The "Write" Life: 2014

Monday, September 8, 2014

Strategic Corporate Social Responsibility Case Presentation - The Corporation

An in-class case analysis presentation of 'The Corporation', focusing on Marks&Spencer and Primark's respective approaches to Corporate Social Responsibility, conducted during the Corporate Governance, Business Ethics & Strategic CSR module at the Willamette University's Atkinson Graduate School of Management MBA Program.

Corporate Governance Case Presentation - Cobra vs Commerzbank

An in-class presentation of the 'Cobra versus Commerzbank' case analysis, conducted during the Corporate Governance, Business Ethics & Strategic CSR module at the Willamette University's Atkinson Graduate School of Management MBA Program.

Friday, August 29, 2014

A New Dawn For The Three Lions

Any ardent supporter of the England national football team would drool over a first-team squad like this:

GK: David James

RB: Gary Neville

CB: John Terry

CB: Rio Ferdinand

LB: Jamie Carragher

CM: Steven Gerrad

CM: Frank Lampard

CDM: Paul Scholes

RW: David Beckham

LW: Joe Cole

ST: Wayne Rooney

Add to this, a bench which included the likes of Ashley Cole, Sol Campbell, Michael Owen, Nicky Butt and Joey Barton among other household names, all at their prime, and you have what was one of the most formidable sides to have ever played the beautiful game. Sure, I've taken the occasional casting liberty and made slight positional alterations to create this star studded formation, but isn't that how it should’ve been? I mean, Paul Scholes and Jamie Carragher still had several good years left when they prematurely called it quits on their international careers, as was evident from their stellar performances for United and Liverpool respectively. Anyway, this was the exact side which started most of England’s games in Euro 2004 – Not too far off is it?

But despite their seemingly illustrious demeanor which could intimidate almost any opposing manager or player if they so much as glanced at England’s team sheet, this divinely assembled squad is astonishingly remembered for all the wrong reasons and is often associated with all that could have been. Be it the frequent clash of big egos resulting in poor team spirit, bad coaching decisions like deploying Paul Scholes in a wide position, or the failed Lampard-Gerrad midfield partnership, excuses such as these began to characterize the squad and the end result was simple failure to deliver on the pitch.

The side’s glorious celebrity status didn't help either, nor did the fact that they were constantly juxtaposed, if not directly compared, to the highly acclaimed world cup winning England side of 1966. The fact that this was England’s solitary world cup trophy throughout their glamorous history and that this was the side widely touted to end the wait for a second, piled even more pressure onto the talented lot. Put plainly, the weight of expectation coupled with poor man management wore down and eventually broke this great team.

But quite contrary to popular belief, the future doesn't look all that bleak for the three lions – at least on paper, given the oodles of talented young protégés churned up by English clubs each year. However, if the past has taught us anything, it is never to blindly trust what we see on paper as it can be deceptive. For this very reason, I decided to take a stab at analyzing the flaws of previous England sides to;

Devise an appropriate formation
Attempt to select the potentially best from the rest
Predict potential success, failure or the same old homespun mediocrity

With all that said, I think England’s next generation squad should look somewhat like this:

Barring Joe Hart, who should captain this side, everyone in the squad will be below 25 years of age with few occasional exceptions. Keepers tend to peak later in their footballing careers and Hart’s quality, experience, and leadership on the pitch will be much needed. The purpose is to start afresh with a nascent goal to rid the team of unnecessary heads. I would love to see England consider a squad like this for a change and play a simple 4-2-3-1 formation. It certainly won’t bring instant success and Euro 2016 will have to be sacrificed for the purpose of implementing it properly, but England don’t have much to lose either – It’s not like they are poised to win the next major competition, so it makes sense that they rather build for Russia 2018. To that effect, here is the squad I would place my money on:

