Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
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Case Study Description of Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead
By 2017, higher education is expected to be a $2 trillion industry worldwide. Within this huge economic engine, the boards of trustees that provide governance to universities and colleges face a complex challenge in that they must serve a variety of stakeholders. Without effective governance, an academic institution's performance is likely to suffer. Penn State University is plagued by an ineffective board of trustees. As a complement to past work that has documented this board's unwise and costly decisions, we examine how five design issues--board size, board composition, fiduciary responsibility, term limits, and transparency--helped create a culture in which poor choices were more likely to occur. We discuss why the board's recent self-imposed reforms are inadequate. We then offer more substantive reforms that could fix the Penn State board's flaws. In particular, we recommend that academic boards should be (1) small enough to allow full participation of all members, (2) composed such that no one stakeholder group can dominate decision making, (3) designed to eliminate actual and perceived conflicts of interest, (4) governed by term limits, and (5) appropriately transparent in their strategic decision making and communications. We leverage these principles to propose a reduction of the Penn State board from 30 voting members to 19. More broadly, other academic boards might benefit from undergoing a self-analysis based on the Penn State case.
Authors :: David Ketchen Jr., Charles C. Snow, Alice W. Pope
Swot Analysis of "Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead" written by David Ketchen Jr., Charles C. Snow, Alice W. Pope includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Penn Board's facing as an external strategic factors. Some of the topics covered in Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead case study are - Strategic Management Strategies, Leadership and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead casestudy better are - – geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, increasing household debt because of falling income levels, increasing energy prices, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models,
increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Penn Board's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Penn Board's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead can be done for the following purposes –
1. Strategic planning using facts provided in Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead case study
2. Improving business portfolio management of Penn Board's
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Penn Board's
Strengths Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Penn Board's in Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Penn Board's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Low bargaining power of suppliers
– Suppliers of Penn Board's in the sector have low bargaining power. Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Penn Board's to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Penn Board's has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Penn Board's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Penn Board's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Strong track record of project management
– Penn Board's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Leadership & Managing People field
– Penn Board's is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Penn Board's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Penn Board's is one of the leading recruiters in the industry. Managers in the Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Penn Board's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Learning organization
- Penn Board's is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Penn Board's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Penn Board's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Penn Board's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High switching costs
– The high switching costs that Penn Board's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead are -
Capital Spending Reduction
– Even during the low interest decade, Penn Board's has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Aligning sales with marketing
– It come across in the case study Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead can leverage the sales team experience to cultivate customer relationships as Penn Board's is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Penn Board's 's lucrative customers.
Need for greater diversity
– Penn Board's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Penn Board's supply chain. Even after few cautionary changes mentioned in the HBR case study - Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Penn Board's vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead, is just above the industry average. Penn Board's needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Penn Board's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Lack of clear differentiation of Penn Board's products
– To increase the profitability and margins on the products, Penn Board's needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Skills based hiring
– The stress on hiring functional specialists at Penn Board's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High cash cycle compare to competitors
Penn Board's has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Penn Board's to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Penn Board's to hire the very best people irrespective of their geographical location.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Penn Board's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Using analytics as competitive advantage
– Penn Board's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Penn Board's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Penn Board's has opened avenues for new revenue streams for the organization in the industry. This can help Penn Board's to build a more holistic ecosystem as suggested in the Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead case study. Penn Board's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Penn Board's can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Penn Board's in the consumer business. Now Penn Board's can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Penn Board's can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Penn Board's can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Penn Board's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Penn Board's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Penn Board's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Penn Board's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Building a culture of innovation
– managers at Penn Board's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Threats Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead are -
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Penn Board's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Penn Board's needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Penn Board's can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Penn Board's in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High dependence on third party suppliers
– Penn Board's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Consumer confidence and its impact on Penn Board's demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead, Penn Board's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Increasing wage structure of Penn Board's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Penn Board's.
Regulatory challenges
– Penn Board's needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Shortening product life cycle
– it is one of the major threat that Penn Board's is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Penn Board's has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Penn Board's needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Penn Board's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Penn Board's needs to make to build a sustainable competitive advantage.
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