Consultancy report. what companies want


Published on

Published in: Technology, Business
1 Like
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Consultancy report. what companies want

  1. 1. EHRM Consultancy Report July 2010 “ What Companies Want “ Graduate education needs in a global labour market BIANCHI Paolo ANDERSEN Solveig GAGLIARDI Marcello GUERIN Julia VLEUGELS Jenneth
  2. 2. EXECUTIVE SUMMARY The client’s demand After the crisis and within a changing global environment impacting companies, Luiss Business School wanted to understand “what companies want” in terms of managerial competencies needed by the next generation of managers. The final objective was to reshape the MBA program so that it fitted these new needs. More specifically, Luiss Business School required recommendations for an “ideal MBA program”. A literature research was performed to investigate external factors influencing companies. Qualitative and quantitative research was carried out in order to gather data about managerial competencies and direct recommendations from managers. 28 interviews were conducted with managers. Key findings from the research The table below shows the main results from the qualitative and quantitative research, displaying the most important managerial competencies organized in eight different families. Hard skills - Fast and efficient decision-making - Analytical approach - Ability to focus on main information Multicultural mindset - Speak other languages - Understand different behavior and ways of looking at things - Work and deal with different cultures - Intercultural understanding CONSULTANCY REPORT Political ability - Transparency CSR mindset - Understanding diversity and its importance - Sensitivity about importance of CSR - Ethic way of doing business - Understand stakeholders Business sense - Quick understanding of business situations - Global overview of the business - Understand and adapt to governmental way of acting Interpersonal skills - Building relationships - Communication skills - Team working - Motivating others LUISS BUSINESS SCHOOL, JULY 2010 Adaptation ability - Flexibility - Worldwide mobility - Deal with and manage complexity Personal characteristics - Humility - Openness 2
  3. 3. Recommendations An ideal MBA program should follow four main directions, which are represented by the four following pillars. 1. Up-to-date content First of all, the content should be tightly related to what is happening in companies. Recommendations focus on a Top 5 list: CSR/ethics/diversity, intercultural management, innovation, ICT and people management. These represent topics MBA students should be sensitive to and knowledgeable about. 2. Practical approach The knowledge transmitted to students, as well as the pedagogical methods used to do so, should be practical. Recommendations to enhance this dimension in the MBA are: internship, team-work, interaction, managerial testimonies, projects in relation with companies, active role in an association, real life case studies, and games and simulations. 3. Preparing for complexity An ideal MBA program should prepare students for dealing with complexity. Therefore, it is recommended that the whole MBA program should be in English, integrating many international students and international professors. Students should spend time abroad (internship or academic exchange). Lastly, students should work on cross-cultural case studies and be trained to work under pressure. 4. Soft skills orientation The future generation of managers needs to have strong abilities in soft skills. Therefore, the ideal MBA program should enhance self-awareness. Workshops to develop soft skills should be organized, and theatre/role play should be part of the training. Students should participate in many networking events and get involved in social work. More generally, lessons should include smaller classes for discussion. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 3
  4. 4. TABLE OF CONTENT 1. PROBLEM ANALYSIS ___6 1.1 Content of the Project ___6 1.2 Client’s Demand ___7 1.3 Understanding of the Project ___8 1.4 Final Objective of the Project ___9 2. THEORETICAL FRAMEWORK __12 2.1 Adaptation Perspective __12 2.2 Business Action Theory __12 2.3 External Factors __13 2.4 New Service Development __13 2.5 Managerial Competencies __15 3. METHODOLOGY __16 3.1 Sub-objective 1: Investigation of External Factors __16 3.2 Sub-objective 2 and 3: Managerial Competencies and Direct Recommendations __17 3.2.1 Qualitative Research: Interviews __17 3.2.2 Quantitative Research: Survey __19 3.3 Integration of Sub-objectives in a Creative Process 4. RESULTS __19 __21 4.1 Results External Factors __21 4.1.1 Literature Review __21 4.1.2 Interview Results __28 4.1.3 Combining the Results __30 4.2 Managerial Competencies __31 4.2.1 Interview Results __31 CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 4
  5. 5. 4.2.2 Survey Results __39 4.2.3 Combining the Results Interviews and Survey __41 4.3 Direct Recommendations __43 4.3.1 Interview Results: Suggestions about the Subjects __43 4.3.2 Interview Results: Pedagogical Methods __44 4.3.3 Interview Results: General Rules __44 4.3.4 Interview Results: Competencies to be Developed __45 5. RECOMMENDATIONS AND CONCLUSION __46 5.1 Up-to-date Content __47 5.2 Practical Approach __49 5.3 Preparing for Complexity __52 5.4 Soft Skills Orientation __54 6. REFLECTION CONSULTANCY REPORT __56 LUISS BUSINESS SCHOOL, JULY 2010 5
  6. 6. 1. PROBLEM ANALYSIS In this chapter a global overview of the project will be provided. This will first consist of an overview of the context in which Luiss Business School operates. After this, the client’s demand will be explicated. Following that, the understanding of the project will be described in order to define the final objective of the project. 1.1 Context of the Project Since the founding of LBS in 1986, the mission of the organization has been to design and offer managerial education solutions both to recently graduated students and professionals, looking for individuals who want to leverage their talent and consequently further their careers, aiming at positions in big corporations, medium sized companies as well as in the public sector. When LBS became private in 1999, its strategy was redefined and a restructuration of the organization started. In an increasing global and competitive market of higher education, the crucial objective was to create more value both for students and companies, considering two main directions. First, the Business School had to become more international: entering a global arena was essential. Second, LBS needed a broader internal faculty so as to create a strong basis of knowledge within its walls. When Paolo Boccardelli was appointed in 2004 as Head of PhD department, he struggled to make LBS a more customer oriented company, as both the faculty and the administration showed some reluctance to change. Thanks to the support of the CEO and the dean of Luiss Guido Carli University (LBS being a division of it), a real evolution was initiated. Since then, the strategy of LBS has been concentrated on three strategic pillars. Innovation is the first one, because to remain competitive, organizations crucially need to develop this competency. As Paolo Boccardelli –now Head of the international department- underlines it: “Innovating the value proposition and the business model constitutes one of the most recurrent quests to be dealt with by executives “ (see appendix 1). In the eyes of LBS’ management, entrepreneurship is included in this strategic pillar. The second pillar is internationalization, since, as it has been said, LBS wants to enter a more global arena. Strong efforts are therefore dedicated to develop partnerships with foreign universities and attracting international participants. Thirdly, LBS gives high importance to the public sector management, as it is historically a significant business for the organization. Luiss Business School MBA The Business School was founded in 1986, and the first edition of the full time MBA was created. Since then the MBA was only incrementally improved and updated. Today, it represents the core business of LBS. Each year, around 60 students participate in this 17 months program (12 months in class and 5 months in a company-project). Part of the classes consists in elective specialized courses and around 20 academic exchanges are offered. The classic and ideal target participant of this fulltime MBA has more or less two years of specialized professional experience (e.g. technical engineer, R&D) and has decided to change field or reorient his/her career. As Paolo Boccardelli expresses, students should be able to “jump to a higher level of responsibility” after the MBA. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 6
  7. 7. Very recently (June 7th, 2010), a new MBA program has been launched at LBS: the International MBA1. The objective of this MBA is to provide internationally scoped content to international students. It reflects very well the new strategic concerns of the school, the educational offer being oriented towards very up to date fields such as globalization, technologies, entrepreneurship, innovation, CSR, etc. Thirteen students are participating in this first edition. This is a “pilot” experiment for LBS, since in the end the idea would be to have only one IMBA gathering around 100 participants and proposing different majors. 1. 2 Client’s Demand On the one hand, the full-time MBA program needs to be updated because even though its content has been revised year after year, the program remains too close to its first versions; a more radical shift is therefore needed. On the other hand, recent social and economic events have driven executives and managers to search for new routes of value creation and growth. Therefore, the objective of the project is to understand “what companies want”, so as to help LBS to improve its educational offer for the MBA program. The requirements from the client fall down into four central tasks: 1. The main external factors -that is to say out of the company’s control- which have an impact on companies’ organization and management have to be identified and investigated. When possible, the impact on companies should be described. Factors such as globalization, entrepreneurial thinking, demography, technology, CSR should be taken into consideration. Literature research is expected in order to provide insight on these issues. This will provide a context for the qualitative research about “what companies want”, offering a better understanding of what in their environment pushes companies to change. 2. Interviews with around 30 managers, being either line managers, HR managers or CEOs from multinational or Italian companies operating in varied sectors, will allow an understanding of managerial competencies needed both in the present and in the future. Among the sample of managers, approximately half of them are alumni from LBS. These alumni are very important in the research because they are able to provide feed-back and eager to share about their experience. Interview guides have to be elaborated according to the category of interviewees in order to structure the interviews and make sure the proper data is collected. This second part represents the main objective of the project. 3. Using creativity and starting from the “blank state” hypothesis, recommendations for an ideal MBA program (accordingly to what companies want) has to be provided. New ideas can concern a wide range of dimensions: topics, contents, pedagogical methods, etc. The main rule to be respected: “Unchain your creativity!” 4. An additional task is to measure the attitude towards change of the faculty, so as to give an outlook of to which extent the academic community is ready to support changes in the MBA program. Interviews with faculty should be done in order to gather information. However, this 1 After this IMBA CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 7
