Corporate Self Analysis

Corporate Self-Analysis Corporate Self-Analysis is the task of examining your own company – its cultural characteristics and practices, its financial and managerial strengths and weaknesses, and its strategic direction– before developing plans for the possible use of alliances in pursuit of company goals. It is an unfamiliar, even uncomfortable, process for many firms. As a result, many companies bypass this activity, which should be undertaken at the beginning of the alliance-planning process and then find later that the mistakes can be traced back to inadequate understanding of their own organizational motives and behaviors that are rewarded or sanctioned within their organization.

Corporate Self-Analysis Corporate Self-Analysis process focuses on the elements of your company’s profile. 1. The Culture Clusters 2. The Financial Picture 3. The Business Definition and SWOT Analysis 4. The Possible Strategic Direction 5. The Senior Executive Input 6. Selection of Alliance Strategy

The Culture Cluster A corporate or organizational culture is a set of coping mechanisms or adaptation skills, that members of the culture use both within and outside their corporate environment. Corporate culture manifests itself in a variety of corporate habit patterns, often seen in the form of rituals, ceremonies, etc.  Ex: Many companies have sports teams and different departments compete against each other. OR Friday causal dress day is another company cultural norm. The Culture Cluster can de divided into 10 separate areas that should be examined.

1.Decision making and problem solving This covers all the ways decisions are made in an organization, including those that reflect management and board receptivity to new ideas, esp. the alliance concept. This is one of the most common areas for culture clash in alliances. One decision-making style is the “shoot from the hip” (To make a decision or execute an action in the spur of the moment), haphazard decision making style of some Start-up companies.  Ex: Retail Clothing Business However, the companies may run into a brick wall when everyone in the organization defers to the Warrior manager and makes no decision without the Warrior’s approval.

1.Decision making and problem solving An important aspect of decision making is conflict resolution. The issue here is the facilitation and solution-finding process, which generally involves finding compromises.  Is an issue send to a more senior executive to be solved and if not, how are the problems solved. It is essential to understand the decision-making process of the organization.

2. Authority –Delegation and Control; Reporting Methods Decision-making analysis will naturally raise issues concerning authority. “How is authority delegated and what management controls are in place, including reporting responsibilities?” This is interrelated to the decision-making process.

3. Work Behavior This topic comprises of dress, management of work space, arrival and departure norms and whether a company is task or process- oriented. Ex: IBM corporate uniform of well-tailored suit, white shirt, and tie, and formal clean-cut looks, also seen in the conservative dress of many large consulting and law firms. One Start-up company involved in speech recognition was actually more productive at night than during daylight hours. Other organizations use time cards to regulate and record the comings and goings of all employees.

4. Compensation and Incentives Most organizations have standard policies and procedures regarding compensation and incentives. The problems occurs when an alliance might call for a company to find a different way of looking at compensation. A clear statement of understanding of the corporate culture regarding this issue in the inception stages of relationship planning would have averted the bad feelings and diminishment of trust that later were very difficult to repair.

5. Leadership and Mentoring Styles Leadership styles can vary from autocratic (exerting total control) to totally delegative (exerting little or no control). The amount of leader control is inversely proportional to the amount of group participation. (Clearly, at the autocratic level there is no group participation). Ex: in certain parts of India a good business leader will be one who makes decisions without asking for the input of his subordinates.

Mentoring at Apple Mentoring programs is an important part of many companies management style. Apple computer is one of them. The company chooses individuals steeped in organizational culture to groom others who are less familiar with the cultures. Mentoring provides political and substantive internal access for fast-track junior executives.

6. Communication—Oral; Written; Nonverbal The way people present information to partner both written down and the act itself that causes the delay, shelves the project, and avoids risk Be prepared and give the project seriously Miscommunications can occur on many levels when you combine cultures, beliefs, values, etc. Understanding the differences in communication styles helps to lessen the tension

7. Level of Secrecy The started-up companies are generally being most open. Family or closely privately held companies are often secretive, no matter what stage they are in This law of secretive applies to revealing corporate goals, knowing who the actual decision makers are, etc. It is critical to understand how the openness/secrecy issue is handle in your company in order to develop a process that will be able to work in an alliance Communicate that knowledge to your partner Create a “fast-track” communication mechanism and environment that effects a micro cultural change. - It means the alliance communications are now open within a certain organizational group - The secretive style is avoided in order to facilitate an alliance between later stage.

