Free Essay

Succession of a Ceo

In: Business and Management

Submitted By aprilpeck0401
Words 2201
Pages 9
Succession of a CEO: How Will ITT Educational Services Incorporated Succeed With Changing Their CEO?
April Peck
Daniel Webster College
October 27, 2014

Executive Summary ITT Education Services, Inc. has been under a vast amount of scrutiny in the past year, not only from the media, but the government as well. How does a company like ITT Educational Services, Inc. overcome this scrutiny? With enacting a new CEO, what will that new CEO need to do in order to change the corporate culture and their strategy? Research that was conducted will show that there are other companies who have found themselves in a similar situation as ITT Educational Inc., as well as what they have begun to do in order to be successful in getting through these issues, while increasing how potential customers felt about the company. Along with this information, research was conducted to show what steps ITT Educational Inc. has already done in order to change their processes to become a more student focused company. In conclusion you will see that the research shows that while ITT Educational Inc. is in dire straits those steps that they have taken will assist with getting the company out of the hole they find themselves in now. Also, it will show that a new CEO can come into this company and with the right structure and strategy can take this company from where they are now to a company that has the ability to feel the same success they felt in early 2000, a while following the government policies that have been put in place for all for-profit educational companies.

ITT (International Telephone and Telegraph) Educational Services, Inc. (NYSE: ESI) provides accredited, technology-oriented undergraduate and graduate degree programs through its ITT Technical Institutes and Daniel Webster College to help students develop skills and knowledge that they can use to pursue career opportunities in a variety of fields. It owns and operates more than 135 ITT Technical Institutes and Daniel Webster College. ITT/ESI serves more than 55,000 students at its campuses in 39 states and online (ITT Educational Services, Inc., 2013). The company has been operating since 1969, but began as an Indianapolis based publisher of technical training manuals and textbooks, and has since become the largest provider of technical degrees in the United States (Reference for Business, 2014). The mission of the company is simple, provide a quality postsecondary education and the services that can help a diverse student body to prepare for career opportunities in various fields involving technology, while striving to establish an environment for students and employees which promotes professional growth, encourages each person to achieve his or her highest potential and fosters ethical responsibility and individual creativity within a framework of equal opportunity (Reference for Business, 2014). ITT Educational Services, Inc. has a corporate philosophy, which is, long term integrity is worth far more than short term profit. The company believes that their success depends on the talent and performance of dedicated employees who concentrate, above all, on quality, compliance and customer service (ITT Technical Institute. 2014). The integrity of the company, however, has been questioned within the past year. Recent headlines about Carmel, Indiana based for-profit education company, ITT Educational Services Incorporated (ITT ESI) have been dire. “Among for-profit colleges already under intense scrutiny, ITT ESI is fighting trouble on many fronts” read the report in the Indianapolis Star (Swiatek & Wang, 2014). Some of these troubles the company are fighting include, a plummet in stock prices by almost 46 percent (Gallagher, 2014), real estate deals falling through, and what might be even more damaging for the company; they are being sued by the federal government. The Consumer Financial Protection Bureau filed a lawsuit in February 2014 stating that ITT ESI encouraged new students to enroll at ITT campuses between July and December 2011, by providing them so called “tuition gap” funding with a zero-interest loan called “temporary credit”. The loan typically had to be paid in full at the end of the student’s first academic year. But, the suit claims, ITT ESI knew from the outset that many students would not be able to repay their balances or fund their next year’s tuition gap (Horovitz, 2014). News of this lawsuit caused the company’s stock shares to fall more than 10.19% (Shareholder Alert, 2014), which was just the beginning of falling stock prices for the company. On May 22, 2014, ITT ESI shares fell again by more than 9.34% (Shareholder Alert, 2014) when the company announced that they were withdrawing its previously disclosed internal goals for the next twelve months and investors shouldn’t rely on those internal goals any longer. Unfortunately for the company, the stocks would fall even more. On June 24, 2014 the stock shares fell more than 3.52% (Shareholder Alert, 2014) when ITT ESI announced they would need to restate unaudited financial statements in its Quarterly Reports, and that the previously issued financial statements should no longer be relied upon. While all of these decreases in stock prices were a hard hit for the company, none would prove to be more costly than the hit the ITT ESI stock took on August 4, 2014 when shares of ITT fell more than 46.05% (Shareholder Alert, 2014), after the company disclosed that its sale leaseback agreement with College Portfolio Buyer, LLC was