  8. 8. should not be taken into consideration when providing recommendations for the ideal MBA program, in order to protect the creative dimension of the recommendations. The client offered autonomy about the organization of the project and its possible redefinition. 1. 3 Understanding of the Project On basis on the client’s demand a model mirroring the understanding of the project has been prepared, so as to attain the global overview and to have a clear common understanding of the project. Figure 1: Understanding of the project On top of the model is element A, changing environment and external factors. These changing external factors have an impact on the companies in such a way that the companies will experience new global needs. Element B is then to identify the changing external factors’ impact on the companies as well as the new global needs of the companies. Caused by element B, companies’ new global needs, is element C, their requirements in terms of present and future managerial competencies. Element C has an impact on element D, educational MBA needs. Element D, the changing educational needs, is a part of the chain and therefore important for the understanding of the project, but it is not an aim to investigate them explicitly. Element D is just leading to element E, which is giving recommendations for the ideal MBA program. The last element of the understanding of the project is element F, the professors´ reaction and feedback on the recommendations. This is not an integrated element of the project, but an additional service that will be provided, so as to see how well the recommendations fit LBS, and to CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 8
  9. 9. make it easier for the client to identify possible challenges when implementing the recommendations. Project scope As it appears from the description of the clients demand, the project is two-folded. One objective is to understand what companies want, in terms of managerial competencies. The other objective is to give recommendations for the ideal MBA program. In carrying out the latter there are many stakeholders and sources who could have been taken into consideration, for instance the current students, politicians, futurologists and so on. In the meanwhile it has been decided to limit the project scope, considering the time constraints and the value of in-depth knowledge. Therefore the focus will mainly be on understanding what the companies want by asking different managers, half of them being alumni. Besides the core project, the professors, but not the students, will be taken into consideration when assessing how well the recommendations fit LBS´ faculty. 1.4 Final Objective of the Project When concentrating the client’s demand, the understanding and scope of the project into one sentence, the following final objective has been developed: Understand the companies’ needs, influenced by the changing environment, as regards the competencies2 of their present and future managers, and bearing this knowledge in mind provide valuable recommendations for the ideal MBA program in order to meet these needs 2 Competency is defined as: “An individual’s ability to use one’s knowledge, skills and attitudes.” For further details see part about competencies within the theory. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 9
  10. 10. Visual overview of the project Dividing the final objective into smaller parts, the different sub-objectives of the project have been worked out. These sub-objectives, can be considered as pieces of a puzzle that together make it possible to answer to the client´s demand and reach the final objective. Below are shown the three sub-objectives of the project and their integration in a creative process. This model is created in order to have a visual overview of the project work. In the lower right corner of the model the feedback from the faculty is placed, as it does not lead to the final objective but it is something additional. Figure 2: visual overview of the project The first sub-objective, to identify the external factors and their impact on companies, will provide an overview and understanding of the context in which LBS operates. It can be seen as a starting point and foundation of the project, which the second sub-objective, managerial competencies, is resting upon. As mentioned earlier, the second sub-objective about managerial competencies and more specifically, to explore companies’ new needs as regards present and future managerial competencies, is the one, according to the client´s demand, which is given the highest weight in the project. The third sub-objective, the direct recommendations from the managers about the ideal MBA program, is the last sub-objective before the process can go on to the integration of the three subobjectives as well as adding creativity. How the recommendations from managers are provided/generated/extracted and how the integration of the three sub-objectives in a creative process is done will be explained later in the methodology part. Following this process, the final objective of the project can be reached. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 10
  11. 11. As it was explained previously, the feed-back from the faculty is an additional service provided to the client, and not a part of the core project. Therefore it does not have an influence on the recommendations, because the reaction and feedback will be collected after giving the final recommendations for the ideal MBA program. The only influence it will have on the project is to make the client aware of possible challenges, when eventually implementing some of the recommendations. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 11
  12. 12. 2. THEORETICAL FRAMEWORK This chapter will provide insights into the theories which are used, either implicitly or explicitly, to base the final ideas and recommendations on. First, the adaptation perspective will be described, then the Business Action theory3. After this an insight in the idea of the concept managerial competencies will be provided. Further, since the external environment is a crucial part of reaching the global objective of the project, the developments and main trends within this environment will be described after. Lastly, the mainstream theory about new service development is explicated in order to give insights in the way of thinking when answering the second part of the global project objective: providing recommendations for the ideal MBA. 2.1 Adaptation Perspective To make it possible to reach the project objective the perspective that has to be taken into account is based on the concept of adaptation. ¨Adaptation is a continuous process which results in changes in products or services brought or sold, in processes of manufacture or in routines and administrative procedures and which implies resource commitment. The resulting adaptations are investments in specific relationships¨(Easton, 1992, p.14). The essence of an adaption perspective is the assertion that organizations survive and prosper to the extent that they are able to align themselves with their environments over time. Organizations that respond more appropriately to environmental changes will, in the long term, be more effective (Milliken, Dutton & Beyer, 1990). This adaptation perspective has two implications for this research. First, since LBS is an organization as a consequence it has a need to survive and in order to do that it has to adapt to its environment. Therefore, the main current global developments (changes) such as the current economic crisis, globalization and changes in demography can have a direct impact on LBS as an organization, which means that LBS needs to adapt to these developments. The other way in which this adaptation perspective is reflected is more directly linked to the focus of the project. For this, the adaptation can be seen in two ways. First, companies as being the clients of LBS are in need of adapting to their environment in terms of the global developments. And second, this adaptation of companies will cause a need for LBS to adapt to its environment, being mainly the companies. 2.2 Business Action Theory This theory can be used to gain a general understanding of business processes and business interaction. Further it can be used as an action framework for evaluation and the design of business processes and its supporting IT (Goldkuhl, 1996). Within these business processes two main roles can be recognized. First there is the role of the supplier and second there is the role of the customer. The generic business interaction model describes the inherent business logic when customers and suppliers perform business with each other. It described generic business actions of both communicative and material character. Making 3 From now on: BAT CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 12
  13. 13. business involves communication, otherwise customer and supplier cannot agree on the business deal. But it cannot be reduced to only communication, it must include the material acts of delivering goods and or services and paying (Goldkuhl. 1998). The BAT framework is oriented towards real business interaction between customers and suppliers and is inspired by the business-to-business interaction. Interaction means that the two parties acts towards each other. BAT emphasizes that the two parties are actively engaged in business interaction. They both perform actions (decisions, communicating, value exchange) directed towards the other party (Goldkuhl, 1998). Essential in business interaction is the exchange of value. The supplier and the customer exchange value and must communicate in order to do this. With this theory the view with an active supplier influencing a passive customer is rejected (Goldkuhl, 1998). The two roles (of customer and supplier) have been given equal importance. This viewpoint is in accordance with communicative action theories which make sender and recipient equally important (Habermas, 1984). Within the BAT the network theory is rejected since this theory defines relationships between the parties as being longterm (Easton, 1992). In contrast BAT states that even temporary relationships between the customer and the supplier are relationships. These arguments explain that business interaction is not only restricted to business exchange. It has an impact on business relationships between supplier and customer too (Goldkuhl, 1998). Both the adaptation perspective as well as the Business Action Theory can be seen as a prerequisite for the validation of the problem of LBS and therefore for this research. Hence, without the need for adaptation for LBS, either to the environmental changes directly or indirectly via its customers (the companies, and without the need for interaction within this process (BAT), there would not be a need for LBS to understand what companies want. 2.3 External Factors External factors are influencing the dynamics of the global labour market and therefore companies’ needs. The investigation and understanding of the most important of these factors provide an additional theoretical framework for our project. The criteria used to select the main external factors were global scope and intensity of pressure upon the organizations. Limited time available for research was also taken into consideration. Here are the selected factors: globalization, demographic trends, economic environment and corporate social responsibility. These factors indeed represent heavy trends in companies’ environment, which force them to evolve (a process mentioned earlier within the adaptation perspective). 2.4 New Service Development A number of markets are characterized by substantial changes as a result of deregulation, technological development and increased internationalization. This forces service companies to keep developing existing services as well as to create new ones (Edvardsson, 1997). The idea of new service development is to design high quality into the service system from the outset, to consider and respond to customers´ expectations in designing each element of the service. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 13
