Is the mega-merger falling out of fashion?
One key characteristic of economic and financial booms seems to be a rising enthusiasm for giant mergers and takeovers. We saw this in the Dot.com boom of 2000 (which ended with the ‘Worst Deal in History’ - the merger that created AOL Time Warner). The more recent boom that came to a crashing halt in 2008 featured more record-breaking takeovers, many of which were associated with the boom in private equity finance and nearly all of which were justified in the name of economies of scale.
So the collapse of the Prudential’s attempt to buy AIA of Asia for more than £24bn is an important event. Is big no longer beautiful?
read more...»Airlines founder plans a shareholder revolt
The airline industry has hardly been out of the news recently – whether the story is BA trying to gain legal decisions to outlaw the strikes being called by Unite, the continuing effects of the ash cloud, or major mergers between airlines like Continental and United in the US or BA and Iberia and BA in Europe. Another story over the weekend concerned the difficulty that can arise when the entrepreneurial founder of a business becomes a board member who has to share control with others.
read more...»Profit seeking paradoxes in an oblique world
John Kay gave a stimulating talk at the London School of Economics last week, one of a series of appearances to showcase his long-awaited new book Obliquity. A large audience were treated to a deeply thoughtful and perceptive discussion of the nature of obliquity and how it affects our personal lives and the decisions and strategies taken by businesses and other organisations in a complex and uncertain world.
read more...»Ireland asks for your help on St Patrick’s Day
It’s hard to take this one seriously, but perhaps you should give it a try. The Irish president, Mary McAleese, has launched a website asking for your views and ideas that could be developed into new businesses with the aim of creating jobs and “bringing back the feel-good factor” to the struggling country.
Maybe it’s worth a few minutes of business studies time to consider both the nature of Ireland’s problems and to take a strategic view of possible ways forwards. And there is €100,000 for the best ideas…..
Video case study - New Balance quality in a successful UK factory
This has to be one of the best short business videos ever produced by the BBC. Absolutely perfect for some great business studies lessons…
read more...»Reflections on the ‘Worst Deal in History’ – and the Best
If, like my students, you have been doing some reflections on the big business stories of the past decade (a good place to start is the Guardian’s Business Review of the Decade) you might have looked at the mega $164bn merger that created AOL Time Warner in 2000. What seemed like a good idea turned out to be a massive miscalculation. Now the man behind the deal has appeared on CNBC to offer his humble apologies for the lost billions. Well worth checking out, and the interesting series of slides on the Top 10 Best (and Worst) Mergers of All Time. What’s the difference between a merger that boosts profits and performance as compared to one that destroys value?
read more...»Tips from the Top
A great video resource from the BBC in which several famous bosses give their view of the key ingredients for business success. Great way to stimulate a quick classroom discussion.
Can Tesco Save the World? Or another example of ‘Greenwash’?
Environmentalism probably emerged as the most discussed political topic of the noughties, topping world poverty, recession, transport and terrorism. Firms and politicians have scrambled to respond with statements and policies that latch on to this trend. How much is serious and valid, how much is hype, and how much is ‘greenwash’? This week’s Panorama was great: it tackled the question head on.
read more...»Q&A - Explain the role of corporate objectives in business strategy
Corporate strategies are essentially about what the business wants to achieve. Business strategy is the gameplan for how those corporate objectives are to be achieved.
read more...»Q&A - What are business objectives?
Objectives play a key role in business management. They provide the measurable statements of what a business wants to achieve, from the top (corporate) level of the firm right down to the detailed functional activities of the business.
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