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“The Living Company” by Arie De Geus Harvard Business Review (March 1997) Presented By: Takbir Ahmed Biswas Lynn Blankenstein Lexi Gray Norawit (Travis)

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Presentation on theme: "“The Living Company” by Arie De Geus Harvard Business Review (March 1997) Presented By: Takbir Ahmed Biswas Lynn Blankenstein Lexi Gray Norawit (Travis)"— Presentation transcript:

1 “The Living Company” by Arie De Geus Harvard Business Review (March 1997) Presented By: Takbir Ahmed Biswas Lynn Blankenstein Lexi Gray Norawit (Travis) Virunkitkoson Yixiong (Kyle) Zou

2 What is a corporation? Defined as: “a large company or group of companies, recognized by law as a single unit.” ~Oxford Dictionary

3 Described as: An organization that is viewed as a “community of human beings that is in business – any business – to stay alive.” ~De Geus What is a living company?

4 Life Expectancy of a corporation Average life span is less than 20 years Examples that show that a corporation can be in business for as long as several hundred years

5 Why is there such a discrepancy? “Living companies produce goods and services to earn their keep in the same way that individuals have jobs in order to live” ~De Geus

6 Living Companies Very good at managing for change in the marketplace Understand: –Who they are –How they fit into the world –The value of new ideas and people

7 Conservatism in Financing Why do they survive so long? Concern about “Safety” of Capital Avoidance of unnecessary expenses Belief in the Value of money in Old fashioned way Tendency of saving extra cash as back-up to avoid investors

8 Sensitivity to the World Around Them Adaptable to changes Forecasting of future Comparison of Past, Present and Future Reaction to “Whatever was going on”.

9 Awareness of Their Identity Employees felt like Parts of a Whole “Fleet of Ships” Managers in the Living Companies were chosen mostly from within The First Priority: To maintain the company’s health

10 Tolerance of New Ideas The Manager must: The Manager must: –Understand the values and traditions of the company –Keep the company alive –Let people grow within the community –Place commitment to people before assets

11 Valuing People, Not Assets 27 long lived companies changed business at least once Scuttle assets to survive Assets and Profits are necessary, but not purpose of life

12 Valuing People, Not Assets (2) Companies with different model Scuttle people to survive Purpose: to make profits for shareholders If in trouble, get rid of people

13 Loosening Steering and Control Managers must: Heed opinions and practices of other people Give people space to develop ideas Take risks with people

14 Loosening Steering and Control (2) Metaphor of Rose Gardening Prune roses: hard or long ? Hard: have the biggest roses in neighbourhood in June (high risk) Long: have roses in every June

15 Why learning is essential Circumstances change Living companies also change Organizing for Learning

16 Conditions of organizational learning Numerous individuals Some of whom are innovative System supports Organizing for Learning (2)

17 How living organizations learn How living organizations learn Birds that flock learn faster Developing programs Organizing for Learning (3)

18 The Human Element It is a choice Focus on going from one generation to the next Level of involvement and a sense of belonging are important

19 Puddles or Rivers? A company must focus on smooth transitions between generations People need to enter and exit the company with the right understanding Need to be able to let go and understand ‘fit’

20 Passing the Baton Strict exit rules Stewardship is important as one person exits and another comes in Important to understand the nature of the company

21 Conclusion Mobilizing the disposable intelligence High levels of tolerance are important Important to brain-rich and asset-rich companies Corporate death causes many to feel a loss

22 Questions ?


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