Strategic Management in Action 3000 words

Strategic Management in Action (SMiA)

Note to the candidates:

• Please note that ALL questions in these case studies are not relevant for your assignment.

• Please find below the relevant questions and the case studies for your assignment. • For more details please refer the module guide and practice with workshop manual. • It is important to refer to key textbook as well - Thompson, J.L (2014) Strategic

Management: Awareness and change (7th edn) Cengage: Learning

PATCH 1: Strategy Development Processes Case study– Sole Rebels

Assignment Question: You are required to provide a 1000 word answer which assesses what approach to strategy development Sole Rebels adopted in order to reach international markets. You are expected to draw upon and use the theory to support and justify your response.

Relevant text book chapter: Chapter 08

PATCH 2: Organising for Success Case study - Bata Shoes

Assignment Question: You are required to provide a 1000 word answer, drawing upon the theory covered in the module, to critique what caused the development of an international strategy.

Relevant text book chapter: Chapter 11

PATCH 3: Leadership and Strategic Change Case study – The UK Health Service between 2006 and 2009

Assignment Question: You are required to provide a 1000 word answer in relation to the theory covered in the modules and discuss what you consider to be the key challenges in leading and championing change in a large public sector organisation such as the NHS.

Relevant text book chapter: Chapter 15

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Patch 1 - Sole Rebels Case study

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Case 8.1 Sole Rebels Africa

S ole Rebels is a story about innovation and how aninnovative young African company has found opportunities to reach international markets.

The company is based in Addis Ababa, Ethiopia. Ethiopia is heavily dependent on foreign aid; and whilst micro businesses such as this are not at all unusual, successfully accessing foreign markets is.

Sole Rebels was founded in 2005 by a local entrepreneur, a young lady accountant, Bethlehem Alemu, who was in her mid 20s when she saw an opportunity to create jobs for local people. She saw a business opportunity in something people, particularly soldiers, had been doing for some while. She started making shoes largely, or even entirely, from recycled materials. She cut up old truck tyres to make the soles and initially used old camouflage jackets and trousers for the tops. Because she wanted something more fashionable, she found some people who would use traditional spinning methods to produce hard-wearing cloth (in attractive designs) for the uppers. It so happened these suppliers lived in a leprosy area, and so again there was a strong social element underlying the decision. Local strips of leather are also used.

Many of her shoes are causal – sandals, boat shoes, loafers and flip-flops. For one design she reinforces the toecaps (on the outside) with inner tube rubber. She is constantly trawling the Internet to find ideas for new designs and improving her range – which boasts names such as Night Rider, Pure Love, New Deal, Class Act, Gruuv Thong and Urban Runner.

The shoes can be bought online from Amazon, as well as direct from the business itself, and through physical outlets in the USA, Canada and Australia as well as in Africa. Amazon buys bulk orders from her and expects quick delivery after placing orders. Again Bethlehem made good use of Internet opportunities – but she also bombarded potential distributors with emails and samples. Retailers include Whole Foods (because of the materials used) and Urban Outfitters. The African Growth and Opportunity Act (AGOA) is really useful as it allows businesses in certain African countries (Ethiopia is one) to import into the USA tariff- free. An Ethiopian government line of credit also helps with the cash flow for large orders.

The business is successful; it provides jobs; it used discarded materials that are notoriously difficult to dispose of or recycle. Production is based in a local workshop but Sole Rebels remains in large part a family-run business. There are around 45 full-time staff and they produce some 500 pairs of shoes a day. Daily

wages range from £1.50 for a trainee to £7.00 for a skilled worker. In a global context this is competitively low; in Ethiopian terms it is relatively generous. Customers can scan in the outline of their sole and have shoes hand cut to size. Retail prices range from £21.00 to £40.00. Bethlehem sees her shoes as the ‘Timberland or Skechers of Africa’ and always seeks to offer uniquely designed products that have international appeal at affordable prices. She does not want Sole Rebels to look too African. She wants people to buy because they are good shoes that they will enjoy wearing and not because by buying from her they are helping Ethiopia’s poor people.