NO.	PLAYER	POSITION	CLUB
1	Joe Hart ( C )	GK	Manchester City F.C
2	Eric Dier	RB	Tottenham Hotspur F.C.
3	Calum Chambers	CB	Arsenal F.C.
4	Phil Jones	CB	Manchester United F.C.
5	Luke Shaw	LB	Manchester United F.C.
6	Adam Lallana	RW	Liverpool F.C.
7	Raheem Sterling	LW	Liverpool F.C.
8	Jordan Henderson	CDM	Liverpool F.C.
9	Jack Wilshere	CM	Arsenal F.C.
10	Ross Barkeley	CAM	Everton F.C.
11	Daniel Sturridge ( VC )	ST	Liverpool F.C.
SUBSTITUTES
1	Danny Rose	LB	Tottenham Hotspur F.C.
2	Jack Rodwell	CDM	Sunderland A.F.C.
3	Jon Flanagan	RB	Liverpool F.C.
4	Chris Smalling	CB/RB	Manchester United F.C.
5	John Stones	CB	Everton F.C.
6	Kieran Gibbs	LB	Arsenal F.C.
7	Harry Kane	ST/FW	Tottenham Hotspur F.C.
8	Nathaniel Chalobah	CDM	Chelsea F.C.
9	Connor Wickham	CDM/CB	Sunderland
10	Jack Butland	GK	Stoke City F.C.
11	Alex Oxlade-Chamberlain	RW/LW	Arsenal F.C.
PROSPECTIVE CALL-UPS
12	Tyler Blackett	CB/LB	Manchester United F.C.
13	Jordan Rhodes	ST	Blackburn Rovers F.C.
14	Michael Keane	CB	Manchester United F.C.
15	Nathan Redmond	LW/RW	Norwich City F.C.
16	Zeki Fryers	LB	Tottenham Hotspur F.C.
17	Theo Walcott	RW/ST	Arsenal F.C.

If your wondering why Tottenham pair, Kyle Walker and Andros Townsend, do not appear in the team-sheet, its probably because they have not been very convincing for England despite being given several opportunities to prove their salt. But, I wouldn't rule them out entirely and certainly think that they should be a part of the fray, as should Chelsea's Patrick Bamford, Southampton's James Ward-Prowse and Manchester United's Nick Powell. The fact is there are too many 'potential starlets' today, while attaining even a glimmer of success depends on the ability to weed out misfits.

This is a system built around the concepts of youth, a fresh start and an even playing field – Basically, a player’s brand or celebrity status will have absolutely no bearing whatsoever on his chances to feature in the national side. Since long, the English FA has stuck to a rigid age-old mentality that required the nation’s best players to perform exceptionally and become big stars at club level before being given the opportunity to earn their first cap. While I believe this to be a fairly sound approach, I feet that England wait a little too long before providing first-team opportunities to very talented youth players, which isn't always the best thing to do. It’s almost as if a player isn't worthy to play for the country if he doesn't start for his club every week and this is not always true – We have seen numerous shining examples of players who performed brilliantly for their countries but weren't all that great for their clubs and vice versa, namely Miroslav Klose and Thierry Henry respectively.

Returning to the England squad from that minor digression, I think it’s best if we reverse the system discussed above - Instead of having promising players become stars first and then earn a place in the team, why not give them the opportunity to play for their nation from a younger age and become stars along the way? This way, they will be able to keep their egos in check, or won’t even have any since they are only eager kids who are enthused to play the game and just grateful for the opportunity to represent their country at such a young age. They will learn to love and respect the national team, before some of them go on to earn millions in club football. More importantly, they won’t have to fixate on earning their first cap for their country and then try too hard to perform in a platonically assembled team consisting of peers who have been hits at their respective clubs, but have never played together before. As clichéd as it may sound, real football management is seldom like FIFA 14, although it would be great if it were! You cannot simply put together a bunch of fairly senior proven star players and expect them to deliver – They have to be nurtured, preferably since their early playing days, in order to adapt to each other’s styles. In this process, a manager will realize that some of his favored selections didn't really work out, while others will surprise and that is why a team is built, not assembled.

