces) 24, 123
Peter Principle 324, 368
Peters Plateau (associated with the PeterPrinciple) 11, 17
phenotype: the four supply chain management
phenotyes are Efficient, Accurate,
Responsive and Agile 201, 241
point of sale 213, 241
point-to-point connections 67, 75
Porters Five Forces 85, 123
power-law distr ibution 85, 86, 123
price elasticity of demand (PED) 212
PRINCE2-method 193principle of economy (from Ernst Mach) 10
PrincipleAgent theory 154
process-oriented 235
Project Management Institute (PMI) 193
project management off ice (PMO) 193
project-based organization 193
Ps, 4Ps concept in marketing: Product,
Pricing, Placement (including distribution),
Promotion 207
Ps, 7Ps in marketing: adding to the
4Ps People, Processes and PhysicalEvidence 207
pull strategy 210
pure plays 76
push strategy 210
quality 27
quality goals 7
quality insurance 114
quality issues 28
radio frequency identification (RFID) 255RAMSIS (in the automotive industry) 293
research and development (R&D) 62, 82, 99,
103, 129
retail concentration 209
return on assets (ROA) 60, 216return on capital employed (ROCE) 60
return on equity (ROE) 60
return on sales (ROS) 60
revenue model 24, 60
risk management 79, 85, 95
S-curve 289
Salamis, Battle of 30
sales and operations planning (S&OP) 240
SarbanesOxley Act 254
Schumpeter, Joseph A., author of the 1942
book, Capitalism, Socialismand Democracy;
coined the term creative destruction 9
SCM supply chain management 206, 232
secondment 275
semi-globalization 99
service-dominant perspective 207Shakti, project 50
Sky Team 65
standardization of core processes complexity
simplif ier 12, 56, 128, 150, 173
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INDEX 385
Star Alliance 65
startup 177
stock-out 233strategic information alignment (SIA) 254
strategy 19, 23
strengths, weaknesses, opportunities andthreats (SWOT) 25, 33
stringing pearls strategy 82
subprime crisis 86, 159
subsidiariesheadquarters, relationship 170
supersonic 291
supply chain management (SCM) 206, 232
Tata Motors 29, 287
Thanksgiving Turkey Trap 32, 287
Themistocles 31
There is No Alternative (TINA) Shellsscenarios about the future 83
think-tank 331
360-degree assessments (of capabilities)
276, 293
top-down 49, 119
top-team 156, 195
transnational strategies 61, 175
trendsetter 289
trouble-shouting 241
under-performance 241unique selling proposition (USP) 48, 241
United Nations (UN) 326
universal mobile telecommunications system
(UMTS) 257unsustainability 43
upmarket 39
US dollar (USD) 296
user-centric 291user-driven 292
user-driven innovation or user
integration 291, 292
V-Modell 193
value added 66, 75, 109
value adding information 29
value at risk (VaR) 193
value proposition 242, 270
value system 274
VDA labels 241
vertex 85, 241
War for Talent 270watchdogs 105, 336
web of firms versus another web pattern 98
wikis 253
Work Breakdown Structure (WBS) 193
work councils 24
World Commission on Environment and
Development (WCED) former name
for the World Council on Economic and
Developments Brundtland Commission 43
World Health Organization (WHO) 179
write-downs 159
Xerxes I of Persia, King 31
zero-failure 239Zuckerberg, Mark 293
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