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Transcript of Corporate Life Savers
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CORPORATE LIFE SAVERS
A STUDY ON TURNAROUND
LEADERS
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INTRODUCTION
The dawn of a leader is required more at hell
than at heaven.
When corporations show downturn, it is theleaders who turnaround them into successful
establishments.
The main purpose of this paper is to analyze
successful turnaround leadership cases, and to
understand the strategies of turnaround
leaders.
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OBJECTIVES
To analyze successful turnaround leadership
cases; and
To understand the strategies of turnaround
leaders.
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METHODLOGY
The study was based on secondary data.
The turnaround cases were collected throughInternet, journals and magazines.
Several turnaround cases have been examined
and from them the most successful fiveturnaround cases have been analyzed in thispaper.
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The cases are taken from different industriessuch as computer industry, airplanemanufacturing industry, automobile industry,
media and FMCG industry; and from differentcountries such as US, Japan, Brazil and UK.
From the strategies adopted by the turnaroundleaders a generalized Turnaround Philosophyhas been presented in this paper.
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SCOPE OF THE STUDY
Turnaround of IBM by Louis V. Gerstner
Turnaround of Nissan by Carlos Ghosn
Turnaround of Embraer by Mauricio Botelho
Turnaround of Gillette by Jim Kilts, and
Turnaround of BBC by Greg Dyke
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LOUIS V. GERSTNER (IBM)
In 1993, IBM was in deepfinancial trouble. The company
reported a net loss of $ 8.1
billion. Many analysts wrote off
IBM was dead. At this time,
Louis V. Gerstner (The life
saver of IBM) became its CEO.
During the year 2001, IBM
reported a net income of $ 7.7billion. During the period of
Gerstner (1993-2001), the
share price of IBM shot up by
nearly 800%.
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CARLOS GHOSN (NISSAN)
When Carlos Ghosn became theCOO of Nissan it was on the verge
of suspending its payments and it
had accumulated losses of $
20billion.
Because of Ghosn, Nissan became
the most profitable auto company
in the world over the course of the
past six years. During the threemost recent fiscal years, Nissan
has managed to increase its sales
by 27% and it recorded a profit of
3.76 billion Euros.
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MAVRICIO BOTELHO (EMBRAER)
In September 1995, Botelho joined
Embraer as the CEO. When he arrived,
Embraer, an aircraft manufacturing
company from Brazil, has $ 330
million in annual losses.
The recovery of Embraer never would
have happened without Botelhos
decision to pursue the growing market
for regional jets. It is the leadership ofBotelho, which makes Embraer as the
fourth largest aircraft manufacturing
company in the world.
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JIM KILTS (GILLETTE)
By the beginning of 2001, therewere lack of coordination among
the executives in Gillette and
respect among peers also declined.
Profit was in decreasing trend and
the company continuously losing its
market share.
At this time Jim Kilts became the
CEO of Gillette. Through his style ofleadership he introduced dramatic
changes into the organization and
made Gillette a profitable
organization.
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FINDINGS
From the above cases, the turnaround strategies
followed by great corporate leaders can be
understood.
Every one of them has their own style of leadershipand their working style and analytical ability was also
quite different.
But all of them operate on a common philosophy the
philosophy of how to turnaround an organization into a
successful one.
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They have a clear understanding of the current
position of the organization
They take a fresh look at the problems
They encourage ideas from the bottom of theorganization
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The turnaround leaders are much efficient inidentifying the potential opportunities available for
the company
They have firm conviction. They know what theyare doing and are not bother about criticisms
They havestrong vision and also have the ability toconvert their visions into reality
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CONCLUSION
Through these cases we learned the significant role ofleaders in corporate turnaround. They have shown thatnewly elected CEOs are much efficient in turnaroundmanagement than existing ones.
However, it will be wrong to presume that when anorganization needs restructuring, there is a need for anew CEO.
But what should be understood from these cases is that,when an organization faces continuous failures, those atthe top should look the problem from a freshperspective.
They should make a through study of the wholeorganization and should encourage views from thebottom of the organization.
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BIBLIOGRAPHY
Books:
Organizational behaviour by Stephen P. Robbins. Ninth Edition.Pearson Education. (P.N. 538-562)
Human Behaviour at work by Keith Davis & John W. Newstrom.McGraw-HILL INTTERNATION EDITIONS. (P.N. 293-300)
Journal
Rosabeth Moss Kanter Leadership and the Psychology ofTurnarounds, Harvard Business Review. June 2003. P.N 59-67.
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Net sources
http://www.icmrindia.org/casestudies/
www.wfpma.com/PDFs/hrglobalchallenges.pdf
http://www.managementtoday.co.uk
http://www.allbusiness.com
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