If his work at Tottenham and Portsmouth are any testament, having a strict and experienced disciplinarian like Harry Redknapp to manage such a young, volatile side will be a must. Moreover, Redknapp seems like a man on a mission; someone who actually cares about England and with a robust plan to bring about a positive change in paradigm, or at least his interviews tend to suggest that.

I think the only way English football can move forward is if they let go of their past – At present, there are way too many dead-weights and under-performers included in the team based on meaningless reputations, which are weighing the side down. With this mentality, it is difficult to expect the requisite and sought after radical change - There will always be weak links in the team as every senior player with a shiny profile will want to hold onto his place, irrespective of his actual contribution on the pitch. If it were a professional business setting, the term ‘accountability’ might resoundingly come to mind.

With that said, I believe that everything that has been done thus far, hasn't been all and entirely detrimental – There were definitely some good points to ponder on. Taking a cue from their performance at this world cup, for instance, I enjoyed watching England attack with lightening pace in a team that was technically built around Liverpool’s Raheem Sterling. It may not have been as evident to the naked eye, but he was given a playmaker’s role and was clearly the fulcrum of the squad. It showed that the talented youngster can operate well as the cog in the side, is adept at handling high pressure situations without crumbling and flourishes in a free role where he can pull all the strings.

One thing that perspicuously did not work in England’s favor was the much hyped mix of youth and experience which they possessed. Personally, I consider this ideology to be overrated and almost never used in the correct context - It makes sense only when you have a well-functioning unit that has played together for a sufficient period of time, like the Germans. It does not blatantly mean that you pick five experienced players and six promising youngsters at random. Despite his impressive club record and his legions of dedicated fans worldwide, Wayne Rooney has not been a hit for England - In fact, none of the persisting superstars of the golden generation have been able to fire on all cylinders, even with major changes to the squad. It is important that players like Steven Gerrad and Wayne Rooney understand this harsh reality and reckon that it is time to move on. It’s the decent thing to do and the only way things have a chance to change for the better. There is no point in retaining ample experience just for the sake of it, and if experienced players aren't contributing equally to the cause, they must be subjected to the same fate as their colleagues. Competency, merit and performance must be given equal, if not more, importance than superfluous 'years of service'.

Following in the light of this concept, the system in question will need certain players of yesteryear and even the generation, to simply move on. Especially the big misfiring names vis-à-vis Gerrad, Rooney, Glen Johnson, and Ashley Young. Frank Lampard has already retired although he should’ve done so earlier. If these players consecutively announce their retirements, others of a similar mold will soon follow suit until the entire bandwagon of expendables is cleared out - An old fashioned downsizing of sorts, if you will. Even fairly decent performers like Gary Cahill should seriously consider their place or be willing to rotate, in an effort to conform to the objectives of the long-term project – One in which the country comes first and no player is bigger than the team.

Sadly, this is the only way the model can work effectively - The young guns must be trusted with the opportunity to run the show independently and autonomously, without being overshadowed by their decorated predecessors. Germany and France have already understood this, which is why Ribery, Lahm, and Mertersacker called time on their careers when they didn’t have to. It is a risky approach, but also one which has paid handsome dividends to the German and Belgian national sides in recent years. France has also adopted a similar philosophy and Spain is on the verge of doing so. In today’s world of football, change is the only constant and there isn't much in the way of a secure approach.

Tuesday, May 6, 2014

Corruption - The Con Man Who Took Down His Own Country (Then Ran For Office)

This is a business dynamics & systems thinking analysis of the Goldenberg scam which caused the Kenyan recession in 1993. Please listen to this podcast available here: http://www.npr.org/blogs/money/2013/03/26/175382519/episode-447-the-con-man-who-took-down-his-own-country-then-ran-for-office

Causal loop diagram explaining the Kenyan policy for increasing foreign capital in the country and the ability of Goldenberg to exploit the policy.