  14. 14. Relating to this, the quality of almost any service is influenced by how well numerous elements function together in the same service process to meet customers’ expectations. These elements can be described by three key sentences: the people who perform the service, the equipments that support these performances, and the physical environment in which the services are performed (Zeithaml, Parasuraman, & Berry, 1990). The service sector aims at creating basics for long-term profitable customer relationships. The main task of service development is to create the prerequisites for services which the customer perceives as attractive. This presupposes that the company has a thorough understanding of the customer´s needs, expectations and perceptions of quality in relation to cost. So as to really understand customers´ needs and wishes, it is appropriate and often necessary to involve customers in the process of developing new services (Edvardsson, 1997). Though some sensitivity is necessary. This can be made clear by the following quote: ¨There are three kinds of companies; those that simply ask customers what they want and end up as perpetual followers; those that succeed –for a time- in pushing customers in directions they do not want to go; and those that lead customers where they want to go before customers know it themselves¨ (Hamel and Prahalad, 1991, p.85). Service quality is realized in the service process, in many service encounters and since the customer is the ultimate judge of the service, customer orientation should be a central point of departure for all service development. This means putting them in the centre, but not being guided in all respects by what he/she says. It is important to understand the customer, its needs, wishes and requirements, but not to follow them slavishly. Moreover, in many cases the customer needs assistance in making his/her needs and quality requirements explicit. About quality the author claims that quality is a matter of satisfying the needs and meeting the expectations of three main groups: customers, employees and owners (Edvardsson, 1997). Further, there are three main perspectives on the concept of service. First, service can be seen as a customer outcome, this means that it is the customer´s total perception of the outcome which ´is the service´, which forms the perception of quality and determines whether the customer is satisfied or not. The main task of service development is thus to create the conditions for the right customer outcome. Second, service can be seen as a customer process. This means that the customer himself, directly and actively participates and affects the result in terms of quality and added value. The third element is the prerequisites for the service. This has to do with the proposed offer, how this offer is going to be realized in the form of process and resource structure. These can be seen as the end result of the service development process. Hence, in order to guarantee service quality, there has to be quality in all the parts of the prerequisites for the service (Edvardsson, 1997). These right prerequisites can be described in a model with three main concepts: the service concept, the service system and the service process. The service concept is a description of the customers which are to be met and how these needs shall be met in the form of service content or design of the service package. The service system includes the resources available to the process for realizing the service concept. And last, the service process is the chain or chains of parallel and sequential activities which must function if the service is to be produced. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 14
  15. 15. Research shows that the concepts service offer, service process and the resources and structure of the service system cover the most essential aspects in the development of new services (Evardsson, 1997). CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 15
  16. 16. These main ideas derived from the literature about new service development has guided the research in the following ways: First, providing recommendations for an ideal MBA based on new companies needs can be seen as part of developing a new service. It can be seen as rephrasing the service concept because it is directed towards fitting more directly to the customers’ needs. Second, support the idea that creating or developing new services is crucial in current times was supported. It can be said that LBS is situated in a market which is subject to substantial changes (see the part about external factors) which creates a force to keep developing existing services or create new ones. This supports the importance of this research and the problem in itself. Third, the theory prevent us from taking the customer’s needs (the companies needs) too much into consideration when developing a new service (providing recommendations for the ideal MBA). Hence, the theory explains that customers not always know what they need. In this way it might be possible that managers, reflecting the companies needs (which can be seen as the customers), do not always know or even are able to explain what they need, especially in the future. 2.5 Managerial Competencies The word competency has been used to describe terms with different meanings and has not been clearly defined in the literature (Hoffmann, 1999). For instance in the work of Boyatzis it is described that a competency may be a trait, a motive, a skill, a person’s self-image or a social role (1982). Based on this he gives the following definition of a competency: “a person’s generic knowledge, motive, trait, self-image, social role or skill which is essential to performing a job, but is not causally related to a superior performance” (Boyatzis, 1982, p.3). In the meanwhile, the most important, regarding defining the word competency in this project, is to have a shared understanding of the of the word. Since the term is used in a slightly different way than the definition that is described above, a tailormade definition is provided. First of all, the word competencies is not referring to the strategic core competencies of the organisation in order to gain competitive advantage. Likewise, a distinction can be made between skills and competencies, where a skill is the ability to carry out a specific task, and competencies are the way one is able to use a combination of different skills. That is, the word competency is considered as referring to an individual’s readiness to use knowledge, skills and attitudes. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 16
  17. 17. 3. METHODOLOGY In this chapter the methodology for dealing with the project will be described. First it will be explained how the results for each of the three sub-objectives are obtained, and following this how the integration of the three sub-objectives in a creative process is done, which will allow the final objective to be reached. After that, the methods used for the analysis will be described to give insights into how the results are analyzed, interpreted and how the final recommendations will be developed from the main results. To get an overview see the figure 3 below. Figure 3: overview of methodology 3.1 Sub-objective 1: investigation of External Factors Literature research will be started in order to get insights into the main topics and trends in the external environment on companies, on a global level. This research will be started by looking into academic literature for information about these topics. Besides, this research will provide an extraction from all the happenings in the environment focusing on the main important topics. These topics will be used in the further research methods for reaching the overall project objective. This further research will consist of empiric research consisting of qualitative interviews. The insights from the literature research will be supported by asking managers for their opinion about the impact of the external environment. Since this will be a small part of the interviews, the main choices and topics regarding these interviews will be explained in the part about the second and the third subobjective. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 17
  18. 18. 3.2 Sub-objective 2 and 3: Managerial Competencies and Direct Recommendations 3.2.1 Qualitative Research: Interviews For providing insights in these sub-objectives, two different research methods are chosen, which are qualitative interviews and a quantitative survey. First, empiric research will be conducted in terms of qualitative interviews. The qualitative interviews will be conducted in a semi-structured way. In this way, there is a clear guidance about what topics are included but there is also room for flexibility in the questions and topics discussed. Like already explained the Interview guide will be based on the literature research about the external environment and how this could have an impact on companies. Given the structure and characteristics of these interviews, and the fact that they are based on theory, they will provide in-depth knowledge about managerial competencies needed now and in the future as well as providing knowledge about how these are linked to the external environment. Besides this, the interviews will provide knowledge about the direct recommendations from managers about an ideal MBA program. Sample for the qualitative interviews For conducting the interviews, a sample needs to be selected. Hence, asking ´all the managers` is not possible. This would be too time consuming. Therefore, a sample within the network of LBS is selected. This method of selecting the sample could imply homogeneity within the group (most of the time groups within one network can have homogeneous characteristics), which could influence the possibility of generalizing the results (Hair, Black, Babin, Anderson & Tatham, 2006). Hence, in this way conclusions cannot be drawn about what companies want in general, because the sample does not reflect the characteristics of the whole population. Further the size of the sample is important for the possibility to generalize (Hair et al., 2006). But what can be considered as the whole population for this project? Do conclusions have to be drawn for all the companies (on a global level and therefore for all the managers), or is a sample of companies within the network of LBS enough? The last question can be answered with a strong yes. The network of LBS can be seen as an important reflection of its clients. This importance of seeing companies as clients of LBS and its need to adapt to its clients has been worked out with use of the adaptation theory within the theoretical framework. Further within this network there will be alumni of the MBA of LBS, who could provide more thorough insights into the overall research object since they will react based on their own experience. Around thirty managers will be interviewed which is quite extensive considering the time and resources. Furthermore, the selected sample (based on the network) also contains a lot of diversity (for characteristics of the sample see appendix 2). In terms of horizontal diversity (different companies), and also vertical diversity (different occupations), looking at hierarchy. There is also a mix of gender in the sample which is 90 percent men and 10 percent women. This does not look very balanced, but it is reflecting the actual number of managers with an international background in Italy. Structure of the interviews CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 18
