Better health and longer life expectancy are forcing us to change our ideas and approach to ageing and the elderly, participants at a conference on ageing and work was told at IESE last night. The Continuous Education session titled "The future of work for an ageing population: how innovation and technologies will transform organizations" was moderated by Prof. Antonio Dávila.
Spanish government reforms are on now track to maintain public accounts and curb the public deficit. Measures taken to meet these goals include raising taxes (VAT, income tax, corporation tax) and fighting tax fraud. These were among the issues discussed during the session "Tax Planning 2012," which was part of the IESE Continuous Education Program.
Success in telecoms is not incremental, it's exponential. Companies were once seen as a center with multiple points of sales but telecoms are part of the fabric of the societies in which they operate and so in Brazil you need to employ Brazilians and in the U.K. you need English people. Furthermore, what we are witnessing with mobile phones is the democratization of access.
The Olympic Games can enhance a country's self-esteem, improve its image in the eyes of the world and contribute to a sense of unity among its people. The Games, for example, gave China a lot more self-confidence about its place in the world. When it comes to sponsorship, the International Olympic Committee insists that sponsors not only give money but also share the Olympic values and ethical principles.
Daniel Callaghan (MBA ´09) drew up his business plan for MBA & Company while he was still at IESE, where he was president of the Entrepreneur Society. "I did an exchange at Yale which is where the second half of my idea met the first," he says.
IESE Professors Pascual Berrone, Domènec Melé and Pedro Videla have been recognized with the Alumni Association's 2012 Research Excellence Awards. The awards, established in 2002, acknowledge the work of IESE faculty members in three categories: best article, best book and best course.
The news in the December edition of "Eye on IESE" include Zhang Ruimin, the CEO of Haier; IESE Christmas initiatives; the 2013 challenges video; Advanced Management Program in Media and Entertainment; and Program for Leadership Development (PLD) New York-Miami.
The coming year is going to determine what we are going to see in the teens of this century, says Prof. Pankaj Ghemawat from Brazil. Meanwhile in Madrid, Prof. González-Páramo urges Europe and US to be part of the solution, not the problem.
Many people, particularly in advanced Western countries, have a highly critical opinion about the company as an institution. This opinion is often based on circumstantial arguments. But at other times the reasons given are more of a general nature: for example, when companies as a whole are given a goal that is considered harmful to society, such as maximizing short-term shareholder value.
Variable remuneration schemes, although increasingly widespread, do not always achieve their main objective: to motivate people.
Typically, these schemes are useful for establishing and communicating business priorities. In addition, they can link labor costs to results, which means that remuneration costs only increase in line with business profits, whether economic or otherwise.
However, IESE's Pablo Maella finds that these schemes are not always effective, mainly because the relationship between variable remuneration and motivation is complex. Numerous factors that cannot always be controlled influence the equation.
Read full article on the IESE Insight website.
Hewlett Packard's $8.8 billion write-down of its fourth quarter 2012 financial results provoked uproar, triggering accusations that the company had misled investors. But what would make managers of equity portfolios misreport financial results?
Previous research has suggested that misreporting increases stock price, and with it, the value of the manager's portfolio. Yet such research has not adequately considered the consequences of changes in firm risk.
In "The Relation Between Equity Incentives and Misreporting: The Role of Risk-Taking Incentives," forthcoming in the Journal of Financial Economics, Chris Armstrong (Wharton), David F. Larcker (Stanford), Gaizka Ormazabal (IESE) and Daniel J. Taylor (Wharton) shed light on this crucial omission.
Read full article on the IESE Insight website.
After its first failed attempt, Media Markt, the European electronics and home appliance giant, is ready to reintroduce its online business.
This new bid comes as the company faces other major challenges: developing its business presence in China, the growth of Amazon in Europe, competition from the rival chain Best Buy, changes in demand for certain kinds of products and the rise of generic brands.
A case study on Media Markt by IESE Prof. Marc Sachon and consultant Eric Laux looks at the strategic and operational implications of the company delving back into the Web.