Causal loop diagram explaining how Kamlesh Pattni was able to leverage his advantage after Goldenberg shut down, despite being a famous scam artist

Policies that could have kept Pattni from succeeding after the initial scam

· A mandatory requirement that allowed purchase of government treasury bills, only after or at the same time as the stated amount of U.S dollars was deposited. This would have prevented Pattni from doubling his earnings from interest after defaulting on his deposits at the end of the three month period, despite being charged a 3% penalty. (See the ‘Recession Cycle’ loop)

· A law which required a more thorough and external (possibly outside auditors/investigators) review of any individual(s) who filed for a banking license, prior to issuing one. Pattni received his banking license too easily and amid suspicion and speculation among banks of a then potential scam. (See the ‘Goldenberg Scandal’ & ‘Expected Reaction’ loops)

· It was mentioned in the podcast that Pattni was acquitted of all his charges by the Kenyan court of law. This only served to reinforce his then transformed image as a catholic preacher and further disguise his misdoings, positioning him to stand for office. Surely, a more detailed investigation and verdict would not have been farfetched considering the available and obvious evidence against him. Moreover, his community service and handouts were clear signs of him attempting to cover up the scam. (See ‘Goldenberg Scandal’ & ‘Expected Reaction’ loops)

· The entire Goldenberg scam could have been avoided altogether, had the Kenyan government chosen not to turn a blind eye to the export of smuggled gold. This would not have been all that difficult since they were already aware of the practice and a basic policy which regulated the export of such gold would have crushed the whole operation. However, this can also be attributed to the imperfections, inefficiencies and corruption which was widespread within the government itself. (See the ‘Leveraged Advantage’, ‘Charity’ & ‘Politics’ loops)

Future Scenario Analysis: Recharge MyDenim Custom Jeanswear & Regeneration

Scenario

The cost of hub rentals in the future will increase to the extent that it will restrict geographic expansion and thereby limit consumer reach. This is a relatively Surprise-Free scenario, because past trends have shown that the cost of real estate, especially rentals, in central geographical locations (Hubs) has been on a gradual yet constant rise.

Uncertainties And Trends

Uncertainty 1: Current Competition

	Scenario The cost of hub rentals in the future will increase to the extent that it will restrict geographic expansion and thereby limit consumer reach. Strategy · License or outsource manufacturing operations · Invest in premium delivery services like priority mail to reduce lead-time and improve consumer reach. · Develop an IMC strategy to engage consumer interaction and boost virality.
Uncertainty 2: Current cost of Expansion	Uncertainty 2: High cost of Expansion

Uncertainty 1: Intensive competition

Plot

This scenario takes into consideration the possibility that the cost of hub rentals in the future will increase to the extent that it will restrict the geographic expansion of MyDenim’s business and thereby limit its subsequent consumer reach. This is a very realistic prospect because past trends have shown that the cost of real estate, especially rentals, in central geographical locations (Hubs) is on a gradual yet constant rise.

Cities or regions that are strategically located or have a close proximity to prime urban centers obviously attract the attention of sellers, which in turn, increase the density of occupants and this drives up the cost of real estate. This is an ongoing phenomena which is widely prevalent in our major cities today that are not short of ever increasing clusters of factories, stores or offices. We can thus extrapolate this trend to expect a similar situation in the future, wherein MyDenim may be unable to penetrate newer markets owing to an unforeseen spike in such costs.

Impact On Business Model

MyDenim’s business model requires an increasing number of hubs, or centrally located manufacturing units, to expand its market and consumer reach. But if the cost of renting real estate property to support these hubs soars unreasonably, the entire operation may experience stagnation of growth which can make it unsustainable in the long run.