Questions

1 Evaluate Sole Rebels against the framework in Figure 8.2.

2 Can you thinks of additional ways in which Sole Rebels might seek to innovate?

Bethlehem Tilahun Alemu, founder and CEO of Sole Rebels footwear

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264 CHAPTER 8 CREATING AND FORMULATING STRATEGY: ALTERNATIVES, EVALUATION AND CHOICE

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Patch 2 - Bata Shoes

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Case 12.4 Bata Shoes Eur

A lthough not a familiar name in the UK, Bata is oneof the world’s leading footwear retailers. The company remains family owned and with headquarters in Lausanne, Switzerland. It manufactures and retails all round the world – there is production in 25 different countries and retailing in 50. Approximately 1 million customers buy Bata shoes every day, and in its life the company has sold 14 billion pairs. The company seeks to stay ahead by innovation in both products and processes. Its shoes are designed for comfort as well as fashion and design. This market position has been brought about because Bata has been able to deal with a variety of environmental shocks.

The company was founded in 1894 in Zlin, which today is in the Czech Republic but then was classified as the Austro-Hungarian Empire. Thomas Bata was a descendant of a family of cobblers who had been shoemakers for centuries. Real growth started during World War I when the company received orders for military boots, which allowed it to move from a small family concern to mass production. Bata has been described as the ‘Henry Ford’ of Eastern Europe. He was always concerned about his employees and built houses and recreation facilities for them. When Thomas died in a plane crash in 1932 there were 16 500 employees.

His half-brother, Jan, took over the business and he set about expanding throughout Europe – previously the company had been concentrated in the East – and adding new products such as toys and tyres. After 10 years of Jan’s leadership there would be over 100 000 employees and various overseas subsidiaries.

But Germany occupied Czechoslovakia in 1939 and Jan Bata was forced to leave the country. He was a recognized supporter of the Czech in exile. The Czech factories were handed over to a distant family member and Thomas’ grandson, another Thomas, was left controlling all the overseas subsidiaries from a new base in Toronto, Canada. It is reported that during World War II Jan Bata helped many Czech and Slovak Jews to escape the Nazi occupation, finding them work in the various factories.

When the war was finished there were ownership disputes over the Czech factories and eventually they were nationalized in 1945. Jan Bata was put on trial (in absentia) by the new Communist government and convicted; it was clear he would be unable to return. His conviction would eventually be quashed in 2007.

Quite soon the family name disappeared from the business in Czechoslovakia, which was renamed Svit.

But the business, known worldwide as Bata Shoe Company, has continued to expand. Private label ranges were added to the basic name in the 1970s: Bubblegummers, Power, North Star and Marie Claire. In the 1980s the retail formats were changed to reflect current trends; there were now city stores, large format stores and speciality sports stores. As was happening with many shoe manufacturers, production in developed countries largely ceased during the 1990s. After the fall of the communists in Czechoslovakia in 1989, named the so-called ‘Velvet Revolutions’, Thomas Bata, the new CEO, was invited to invest in the ailing Svit business, but it could not be returned to its original ownership. Instead he bought a number of stores and also established partnership agreements with businesses in Russia, Poland, Croatia and Slovenia. The original Czech company was simply unable to compete in a new, free market and it went bankrupt in 2000. There is, however, a shoe museum in Zlin and the Bata family still have a small shoe trading business. The actual business may have gone full circle but the company name is revered in the Czech Republic for what it has achieved.

Questions

1 How well do you think Bata dealt with the chal- lenges and threats it faced?

2 Do you think the enforced trigger caused the development of an international strategy that otherwise might not have happened?

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12.4 MARKET ENTRY STRATEGIES 427

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Case 15.3 The UK National Health Service between 2006 and 2009 UK

Implementing change

In 2006 retired corporate CEO and television presenter

(Sir) Gerry Robinson spent a period of time with the NHS Trust hospital in Rotherham. The engagement was

filmed for the BBC and Robinson’s self-imposed task was to reduce waiting lists and waiting times.

In his endeavours he engagedwith the Chief Executive

and consultants and anaesthetists, hospital managers, theatre sisters and ward nurses in different parts of the

hospital. Some individuals were ‘up for change’ whilst others were clearly feeling threatened by the thought of

change. There was no real culture of change, and supporters and opponents could be found in any staff

group, and were, in fact, actually found in all of them. Essentially Robinson was trying to enable the

entrepreneurs within the hospital to be given a chance. It was clear to Robinson that he was not looking for

a ‘one-size-fits-all’ answer – what might work was going

to be different in different sections. It was, therefore, all about empowerment and local initiatives – and then about sharing the outcomes so others could learn.

