Strategy Management Changes

1
Strategy Management Changes
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• Strategies
• Offensive strategy
• Defensive strategy
• Transition strategies
• Passive strategy
• Destructive strategy
• Limited offensive strategy

3
Passive Strategy

• Production without customer oriented strategy
• Supply a delivery without payment
• Vicious circle
• Clever solution (leas resistance) how to survive
• Domino effect (Threat ! Banks too!)
• Bank credits for salary

4
Strategies of survival

• Employment stability
• Short and medium termism
• Maintenance of optimal employment levels
• Managerial survival before the arrival of new
  owners

5
Destructive Strategy

• Supplier Costumer
• Limited Limited
• Company Company

• Supplier Customer

6
Strategies in Different Ownership Forms

• Strategy Participants in
• str. dec. mak.
• Defensive Ministry

• Form
• State owned
• Degovernmentalized C.
• (Nat. Property Fund)
• M. Buy-out
• Foreign investor 100
• Restitution owner
• Voucher method
• New private companies
• Joint-venture

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Strategies in Different Ownership Forms

• Strategy Participants in
• str. dec. mak.
• Defensive Ministry
• Passive Top mng

• Form
• State owned
• Degovernmentalized C.
• (Nat. Property Fund)
• M. Buy-out
• Foreign investor 100
• Restitution owner
• Voucher method
• New private companies
• Joint-venture

8
Strategies in Different Ownership Forms

• Strategy Participants in
• str. dec. mak.
• Defensive Ministry
• Passive Top mng.
• Destructive Top mng. (competent m.)

• Form
• State owned
• Degovernmentalized C.
• (Nat. Property Fund)
• M. Buy-out
• Foreign investor 100
• Restitution owner
• Voucher method
• New private companies
• Joint-venture

9
Strategies in Different Ownership Forms

• Strategy Participants in
• str. dec. mak.
• Defensive Ministry
• Passive Top mng.
• Destructive Top mng. (competent m.)
• Offensive Owners

• Form
• State owned
• Degovernmentalized C.
• (Nat. Property Fund)
• M. Buy-out
• Foreign investor 100
• Restitution owner
• Voucher method
• New private companies
• Joint-venture

10
Strategies in Different Ownership Forms

• Strategy Participants in
• str. dec. mak.
• Defensive Ministry
• Passive Top mng.
• Destructive Top mng. (competent m.)
• Offensive Owners
• Lim. Off. Parent comp.

• Form
• State owned
• Degovernmentalized C.
• (Nat. Property Fund)
• M. Buy-out
• Foreign investor 100
• Restitution owner
• Voucher method
• New private companies
• Joint-venture

11
Strategies in Different Ownership Forms

• Strategy Participants in
• str. dec. mak.
• Defensive Ministry
• Passive Top Mng.
• Destructive Top Mng. (competent m.)
• Offensive Owners
• Lim. Off. Parent Comp.
• Offens. Def. Owners Top mng.

• Form
• State owned
• Degovernmentalized C.
• (Nat. Property Fund)
• M. Buy-out
• Foreign investor 100
• Restitution owner
• Voucher method
• New private companies
• Joint-venture

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Strategies in Different Ownership Forms

• Strategy Participants in
• str. dec. mak.
• Defensive Ministry
• Passive Top Mng.
• Destructive Top Mng. (competent m.)
• Offensive Owners
• Lim. Off. Parent Comp.
• Offens. Def. Owners Top mng.
• Def. Mut. Funds Owners T. Mng.

• Form
• State owned
• Degovernmentalized C.
• (Nat. Property Fund)
• M. Buy-out
• Foreign investor 100
• Restitution owner
• Voucher method
• New private companies
• Joint-venture

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Strategies in Different Ownership Forms

• Strategy Participants in
• str. dec. mak.
• Defensive Ministry
• Passive Top Mng. Destructive Top Mng. (competent
  m.)
• Offensive Owners
• Lim. Off. Parent Comp.
• Offens. Def. Owners Top mng.
• Def. Mut. Funds Owners T. Mng.
• Offensive Owner

• Form
• State owned
• Degovernmentalized C.
• (Nat. Property Fund)
• M. Buy-out
• Foreign investor 100
• Restitution owner
• Voucher method
• New private companies
• Joint-venture

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Strategies in Different Ownership Forms

• Strategy Participants in
• str. dec. mak.
• Defensive Ministry
• Passive Top Mng.
• Destructive Top Mng. (competent m.)
• Offensive Owners
• Lim. Off. Parent Comp.
• Offens. Def. Owners Top mng.
• Def. Mut. Funds Owners T. Mng.
• Offensive Owner
• Offensive Limited Parent. C.
• Offensive Parent C.

• Form
• State owned
• Degovernmentalized C.
• (Nat. Property Fund)
• M. Buy-out
• Foreign investor 100
• Restitution owner
• Voucher method
• New private companies
• Joint-venture

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Foreign Capital

• National feeling
• Ownership of land highly sensitive
• FDI is a powerful engine of modernization
• FDI difficult to lure, difficult to control by
  national government
• FDI means of integrating the country into the
  global economy
• Most successful in HU, last years in CR

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Foreign direct investment

• Rapid growth in transition. The main driving
  force of FDI has been privatization
• Hungary, CR, Poland were the favorites in 1997,
  cumulatively attracted 84 per cent of overall FDI
  in CEE.
• In 2002 the CR replaced the Hungary on the first
  position
• Sectoral pattern
• Russia energy
• CEE associated with globalization (automative,
  food, pharmaceutics, hotels)

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Motivations for the investors

• Low costs
• Market potential
• Geographical determinant
• Country risk perceptions
• Tax regime
• Critical mass of investment (the herding
  effect)
• Control mode
• Subcontracting
• J-V
• Wholly owned subsidiary

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Motivation for the countries

• Source of investment capitaldriving force for
  restructurin, know how transfer
• Employment stability
• Western market entrance
• Is there a relation between FDI and growth
• Is there a relation between FDI and advancement
  of reform?

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Portfolio investment and other capital inflows

• Driven by several determinants
• The push effect exerted by international
  interest rates
• Low level in developed countries
• The pulling effect exerted by domestic factors
• Macroeconomic stability (rate of inflation)
• Structural policies (scope, speed, form of
  privatization)
• Opening and expansion of stock exchange

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Reluctant with FDI

• Refusal for political reasons
• Negative attitude to wards foreign capital
• The Germans are only thinking of money
• Anti German sentiment
• Example FDI in Czech republic
• Contacts of former nomeklatura are fundamental
• For
• Maintaing production level
• Protect employment level
• Promote enterprise survival
• Bartering
• Managers have devised basic, uncomplicated
  strategies
• Formulated around a concern for short to medium
• Term survival rather than longer term growth
  with a clear direction
• Examples Czepel strategy
• Strategies in Russian companies

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Joint Venture Strategies in Russia

• Old strategies
• Value added chains cheap labour
• cheap raw material
• own machine tools, halls
• less capital investment
• less risk
• Counter trade ammonia, urea, potash
• contra oil, timber, caviar
• soft drinks x vodka
• Concession oil, gas, timber
• technological know how
• payment in for of products

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• New strategies
• Joint Ventures vertical integration
• growth
• no ceiling in ownership
• components accessible
• Direct foreign investment
• fundamental engine of social change in Russia