Management and Strategy

According to Harrigan the ENDGAME strategy is a function of rate of decline and the size of endgame demand. If rate is low it is a Hospitable environment whereas if the rate is high the environment is Inhospitable. Based on the type of environments the strategy should change.

Hospitable Environment:

• Leadership strategy
• Harvest strategy

Inhospitable Environment

• Niche strategy
• Exit Strategy

Finkelstein believes there are 2 ways of justifying why firms don’t respond to challenges. A simple explanation is by saying

• The executives were stupid
• The executives could not have known what was coming
• A failure to execute
• The executives did not try hard enough
• The executives lacked leadership ability
• The company lacked the resources
• The executives were crooks

But the better explanation would be

• Distracted by new products
• Not innovating once successful with new products
• Founder holds on too long
• Bad mergers and acquisitions
• Discounting competitive threats
• Flawed assumptions

It is so simple to go with first set of reasons but I guess in complex business environments we need better explanation.

Argenti talks about why the mighty organizations collapse. His theory states following reasons for failure

Management defects

• Heavy Reliance on one leader
• Passive and unskilled boards
• Insufficient depth of management

Accounting Defects

• Focus on one big bet or no diversification in finances
• Very high leverage
• Information Abuse

Resistance to Change

Poor Planning