  19. 19. Three different types of interviews will be conducted (see figure 4), in sequence: first, exploratory interviews (two of them) are conducted to get first insights into the topic. Those will be based on pre-readings about the external environment. Second, a semi-structured interview guide will be created based on these pre-readings. And last, this semi-structured interview guide will be reshaped based on the first insights from the other two categories of interviews. For an insight in the structures (interview guides) of the two categories of semi-structured interviews see appendix 3. Interview type: Exploratory interview (E) Semi-structured interviews (1) Semi-structured interviews (2) Interview structure: Unstructured Semi-structured Semi-structured Development: Based on pre-readings Based on pre- readings Semi-structured interviews category E + 1 Figure 4: categorizing interviews Analyzing the interviews The interviews in the research will be analyzed in the following way: first, the raw data on the recorders will be transferred into written documents. This will not involve transcribing the whole interviews, including all the content, but it will mainly be focused on the most important parts. The criteria for what is considered as being most important are based on interpretation of the usefulness of the data regarding the overall objective of the research. Therefore, these written documents will look like summaries. After transferring the raw data into written summaries, all of them will be read and the ideas and recommendations from the managers will be extracted. This will be done in group sessions, and every time an idea or recommendation is extracted from a written summary it will be placed into the proper category, either external factors, managerial competencies or direct recommendations for the ideal MBA program (see the categories in the table below). Sub-objective Category label 1. Identify the main changing external factors External factors and investigate their impact on companies 2. Explore companies’ new needs as regard Competencies present and future managerial competencies 3. Provide insights from managers about the Directs recommendations from managers about ideal MBA program. the ideal MBA program Additional questions Figure 5: categorizing the data Within these categories, especially in the second one (competencies) and the third one (direct recommendations for the ideal MBA program), a lot of diverse answers from managers are possible. Getting more structure into the expected diverse answers from managers will be necessary in order to come to conclusions. This structure will emerge gradually from all the data, since the different ideas from the managers within each category will be clustered and linked to similar ideas. In this CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 19
  20. 20. way different clusters like CSR, communication, cultural understanding and so on can emerge from the ideas within the second category concerning managerial competencies. The same gradual clustering will be done for the direct recommendations about the MBA program. In this case the clusters could for instance be subjects, pedagogical methods and the like. Since managers can use different words for the same kinds of competencies (or for the other topics), as well as they can have a problem of language reflecting in other expressions than they intend, a very strict research oriented way of coding the material will not be effective. The other complexity involved is the factor of time. Hence the process of coding around thirty interviews is very timeconsuming and not reachable according to the time span of the project. Analyzing in a group will include a confrontation of different ideas about the data. In this way a more valid and reliable result will be provided. 3.2.2 Quantitative Research: Survey The second research strategy for reaching the second sub-objective is conducting a quantitative research survey. This strategy is used to get a more general view on the competencies needed in the future. Hence, besides the sample of managers taken for the qualitative interview more managers are being asked about these topics, there are more viewpoints included in the research. In this way the results from the qualitative interviews can be generalized. The competencies used to create the survey will be extracted from a list of managerial competencies from EM Lyon Business School (see appendix 6). The survey will be constructed and distributed with use of the web. For an overview of the survey see appendix 7. Sample survey For sending the survey to managers (in general) a sample has to be selected. Therefore, a sample within the network of LBS was chosen. For almost the same reasons as for the interview sample, this method of sampling is used. First, the network being an important reflection of the clients of LBS. Second, horizontal and vertical diversity. Third, the typical mix of male and female respondents. But in addition, the selected sample is quite large, (n=213) which increases the possibility to generalize. Sample size Gender n=213 25% female 75% male Positions Line manager/HR manager/ Top manager Companies Small/medium size/ large Characteristics International/multinational companies or national with international workforce Figure 6: sample characteristics For more explanation see the paragraph about the interview sample 3.3 Integration of the Sub-objectives in a Creative Process CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 20
  21. 21. The outcome of this process is to provide recommendations to create the ´ideal` MBA program, while the rule given by the client is to ¨unchain creativity¨. In order to achieve this, a brainstorming session will be organized. The knowledge used as a basis for the brainstorming session comes from three sources. First, data gathered from the interviews about managerial competencies needed now and in the future (subobjective 2). Second, the results from the survey focusing on the same content (sub-objective 2). And third, data gathered from the interviews concerning direct recommendations from the managers about the ideal MBA program (sub-objective 3). For an efficient and productive brainstorming, it is important to respect some rules. As a cornerstone, the brainstorming rules by Beaubien (1997) will be used, completed with additional rules (see appendix 11). The agenda of the brainstorming session will include an individual brainstorming at the beginning of the session4, written brainstorming through passing a sheet of paper, reacting and associating on others’ ideas, free brainstorming, and lastly brainstorming using ideas already mentioned to bounce back on them. After the brainstorming session, all ideas generated will be written on paper. The relevant ideas will be selected by linking the recommendations to the different competencies. In this way, the ideas that do not help to develop these competencies will naturally be sorted out. As a consequence it is possible to see what subjects, pedagogical methods as well as general recommendations will help the students to develop each one of the 30 most frequently mentioned competencies by the interviewed managers. To see the table see appendix 13. After the creation of the table the next step will be to identify the best ideas and in the end come to the final recommendation for the ideal MBA program. This will be done by taking a step back, and putting things into perspective, which will provide a global picture of all the recommendations. Then the main directions for an ideal MBA program can be identified. Within each direction it will then be possible to find the best ideas and afterwards provide the final recommendations for the ideal MBA program. 4 « Brainstorming », CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 21
  22. 22. 4. RESULTS 4.1 4.1.1 Results External Factors Literature Review This chapter will focus on the global external factors that generate new needs in companies nowadays. “What companies want” will be investigated, and the major challenges that present and future managers will have to cope with. The following pages are an excursus on topics including globalization, technology, demographic trends, economic environment and corporate social responsibility, summarized in order to provide the essential inputs for the development of our research. Globalization and technology Globalization: description of the phenomenon Already in 1962, McLuhan coined the expression “global village”, meaning that the developing mass communication created for the whole world a village-like mindset. On a world basis, Internet and telecommunication tools allowed people to be more and more connected. Furthermore, this trend is spreading to an increasing number of individuals: in 2010, there are 4.22 billion mobile phone subscribers. A quarter of the world’s inhabitants (1.6 billion) can use Internet, and the evolution is astonishing: the number of Chinese Internet users has increased by 1.400% from 2000 to 2009, while the Indian rate has reached 10.622% in 2009 (Laudicina, 2010). As far as the world economy is concerned, one of the most significant changes over the past two decades has been a growing globalization of markets and industries (Wiersema and Bowen, 2008). The ongoing consequences of globalization include widespread industry rationalization and heightened competition at regional, national, and global levels (OECD, 2003). Besides this, the number of cross-border mergers and acquisitions, and the number of multinational firms has increased extensively (United Nations Conference on Trade and Development, various years). Emerging markets and multinationals from these markets are becoming more and more present on the world’s stage (Pillania, 2009). For example, a growing number of emerging markets is entering developed countries and competing with powerful multinational companies. Focusing on these new markets, Pillania coined the concept of “Globality”, as “the new name for a new and a different global reality in which we’ll be competing with everyone, from everywhere, for everything” (Pillania, 2009, p. 181). Regarding this challenge, the author proposes “seven struggles for each company”, which are explained below (2009, p.182). 1. “Minding the cost gap” means maintaining costs low and continue to grow while it becomes more and more challenging for companies as costs increase (raw materials price). 2. “Growing people”: the fast developing economies count many educated and trained workers and managers while in the developed economies the talent pool decreases while wages rise. There is a CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 22
  23. 23. lack of talents for some jobs or industries, and finding the best fit between the proper talent and the job is still an HR challenge. 3. “Reaching deep into markets”: New markets are very appealing, not only for the amount of their population, but also for the rising prosperity and sophistication of the customers. The challenge is to reach all possible buyers, while companies still make many mistakes: they do not understand properly their customers, they offer products that are not adapted, they have structures that are too expensive, and their distribution systems are too complicated. 4. “Pinpointing”: many international corporations have off shored some of their operations in the world in order to reduce costs. The challenge is to rethink the value chain, relocating its elements so as to locate the right activities in the best locations. 5. “Thinking big, acting fast, going outside”: market leaders reach success and rapid growth thanks to mergers, acquisitions, alliances and partnership. This allows these organizations to learn quickly. 6. “Innovating with ingenuity”: challengers may be known as expert copiers, interpreters, simplifiers and adaptors rather than innovators. Actually their strength is ingenuity, i.e. the capability to influence their access to the world knowledge and tailor it in an extremely efficient manner. 7. “Embracing manyness”: it is going beyond the idea of one-best-way or single global strategy. The concept of manyness means that success will come from an adaptation to complexity, as the company of the future is bound to adapt to many countries, economies, markets, locations, and facilities. It will resort to many strategies for different cultures, products, services, customers and situations. And it will use many kinds of backgrounds, skills, talents, ideas, and organization systems. Impact on organizations For years, companies have operated across countries’ borders: in order to do so, they have resorted to many forms of organization (Maerki, 2008). The researcher distinguishes three steps of evolution: 1. The “international corporation” in the XIX century and before: the company did business abroad but the decision-making, production and finance remained in the home country; 2. The “multinational model” in the XX century: corporations reproduced their operations in the countries where they were involved. Because of globalization, this model has become redundant and not competitive, as it is too costly to reproduce the same processes in each subsidiary; 3. The new model for the XXI century is the “globally integrated model”: companies gather their operations in few locations to “serve the entire globe”, look at their environment from a global perspective and implement a corporate governance to create durable economic value. Multinational firms try to adjust to the global model so as to reduce expenses and develop their competitive advantages (Laudicina, 2010). These rapid evolutions of course influence their organization. For example, the changing business environment obliges global corporations to develop longer and leaner supply chains, create decentralized service centers, and foster multipolar management. As the author underlines, “as these trends continue to evolve, it is reasonable to expect corporate models to evolve as well” (Laudicina, 2010, p.7). CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 23