terminated. More bad news was to face ITT ESI again when in September, 2014 the company received a “Wells Notice” from the Securities and Exchange Commission, which is the last step before a civil enforcement action is filed that gives a recipient one last chance to convince regulators not to file a lawsuit, which has the potential to allow the federal government to place a cease-and-desist order along with fines on the company (Shareholder Alert, 2014). With all the scrutiny in the press that ITT ESI is getting, plummeting stock prices and potential civil lawsuits what has the company done in order to rebound? For now the company is being very quiet in hopes that the deals they are making do not falter again, but one thing that is know for sure the company has decided to move to a new CEO. So how will this company, that in 2010 brought in nearly $1.6 billion in revenue and yielded earnings of $374 million (Alpert, 2012), is going to successfully transition from CEO Kevin Modany to a new CEO while battling government lawsuits, falling stock prices, and media scrutiny. In order to come out successful after all of these pit falls ITT ESI will need to not only bring in a new CEO, but there will also need to be some major changes in the company’s strategy and culture. While one cannot, at this time, have complete knowledge of how ITT ESI will accomplish this task, there are other companies in the past that have faced scrutiny, as well as lowering stock prices. One great example recently would be General Motors. Much like ITT ESI, General Motors (GM) faced multiple federal investigations and a credibility crisis over its handling of ignition problems that were linked to at least a dozen deaths (Guarino, 2014). The reason, other than the deaths, that caused the criminal investigation for negligence that GM faced was the alleged cover-up that dated back a decade, also the terms of its federal bankruptcy, including a provision shielding the company from any liability from lawsuits filed before it went bankrupt, may be called into questioning (Guarino, 2014). Faced with a new position of being the first woman to be appointed CEO, Mary Barra was also facing the federal investigation the company she was leading, as well as plummeting stock prices. How would she lead the company back to the success they had after their government bailout? She rolled up her sleeves and faced the issues head on. For any CEO like Mary Barra, or the new CEO that ITT ESI brings in, one thing is certain, according to Peter Cuneo, CEO of Marvel, they have to be transformational. They will have to think radically every day (Nicholson, 2014). These CEOs, according to Cuneo, need to have the ability to change the strategy of their company, as well as the culture. For example, ITT ESI is already preparing for that change. Even though Kevin Modany is not officially leaving the company until February 2015 (Cramer, 2014), there are some signs that show ITT ESI is planning on making some steps towards transforming their strategy. While ITT ESI did use “temporary credit” during 2010 and 2011, since then they have incorporated a new strategy call the Opportunity Scholarship. This new strategy gets the company back to a more student focused base, offering students a scholarship funded by the company up to $25,000 (ITT Technical Institute, 2014). The scholarship is need based and dependent upon the types of federal financial aid funding each student qualifies for. There have also been new programs introduced to several ITT Technical Institutes throughout the United States, from the Breckenridge School of Nursing, to a degree in Software Development which focuses on program coding, the company is changing based on the degrees that prospective students are looking for, as well as programs that are needed within specific industries. Aside from these changes that the company has already taken, what can the new CEO do to change the company, as well as how people feel about the company due to the media scrutiny they have faced in the past year? The new CEO of ITT ESI needs to take a lead from Mary Barra, by facing the problems head on. The company needs to take responsibility for the mistakes made in the past, much as GM has done, but also show the steps they have taken to ratify those mistakes in order to regain the integrity they have as a part of their corporate philosophy. The company can also take a lead from Citigroup, when in 2005 the company decided to get back to basics by selling Travelers life and annuity unit in order to concentrate on their core strengths (Marlin, 2005). ITT ESI needs to do the same. In the past 3 years the company has taken on new programs, new locations, and a deal with Daniel Webster College. Instead of opening in new markets the company needs to focus on campuses that already have established schools, by changing their marketing strategy for those locations, or introducing different programs to that location. While it is still unknown the exact steps that ITT ESI is going to take, or what the new CEO is going to do to change the shape of the company, one could bet on drastic steps being put in place. It is important for any CEO in the situation that he or she will be in to look at CEOs from different companies in different industries and they changes they have enacted. Also, it would be important for them to view how other companies have successfully pushed through the government investigations and lawsuits, remembering, while the industry may be different, the game is still the same. This is corporate America and it can be a beast, but a beast that can be tamed.

