   |
|
|
SUMMARY PERAFACE
/ ORGANIZATION AND SUCCESS By Ahmet Hamamcıoğlu/Editor Concentrating on
technological investments, cost cutting measures and research/development
activities is must for organizations to live on. It can be said that every
behavior of an organized individual needs two basic things that contradictory
with each other. First one is converting the main work into sub-works; other is
co-ordination of those sub-works. As for organization, it can be defined as the
total number of sub-works that can be re-coordinated after converting. It is a
conscious, planned and ever lasting process. An organization is an arrangement
of human behavior for social targets. In another words, it is a structure that
accelerating the work to be done, and that is arising from individual and social
values. Further, it is a bridge between policy (social targets) and value
creating (human behavior). When individuals work together they may exchange
information of their own dynamic interactive. Organization is necessary and
useful for drawing the lines of that information exchange. Dr Min Basadur, an
expert on interactive creativity in labor world, states that there are three
main characteristics of productive organizations; flexibility, productivity and
adaptation capability to the conditions. That means that the factor which brings
competitive edge to an organization, is intelligent individuals who are learning,
thinking and sharing their information with others. Lars Ramquist,
chairman of the board of directors of Ericsson Company, stated that the most
important wealth is human in this competitive area. He maintains the necessity
of information sharing that ranging from top level to lower levels. Another point to be
taken into consideration is to orientate the information, experience and
potentialities of the organizations to proper studies, and thus to give
possibilities themselves to change their directions together with individuals. Success of the
organizations depends on success of the working stuff. For the success; working
stuff not to be forgotten, apart from this the organizations must focus on ever
lasting development, the future needs to be determined and finally we have to be
aware of the activities of other organizations in same area. To find the balance
between long and short term is the aim. We should dream and make scenarios all
the time. In that case it can be found the answers of questions before they
arise. It’s possible to
catch the success by building systems that support the working stuff to join to
the administration. In modern administration systems which brings the team work
onto front; activities like development, supporting and guiding are being
important. From now on,
successful leaders means the leaders who would achieve to build a balance
amongst the interests of organization in which they work, domestic area in which
they live, working stuff and the society. A STORY / ADVENTURE OF
A POLE
Source: Bütün Dünya / December 1998 Edward
Mott Robinson, owner of a whaler fleet in the midst of 19th century was
famous with his merciless behavior especially when his interests were in subject.
Hetty Green, his daughter, was same as him. Mary L, the whaler
ship of Robinson was back in New Bedford after two years journey. Before he paid
for the crew he studied the ship’s log then he noticed that one of the cabin
boys, fifteen years old Tommy, climbed on the main pole and carved the initials
of his name onto it. “Tommy!” he said
frowned, “Wet weather and wind together will cause decaying on the pole which
you carved. Your salary is 5 dollars per month, you worked 24 months and right
to get 120 dollars now. But, a new pole will cost me to same money. So, you
won’t get any!” The crew advised
Tommy to go to a lawyer whose name was Buttler. Lawyer first listened Tommy and
said, “Now, go to the ship and look around of her and then tell me what you
saw!” Tommy did what was said and reported to him. One day, Tommy went
to the Lawyer and informed him that Mary L. was ready to sail for a new journey.
Lawyer asked whether any repair was made on the ship and learned that only the
new pumps were mounted on the bilges. They went to the
Robinson’s office together. Buttler said “You sold the main pole of Mary L.
to Tommy. Even he paid the price for it you didn’t deliver the post. We
learned that your ship will sail for two year’s journey but we need the pole
now.” Robinson was aware of everything. “I think, I’m going to purchase it
again” he said and prepared 120 dollars for Tommy but the Lawyer warned him
that this value wasn’t enough. Lawyer said, “We do not want to sell our pole.
If you really need you may hire it 10 dollars for each month, it means 240
dollars for 24 months.” There’s nothing to
do for Robinson, he paid the money and then Mary L. sailed. KNOWLEDGE-BASED ACQUISITIONS By Mark L.
