1. Current Trends in Strategic Management The New Economy New Directions in Strategic Thinking Redesigning the Organization New Modes of Leadership OUTLIN E

2. The Turbulent 21 st Century Collapse of New Economy Dot.com bubble bursts TMT recession Collapse of New Economy Dot.com bubble bursts TMT recession Corporate Scandals Enron, WorldCom, Parmalat Jack Welch’s retirement package Corporate Scandals Enron, WorldCom, Parmalat Jack Welch’s retirement package War Invasion of Afghanistan & Iraq Civil was in Congo, Liberia, Sudan War Invasion of Afghanistan & Iraq Civil was in Congo, Liberia, Sudan Age of Disbelief Age of Disbelief The Curse of Terrorism Sept. 11, 2001 Suicide bombings in Israel, Iraq, Saudi Arabia, Turkey, Afghanistan The Curse of Terrorism Sept. 11, 2001 Suicide bombings in Israel, Iraq, Saudi Arabia, Turkey, Afghanistan Fear of Disease SARS, Mad Cow, Bird Flu Fear of Disease SARS, Mad Cow, Bird Flu Unstable Currencies US$ declines by >50% against Euro 2002-04 Unstable Currencies US$ declines by >50% against Euro 2002-04 Decline of Multilateralism Collapse of Doha round Trade wars between US, EU, China Weakening of UN International competition intensifies China as Workshop of the World Outsourcing to LDCs

3. Source: Bureau of Labor Statistics US Labor Productivity: Changes in Non-Farm Output per Hour Worked from Year ago Quarter, 1995-2003 US Labor Productivity: Changes in Non-Farm Output per Hour Worked from Year ago Quarter, 1995-2003

4. Return on Equity of US Manufacturing Corporations, 1990-2003 Return on Equity of US Manufacturing Corporations, 1990-2003 Source: US Bureau of the Census

5. The value of mergers and acquisitions worldwide The value of mergers and acquisitions worldwide Source: Thomson Financial Securities Data

6. Key Trends of the 1990s: Quest for shareholder value Adjusting to increased turbulence & more intense competition Influential Strategy Concepts: Modern financial analysis —shareholder value, economic profit, option theory Core competences and intangible assets Dynamically competitive markets —“hypercompetition” Competitive advantage through alliances, networks, and standards Major Themes of Business Strategy: Cost cutting—squeezing overhead, business process re- engineering, increasing labor productivity Outsourcing/refocusing/ divestment Performance management and incentive alignment Directions in Strategic Management Practice—Trends of the 1990s

7. Future Sources of Profit Limits of downsizing/cost cutting Where are future sources of profit? Technology Continued advances in ICT Forces Shaping Company Strategies 2001-04 Concepts & Theories Resources & capabilities as basis for competitive advantage Knowledge-based theory of the firm Option theory Complexity theory The Business Environment Uncertainty Stalling of economic liberalization Intense competition Demands of society Social & environmental responsibility Ethics & fairness Quest for meaning

8. STRATEGY Multiple competitive advantages/multiple capabilities Innovation / New Product Development / New Business Development Alliances & networks MANAGEMENT SYSTEMS Knowledge management (incl. best-practice transfer) Redesigning incentive systems Rethinking performance management Capturing human creativity Emerging Developments ORGANIZATION STRUCTURE Reconciling flexibility & integration Modular structures Multidimensional structures Informal organization & self-organization

9. The Need to Redesign Organizations THE PASTTHE FUTURE Emphasis on controlEmphasis on co-ordination Decisions located centrally Decisions located where relevant knowledge exists Simple structures, unified line of command Multidimensional structures Diffused authority, but clear responsibilities Single performance goal Multiple performance goals Organization by designSelf organization

10. Emerging Organizational Forms Process-based Organizing around business processes organizations Organizing around corporate processes - entrepreneurial process - competence building process - renewal process From unitary to parallel Separate coordination structures for structuresdifferent processes. E.g. 3M’s product development structure; separate structures for TQM and change management Project-based organizationE.g. engineering cos., consulting firms, also manufacturing cos. e.g. Oticon Network and virtual E.g. electronics in Silicon Valley, clothing organization and packaging equipment in Italy Organizing for capabilityShifting emphasis of organization development design from control to coordination

11. THE REQUIRED COMPETENCIES OF BUSINESS LEADERS business literacy creativity cross-cultural effectiveness empathy flexibility proactivity problem-solving relation-building teamwork vision THE LEADERSHIP NEEDS OF ORGANIZATIONS The ability to: build confidence build enthusiasm cooperate deliver results form networks influence others use information New Models of Leadership: What Competencies do Top Managers Need?