Resources
Alpert, B. (2012). Clever is as clever does. Barrons. Retrieved from: http://online.barrons.com/ articles/SB50001424053111904857404577333971078578982. Cramer, B. (2014). ITT educational CEO Kevin Modany to resign. BidnessEct. Retrieved from: http://www.bidnessetc.com/23664-itt-educational-ceo-kevin-modany-to-resign/.
Gallagher, J. (2014). Daily wrap: stocks rebound; ITT tech in trouble. Insurancenewsnet.com. Retrieved from: http://insurancenewsnet.com/oarticle/2014/08/05/daily-wrap-stocks- rebound-itt-tech-in-trouble-a-540086.html#.VE1skJUtDIU.
Horovitz, B. (2014, Feb 26). U.S. sues college chain ITT over loans. Gannett News Service. Retrieved from: http://search.proquest.com/docview/150286833?accountid=27655.
ITT Educational Services, Inc. (2013). About ITT educational services: Corporate Profile. Retrieved from: http://www.ittesi.com/index.php?s=45&item=111.
ITT Technical Institute. (2014). Opportunity Scholarship. Retrieved from: http://www.itt- tech.edu/opportunity_scholarship.cfm.
ITT Technical Institute. (2014). Our Corporate Philosophy. Retrieved from: http://www.itt- tech.edu/employment.cfm.
Marlin, S. (2005). Back to basics for Citi, AmEx. InformationWeek. Retrieved from: http://qd9rx6wg2c.search.serialssolutions.com.proxy.dwc.edu/?genre=article&issn=8750 6874&title=Informationweek&volume=&issue=1025&date=20050207&atitle=BACK%2 0TO%20BASICS%20FOR%20CITI%2C%20AMEX.&spage=18&pages=18- 18&sid=EBSCO:Academic%20Search%20Premier&aulast=Marlin,%20Steven
Nicholson, N. (2014). The transformative CEO. Communication World. Retrieved from: http://cw.iabc.com/2013/11/20/transformative-ceo/.
Reference for Business. (2014). ITT educational services: Company profile. Retrieved from: http://www.referenceforbusiness.com/history2/86/ITT-Educational-Services-Inc.html.
Shareholder Alert. (2014). Pomerantz law firm investigates claims on behalf of investors of ITT educational services. Retrieved from: http://www.cnbc.com/id/102064048.
Swiatek, J. & Wang, S. (2014). Woes stack up for Carmel based ITT tech. Indy Star. Retrieved from: http://www.indystar.com/story/news/education/2014/08/09/woes-stack-carmel- based-itt-tech/13807225/.

Similar Documents

Premium Essay

Charismatic Ceos and Succession Planning: Not so Charismatic

...“Charismatic CEOs and Succession Planning: Not so Charismatic” This article takes a look at CEO succession planning. It essentially focuses on charismatic CEOs and how they chose their successor. This article argues that the approach most charismatic CEOs take is flawed, hence, their successors tend to struggle. Most charismatic CEOs often do not make succession planning a priority until it is too late. In cases where a company puts a process in place, charismatic CEOs tend to be domineering in their choice of a successor. In other cases, charismatic CEOs die on the job, thereby making the transition shaky. Although this article delves into the open literature for insights, it also uses a case study to drive home the point that charismatic CEOs’ approach to succession planning is flawed. The challenges of succession planning are truer today than ever. Indeed, the abrupt departures of two important charismatic CEOs – Charles Prince of Citygroup and Stanley O’Neal of Merrill Lynch – in the aftermath of the 2008 financial crisis, which fetched these firms colossal losses have made scholars to beam their searchlight on this neglected aspect of corporate governance. The nonchalance with the way some CEOs handle the process of succession planning not only puts their companies in jeopardy, but also signposts a major criterion on which outgoing CEOs and their executive board members will be evaluated. Before we proceed, we will issue a caveat: the practice of succession......

