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
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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 - – talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, technology disruption, wage bills are increasing, cloud computing is disrupting traditional business models,
increasing transportation and logistics costs, geopolitical disruptions, 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 -
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.
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.
Diverse revenue streams
– Penn Board's is present in almost all the verticals within the industry. This has provided firm in Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
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.
Effective Research and Development (R&D)
– Penn Board's 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 Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
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.
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.
Organizational Resilience of Penn Board's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Penn Board's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Penn Board's 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 Ketchen Jr., Charles C. Snow, Alice W. Pope 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.
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 -
Products dominated business model
– Even though Penn Board's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. 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 should strive to include more intangible value offerings along with its core products and services.
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 bargaining power of channel partners
– Because of the regulatory requirements, David Ketchen Jr., Charles C. Snow, Alice W. Pope suggests that, Penn Board's 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.
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.
Interest costs
– Compare to the competition, Penn Board's 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.
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.
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.
Low market penetration in new markets
– Outside its home market of Penn Board's, 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 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
Employees’ incomplete understanding of strategy
– From the instances 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 seems that the employees of Penn Board's 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.
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.
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 -
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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Penn Board's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Penn Board's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Penn Board's can use these opportunities to build new business models that can help the communities that Penn Board's operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Learning at scale
– Online learning technologies has now opened space for Penn Board's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Penn Board's 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.
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.
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.
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 -
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.
Environmental challenges
– Penn Board's 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. Penn Board's can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Penn Board's can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Flawed by design: Why Penn State's recent governance reforms won't work and what should be done instead .
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.
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 Penn Board's.
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 Penn Board's business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Penn Board's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
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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