Sirower & Geoffrey Nicholson In the wake of big
mergers engineered last year by Travelers Group and Conseco Inc., cross-selling
is suddenly in vogue again in financial services. Rather
than merely search for cross-selling opportunities, acquirers must instead
develop merger strategies explicitly centered on knowledge-based selling
activities. It is tempting to blame acquisition mishaps on rising price-to-book
values ("we paid too much") or poor execution after the deal ("we
didn't manage the cultures right"). Managers simply fail to craft a
credible revenue growth strategy to justify the combination. Executives must begin by recognizing that
every acquisition must pass two tests before it creates value for shareholders.
First, stand-alone performance expectations must be maintained-from the
announcement of the deal right through the post-merger integration process. Second, an acquisition must change the
economics of either the acquirer's or the target's business. Therefore, the
benefits to be derived from combining businesses must more than justify the
premium paid to execute the transaction. KBS strategies can be grouped into two basic
categories: capture point strategies and algorithm-based strategies. Both
involve leveraging customer information. The difference is that capture point
strategies rely on information provided by customers at the point of sale, while
algorithm-based strategies rely on customer information previously gathered and
stored by the financial services provider-essentially database marketing that
incorporates recent advances in technology. A good example of a capture point
strategy is trying to sell customers a loan or auto insurance policy when they
are shopping for a car. An algorithm-based selling system, by contrast, might
alert providers to the best type of mutual fund to offer customers based on
their age and income demographics, as well as the best timing and selling
mechanics. Last year's Citigroup deal heralded a renewed
interest in the potential of cross-selling in financial services. This $83
billion transaction, as well as the smaller Conseco/Green Tree Financial deal
($7 billion), trumpeted the benefits of synergies between disparate business
units. But results have been mixed. The new Citigroup had problems in the early
going and has yet to prove that one plus one equals more than two. But the market has been skeptical about both
the cross-selling synergies and Conseco's ability to integrate the largest
acquisition in its history. It also didn't help that Conseco offered a huge 83%
premium over Green Tree's pre-announcement share price. How could Conseco fall
so far? The answer lies in the powerful signal that Conseco sent to the
financial markets about its apparent plans for discontinuing its tremendously
successful acquisition program in its core business. The Conseco reversal
demonstrates that acquisitions must begin with a compelling vision that
stakeholders can grasp. The acquirer must explain why it needed to buy an entity
in order to sell new products, and pay a premium to do so. A better approach is to figure out how the
respective customer knowledge bases of the merging companies can be uniquely
leveraged to produce performance gains not available to either firm outside of a
transaction. This approach is designed to produce post-merger revenue growth
exceeding prior forecasts for the predecessors. One component of KBS strategy is
built around capture points. Capture point strategies utilize the knowledge
consumers provide when they purchase a given product. A customer cashing in a
certificate of deposit, for example, provides a great capture point for selling
that individual another savings or investment product. The task of the acquirer
is to do a deal that enhances these natural capture points in either or both of
the merging businesses. Algorithm-based strategies also can help to
form the basis of a viable acquisition strategy. These strategies require some
prior knowledge of an individual, which is then used to market appropriate
products to that person. Algorithms based on customer data can alert providers,
for example, that a customer with children approaching the age of 17 likely
needs college financing. Identifying and then constructing KBS strategies is but
one step in delivering value in the post-merger integration process. Before
diving into heavy cost-cutting and organizational redesign, acquirers need to
address issues involving information, incentives, sales processes and channels.
