Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right?
Eugene Isenberg, CEO of Nabors Industries, was listed in a 2006 Wall Street Journal article as one of the highest paid executives in the U.S. over the previous 14 years. He received this compensation as a result of a unique bonus arrangement and large stock option grants with several favorable features. At the same time, the strategy that he implemented for Nabors led to a remarkable financial turnaround as the company emerged from bankruptcy and expanded to become a global leader in the oilfield services industry. Readers are asked to evaluate the structure of Isenberg's compensation agreement in light of the company's industry, strategy, and financial position. Particular consideration is paid to the total compensation, mix of compensation, performance measures, and other compensation terms.
Swot Analysis of "Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right?" written by David F. Larcker, Brian Tayan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nabors Compensation facing as an external strategic factors. Some of the topics covered in Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? case study are - Strategic Management Strategies, Executive compensation, Financial management, Performance measurement, Reorganization and Organizational Development.
Some of the macro environment factors that can be used to understand the Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, there is backlash against globalization, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs,
increasing government debt because of Covid-19 spendings, increasing energy prices, etc
Introduction to SWOT Analysis of Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nabors Compensation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nabors Compensation 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 Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? can be done for the following purposes –
1. Strategic planning using facts provided in Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? case study
2. Improving business portfolio management of Nabors Compensation
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nabors Compensation
Strengths Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nabors Compensation in Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? 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.
Training and development
– Nabors Compensation has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? 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.
Successful track record of launching new products
– Nabors Compensation has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nabors Compensation 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.
Sustainable margins compare to other players in Organizational Development industry
– Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? firm has clearly differentiated products in the market place. This has enabled Nabors Compensation to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Nabors Compensation to invest into research and development (R&D) and innovation.
Analytics focus
– Nabors Compensation is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by David F. Larcker, Brian Tayan can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Organizational Resilience of Nabors Compensation
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nabors Compensation does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Nabors Compensation has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nabors Compensation to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Nabors Compensation is one of the leading recruiters in the industry. Managers in the Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Nabors Compensation has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Nabors Compensation in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Nabors Compensation 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.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Nabors Compensation digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nabors Compensation 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.
Weaknesses Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right?, it seems that the employees of Nabors Compensation don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Interest costs
– Compare to the competition, Nabors Compensation has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right?, in the dynamic environment Nabors Compensation has struggled to respond to the nimble upstart competition. Nabors Compensation has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Nabors Compensation 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 bargaining power of channel partners
– Because of the regulatory requirements, David F. Larcker, Brian Tayan suggests that, Nabors Compensation is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Skills based hiring
– The stress on hiring functional specialists at Nabors Compensation 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 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 Nabors Compensation supply chain. Even after few cautionary changes mentioned in the HBR case study - Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nabors Compensation vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Nabors Compensation, firm in the HBR case study Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nabors Compensation is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? 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 Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? can leverage the sales team experience to cultivate customer relationships as Nabors Compensation is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Nabors Compensation 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.
Opportunities Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? | 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 Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nabors Compensation can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Nabors Compensation can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nabors Compensation is facing challenges because of the dominance of functional experts in the organization. Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help Nabors Compensation to increase its market reach. Nabors Compensation will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Buying journey improvements
– Nabors Compensation can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nabors Compensation can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nabors Compensation 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, Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Nabors Compensation can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nabors Compensation can use these opportunities to build new business models that can help the communities that Nabors Compensation operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Manufacturing automation
– Nabors Compensation can use the latest technology developments to improve its manufacturing and designing process in Organizational Development 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.
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 Nabors Compensation 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.
Creating value in data economy
– The success of analytics program of Nabors Compensation has opened avenues for new revenue streams for the organization in the industry. This can help Nabors Compensation to build a more holistic ecosystem as suggested in the Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? case study. Nabors Compensation can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Nabors Compensation has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Using analytics as competitive advantage
– Nabors Compensation 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 Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nabors Compensation to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Nabors Compensation business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nabors Compensation can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Nabors Compensation 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.
Environmental challenges
– Nabors Compensation needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Nabors Compensation can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Shortening product life cycle
– it is one of the major threat that Nabors Compensation is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Nabors Compensation
– 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 Nabors Compensation.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Nabors Compensation in the Organizational Development sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nabors Compensation with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Nabors Compensation.
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.
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. Nabors Compensation needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nabors Compensation in the Organizational Development industry. The Organizational Development 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.
Weighted SWOT Analysis of Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? 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 Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? 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 Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? 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 Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? 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 Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? 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 Nabors Compensation needs to make to build a sustainable competitive advantage.