  24. 24. Globalization also increases the complexity for companies, especially concerning responsibility needs (Maerki, 2008). Governments continue to have an impact on the company’s social responsibility as they generate regulations. Besides, companies have to take into account other stakeholders: consumers, NGOs and communities. Challenges to come As Laudicina puts it, “in this transformed environment, global corporations will face difficult decisions about how they structure their business”(2010, p. 8). Indeed, they have to find out which markets shall bring the strongest growth, considering demographic changes and consumer preferences. They have to understand what the future low-cost sources will be when many factors are changing: labor costs, visibility, quality risks, transportation costs, political risks, new demand drivers, etc. It seems that in this world of complexity, contradictions and rapidity, organizations have to be agile and forecast probable scenarios for the future so as to know how to behave in the present (Laudicina, 2010). Last but not least, the current challenge for organizations is to find a trade-off between the “demands of the short term and local, with the imperative of the long-term and global” (Laudicina, 2010, p.11.). The global dimension of nowadays’ biggest corporations also has another important consequence: such companies somehow shape the communities on which they insist (Avishai, 1994). This happens while the idea of «Nation» continues to lose adhesive power and influence on societies, especially on the multi-ethnical ones. The Nation is increasingly reduced to the role of a formal institution (Bauman 1998). In addition to this, companies foster mobility: every resource of the globalized company (including human resources) has to experience as much mobility as possible (Baumann, 1998): transnational companies definitely give to communities a dynamic shape, which often turns out to be a precarious one. These two phenomena global corporations are accountable for – the shaping of the society and the fostering of mobility – emphasize the importance of Corporate Social Responsibility issues, as the companies are experiencing new forms of liability that are not only related to shareholders, but involve the broader class of the stakeholders (Avishai, 1994). Technology as innovation “Innovation is not useful for companies only, but also and above all for the society which elaborates such innovation [...] Innovation does not change only the destiny of companies, but changes the whole world as well” (Munari & Sobrero, 2004). Innovation is the fundamental process where technology plays the main role and becomes a centerpiece of the whole modernity. Munari and Sobrero define a radical innovation as a ‘jump in a new systematic and structural diversity’ (2004, p.24). Such a jump can be divided into two steps, deeply interrelated: the innovation of sense and the useful innovation. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 24
  25. 25. The innovation of sense goes through the society and shapes its common sense. For example, the socalled Green economy lies mostly on an innovation of sense concerning the sustainability of our model of growth (Lubin & Esty, 2010). This innovation quickly spread worldwide. Then the useful innovation can come after an innovation of sense, or be the reason for an innovation of sense itself. It is a concrete and technological innovation which concerns a product or a process in a company (a new solar panel based on concentration lens and a new photovoltaic wafer that can produce 20% more energy than the traditional one is an example of useful innovation). Innovation and technology are paramount nowadays, therefore the fast obsolescence of modern technologies are to be a major feature of the global era. It seems to be drawing the path for economic changes. The fear of obsolescence is the driver that reshapes the new markets’ needs. Technology innovations access the market through new companies, then they join a larger net made by flows of information, data, people, thoughts, interests, new needs, expectations, goods/services, which can be called the whole company-stakeholders structure (Munari & Sobrero, 2004). Demographic Trends The ageing population Most executives in developed nations are vaguely aware that a major demographic shift is about to transform their societies and their companies. They even assume that there is little they can do about it (Strack, Baier & Fahlander, 2008). Nevertheless, according to the facts and figures, the awareness about the impacts of demographic trends should be increased in a significant way. The statistics are undeniable: in most developed economies, the workforce is steadily ageing, a reflection of declining birth rates and the graying of the baby boom generation. The percentage of the workforce between the ages of 55-64 is growing faster than any other age group. Even in an emerging economy like China, the number of manufacturing workers aged 50 or older will more than double in the next 15 years (Strack, Baier & Fahlander, 2008). To clarify this trend, on average, the proportion of individuals older than 65 years is projected to increase by more than 10 percentage points, from 14.3% in 2000 to 25.7% in 2040. The speed of this ageing process is expected to vary among countries and to be more rapid in the Republic of Korea, Germany, Canada, Austria, Italy, Spain, Japan, the Netherlands and Switzerland. In addition to ageing, many OECD5 countries are likely to experience a reduction in the size of their population. This reduction, it appears, will be particularly pronounced in Italy, Germany, Japan, Greece and Spain (Spieza, 2002). 5 Countries which are member of the organization for economic cooperation and development. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 25
  26. 26. Labour supply The major population changes are likely to have a significant impact on the labour market. This impact stems from the shift in the age distribution of the population and the increase in the proportion of elderly people. As older individuals tend to have lower rates of labour force participation, this shift is likely to result in lower overall participation rates and a contraction of labour supply. Implications for organizations: productivity and knowledge retention It can be said that a main consequence of ageing is the effect on knowledge retention in the organization. As employees get older, and retire, companies can face significant losses of critical knowledge and skills. The demographic trend has been exacerbated by the relentless focus on cost reduction that has become the business norm. To be more specific, retirement is causing the loss of a worker with the skills to perform a specific job. It may also represent the loss of crucial knowledge whose value to the organization extends beyond the individual position (Strack, Baier & Fahlander, 2008). Furthermore, the shortage in labor supply (and especially younger workers) will hinder the replacement of older talents with new ones. Therefore, companies in industrialized markets will face a labor shortage and brain drain of dramatic proportions (Dychtwald, Morison & Erickson, 2006). Second, there is a strong debate surrounding the effect of aging on productivity. One the one hand authors state that: ´the aging labour force is less efficient because elderly individuals have less physical and social capacity, higher morbity and less dynamic and innovative aptitudes´(Simon, 1986). This argument is more directed on the incapability of the workers and therefore places the responsibility for ineffective productivity with the employee. Other authors highlight that this argument is too restrictive. According to them, at the individual level, the issue of ageing and working can be seen in terms of an imbalance between functional capabilities and the demands of work. They also focus on the ageing affect on productivity, but in a more constructive way (Coleman, 1993). As a consequence of this last point of view, a key finding on aging and productivity is that individual performances at work strongly depend on the content, organization and environment of the work itself, which emphasizes the responsibility of the organization, regarding this subject (Spieza, 2002). In terms of organizational policy, these findings about productivity and knowledge retention have several main implications. A major organizational requirement, as a consequence of ageing, would be to create a culture in which learning and development are given high priority among older workers, as well as younger employees. Companies should assist older workers in moving laterally into new and challenging jobs and provide training that is specially tailored to their requirements, to safeguard the productivity (Spieza, 2002). CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 26
  27. 27. Economic Environment “The global economic crisis, which severely tested our adaptability and flexibility this past year, will be truly transformational in its impact. Many accepted paradigms, including the way in which business interacts with its stakeholders, particularly governments, will have to be rewritten. The turbulence of the last months will significantly accelerate the development of business models that capitalize on the new opportunities created by the crisis, including the expansion of the so-called green economy”. (Schwab, 2009) “The shocks that hit the U.S. economy last fall were, by almost any measure, larger than those that precipitated the Great Depression”. (Romer, 2009) The words of Schwab and Romer bring us directly into the core of the problem: after the global financial crisis the world will never be the same. To understand what companies and managers will have to adapt to, attention was pointed to the external environmental factors related with economics. The fall of Lehman Brothers appears to be a turning point in history. The figure below shows a projection of Goldman Sachs about the GDP of the G6 and the BRIC Countries from 2000 to 2043 which highlights the most relevant over takings of emerging economies over the developed ones (USD billions (2003)). The overtaking Countries are in bold, the overtaken in italic bold. 2000 2016 2023 2039 2041 2043 19.702 27.847 31.559 43.175 44.987 46.908 USA 9.825 15.106 17.518 26.542 27.929 29.399 Japan 4.176 4.925 5.443 5.998 6.086 6.187 4 major EU Countries 5.701 7.816 8.598 10.635 10.972 11.322 BRIC 2.700 9.02 15.110 44.147 50.038 56.473 China 1.078 5.156 8.863 24.949 28.003 31.257 India 46 1.53 2.682 11.322 13.490 15.989 China +India 1.547 6.687 11.545 36.271 41.493 47.246 Source: global economics, Paper 99, p.19 Figure 7: projection of Goldman Sachs about the GDP of the G6 and the BRIC Countries: 2000-2043. G6 As can be seen, according to Goldman Sachs (2003), Brazil, Russia, India and China will definitely overrun the G6 economies by 2043. In the year 2000 the GDP of the BRICs was 13% of the advanced economies. According to Goldman Sachs the first overtaking will take place in 2016, when China’s GDP will result greater than the Japanese one, and the BRICs will generate a GDP equal to a third of the G6’s. The next step should be in 2023, when China alone will rank over the top four Europeans and the BRICs will be near to the US. The final chapter is between 2041 and 2043, when also India will overtake the best four European countries and China will reach the US. The future appears to be a multipolar one. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 27
