bmgt364.9.13.2010

bmgt364.9.13.2010 - Management and Organization Theory...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
© 2005 Robert H. Smith School of Business University of Maryland Management and Organization Theory Environment and Competitive Advantage Why Do Good Companies Go Bad?
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
© 2005 Robert H. Smith School of Business University of Maryland How Good Companies Emerge in the First Place Good companies successfully emerge in the first place by being at the right place and at the right time. Many companies start opportunistically. ...by accident, not by some great design where people chart out their futures. When the general and specific environment changes and the company is either unable or unwilling to change its culture, processes, systems and structure, it is likely to fail or get transformed. Leadership is all about anticipating and adjusting to external contexts and events.
Background image of page 2
© 2005 Robert H. Smith School of Business University of Maryland Causes of Decline Lack of stakeholder orientation Too focused on the interests of one or two stakeholders at the expenses of the others Losing the emotional connection with its stakeholders is a signal that a company is heading towards decline Role of management is to ensure that a firm continues to satisfy the functional, as well as psychological, needs of all its primary (customers, employees, investors) and secondary (community, suppliers) stakeholders over time.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
© 2005 Robert H. Smith School of Business University of Maryland Failure: Often the result of major changes in the environment 1. Customers    Companies fail to keep up with the changes  their customers are going through.   2. Technology  - technology advances force a change in  direction or add complexities.   3. Competition    non-traditional competitor have the potential  to rapidly change the rules of the game.   4. Globalization  - expansion into new markets increases  complexity, industries globalize   5. Investors    certain industries and companies are no longer  popular with investors, sentiment toward a company changes   6. Regulation  - the government deregulates, e.g., aviation, or  adds regulations, e.g., securities industries
Background image of page 4
© 2005 Robert H. Smith School of Business University of Maryland Why Good Companies Go Bad Why Good Companies Go Bad Active Inertia: Companies get stuck in their tried and-true activities, even in the face of dramatic shifts in the environment. Instead of digging themselves out of the hole, they dig themselves in deeper. Companies are victims of their own success: they’ve been so successful, they assume they’ve found the winning formulas. But these same formulas become rigid and no longer work when the market changes significantly. Before asking, “What should we do?” and rushing into action, managers should ask, “What hinders us?” They should look deeply at the assumptions they make about their business and industry. And they should pay particular attention to hallmarks of active inertia: strategic frames becoming blinders,
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 31

bmgt364.9.13.2010 - Management and Organization Theory...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online