Interestingly, the CEO was an NHS-outsider but

needed to be encouraged by Robinson to ‘walk the floors’, to lead and to speak routinely with the staff. His interventions, when they happened, clearly affected staff confidence to try out changes in their own areas.

The following is a list of different initiatives (suggested and championed by staff in various roles) that were tried, many of which, but not all, worked favourably:

l one additional patient on every consultant list for every (half-day) clinic – this improved waiting lists for children quite markedly

l switching from two (half-day but specified target hours) lists a day to one all-day list

l parallel theatre lists where two consultants and their teams could work adjacently and use capacity more effectively – moving from one procedure to another when and where it made sense

l using theatres routinely on a Friday afternoon rather than only exceptionally

l pooling patients amongst a qualified team – which was tried in endoscopy, but wouldn’t be appropriate everywhere

l anaesthetists providing recovery services so that surgeons were able to move on more quickly.

15.1 STRATEGIC CHANGE: DYNAMICS, MANAGEMENT, GROWTH, FORCES, TYPES AND MODES 525

Patch 3 - The UK Health Service

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The follow-up in 2007

Gerry Robinson returned to Rotherham General Hospital

roughly a year after his first visit. He confirmed there had been changes, largely driven by the CEO taking

more ownership. But that did not mean everything was working

effectively. He commented that it seemed to take staff

forever to reach a point where they are doing what had been staring them in the face when they started talking

and deliberating. The structure and systems continued to inhibit.

The following points came out of the programme:

l The NHS remains driven by government policy and initiatives and some of these are questionable. The Rotherham Primary Care Trust was investing huge amounts to build a convenient new drop-in centre in the town centre (a Polyclinic) where people could turn up for quick-and-easy treatments – but the impact would be lower utilization of some hospital resources.

l Governments appear to understand policy better than they do front-line (local) management. The issue is not so much changing policy but making existing policies work on the ground.

l There need to be champions of change and also a willingness to make it happen. There is a need for ‘enablers’ to influence the culture.

l Small successes ‘every day’ can be more influential than occasional big impacts. Linked to this, it is perhaps better to focus on making things work within existing structures rather than changing the structure.

l There will continue to be tensions and clashes between staff groups. Who runs the hospital, for example – managers, consultants or the CEO? But these can be resolved – sometimes using humour. In the first programme one frustrated manager had asked of the consultants – How old are they behaving today? In response the consultants had acquired T-shirts with ‘Delinquent’ printed on the front and ‘I am acting ? years old today’ on the back. In this context it is worth remembering that creativity and innovation prosper in a culture of fun and irreverence, even though the work is serious and taken seriously.

The situation in 2009

Robinsonwrote an article for theDaily Telegraph inMarch 2009, where he suggested that crises in patient care (continue to) stem from ‘excessive bureaucracy and poor

quality leadership’. In recent years, he said, the number of people in management positions had soared and

exceeded the number of consultants tending to the sick.

Their salaries had also risen substantially. The outcome: more managers but not better management. Robinson

argued for better ‘checks and balances’ and monitoring procedures. Lines of responsibility were ineffective. The

complexity was slowing down decision-making and hiding accountability.

He cited an abundance of paper checks (box ticking to

document everything) but questioned whether this was ever followed up. One telling comment was that Chief

Executives are apparently so tied up managing their managers they don’t manage the medical staff, who

then go their own way. One conclusion is that the whole system of what is centralized and what is decentralized

needs revisiting. ‘Until we learn to manage the NHS more effectively

we will never have the health service we pay for – and

deserve.’

Reference for last section

Robinson, G. (2009) ‘Cure the NHS with far fewer

managers’, Daily Telegraph, 28 March.

Questions

1 What do you think are the main lessons to be learned from this case?

2 Will it ever be easy to engineer change in an institution like the NHS?

3 Does the saying ‘two steps forward, one step back’ explain the very best that could be hoped for?

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526 CHAPTER 15 LEADING CHANGE

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