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The discussions revolved around three main areas of interest: the cultural
determinants imposed by an interconnected world on business management,
strategic change in organizations and the confirmation of human capital
as the company's differential value.
In the first area of debate, particular emphasis was placed on the role
played in organization management by culture and values, information and
change processes in the global economic structure.
IESE Dean professor Carlos Cavallé drew a parallel in his presentation
between the Barcelona conference and the conference held in Phoenix (Arizona)
last year. Carlos Cavallé analyzed the roots of Western culture and
its impact on business development and the concept of strategy. In another
keynote session, Reuters president Peter Job discussed the role played by
information in globally operating companies and the methods such companies
can use to manage the complexities deriving from the information overload.
Norbert Walter, a senior economist at Deutsche Bank, expressed his views
on the impact that the Maastricht Treaty and the creation of a single European
currency will have on European and non-European companies' strategies.
New strategies
In the second area of debate, the implications of the new competitive environment
for corporate strategy were analyzed. The presentation given by Pedro Luis
Uriarte, BBV's CEO and creator of the so called "1000 days restructuring
process", in particular, aroused considerable interest. For his part,
Kees J. Storm, president of Aegon, one of the world's largest insurance
companies, explained the successes achieved by his company's decentralization
policy, stressing particularly the increase in profitability.
On a strategic and organizational level, some of the processes imposed
by the new global context were analyzed. In their presentation, Tim Bell
and Frank Marrs, director and partner responsible for insurance services
at KPMG Peat Marwick, together with Ira Solomon and Howard Thomas from the
University of Illinois, discussed new procedures for refocusing audit and
control towards an approach that was closer to real-life corporate situations.
Kevin Coyne, director of McKinsey & Co's Initiative in Strategy Theory,
explained that the traditional framework for strategy development was no
longer suitable for understanding a profoundly complex, changing and often
uncertain environment. The limitations of traditional models of strategy
have stimulated spectacular growth of new approaches in the last 20 years.
The problem, Coyne said, was that the new theories that were emerging were
as limited as those that they sought to replace. In short, he concluded,
it was necessary to devise more sophisticated and comprehensive conceptual
frameworks that could be used in a broad diversity of specific situations.
More personal organizations
Finally, the third level of discussion centered on the importance of people
and their involvement in organizations. Professors Christopher Bartlett,
from Harvard Business School, and Sumantra Ghoshal, from the London Business
School, described the new emerging corporate model, using the cases of companies
such as 3M and ABB.
On this third level, the growing importance of human capital in the organization
was confirmed. This is a classic issue that is starting to be rediscovered
as it becomes increasingly clear that the only competitive advantage that
cannot be imitated by competitors is the knowledge and ideas of the people
working in the organization.
A very significant conclusion can be drawn from this. Companies are facing
a changing world in which the complex interconnections between the various
events taking place around the company make it impossible for a single manager
- or even a group of senior managers - to adequately process and integrate
this information into strategy formulation and implementation. On the contrary,
companies should seek to decentralize decision-making, give more autonomy
over decisions and thin out the middle layers of the hierarchy so as to
give more room for the initiative and creativity of people at the lower
levels in the organization.
The old management style must be superseded by one which under-stands
that the people who are closest to concrete, daily reality often have specific
information on products, markets and production methods that are unlikely
to be accessible by or transmittable to higher management levels.
With the right incentives and organizational structures, these people
could contribute to the company's strategy the knowledge they have already
acquired or are in the process of acquiring. They also have a potential
for creativity that the old management system never allowed them to manifest.
This implies a major challenge for organizations: greater responsibility
and autonomy in decision-making, together with a necessary increase in the
diversity within organizations, pose a major challenge for executives in
any organization. Such a context requires managers to develop greater delegating,
coordinating and orga-nizing skills. But, above all, it calls for a change
of attitude in the way companies are run, with parameters such as mutual
trust and leadership replacing the old bureaucratic-authoritarian structures.
Quite an agenda for competing in an interconnected world! |
Professor Jordi Canals and Peter Job, President of Reuters
Kees J. Storm, Executive Board Member of Aegon and Carlos
Cavallé, Dean of IESE
Artur Mas, Minister for the Economy in the Catalan Goverment
and professor Joan Enric Ricart, co-ordinator of the 17th SMS Conference
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