Words: 3191 - Pages: 13

Premium Essay

We Are the World

...Research Paper BASED ON Career Concerns of Top Executives, Managerial Ownership and CEO Succession By M. Martin Boyer and Hernán Ortiz-Molina Career Concerns of Top Executives, Managerial Ownership and CEO Succession INTRODUCTION This research shows that how a top manager’s stock ownership in the firm affects their chance of appointment in CEO succession events and how non-appointed managers with higher ownership reacts to search of better career opportunities elsewhere following the CEO turnover event. Career concerns induce top managers to take costly actions that improve their chances of appointment in CEO succession events. This research posits that managerial ownership choices can serve for this purpose. Maintaining larger ownership stakes upon appointment at the CEO position is less costly for more talented managers because they can more profitably run the firm. As a result managers should use their ownership in the firm to signal their ability to the board; and more talented managers should own a larger equity stake in the firm than less talented managers. After developing the conceptual framework in which the ownership decisions of managers with career concerns signal managers’ talent to the board, Researchers derive and empirically test several predictions relating CEO appointment decisions, managerial ownership and executive departure surrounding CEO succession events. The first two predictions follow directly from the intuition that higher......

Words: 1454 - Pages: 6

Premium Essay

Hsbc

...Case Overview In September 2010, the business world was shocked by a public boardroom debacle at HSBC. Incumbent Chairman, Stephen Green, had announced his pre-mature departure from HSBC ahead of schedule, putting HSBC’s succession plan into the spotlight. An unforeseen and public power struggle ensued, with speculation as to whether incumbent CEO Michael Geoghegan or one of several other possible candidates would get the top job. The chaotic succession process undermined HSBC’s stellar reputation for smooth management succession, and damaged the credibility of the board. The objective of this case is to allow a discussion of issues such as the importance of board and senior management succession planning and what it entails, the difference between a Chairman’s and CEO’s roles, attributes of a good Chairman, and whether former senior executives should become board chairmen. HSBC: A Model of Smooth Succession HSBC has a long history of smooth board and senior management succession underpinned by clear succession plans. Regular review of these plans by independent non-executive directors also serves to strengthen its robustness. This is the abridged version of a case prepared by Apple Goh, Chidambara Thanu, Mabel Koh, Lew Karxieu, Oh Kai Li and Song Huizhen under the supervision of Professor Mak Yuen Teen and Dr Vincent Chen Yu- Shen. The case was developed from published sources solely for class discussion and is not intended to serve as illustrations of effective or......

Words: 1286 - Pages: 6

Premium Essay

Strategic Human Resources Planning

...Succession management plans are valid in all types of businesses (corporate, family business, small business) and is critical to the effective functioning and internal alignment of an organization for retaining employees, ensuring that critical tasks are completed, and helping the organization fill vacant positions more quickly and efficiently. There are several major benefits of implementing a succession management process. First, succession management allows for an organization to respond quickly and stay on target amidst change or turmoil such as a drastic and sudden change in the economy or business cycle. For example, if a significant change in the Canadian dollar appears quickly, with an effective succession management plan in place, the company is able to take appropriate action quickly to ensure the stability of the company regardless of any external factors that could potentially take a significant toll on the organization. Secondly, by having a plan in place it creates smooth, internal transition of staff, allowing the organization to save both time and money. By putting in a succession management plan, a company will be able to support new organizational structures and flexibility by providing back up for various positions and removing stress from one particular employee, such as having a program that involves employee rotation. Fourthly, succession plans help to develop employees for new opportunities and in turn giving them the required skills to......

Words: 2252 - Pages: 10

Free Essay

Hp Leadership Change

...Module 3 - Case Mgt 401 Trident University Module 3 - Case Mgt 401 IS CEO Meg Whiteman an example of internal or external succession at Hewlett-Packard and why? CEO Meg Whitman is an example of external succession at Hewlett-Packard. Hewlett-Packard went in search of a new CEO outside of the organization as a reaction to then CEO Leo Apotheker’s struggle to keep the $ 9.5 billion organization competitive, and a stock plummet of 47 percent. (Levy & Kucera, 2011) I venture to guess that Hewlett-Packard’s board was banking on Whitman using her proven talent as CEO of EBay Inc. to expose Hewlett-Packard to fresh management methodologies, systems, and approaches that differ from those used internally. (Sullivan, 2005) What happended at HP under the leadership of Leo Apotheker? Leo Apotheker was replaced after only eleven months as Hewlett-Packard’s CEO. Apotheker was the former head of European software giant SAP and was hired by Hewlett-Packard, one of the United States’ predominate hardware companies. HP’s software business made up around 2% of the company’s annual $125 billon revenue. (Goldman, 2011) Apotheker unsuccessfully tried to shift Hewlett-Packard’s culture from a hardware company to a more profitable software business. He knew and was successful in the software business and couldn’t make the transition to HP’s business plan. He made poor leadership choice and was stubborn about acquisitions, like Palm and Autonomy. By the end of tenure he wanted to...