Each Company Is Unique
Media Markt, along with Saturn and Redcoon, form part of Media-Saturn Holding, a conglomerate controlled by the German group Metro.
Although part of the same holding company, each is managed independently. They even compete with each other. Most consumers are not aware that the three brands answer to the same boss.
Open Window on Conflict
Media Markt's first stab at online sales came in 2000, with the creation of an autonomous, independent portal for selling over the Internet.
Things did not go so well. This was due, in part, to Media Markt's decentralized structure. Each store tailored its advertising and operations to the needs of regional customers.
The emergence of the portal, with supply that everyone could see, revealed how heterogeneous Media Markt's merchandise and pricing actually were.
Seeking a Multi-Channel Strategy
The whole adventure was called off in 2007, but the company knew that renouncing online sales was simply not an option. With several studies showing that online sales are gaining more and more market share, while traditional sales are stagnating, at best, Media Markt knew it couldn't swim against the tide forever. It had to find a better way to go about it, one that resolved the conflict among its different channels.
In 2011, an opportunity emerged to acquire Redcoon, an Internet "pure player" that specialized in online sales of electronic goods at big discounts. The company used this transaction to resurrect the online sales platforms of Media Markt and Saturn.
Read full article on the IESE Insight website.
Leaders and professionals from the energy sector will meet on IESE's campus in Madrid today for the 10th Energy Industry Meeting, organized by IESE Business School and Goldman Sachs. Among those participating are Carmen Becerril, president of Acciona Energía; Miguel Antoñanzas, president of E.ON España; Andrea Brentan, CEO of Endesa and Rafael Villaseca, CEO of Gas Natural Fenosa. Also participating is Spain's Minister of Industry, Energy and Tourism, José Manuel Soria.
Under the theme "A New Energy Policy for the Emergence of a New Global Paradigm," the event addresses critical issues in the energy industry on both European and international levels. Taking into account the latest developments in the United States, participants will discuss how key objectives for sustainability and security can be achieved, without sacrificing competitiveness and efficiency.
The meeting will also take aim at topics such as: fundamental changes in the global energy sector in terms of technology, reserves, markets, geopolitics, environment, financing and legal security; improvements for greater economic competitiveness through energy market liberalization; the need for new strategies for energy policies and regulatory reforms set out within the EU framework; and system financing.
Although search funds are still at an embrionic stage in Europe, they are gaining ground as a way for motivated entrepreneurs to create value for companies and investors, said panelists during a special Continuous Educations session held on IESE’s Barcelona campus this week.
Moderated by Mathieu Carenzo, Director of IESE’s Entrepreneurship & Innovation Center-EIC, the session spotlighted how search funds work and caveats for aspiring search fund entrepreneurs.
"Raising the fund is the easiest part," said panelist Marc Bartomeus, whose UK-based fund includes investors from the United States, the UK and Spain. "It doesn´t mean it’s easy. Searching for a business is much more complex."
With the search fund model, aspiring entrepreneurs raise money from investors and seek out a company to acquire. There are three key stages of the search fund model: raising the fund, finding the right company and managing to grow the company in order to provide a return for investors.
Simon Webster, president of the European Search Fund Association and an experienced search fund entrepreneur, said that leading a search fund in the U.S. is easier than in Europe because the concept is more widely-known there.
Also European investors typically prefer entrepreneurs with at least 10 years of experience in a given sector, while U.S. search fund investors – particularly serial search fund investors – are often willing to take a risk on younger entrepreneurs.
During the event, titled "The Search Fund: How to Obtain Funds through Entrepreneurship," the panelists also gave tips on how to identify potential small and medium-sized businesses for acquisition and how to approach current business owners effectively.
When looking for a small company to acquire, said Webster, "you’re looking for something quite unique. It’s saying to an owner, ‘look I´m willing to invest my career in this business that you’ve taken to this stage. I want to help take it to the next stage."
