Liberating Entrepreneurial Energy Continental Essay
- Length: 11 pages
- Sources: 11
- Subject: Business
- Type: Essay
- Paper: #82001743
Excerpt from Essay :
Organizing research-development-engineering meetings
Such meetings were organized by Continental in order to focus around researchers and developers within the company and to grant them an entrepreneur value, in order to directly confront them with the demands expressed by the managers in charge of divisions that worked with the market and with customers. These meetings were in the favor of both the company and the researchers and developers. This is because the company benefitted from the ideas and brainstorming of these employees, while researchers and developers had the chance to express their knowledge and skills and to present their innovative ideas.
Developing the company into becoming a systems supplier for the automotive industry
This strategic direction can be explained through Grunberg's ambition and belief in Continental's capability of developing cutting-edge technology and therefore creating the competitive advantage needed by the company in order to become the leader in the market in case. Also, given the fact that the market demands required certain modification regarding the company's strategy, Grunberg decided to reorient Continental's strategic activities towards producing several systems used in the automotive industry. The main aspect that the company focused on was represented by technical chassis components introduced in the company's product line.
This was considered to encourage and support the expansion of the product range offered by Continental, as this was thought by Grunberg to be the strategic solution to the problems that affected the company's activity. As a consequence, it was expected that Continental would increase its market share by introducing a series of new products on the market. The development of the automotive industry and the increasing demand for such products allowed for such an improvement in the company's position.
Acquiring several companies
The acquisition of smaller companies is sometimes a good idea in order to expand the production capacity and the line of products of the company, given the fact that such smaller companies have the advantage of being able to produce goods that the acquiring company does not produce. Such an example is Teves ITT Industries. Grunberg decided to acquire it because of brake and chassis operations that were necessary for expanding Continental's product line and improving its position on the market.
Corporate governance at Continental AG
In the case of Continental, the Corporate Governance Principles serve to create a responsible management of the company that is based on creating value through its innovative product and services (Continental, 2010). The main objectives of these principles are represented by increasing the transparency level regarding the boards' activity and to help stakeholders understand the mission, vision, and strategy of the company. In addition to this, the corporate governance principles are intended to increase the confidence level of investors, customers, and employees in the management and control of the company.
Corporate Social Responsibility at Continental AG
The current global economic environment requires the sustained support of companies and their involvement the problems of the community. This means that it does not suffice to provide high quality products and services, but it is also necessary to get involved in aspects that concern the environment or the community, with all of its components. Most companies, especially large corporations are intensely involved in such activities. Continental makes no exception.
In order to prove its commitment towards supporting the community, Continental sustains corporate social responsibility activities by developing a constructive dialog with several interest groups (Degenhart, 2010). In other words, the company aims at treating people and the environment in a responsible manner. This means that the company intends to intensify its efforts into improving resource-saving products. In this activity, employees play a very important role. Their skills and motivation is intended to help achieve the objectives of the company.
Corporate Governance at Goodyear
The presentation of Goodyear's guidelines seems to be more formal than that of Continental. The document refers to the size and composition of the board, the term limits, the responsibilities of the board, the selection of directors, the majority election of directors, board meeting agenda, their interaction with investors, strategic planning, shareholder proposals, and several standards (Goodyear, 2010).
Corporate Social Responsibility at Goodyear
The main aspects that the corporate social activity is based on at Goodyear is represented by the company's focus on consumers, engaging the company's associates within such practices, respecting the environment, supporting the communities, supporting the company's employees (Goodyear, 2009). As one may observe, there is not much difference between the corporate social responsibility at Continental and that at Goodyear. Such practices are similar in most companies. The difference between the activities implemented by these companies is represented by the organizations they collaborate with.
There are two theories regarding to corporate social responsibility that are taken into consideration when companies establish their involvement in such aspects: the shareholder theory and the stakeholder theory. The shareholder theory assumes that the company's main objectives is to generate profits for its shareholders, with no interest regarding matters of the society (Smith, 2003). The stakeholder theory assumes that the company must involve in the problems of the community and in taking into consideration different categories of stakeholders (Phillips, 2003).
Regarding the company's functional structure and its modification by Grunberg, the main aspect that can reveal its effectiveness is represented by the fact that he tried to decentralize the structure of the company, especially where the decision making process is concerned. Grunberg's intention consisted in allowing more power to division managers, in an effort of stimulating their initiative and, therefore, encouraging the innovation that was required by the company's processes. In other words, Grunberg tried to impose the division managers to implement an entrepreneurial manner in their activities.
His plan proved to be successful, given the fact that the process in case led to unleashed mobilization of entrepreneurial potential in each division of the company. Therefore, one may consider that Continental was characterized by corporate entrepreneurship as a result of Grunberg's plan. The managers and employees at Continental were encouraged to direct their activity towards increasing profits.
Grunberg also modified the company's organizational structure. This is because he considered that the initial organizational structure of the company did not allow for a flexible decision making process and satisfactory informational flow. The organizational structure that Grunberg implemented focused on decentralization. This type of structure allowed to the company to focus on the production process and on including innovation within the activities of the company, rather than on administrative aspects. The improvement of the company's position on the market reveals the efficiency of this strategy.
As a result, the corporate structure of Continental also modified. Grunberg and the managers made certain modifications to the initial corporate structure that allowed more independence to certain divisions. In addition to this, the modified corporate structure supported better communication and collaboration between divisions. This way, the company was able to encourage the entrepreneurial potential of managers and employees.
Stephan Kessel took over Continental when the company was on a good global position, given the significant improvements made by Grunberg. However, Kessel was aware of the fact that the company had to continue to implement similar strategies in order to maintain its position on the market. The company benefited from the opportunities created by the automotive industry growth.
Kessel's idea was to transform the company from a high quality manufacturer if several products required in this industry to an expert in automotive chassis. This allowed the company to gain competitive advantage in a narrow field, therefore establishing the company as a leader in this market segment. In other words, Kessel decided to address a smaller market segment, but of high importance, and specialize in that segment of products, rather than addressing a larger market dot not allow for significant development of the company, with large players already established on that market, and with difficulties in gaining market share.
Although the idea made sense, it was not easy to integrate chassis production into the company's operations. The integration of such components assumed that a series of collaboration activities between the company's divisions had to be developed and implemented. The focus of the company regarding this aspect consists in creating value in all of the company's business activities. In order to achieve these objectives it is necessary that the company develops and implements an organizational culture of high performance.
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