8. Attitude Toward Time and Milestone Individual, companies, and countries, differ enormously in their conceptions of time “Now,” “Soon,” and “On time” have a corporate cultural meaning Milestone has to do with the time-related expectations that placed within and around alliance projects.

9. Ethics and Values The goal is to understand the code under which you are operating and your partner. Each of us has an individual code of ethics. Example: “bribery” Western cultures consider it as an unethical, but other cultures consider a normal and cost of doing business.

10. Personal Versus Corporate Goals The final aspect of the Culture Cluster is of particular importance in family owned company In an alliance with family-owned company, the other partner needs to understand the family way of doing things Example: Family Ties Down Under

III. The Business Definition and SWOT Analysis The Business Definition There are two goals for the business definition  To define existing business.  To assess future potential. SWOT analysis The way to do SWOT analysis  List the major characteristics of a company which contains  A description of the company  Products and services  Market  Competition  Physical  Human  Financial resources

 Outline both strong and weak areas.  Include product, service, and market evaluation in SWOT information.  Prepare questions and thoughtful answers. “Has the product been tested and proved in the home market?” OR “How has the product/service been doing in the United States?”.

Example: The Impetuous Texans The Texas company  10 years in the laser instrumentation business  the leader in a highly specialized medical field. During R&D  discovered a new sensing security  decided to sell in Europe first Problem  unfamiliar with the Europe marketplace Decision  alliance with the German company Partnership selection process  focused on identification of candidates, setting up meetings, market analysis, and distribution network  not focus on strategies and alliance goals. Actions  sent the representatives with prototype to German Outcome  German company declined the distribution opportunity Reason  product was not acceptable and failed in almost every test.

Major failure factor: The product was prematurity and had inadequate quality control and testing. Lack of cultural understanding.  The U.S. company was the Hockeystick stage. The CEO thought that his company’s success in the laser instrumentation area would carry over the consumer products business,  the German company was Mature. Though they admired the Texan company’s success in the laser market, that was not their industry and so it had little real impact on them. Overconfident and ignored the possibility of a hostile technical evaluation. Allocated not enough human and capital into the project. Result: The U.S. company lost credibility, time, bargaining power, and money.

Damage control: The product will be subjected to further R&D and sent along with technical expert to German. Reworking long-term goals by  Understanding culture cluster, business definition, financial picture, and SWOT analysis  Rethinking strategic partnership strategy At the end, they negotiated to sell the technology to the Germans, who saw a strategic fit between the U.S. technology and their existing product.

Organization responsibility SWOT analysis should include sources of strength for membership on the alliance team. In the planning stages, the team should include representatives from Corporate planning group Operations CEO R&D Marketing Finance This is because cross-functionality is very important to broad-based responsibility for the alliance. You also have to concern about human resources. And here is the corporate life cycle and HR that will tend to be used in connection with alliances in each stage of the cycle. Moreover, HR also determines the effectiveness of the capital investment. In all alliance, the resource that must be available and allocated is “patient money” meaning that to get benefits from alliance, you must be patient and have a careful investment by focusing on HR of talent, attention, and realistic awareness of costs.

IV. The Possible Strategic Direction Large company  The strategic information gathering and SWOT analysis is repeated in each division In one company  Centralized sharing of information and planning did not take place

V. Golf Course and Designer Alliances Golf Course Alliance  2 CEOs meet on the golf course and agrees to do alliances together Designer Alliance  Is a relationship that is announced with great fanfare and press coverage and hailed as a great new step toward changing an entire industry

VI. Selection of Alliance Strategy Develop a mission statement  An important of writing a mission statement is that it serves as a reference point to assess your company’s success in the alliance  Have to define your success criteria because it will assist you in looking clearly at the opportunity within your corporate guidelines  Develop a formal, explicit, written statement of your objectives and your success criteria for the alliance