In a separate panel discussion, moderated by IESE Prof. Antonio Dávila, three seasoned investors - IESE Prof. Rob Johnson of Delta Partners, Pep Casas of Neoko Capital and Will Thorndike, Partner and General Director at Housatonic Partners - provided the investor perspective.
Thorndike, who is currently involved in 20 search funds, said that his firm continues to invest in this asset class because "the returns have been very good."
"What is remarkable about the return data is that the overall IRR is very high and that IRR has been sustained over very long holding periods," he said.
Search funds have become increasingly attractive for both entrepreneurs and investors and now make up a significant component of the U.S. investor group, he said.
Paraphrasing Hollywood film star Mae West, Thorndike said "too much of a good thing has been wonderful."
We know we could make better use of our resources in both the public and private sector. However, often we don't know how, which is why evidence-based policies are vital for determining policy goals and to measure whether they are being achieved, says IESE Prof. Núria Mas.
“The time has come to stop talking about internationalization,” said IESE professor Jorge Soley, who believes that the term should be regarded as part of the definition of a company. At the same time, he believes that “we should begin to think in a phase beyond exporting and more in establishing yourself in the receiving country. Exportation has already been achieved.”
In the Continuous Education Program session held within the small and medium-size business cycle, “A Before and After for Small and Medium-size Businesses,” the professor shared the table with Jonathan Mealey, senior treasury consultant at Monex Europe and Eimear Daly, head of analysis at Monex.
Soley said we should be conscious that “not all companies need to export,” and that “first they have to be competitive in their market, if not, it’s absurd.” He added that it’s not a good idea to embark on a process of internationalization when you’re in crisis or up to your neck in water because it requires a lot of resources and time to learn.
For their part, the two speakers from Monex complemented the professor’s talk with the presentation of the results of the Ambition Survey, a survey carried out jointly with BDO on the main global opportunities for investment.
The survey, carried out among more than 1,000 financial directors of medium-size companies, revealed that they continue to see international expansion as a way of increasing income, although they have become more prudent and more focused in their investment decision-making.
More than a third of those questioned said they believe in international investment as a way of driving growth although it’s more difficult to do business now than it was three years ago. The main reasons, in their opinion, are the bad economic situation, greater regulation and increased competition.
They mainly focus on the BRICs and established markets while southern Europe has become a much more risky option. The so-called big seven (China, the United States, Brazil, India, Germany, Russia, and the United Kingdom), led by China, top the list of the most attractive investment markets, given their size and their potential clients.
In their conclusions, they said the main recommendations given by the financial directors whom they questioned about international expansion was to count on good local people and knowledge about the culture and economy in the market and which you are going to work. “With a good team behind you, you can focus on getting into new markets.”
The conversation about big data revolves around business benefits. But as IESE's Evgeny Káganer says, we should start thinking about what's in it for us: how emails, tweets, texts and apps can improve our work habits, productivity patterns and well-being. We, as individuals, should start steering the conversation, telling businesses how we want products, services and business models to be, instead of the other way around.
Today marks the start of the 18th annual MBA International Case Competition, held on IESE's Barcelona campus. The event draws other prestigious business schools from around the world to share experiences and compete for professional opportunities. Four winners at the competition will receive summer internships at the international offices of sponsor Roland Berger Strategy Consultants.
"At IESE, we nurture talent and create frameworks for sharing knowledge among students from all over the world. And at this time it is especially necessary for global business schools to support and offer real opportunities for young people," said Prof. Franz Heukamp, director of IESE's MBA program.
Young people, such as those participating in the competition, will play a critical role in economic sustainaibility and development in the future, he said: "Taking part in the 18th International Case Competition are those who will be, without a doubt, the business leaders of the 21st century."
The Primark case
Taking center stage will be the IESE business case Primark: £10? Ooh that's Expensive!, to be analyzed and debated by teams of four first-year MBA students from IESE, London Business School, Tuck, Yale, Chicago, HKUST, CEIBS and INSEAD. The case, written by IESE professors Julián Villanueva and José Luis Nueno, and by researcher Julie Ziskind, explores the "fast fashion" business model developed by the chain Primark.