  28. 28. While developed economies lose out to emerging countries, prices are expected to decrease worldwide: “Most markets will experience pressures on pricing. Economic weakness and extra capacity, and possibly a shift in the zeitgeist from excess to frugality, have already pushed prices downward. Expansion into poorer markets at home and abroad will intensify this trend” (Ghemawat, 2010). Meanwhile, a great debate is taking place concerning the behavior of large financial institutions’ leaders, as well as about the whole category of top managers, accused to be greedy and more interested in stock options than in the common good. ‘In the United States the Pew Research Center asked the public how much people in ten occupations contributed to the well-being of society. Business executives were ranked at the very bottom and only 21% of respondents thought they contributed significantly’ (Ghemawat, 2010). After top executives got their bonuses and went away, governments had to save the day. The governmental intervention in the economy is a strong reality, rising from the ashes of neo liberalism (Stiglitz, 2008): “The current crisis has demonstrated that markets do not automatically control systemic risk, any more than they automatically create competition. Pragmatically speaking, therefore, government intervention is required to prevent markets from destroying themselves, and the relevant question is what kind of intervention is effective” (Duncan Watts, 2009). The governmental intervention is likely to be focused on the so-called Green economy. As Klaus Schwab wrote at the beginning of the 2009 Davos World Economic Forum, the crisis also created new opportunities, and the Green economy is one of the most important. Former Prime Minister of the UK Gordon Brown claimed: ¨we will join a Green New Deal¨; meanwhile, President Obama promised to pump $150 billion into green technology over the next decade. To summarize, the main features of the economic environment that were considered as most important to be taken into consideration are: - The global financial crisis and its consequences; The rise of the BRIC countries; The increase of government size into economies; The global low-price competition and the decrease of western purchasing power; The Green economy. Corporate Social Responsibility In this part first of all it will be explained why companies act in socially responsible ways, and further what impact it has on the role of the manager. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 28
  29. 29. During the last two decades there has been an increasing focus on CSR both in the business press and in academic papers, but there has not been much focus on understanding why CSR has become so important (Cambell, 2007). In the article by Cambell (2007) were found eight propositions about what factors have an impact on the companies’ attitudes and actions towards CSR, which will be passed through below. 1. The first proposition concerns the financial performance of the companies. So if the companies are experiencing relatively weak financial performance and are operating in an unhealthy environment, they are less likely to act in socially responsible ways. 2. The intensiveness of the competition also has an impact on CSR. That is, if the companies are operating in a market where the rivalry is low and close to monopoly, they will have little incentive to act in socially responsible ways, because for instance the reputation of the company will not likely influence sales. Likewise, if the companies are operating in an environment where the rivalry is very intensive, they will be less likely to act in socially responsible ways, because the profit margins are so narrow that investing in CSR will set shareholder value and firm survival at risk. 3. The state regulations too have an impact on CSR in such a way that companies are more likely to act in socially responsible ways when state regulations are strong, well-enforced and ensure such a behaviour. Further the state regulations must be based on negotiations and consensus among government, companies and other stakeholders. 4. The companies are more likely to act in socially responsible ways, when there is a system of wellorganized and effective industrial self-regulation that ensures such behaviour. 5. The private organizations, including NGOs, social movement organizations, institutional investors and the press, have an impact on the companies’ likelihood to act in socially responsible ways, when they monitor the companies’ behaviour. 6. When normative calls for a social responsible behaviour are institutionalized (e.g. in important business publications and business school curricula), the companies are more likely to act in socially responsible ways. 7. When the companies belong to trade or employer associations that promote social responsible behaviour, they are more likely to act in socially responsible ways. 8. When companies are engaged in institutionalized dialogue with their stakeholders (e.g. unions, employees, community groups, investors etc.) they are more likely to act in socially responsible ways. Because of the fact that CSR is so ambiguous, managers have the responsibility to create meaning for their teams (Angus-Leppan, Metcalf & Benn, 2009). In order to do that, the manager needs to understand the past, present and future. In other words, to have a so-called system perspective (Maon, Lindgreen & Swaen, 2008). Overall, what is important regarding CSR is the mindset of the manager, because managerial perceptions are of vital importance for the company’s CSR strategy. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 29
  30. 30. That is to say that the right interpretation of the environment and the requirements from stakeholders can lead to success and improved performance, while a wrong interpretation can lead to performance deterioration and crisis (Maon, Lindgreen & Swaen, 2008). CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 30
  31. 31. 4.1.2 Interview Results In this part an overview of the main environmental factors, influencing companies will be provided. This overview is extracted based on the answers from the interviews with 28 managers. The factors are divided into five families of consequences which are explained in sequence of importance (first highest, last lowest importance): global financial crisis, globalization, (information) technology, governments and green economy. Global Financial Crisis The crisis explodes in year 2009, after the bankruptcy of Lehman Brothers, and the world economy is still struggling for a satisfactory growth. The difficult scenario and its consequences are vivid in the minds of the interviewees, who referred to the global financial crisis and related factors 21 times in 27 interviews. No other external factor has been quoted so much. Managers generically pointed the financial crisis as a factor having a major impact on the companies nine times. Occasionally, they mentioned other factors that they linked or are linkable to the financial crisis: the decrease in demand and the fact customers purchase less are factors quoted six times. The credit crunch was quoted four times, and the complete stop in the real estate market was pointed once, as well as the fluctuation of the prices of energy-related commodities and fuels. The consequences on the companies, according to the interviewed managers, are: - Difficulties in motivating people: it is not possible to hire workers with a satisfactory contract; - Companies are now focused on where to create value, especially through innovation; - In order to cut consulting costs, clients of consultancy services started developing own internal consulting activity; - To relocate manufacturing to countries like China and generally in Asia, became a more important issue; - Companies have to satisfy customers more focused on the time of delivery and on the costs than before. Globalization Managers referred to globalization and other related factors eight times in 27 interviews. Globalization has been pointed twice directly. Besides, competition-related issues have been mentioned three times. The competition has been defined as “always changing”, as a “low-cost competition”, or described as a “battle taking place on the field of marketing”. China and oriental markets have been indicated three times as impacting the world trade, source of new competitors, great opportunities, as well as Russia, for the real estate business. Once a manager generically referred to the emergence of new markets. In addition, one manager offered his point of view about the consequences of globalization on companies, explaining that they need to rethink their organization. Italian companies in particular are still operating with a lot of “power to the centre”: operations all around the world are rather an “execution of what is decided at the centre”. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 31
  32. 32. (Information) Technology: Managers mentioned once technology and the IT revolution, along with research and development, as factors impacting their businesses. Governments The government and the dynamics of the public sector have been highlighted once as influencing the business, and the regulatory environment has been mentioned once as well, because of its role in writing the rules of particular markets as the energy market. Green economy Once a manager pointed the booming of the market of renewable energies in Italy as the factor that mainly affected the company. 4.1.3 Combining the Results: Interviews and Literature Review The results from the semi-structured interviews support part of the choices of subjects made earlier in the literature review. The literature review was concentrated on five main issues: globalization, technology, demographic trends, economic environment and corporate social responsibility. When asked about “the most important external factor, out of the company’s control, that had a major impact on the organization, within the last three years”, 21 times the managers answered referring to the global financial crisis, which was the first part of the literature review about the economic environment (Schwab, 2009; Romer, 2009). The interviewees mentioned – eight times in 28 interviews – the importance of globalization, that was thoroughly examined within the literature review (Avishai 1994; Baumann, 1998; OECD, 2003; UNCTD, 2003; Wiersema and Bowen, 2008; Pillania, 2009; Laudicina, 2010). One of the interviewed managers defined the kind of competition fostered nowadays by globalization as a “low-cost competition”. In parallel to that the first of the “seven struggles for each company” described by Pillania, part of the literature review, is “Minding the cost gap”: companies have to maintain costs low and continue to grow, while it becomes more and more challenging for them as costs increase – e.g. raw materials price (Pillania, 2009). On the same issue Pankaj Ghemawat was also quoted, underlining that “most markets will experience pressures on pricing” (Ghemawat, 2010). Another manager underlined the importance of relocating the production to low-labor-cost markets, and this is linkable to what Pillania calls “pinpointing” (Pillania, 2009). In addition to that, one of the interviewed managers explicitly mentioned the decentralizing effect of globalization on the organization of companies. It is exactly what Laudicina means when he writes that companies have to create decentralized service centers, and foster multipolar management (Laudicina, 2010). The rise of the BRIC countries described through a Goldman Sachs study (Goldman Sachs, 2003) appears to be an acknowledged issue to the interviewees, who mentioned China and the oriental markets three times. Also the increase of government size (Stiglitz, 2008; Duncan Watts, 2009) was quoted twice. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 32
