Day 2 : Managing Strategic Investments in a Flat World

How can you best manage your organization, and your major investment projects, in order to achieve its strategic objectives and to deliver the financial performance needed for sustainable new growth?

Today’s organizations are complex.  They operate in a globally competitive marketplace with fast-changing technologies, opportunities, and workforce.  From the standpoint of managing such an organization to achieve growth and sustainable financial performance, the necessary building blocks are a performance measurement, evaluation, and control system, and an incentive-compensation system.  The performance measurement is via a financial and cost accounting system.  This is complemented with budgeting and management control systems for the purpose of monitoring, evaluating, and rewarding performance.  The hallmark of a good performance measurement and management control system is that it is aligned with the corporate strategy and the focus is not simply on financial metrics, but also on non-financial and operating measures. 

The module on managing organizations will focus on developing the following skills for the participants: 

• Analyze and evaluate corporate strategy
• Select and manage the right projects to achieve that strategy
• Develop an appropriate organization structure, i.e., decision rights allocation – who is doing what and who is responsible for what
• Develop financial and non-financial performance metrics that follow from the corporate strategy and decision rights
• Develop a Balanced Scorecard management control system with financial and non-financial measures and an incentive compensation system

Two cases (Mobil and ATH Technologies*) will be used to illustrate the concepts, enable all participants to practice implementing the ideas, and discuss the pros and cons. 

The module valuation and global capital markets will focus on:
 
Understanding strategic financing for fast growth

• The trade-offs between debt and equity
• Matching financing policy and product market strategy
• Knowing the contracting environment
• Staging capital commitments

Knowing when to invest

• The debate between finance and strategy
• The importance of corporate governance structures
• Performance metrics

Valuation in global markets

• The impact of globalization on the cost of capital
• Discount rate effects
• Corporate governance effects

*Other cases of more particular relevance may be selected after discussion with you.

The role of corporate governance in facilitating project management, innovation, and global competitiveness

Corporate governance is a set of mechanisms designed to influence management decisions when ownership is separate from control.  The need for a corporate governance process arises in part because self-interested management’s decisions might be to the detriment of non-controlling (minority) shareholders, or to the detriment of lenders.  Corporate governance mechanisms include the Board of Directors, institutional shareholders, and a market for corporate control. 

The corporate governance module is designed to explain the importance of corporate governance in the global economy, identify attributes of good corporate governance systems, and, most importantly, discuss interactively what you can do to improve governance within your organization to facilitate growth, innovation, and shareholder value maximization.