ans - ppt - in 13 major success studies. It was found that...

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Are “Great” Companies Just Lucky? By Nikhil Bhimani Raj Chauhan
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Studies show that the so called “Great companies” are not exactly special Are these companies actually great ? Or does luck just favor them? We can credibly claim that a company is remarkable only when system variation alone cannot account for its result.
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To understand how some firms get lucky because of system variation this study was undertaken .All the companies traded on the U.S exchange between 1996 -2006 were ranked. In deciles (0-9). Using that frequency to estimate the probability that an unexceptional firm would move from one deciles to another simply because of systemic variation, the simulations that gave us a picture of how firms might do if they differed only in their luck. Finally, when actual results were compared with simulated results, it helped us to determine which firms had delivered performance so unlikely that it was probably due to something remarkable about them. Using this method, the evaluated 287 allegedly high-performing companies
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Unformatted text preview: in 13 major success studies. It was found that only about one in four of those firms was likely to be remarkable; the rest were indistinguishable from mediocre firms catching lucky breaks. By our method, even in the study with the best hit rate, only slightly more than half the high performers had profiles that were credibly attributable to something special about the firms. In short, what qualifies as remarkable performance is anything but self-evident. No one reads “The Tortoise and the Hare” and,faced with a chance to bet on such a race, chooses the tortoise. Rather, people take from this tale the idea that there is merit in perseverance while arrogance can lead to a downfall Similarly, success studies should be treated not as how-to manuals but as sources of inspiration and fuel for introspection. Their value is not in what you read in them but what you read into them....
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This note was uploaded on 09/21/2011 for the course ECON 101 taught by Professor Flah during the Spring '10 term at Punjab Engineering College.

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ans - ppt - in 13 major success studies. It was found that...

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