  34. 34. 4.2 Managerial Competencies 4.2.1 Interview Results General overview As it appears from the data, there are eight main families which emerge from the data, in sequence: hard skills, political ability, business sense, adaptation ability, multicultural mindset, interpersonal competencies, CSR mindset and personal characteristics. It is obvious that some of these families cover a wide range of different competencies (the precise results can be found in appendix 5). It is interesting to notice that the families business sense and interpersonal skills cover a high number of different competencies which could imply that these families of competencies are very valued within the companies. Within each family there are some competencies which are mentioned more frequently. This could imply that they are given higher priority by the managers interviewed. In the table below are shown the most frequently mentioned competencies, and therefore the most important competencies according to the managers. Multicultural mindset - Speak other languages - Understand different behavior and ways of looking at things - Work and deal with different cultures - Intercultural understanding CSR mindset Interpersonal skills - Understanding diversity and its importance - Sensitivity about importance of CSR - Ethic way of doing business - Understand stakeholders - Building relationships - Communication skills - Team working - Motivating others Personal characteristics - Humility - Openness Figure 8: most frequently mentioned competencies CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 34
  35. 35. In-depth overview within families of competencies The figures below show for each family of competencies all the competencies mentioned by managers, and the most frequently mentioned are highlighted in bold letters. Within each family the competencies that are linked close to each other are clustered in elements. Figure 9: linking the competencies: hard skills As it can be seen in figure 9, having an analytical approach is appearing very often in the interviews, so it is highlighted as being important (put in bold characters in the figure). Analytical approach is linked to other competencies, which are: critical thinking, problem solving, evaluating trade-offs and performing risk analysis. This might imply that these competencies are more important for companies as well. Further, within another element in the figure, it appears that fast and efficient decision-making and focusing on main information is marked as being crucial. Since there are two main competencies marked as important it can imply that this element (sub-category) should be considered as more essential. This means that the competencies efficiency and prioritizing are crucial as well. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 35
  36. 36. Figure 10: linking the competencies: political abilities In figure 10 above the competencies that belong to the family of competencies called political abilities are shown. Among these competencies transparency was mentioned very often by the managers, which implies that it is an important managerial competency. Transparency is closely link to credibility and the ability to build legitimacy as a leader, so the whole element consisting of the three competencies can be considered as essential. Figure 11: linking the competencies: business sense CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 36
  37. 37. As is appearing from figure 11 there are two competencies within one element which are mentioned very often in the interviews. These are: having a global overview of the business and having a quick understanding of business situations. After looking more in-depth to the competencies they were linked to the following competencies: having a global world view and being able to understand the environment of the company. Since there are two competencies of the same element mentioned very often, it can be said that these kind of competencies are perceived as being important by managers, and therefore companies. The other competency which is mentioned very often is understanding and adapting to the governmental way of acting. For this competency some sensitivity is needed. As can be seen in appendix 9 the other competencies within this element are: associating the goals of the government with the goals of the company and the ability to lobby with the government are only mentioned once and twice. Further, as can be seen in the interview summaries (appendix 4), the competency related to understanding and adapting to governmental way of acting is only mentioned when the question about the government is asked (dependent on the category of interviews either being question 4 or 5). This can imply that the question pushes the interviewees to answer in a certain direction. In short, this competency should not be seen as being very crucial for managers. Figure 12: linking the competencies: adaptation abilities Above is shown the competencies that belong to the family called adaptation abilities, and within this family, six sub elements emerge from the data. It is very clear that one of these elements, flexibility and world-wide mobility, is given higher priority by the managers, because these competencies were without any doubt the ones that were mentioned most frequently within the family, and therefore they are highlighted in bold characters. Besides that, the competency, to deal CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 37
  38. 38. with and manage complexity, was mentioned quite often as well, which implies that it is an essential competency for the next generation of managers. Figure 13: linking the competencies: multicultural mindset As it appears from figure 13, the competencies related to dealing with and understanding different cultures and behaviors are mentioned very often. The three competencies within the element are: working and dealing with different cultures, having a cultural understanding, understand different behaviors and ways of looking at things. They are mentioned often and can be seen as linked to each other. Hence, understanding different behaviors and ways of looking at things can be interpreted as having a cultural understanding. Further, being able to work and deal with different cultures might involve that the cultural understanding is present. As a conclusion, the competencies within this element are considered as being vital for managers and therefore companies. As can be seen in the figure 13 speaking other languages is mentioned frequently and therefore is given higher priority. Another critical point can be made regarding this topic. The ability to speak English has to be included in the competency of speaking other languages. Hence, what does it mean when a manager talks about speaking other languages? This involves most of the time speaking English. Therefore, this language can be included in the competency to speak other languages, and in total it can be seen as being crucial for managers. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 38
  39. 39. Figure 14: linking the competencies: CSR mindset Figure 14 above shows the family of competencies called CSR mindset, and consists of four elements. Among all these competencies, sensitivity about CSR is the one mentioned most frequently by the managers, and therefore is considered as an essential competency for the next generation of managers. The three competencies, to understand the impact of the green economy on the company’s image, and understand the advantages of green economy as well as understand the stakeholders are competencies which are all part of being sensitive to CSR. Therefore the whole element can be considered as vital managerial competencies. Regarding diversity, the managers give high priority to the understanding of diversity and its importance, since they mentioned this competency often. As more specific parts of diversity, the managers also mention understand gender diversity and its importance and understand the different generations and how they can add value. These two competencies are a part of diversity in general, and therefore the whole element regarding diversity consists of crucial competencies for the next generation of managers. Finally, the managers mention ethic way of doing business quite often, which is related to taking limited risks and having a long-term focus. This implies that the ethic way of doing business is a essential managerial competency. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 39
  40. 40. Figure 15: linking the competencies: interpersonal skills Within this family of competencies seven elements are created. Among these four of them contain competencies mentioned frequently by managers. In the first element the competency ability to build relationships is mentioned. In the second element the competency communication skills is placed. Since the other competencies such as listening are closely related to this, these can be perceived as being significant as well. Furthermore, within the third element in the figure team-working is mentioned very often and can be perceived as being essential. Within this element the competencies knowledge sharing and the ability to learn from others are mentioned often as well. It can be said that together with teamworking these two competencies are being perceived as essential by managers. Within the fourth element, motivating others is mentioned very often. Further, the ability to understand people is also mentioned quite frequently. Since these two can be linked very easily (you need to understand people before you can motivate them) both of them are considered as very essential for managers. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 40
  41. 41. Figure 16: linking the competencies: personal characteristics The last figure 16 of the families of competencies is called personal characteristics and consists of eight elements. This family is characterized by the fact that many of the competencies are not specifically linked together and only mentioned few times by the managers. However, there is one exception, because there is one big element to which openness and humility belong. These two competencies are mentioned most often. Therefore openness and humility are considered as essential managerial competencies. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 41
  42. 42. 4.2.2 Survey Results In this chapter the results from the quantitative survey will be provided. To get a visual overview of all the results from the survey see appendix 8. Hard skills vs. Soft skills As can be seen in figure 17, the respondents answered in a balanced way about the importance of hard and soft skills. The respective percentages are for hard skills: 49.03% and for soft skills: 49.9%. It is obvious that the two percentages do not add up to 100%. This means that some respondents have made mistakes in distributing the points. After detecting the response with missing answers and the response containing significant mistakes, it becomes clear that these mistakes do not change the percentages significantly. Therefore, these percentages reflect the fact the managers give equal importance to the hard skills and soft skills managers should have. Figure 17: importance hard and soft skills Dimensions of hard competencies When looking at the distribution of dimensions of hard competencies, it can be said that they are rather equally distributed, with a range from 7.99% to 17.34%. Most of the dimensions are distributed around 12%. Two of the dimensions are given a higher score. These are: strategy & organization (17.34%) and innovation (17.16%). This means that these subjects are given a higher importance by managers. Families of soft competencies Within these answers on this topic there are three families of competencies that are given high importance. In sequence: cognitive competencies (19.69%), entrepreneurial competencies (16.34%) and adaptation competencies (16.54%). Further, the following competencies are almost all very closely linked to these competencies. Only the CSR mindset is quite distant, because it has the lowest score (11.95%). Cognitive competencies Within this family there are two competencies which are given high priority. For the highest ranked competency: priority setting and time management 31 out of 59 managers have put this competency CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 42