Words: 668 - Pages: 3

Premium Essay

Succession Plan Risks

...Succession Plan Risks HRM 420 Mr. Cardillo January 25, 2016 Quest Diagnostics Succession planning is "a strategy for passing each key leadership role within a company to someone else in such a way that the company continues to operate after the incumbent leader is no longer in control" (Investopedia, 2016). Quest Diagnostics is "passionate about developing innovative, ground-breaking tests, products and tools to enhance patient care, provide value to our clients, and transform information into knowledge and insights" (Quest Diagnostics, 2000-2015). Due to the commitment to its customers and company a succession plan must be in place to avoid any interruptions during transition periods. Like all plans, a succession plan also runs risks; however, the following succession plan for Quest diagnostics will consider vacancy, readiness, and transition risks for the next President and Chief Executive Officer. It will also consider internal candidates and external candidates for the positions that need filling. Vacancy Quest Diagnostics needs to have a succession plan set in place in case the current the current President and CEO of the company retires or resigns. The current President and Chief Executive Officer is Steve Rusckowski. He is currently making "$9,266,835 in total compensation." (Salary.com) Steve is only 57 years old which means that in eight years, he will be at retiring age. Quest Diagnostics needs to plan ahead in case he makes an early retirement.  ...

Words: 1410 - Pages: 6

Premium Essay

Succession Management

...1.      Outline the major benefits of implementing a succession management process. Succession management programs are used to identify individual employees who have the skill and ability to assume fundamental roles within the employing organization and prepare them for positions if and when they become available, do to uncontrollable situations (1). Otherwise a succession management program can ensure a smooth transition of power under normal circumstances (4).   A succession management program can identify and replace a vital member of an organization quickly and effectively. Without a succession management program in effect, it can take anywhere between 6 months to 2 years to replace a key employee and therefor decrease the operating performance of the company producing a negative effect on the organization for years following the replacement. Here are a few reasons why an organization should ensure they have a succession management program in effect as outlined in course text (2): 1.      Provide increased opportunities for high-potential workers. 2.      Identify replacement needs as a means of targeting necessary training, employee education, and employee development. 3.      Increase the talent pool of promotable employees. 4.      Contribute to implementing the organization’s strategic business plans. 5.      Help individuals realize their career plans within the organization. 6.      Tap the potential for intellectual capital in the organization. 7.     ......

Words: 3600 - Pages: 15

Premium Essay

Sucession Planning

...Are we on the brink of a Leadership Crisis? Daily news has been flooded with high profile CEO exits from large companies. While some of these exits were planned, most of the CEO turnover is abrupt, attributed to unsatisfactory company performance. Hyper competition and shareholders increasing focus on short term gains have made the CEO job tougher than ever before, CEO turnover is on a rise globally. A leader influences company culture and impacts the organizations strategic constituencies that lead to better or worse business performance. Hence, it is strategically important to choose the most competent leader. Companies must have a leadership pipeline in place that is ready and competent to take over the reins when incumbent leaders step down, voluntarily or involuntarily. Insider vs. Outsider? Both insiders and outsiders have strengths and weaknesses. While more firms look outside for hiring CEO’s, research suggests a strong positive correlation between business success and inside leaders. Insiders have strong business knowledge and industry expertise while outsiders bring in fresh perspectives. Leadership skills require an ability to leverage core competencies and develop internal capabilities. To do that, extensive inside knowledge is a prerequisite along with a greater awareness to the operating environment. The goal for businesses then is to develop inside-outsiders. Inside leaders groomed to look at organizations from an outside viewpoint.......