Plausibility

Judging from the behavior of the global real estate market over the last rounded decade (2000 – 2010), which debatably is a conservative approach owing to the sub-prime mortgage crises in the U.S. and the European recession, the average rate of rental displays an oscillatory increase. Since only 3 out of the 10 years showed a decline in rental prices, we can estimate the odds of this scenario actually becoming a reality to be approximately 3:10 (See graph below).

Precursors

The following indicators can provide an early warning that this scenario may be unfolding as a reality as they are factors that lead to higher rental prices in major cities.

· Government Regulation: Many well-intentioned policies like housing-choice vouchers, affordable housing mandates, rent control, height regulations, historic designations, and protective zoning laws contribute to the creation of a bifurcated, distorted market — one in which a $500 apartment can exist next door to a $3,000 one. Affordable housing mandates, which usually require a developer to set aside a small percentage of new units for affordable housing, sound good in theory, but developers simply pass on the cost of the affordable units to other residents, driving up the cost of market-rate rents.

· Plummeting Crime Rates: As crime rates plummet, more people are willing to live within cities. That decrease in crime, coupled with a cultural move away from suburbanization, reversed the wealth/population flight that marked the second half of the 20th century. Many cities are now close to, or exceeding, their 1950 population highs. There is a positive correlation between rising rents and house prices and falling crime rates in places like Atlanta, Washington, New York, Los Angeles, and Chicago.

· Social Stratification: Along with high unemployment, and stagnant and falling wages for bottom- and middle-income earners, the hollowing out of the middle class brought with it a geographic realignment. As the economy required higher levels of education, a lot of cities, especially on the coasts, became hubs for a lot of well-paid people who could afford higher rents and higher house prices.

· Market Speculation: This is one of the most hidden factors to high rental costs: large landlords and investors who can afford to buy up huge swaths of the available housing stock, reducing the natural elasticity of the market. Investor-driven developments are catalysts that can speed up the pace at which neighborhood rentals change.

Recommended Strategic Actions

These strategies align with the ideology of ‘reserving the right to play later’.

· License or outsource manufacturing operations

If the rental expenses for hubs becomes unsustainable, it will make more sense for MyDenim to either license or outsource some or all of its manufacturing operations for new regions. This is an operation that will commence now, on a smaller scale, irrespective of fluctuations in future rental rates. This option will give MyDenim the flexibility to reach newer markets without having to bear the costs of renting out its own facility. While there will be a fraction of revenue loss as a result of the Licensing operation or outsourcing fee, it will give MyDenim the formidability needed to survive in a changing landscape.

· Invest in premium delivery services like priority mail to reduce lead time and improve consumer reach

As per the present strategic plan, MyDenim will fulfill a small proportion of its customer deliveries via premium services like priority mail. This will be especially true in the case of customers who either demand the service or those who are located in outlying destinations, beyond the normal reach of the nearest hubs. It is plausible that this operation could be easily scaled up in the future, if opening new hubs is no longer a viable option. It will help reduce the average lead time and maintain greater consistency of deliveries.

· Develop an IMC strategy to engage consumer interaction and boost virality

This is another strategy which will commence immediately and with minimal financial investment initially. We plan on gradually growing this effort and pumping more revenue into the marketing budget to improve customer knowledge of MyDenim’s brand and offerings. Should hub rentals become too expensive, there will be a significant fraction of the intended investment that can be directed towards this IMC strategy, thus scaling it up to a greater extent. This will slowly but surely build the MyDenim brand and propagate it to a larger audience, who wouldn’t mind longer lead times or marginally higher prices. This relationship marketing initiative will complement the first two strategies for this scenario.

Annex One: List of MyDenim Risks

1. Threat of customer dissatisfaction

2. Limited geographic presence

3. Failure to attain expected market share due to existing competition

4. Delays and inconsistencies in delivery time

5. Machine breakdown and/or system failure

Annex Two: List of four different scenarios discussed in the team, including the one with full write-up (In green)