  43. 43. in their top three list (52.54%). For the ability to solve complex problems, 30 managers (50.85%) give high priority to this. Besides these two competencies there are three competencies which are selected a lot of times. The number of times the competencies are selected is in a very close range: intellectual agility (26 times selected, 44.07%), fast-decision-making (27 times selected, 45.75%) and having a strategic orientation ( selected 27 times, 45.76%). Political competencies Within this family there are two competencies clearly more often selected by the managers. Building credibility is selected by 51 out of 59 managers in their list of three main competencies. Further, managing through networks is selected by 47 out of 59 managers (79.66%) in their list of three competencies. Entrepreneurial competencies Within this family of soft competencies there are two competencies clearly more often selected by the managers. Innovating is selected by 41 out of 59 managers (69.49%) in their list of three main competencies and client orientation 37 times (62.71%). Following these competencies there are result orientation (selected 26 times out of 59, 44.07%) and opportunity seeking and taking (selected 25 times out of 59, 42.37%). Adaptation competencies Within this family of competencies there is one competency selected very often which is flexibility. This competency is selected by 52 managers in the list of three main competencies of 59 managers. CSR mindset Within this family of competencies there are two competencies selected very often compared to the others. First, ethics and values is selected frequently, 55 managers (out of 59) selected this competency in their list of three main competencies. Second, social responsibility is selected by 51 managers. Interpersonal competencies Within this family of competencies there are three competencies selected more frequently than the others. These are: conflict management, openness to others and delegation and empowerment. The number of times they are selected, to be in the list of main competencies, is respectively: 43, 41 and 40 times out of 59 managers. Intrapersonal competencies Within this family there is one competency clearly more often selected by managers to be a main competency. This is developing others, which is selected by 43 out of 58 managers. To summarize, managers give almost equal importance to soft skills and hard skills. Further within the family of hard competencies they rank the dimensions strategy and organization and innovation as being essential. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 43
  44. 44. There are three main families within soft competencies which are given more importance. These are: cognitive competencies, entrepreneurial competencies and adaptation competencies. Within the family cognitive competencies, the main selected managerial competencies are: priority setting and time management and complex problem solving. Within the family entrepreneurial competencies the main selected managerial competencies are: innovating and client orientation. Within the family adaptation competencies the main selected managerial competency is flexibility. 4.2.3 Combining the Results: Interviews and Survey As is appearing from the interview results it seems that hard skills are not given much importance by managers. Hence, the competencies within this family are not mentioned a lot of time. However, these competencies will further be considered as being equally important. This conclusion is based on several arguments. First, the interview questions direct the interviewees partly towards mentioning soft-skills. Second, a lot of different managers mention that: ¨hard skills are taken for granted¨ or ¨are basic¨. And third, the result from the survey shows that managers value soft skills and hard skills as being almost equally important. From the quantitative survey it becomes clear that priority setting and time management are very valued by managers. Though, in the qualitative results the competencies prioritizing and time management are not valued as being very important since they have not been mentioned a lot of times. From the quantitative data a conclusion should be drawn that these competencies should be given more credit. Further, from the quantitative research it becomes clear that the ability to solve complex problems is essential. This can be linked to two competencies within the qualitative results, being: problemsolving and dealing with and manage complexity. The last competency is already given high importance to, but the first is not. This means that there should be given more importance to the competency problem solving. Building credibility appears to be an important competency from the quantitative web-survey. There are three competencies (from the qualitative results) that can be linked to this competency, which are: transparency (managers claim that this is necessary to build credibility), building legitimacy credibility. The importance given to credibility within the quantitative survey means that a higher priority should be given to this competency. Managing through relationships is highly valued by managers within the quantitative survey. This competency can be linked to two competencies within the qualitative results. First: building relationships, which is already highlighted as important. Then: networking, which should be given more credit according to the results of the web-survey. Flexibility is given high importance both in the quantitative and qualitative research. This supports the idea that this competency is crucial for managers. From the data generated from the quantitative survey it appears that one of the most important managerial competencies is the ability to develop others. This competency was also mentioned in the interview, in a slightly different way, however. It is, the ability to make people grow. They can be CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 44
  45. 45. considered as the same competency. From the qualitative data the ability to develop others is only mentioned twice and therefore not considered as one of the most important competencies, in the first place. In the meanwhile, the result from the quantitative data suggests that the ability to develop others should be given a higher priority. The next competency, which appears to be one of the most important based on the quantitative data is empowerment/delegation. This competency also emerges from the qualitative data and is mentioned quite often. This means that from the qualitative data it was not one of the most important competency, but still not one of the least important either. So the quantitative data shows a stronger importance to empowerment/delegation, and therefore it might be more appropriate to upgrade the priority of the competency. Openness to others is also a competency that appears to be one of the most essential from the quantitative data. From the qualitative data the competency openness, in general, not necessarily to other people, is mentioned most frequently, which means that the quantitative data confirm the first implication that openness definitely is one of the most crucial managerial competencies. Further, conflict management appears to be one of the most important competencies based on the quantitative data. During the interviews this competency is mentioned six times, which means that it is not ranked as one of the most crucial competencies, but still not one of the least crucial either. The result from the quantitative data implies that the overall importance of conflict management should be increased, and in this way conflict management should be given a higher priority as a managerial competency. Social responsibility in the survey can be linked to the competency of responsibility in the CSR mindset family from the qualitative research, which was mentioned quite a lot. It can also be related to sensitivity about importance of CSR which is a prevailing competency in the family. The result of the survey is therefore confirming the value that interviewees grant to the social responsibility of managers. In the result of the quantitative survey ethics and values can be related to the CSR mindset family in the qualitative research. Being ethic can be linked to an ethic way of doing business, which is frequently mentioned. Then the values can also be connected to the responsibility already referred to in last paragraph. Thus, it is verified from quantitative survey that an ethic way of doing business is an important competency required from managers. From the results of the quantitative survey client orientation is strongly related to customer orientation in the results from qualitative data in the business sense family. However, in the qualitative research, this competency was not cited very frequently. Therefore this survey result highlights something that did not appear clearly during the interviews: customer orientation is a significant competency managers should have. The innovating competency from the quantitative survey is closely linked to the competency innovativeness from the business sense family in the qualitative result. This competency is not CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 45
  46. 46. mentioned very often by managers. It can be concluded that the survey sheds light on an additional important competency for the new generation of managers: the ability to innovate. For a clearer overview of the most important competencies both from the quantitative and the qualitative data see appendix 9. 4.3 Direct Recommendations In this chapter direct recommendations from managers about the MBA will be provided. These recommendations are concerning subjects, pedagogical methods and competencies to be developed during an MBA. For a global overview of all the direct recommendations from managers about an ideal MBA see appendix 10. 4.3.1 Interview Results: Suggestions about Subjects Below in figure 18 is given an overview of the different subjects that the managers recommend for the MBA program. The subjects highlighted in bold characters are the ones mentioned most frequently, and are the following: finance, strategy, marketing and organization. This implies that these subjects are still very important and therefore should remain in the MBA program. From the data emerge different groups of subjects, which are put in different places in the model according to how classical or original/new each group of subjects is. That is, on the left side of the model, in blue colours, are shown all the classical subjects that the managers mentioned. In the middle, in purple colours, are shown the subjects that are in between, which means that in some business schools they are not new, but in others they are quite new. Finally, on the right side of the model are shown, in red colours, all the new and original subjects that the managers mention during the interviews. These might be especially interesting for the further interpretation, idea generation and the final recommendations, since they bring a valuable input to the creative process. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 46
  47. 47. Figure 18: organizing recommendations subjects 4.3.2 Interview Results: Pedagogical Methods First of all, what is obvious is the fact that in the mind of managers, an equilibrium between theory and practice is needed. Models and frameworks are useful to understand the world. Globally, managers insisted mainly on the practical dimension needed in an MBA. Second, students should be confronted with real situations and be provided testimonies from diverse managers . Tangible examples are necessary, not only about successes but also about failures. Third, using best practices is mentioned as a good way to teach. Besides that, students should learn in a practical way, that is to say mainly through case-studies (including cross-cultural case-study). The managers interviewed use the meaning of case study in two different ways. First, a case study is a written document in the Harvard Business School style, which proposes students to analyse a situation and provide recommendations. According to the second meaning, it is much more interactive: a manager presents to the students a situation he/she went through and makes them analyse and provide recommendations. Another idea is to propose games and simulations. Last but not least, the need to learn through internships is highlighted as something essential. Next, the aspect that is very much underlined by the majority of managers was the need to do project works in teams. CONSULTANCY REPORT LUISS BUSINESS SCHOOL, JULY 2010 47