Words: 1290 - Pages: 6

Premium Essay

Unemploment Problem Socal

...emeraldinsight.com/0262-1711.htm Integrating leadership development and succession planning best practices Kevin S. Groves College of Business and Economics, California State University, Los Angeles, California, USA Abstract Purpose – Organizations often fail to utilize managerial personnel effectively for leadership development and succession planning systems, and many execute these critical practices through separate human resource functions that shift the responsibility for leadership development away from line managers. The purpose of this article is to present a best practices model for optimal development of the leadership pipeline and a series of practical recommendations for organizations. Design/methodology/approach – A group of 30 CEOs and human resource executives across 15 best practice organizations were asked via semi-structured interviews to describe the content and delivery of their respective organizations’ leadership development and succession planning practices. Findings – Analysis of interview data indicated that best practice organizations effectively integrate leadership development and succession planning systems by fully utilizing managerial personnel in developing the organization’s mentor network, identifying and codifying high potential employees, developing high potentials via project-based learning experiences and manager-facilitated workshops, establishing a flexible and fluid succession planning process, creating organization-wide forums......

Words: 10562 - Pages: 43

Premium Essay

Succession Planning

...Succession Management This year, Jim Pender, the President and CEO of Stonewall Industries, is set to retire after 40 years of service with the company. The executives from the new parent company, US Corp, have absolutely no idea who should replace Pender as President. All of the current VPs have various strengths and weaknesses and no one on the team seems to be viewed as the heir apparent. The internal candidates for the position would be VP Manufacturing, McBain; VP Mining, Khan; VP HR, Byer; VP Finance, Ho; and VP Marketing, Krajevski. Jones, VP of the Plastics Division is not viewed as a candidate because he doesn’t have gypsum wallboard experience. All of the candidates are viewed as ‘competent’ in their current roles. Byer and Ho are viewed as ‘exceptional’. Neither executive, however, has direct line management experience in the manufacture of gypsum wallboard. One of the key problems that the organization faces is that there is no formal performance management system in place, let alone a succession management process. Your group has been hired as consultants to US Corp with the mandate to: a. determine if there is a viable internal candidate for the President and CEO position within the Stonewall organization, and b. develop and implement a succession management process so that Stonewall will not find itself in this position again. Questions 1. Outline the major benefits of implementing a succession management process. (10 marks) -......

Words: 1942 - Pages: 8

Premium Essay

Whatis Strategic Management and Why Is It Critical to the Success of an Organization in Meeting Its Goals and Mission?

...APPLE, Inc. CASE STUDY WHATIS STRATEGIC MANAGEMENT AND WHY IS IT CRITICAL TO THE SUCCESS OF AN ORGANIZATION IN MEETING ITS GOALS AND MISSION? Regiane Velez Kaplan University GB520: Strategic Human Resources Management APPLE, Inc. What is Strategic Management, and why is it critical to the success of an organization in meeting its goals and mission? What is Strategic Management? The concept of "strategy" is based in a war scenario, the constant fights and battles over the centuries have caused the military to start thinking before you act- the battles are analyzed and planned in advance. In General Sun Tzu’s words: “The general who wins a battle makes many calculations in his temple ere the battle is fought.” When translating it to today’s Strategic Management’s words, it means: “Those companies and individuals who win in the business world make much calculation, planning and deliberations on their strategy and plans.  Those who plan less have lower chance of success, much less those who don’t plan anything at all.” (Soo, 2011). Developing a Strategic Planning increases the likelihood that in the future, the organization will be in the right place at the right time. Strategic Management collects all activities and processes utilized by an organization in order to align resources and actions with mission, vision and strategy throughout the organization. When applied correctly, strategic......

Words: 1439 - Pages: 6

Premium Essay

Healing International

...Question #1 The purpose of developing and maintaining a succession management process is to have a safety net for the company to fall back on, in situations similar to the one faced by Stonewall Industries. The succession management process is cultivated by the HR department and consists of qualified, trained candidates seeking a position within the company. The degree to which the risk management of the succession pool embodies is determined by the sufficient funds used to maintain it. Since the talent is being drawn from groups of individuals who are being sent on call in a moment’s notice, monetary compensation is expected. The overall ideal of having a succession management system in place is to enable a faster response to the impending need for an executive staff member. Benefits of implementing a succession management process are: 1. Improve internal candidate pools. 2. Assure business continuity. 3. Reduce skill gaps. 4. Retain employees. 5. Help individuals realize their career plans within the organization. 6. Develop leaders more quickly. 7. Encourage the advancement of diverse groups. 8. Improve employees’ ability to respond to changing environmental demands. Question #2 Creation of elite corps of employees: * Managers fear that publicly identifying those who will be promoted, a cadre of “crown princes” will be created. * They may coast through their job, they know that their contributions have already been recognized and the reward is in......