Students will present their conclusions before a panel of experts that will include Alexander Belderok, partner at Roland Berger Amsterdam; Gustavo Lopes da Silva, partner at Roland Berger Madrid; Prof. Villanueva and various external analysts.
The Case Competition reflects the strong commitment that IESE and Roland Berger share to develop business talent globally. By bringing together future leaders from Europe, North America and Asia, the event provides an invaluable learning experience for the participants, as well as the chance to network, strengthen team skills and compete.
IESE’s Energy Club held a one-day conference titled "Global Energy Day" on the Barcelona campus during which a series of experts in the field analyzed the challenges and the changes in the energy market.
After an introduction by Nicolás Giordano, Iván Martén, senior partner and managing director of the Global Leader Energy Practice at the Boston Consulting Group, spoke about "The New Dynamics of Energy."
"Energy will the key issue of the 21st century," Martén said. "We want sustainable energy from a security and environmental point of view but we also want it to be cheap and this combination is impossible, so there have to be trade-offs."
A major problem, he said, is that the implications of energy use are measured in centuries and investment in decades, while political decisions are made in a time frame of four years. Politics make the energy ecosystem very fragile, he said, citing the 2009 Russia gas crisis, the Arab spring, the Fukushima nuclear disaster, Iran’s threat to blockade the Strait of Hormuz and the recent terrorist attack on a gas refinery in Algeria. All of these, he says, make self-sufficiency in energy supply – whether through renewables or shale gas - increasingly attractive.
The demand for coal is growing, Martén said, pointing out that coal is the most balanced fuel in terms of world distribution, whereas 70% of oil reserves are in Russia and the Middle East and 65% of gas is in five, mostly unstable countries. Demand will continue rising fast, especially in non-OECD countries such as China and "there is no revolutionary source of energy that is going to solve the problem of growing demand."
The need to reduce CO2 emissions implies action on both the supply and demand side. Energy efficiency programs are the key in order to cut emissions because renewables can’t fill the gap, he believes. However, renewables offer independence and the cost of wind and solar production is falling. Cheap oil is a thing of the past, he said, because the cost of exploration has gone up and because producing countries need the price to remain high to offset balance of payments.
His talk was followed by a panel on energy security moderated by Alok Thakur. "We tend to speak about the supply side in terms of security but efficiency on the demand side is also key," commented Emilio Estrada, deputy country head for BP in Spain.
For Máximo Whitelaw, sales and marketing manager at Cargill International, "Energy security also involves managing price volatility," while Ricardo Rodríguez Ortiz, manager at Schlumberger Business Consulting, and also an IESE MBA alumnus, said the essence of energy security is ensuring that supplies get to consumers.
A the 10th Energy Sector Meeting, jointly organized by IESE and Goldman Sachs, was held on the Madrid campus and brought together some 200 professionals from the sector. The title of this year’s conference was “A New Energy Policy to Face up to the Urgency of the New Global Paradigm.” Some 30 speakers discussed questions of competitiveness, regulatory reform and energy financing. The meeting was overseen by IESE professor Juan Luis López Cardenete.
José Folgado, the president of the Spanish grid, emphasized a number of key points for energy to become a source of growth and development in Spain. Among them were greater use of electric power and less of hydrocarbons in transport, more energy savings and efficiency, the development of smart grids and meters and the prioritization of national sources of energy such as nuclear and hydroelectric.
The president of Gas Natural Fenosa, Salvador Gabarró, said that “natural gas is an energy of the future,” and that there are sufficient reserves for at least 230 years.
José Manuel Soria, the minister of industry, energy and tourism, defended the use of nuclear energy as part of the energy mix and backed the continued use of nuclear power stations in Spain. “But all of this must be compatible with the growing role that renewables will play in this mix,” he said.
Alastair Maxwell, who has joint global responsibility for energy at Goldman Sachs, said that prices were a vital aspect of the sector’s development. “The price rises in 2004 and 2007 have encouraged investment in new technologies. As a result of this investment, the sector has entered a new era.”
