Monthly Archives: December 2016

The value of business to society and the obligations of businessmen: Starting a New Year

Business people must be proud. When operating wisely and ethically, they bring value not only to themselves, their people but also to the society at large.

The call for businesses to do better, to deliver results and to improve stems not only from the self-interest of businessmen but also from the way markets are naturally structured to function to serve the general needs of society and as a result, create value.

As the New Year is approaching, it provides a good opportunity to think anew our businesses: What we deliver and how? Which customers are we addressing? Is our business growing or is it in a stalemate? What are our responsibilities to ourselves and our people? Are we considering responsibilities to other people too?

Responsible business people must think wider and honor the role that society has entrusted business to play in creating mutual long term benefits.

A business, above all, is an instrument of economic performance, but we must not forget that it has in its ranks people and operates in a local/global society, and therefore it is also a part and an organ of society. It is its own goal to grow and expand and become better that, when achieved, also creates value and prospects for society. Thus a businessman’s responsibility for success cannot be confined to himself alone but must extend to society as well.

This societal responsibility of the business becomes clearer and more easily understood during business failures and bankruptcies where the business owners/managers are obligated with none or limited responsibilities while society is asked to foot the bill for the business failure.

So be it good or bad times, a businessman must also see himself as an agent to whom society has entrusted resources [...]

By |December 29th, 2016|Uncategorized|0 Comments|

An answer to an article in the Economist that Management theory is dying

No, management theory is not dying.

“Management theory is becoming a compendium of dead ideas”, an article in the Economist Schumpeter asserts and proceeds to argue that globalization and competition have more or less become obsolete and replaced as management pillars, the former by nationalistic elements while the latter by mergers and consolidations. See complete article at

I think that not only the article’s arguments fall short of convincing but left unanswered they will propagate among managers a pessimism unjustified.

Nationalism can never normally win Globalization:

Globalization is an economic force that has its origins in the optimization of the markets and as such will not cease to exist and exert its pressures on any walled countries.

Competition will not give its place to Mergers:

Mergers and acquisitions have not been all that successful. Their failures and the resulting economic loss is for most companies an avoidance lesson rather than a new principle of management theory to take the place of competition. Furthermore, mergers are a phenomenon in a few large countries and therefore cannot be generalized as a basic idea to cover the numerous other smaller countries that live without them.

Finally, we must not forget that a business is an economic organ of society and its nature, therefore, cannot be devoid of any new societal happenings and trends.

By |December 18th, 2016|Uncategorized|0 Comments|

The biggest driver for a Business is its Management

Management is not a thing that by virtue of having it a company can rest assured that it has fulfilled that part of its business obligation. We want to argue that management makes a difference as a force of differentiation and thus it is very necessary for companies to work on their management and improve it as much as they can.

But let’s first examine what drives our businesses? Answer:

(a)    The capital investment we made at the start

(b)   Customer demand for what we have designed to produce

(c)    Our people whom we employed and

(d)   Management

Capital investment is mostly a one-off action over a long period of time. Customer demand for a specific product is again not an everyday affair. And our employees after hiring become rather permanent. Only Management is a constant daily function with a dynamic responsibility to produce out of these resources the maximum possible output. How? By Management assuming responsibilities, among others, to:

Set Objectives
Organise people and work
Motivate workers and managers alike
Design a strategic course
Work for now and the future
Constantly communicate the purpose and aims of the company
Create a harmonious culture of integration and synergy
Improve its people by training and coaching

Daily, Management has to organise, to engage and mobilise, to have and place the right people at the job, to create the right positive environment, to show direction, to align the workforce with the company purpose and vision.

The way things are done and the way people work is an important responsibility of management. And in that lies Management uniqueness and power for in a company its people are its main resource and their best utilisation is a most sought-after driver.

Thus it may be said that Management drives [...]

By |December 16th, 2016|Uncategorized|0 Comments|

Use strategy maps to strategize your business internationalization

When contemplating to expand to a foreign country, businesses must decide on what will be their strategy, and that strategy might be the same or different from their local one depending on the targeted customer needs and the competitor offerings in that foreign country.

Business strategy for internationalization sits on top of the business strategy. Without the latter, any internationalization strategy will be baseless. And this because

The Strategy for internationalization answers to choices which country, which configuration and costs, which mode of entry, which scale, which time, which entry vehicle, whereas the second,
The Strategy, tells how you will play the game to win in the new market by supplying answers to choices like who will be the customer, what will be the product or service and how will the game be played to exploit the company’s Competitive Advantage.

To aid strategy formation, one very important tool is the strategy maps which are prepared in the context of competitive analysis and are shown in the figure of the post.

Their purpose is to help the company make a choice of how to position itself in the market it aims to operate. They show the positioning of the competitors and challenge the company to find a differentiated position by which to appeal to its targeted customers.

Such a differentiated position should not be the ultimate concluding choice at least not before passing it through two essential considerations:

Is the new position attractive to the target customers?
Is the new position feasible for the company to attain?

And it is only after answering yes to both the above questions, that the differentiated position becomes a strategic choice for the company.

(1) The above is a follow up to our post on “business [...]

By |December 7th, 2016|Uncategorized|0 Comments|

Can business internationalization sustain the threat of black clouds?

Internationalization and Globalization are long words with long life-changing consequences for businesses and societies alike. They are without doubt a force of trade and equally so a force of bringing people together, and by creating for them a mutual interest they contribute to world peace and stability.

They stem from a global way of life that the web and travel have catalyzed in many ways.

But they are also primarily the result of the concept of free trade seen in the wider context of a borderless planet. The most able business by quality and costs is a winner and supplies its products/services to all interested customers on earth. And the customers get the benefits that wouldn’t have if confined to buy from locals only.

By their nature, they favor the big, but the small also have their chance to wider markets if they can offer a differentiated product that might be configured with ingenuity on their local advantages.

Surely what propelled globalization some years ago, it may be different today.

The first blow to globalization came some three years ago from the political measures and sanctions on Crimea. Then recently and very noticeably, we saw Brexit, and in the US the election of a president on the promise of closing the borders and moving out of existing international treaties.

The narrow concept of nationalism is a blow to globalization. Nationalistic flames, especially in Europe, have been fanned by an unprecedented refugee movement from the war-torn countries of the Middle East and its nearby regions. There is the danger that the nationalistic flame will burn brighter in other countries too toppling established political order in favor of extreme nationalistic movements.

I am not aware of any calculations as to the economic loss, [...]

By |December 4th, 2016|Uncategorized|0 Comments|