Words: 1097 - Pages: 5

Premium Essay

What Is Strategic Management, and Why Is It Critical to the Success of an Organization in Meeting Its Goals and Mission?

...APPLE, Inc. What is Strategic Management, and why is it critical to the success of an organization in meeting its goals and mission? What is Strategic Management? The concept of "strategy" is based in a war scenario, the constant fights and battles over the centuries have caused the military to start thinking before you act- the battles are analyzed and planned in advance. In General Sun Tzu’s words: “The general who wins a battle makes many calculations in his temple ere the battle is fought.” When translating it to today’s Strategic Management’s words, it means: “Those companies and individuals who win in the business world make much calculation, planning and deliberations on their strategy and plans. Those who plan less have lower chance of success, much less those who don’t plan anything at all.” (Soo, 2011). Developing a Strategic Planning increases the likelihood that in the future, the organization will be in the right place at the right time. Strategic Management collects all activities and processes utilized by an organization in order to align resources and actions with mission, vision and strategy throughout the organization. When applied correctly, strategic management activities transform the vision into performance and enable the plan to evolve and grow as requirements and other circumstances change. Apple – Both sides of the fruit The right side In researching the Apple’s success, we can find a myriad of reports appreciating this fact....

Words: 1406 - Pages: 6

Premium Essay

Integer Components

...Integer Components Executive Development Final Paper Christopher E. Flores Management Principles December 14, 2013 Table of Contents: Launching Integer Components Management Training Program…………………3 Grooming Candidate CEOs……………………………………………………………7 Choosing a Successor CEO………………………………………………………….11 Launching Integer Components Management Training Program This group of fifteen cohorts should have strong conceptual skills to move to the ranks of senior management. These are different from technical skills and human skills and include creativity, formulating abstractions, analyzing complex situations, understanding issues and solving problems. The individuals in this cohort must have excellent cognitive abilities that allow them to examine complex issues to devise specific and effective courses of action. They should have the ability to develop creative strategies by effectively seeing the organization as a whole, understanding the relationships among the various subunits, and view the organization in relation to its environment. He or she should be adept at articulating the goals of Integer Components into words and expressing the economic principles that affect the company. Comfort with talking about the ideas that shape the company and the intricacies involved is something they will be doing on a regular basis. Working with abstractions and hypothetical/what-if scenarios are aspects of this skill set. Without strong conceptual skills, they could......

Words: 3392 - Pages: 14

Premium Essay

Strategy

...on Strategic Vision • Favored Modes of Successor Preparation by CEOs of Family and Nonfamily Firms by Mark K. Fiegener, Bonnie M. Brown, Russ Alan Prince, and Karen Made File Abstract How do CEOs of small businesses help their successors develop the strategic knowledge and insight needed to run the company? This study compared the ratings of 236 family-firm CEOs with those of 121 nonfamilyfirm CEOs regarding the relative importance of different modes of successor preparation. The results show significant differences between the family and non-family sub-samples in 15 of the 19 forms of preparation studied. In general, CEOs of non-family firms tend to favor successor preparations that are "outsourced" rather than internalized within the company. CEOs of family firms take a more direct approach to preparing successors — one that places a premium on developing personal relationships between CEO and successor, and between the successor and the stakeholders ofthe business. Perhaps no recurring event in the life of an organization is more critical than the transfer of power and authority from the incumbent CEO to a successor. Organizations are especially susceptible to loss of vision and purpose during periods of CEO transition, as the leaders who helped shape the vision are replaced by others who may not share the same values and abilities. Although the timing of a transition may be a surprise (as when the CEO suffers an unexpected illness or injury), the fact that it is......

Words: 2495 - Pages: 10