First, managers must break down product silos and organize the new company
around the unique information insights provided by one or both of the merging
organizations. Second, managers must appreciate the
counterintuitive insight that branches constitute the most efficient sales
channel. While branch consolidation will remain a significant source of cost
reduction in bank M&A due to the redundancy of overlapping networks,
acquirers must seize the opportunity to build their KBS strategies around the
branch delivery system. Branches are natural capture points. Given their
production capability, they should be transformed into lean marketing platforms
and, thus, an important source of profitable revenue gains following a merger. Third, if acquiring
banks are going to compete in insurance and investment products, their sales
resources must be competitive with nonbank rivals. But compared with the
securities and insurance industries, banks have far fewer sales people as a
percent of total employees. They also pay less. That makes it difficult to
attract the talent needed to compete with these rivals. Appropriate sales force
and business unit incentives must be deployed to support KBS strategies. SUPERSTARS OR SHOOTING STARS? Kenneth KLINE,
senior editor, Banking Strategies Magazine The future of
banking may possibly be found at Net.B@nk Inc., where there's nary a teller or
vault in sight, just bare rooms and modular furniture in a nondescript suburban
Atlanta office park. Appearances don't matter since
the public never comes to visit. As one of the nation's first true virtual banks,
Net.B@nk operates entirely via computer and telephone wires. It is also growing
explosively. Net.B@nk has gained 30,000 customers since its PC screens first
flickered to life in 1996 and is now pulling in thousands of accounts per month
with the allure of above-market interest rates. The fact that similar results
are being reported by other cyber-banks seems to suggest that a powerful new
force has arrived on the American banking scene. This force may even represent a
new business model for the industry, some experts reckon, one that could
jeopardize the heavy investment traditional banks have made in brick and mortar.
The implications pose serious questions for
banking's titans. With such momentous issues at stake, it is important to
analyze all of the ramifications of the Internet bank challenge. Do Web banks
constitute a viable long-term business model? Do they have the customer
acquisition capabilities and the profitability dynamics to sustain themselves
beyond the startup phase? The questions are difficult to answer, since not one
of these fledglings is more than four years old. But some insights are emerging. First, while the Web banks certainly operate
with a lower cost structure than traditional branch banks, they are not as
efficient as many seem to think. True, transaction costs are low, but marketing,
technological and funding costs can be quite high. Secondly, while the startup
banks do a good job of generating deposits, they have been less successful
originating loans, and therefore typically purchase assets that provide lower
spreads than would be available to a traditional bank. The upshot is that big-bank
CEOs should not stampede into Internet-only banking without first considering
all of the alternatives. But that doesn't mean strategists should hit
the panic button. All of the cyber-banks are quite young, and their long-term
potential for profitability and widespread customer acceptance remains a
question mark. "Managers are projecting their hot startup growth rates into
the future, but people might want to peer beneath that 'dot com' hood and see
what's really driving this thing," says analyst Jeff Runnfeldt, with First
Security Van Kasper. Their inability to take deposits and provide
cash at physical points of distribution remains a major barrier, although shared
ATM networks and computer-reloadable smart cards may constitute an acceptable
"work-around" for some customers. There's also the issue of
profitability dynamics. In the early going, Web banks have found it easier to
attract deposits than to sell loans. They can offer high rates and bring in
floods of cash, but they cannot turn around and electronically redeploy those
resources into high-yielding assets. This translates into a very thin net
interest margin, which partially offsets the low overhead advantage. It boils down to a revenue challenge.
Typically, the Web banks invest their high-cost deposits in mortgage-backed
securities, Fed funds, bonds and other conservative assets, virtually ensuring a
thin net interest margin. Fee income is also hard to come by, since these banks
offer most transaction services -- such as account transfers and electronic bill
pay -- for free. Internet bankers downplay the margin drawbacks,
contending that their lower cost structures provide a powerful offset. Net.B@nk,
for example, handles all customer contact via PC and telephone, and it
outsources most back office functions. Net operating expenses equaled 1.66% of
average earning assets during the first quarter, according to SNL Securities LP,
compared with roughly 4% at most traditional banks. But when you factor in the
lower net yield on those expensively funded assets, the picture is less rosy.
For example, Net.B@nk's 66.2% ratio of operating expenses to operating revenues
is actually at the high end of industry norms. Even Web banks' core competitive advantage --
low non-interest expenses -- fades somewhat when elaborate technological
capabilities and marketing campaigns are introduced. Take the case of Security
First Network Bank, the oldest and most sophisticated Internet startup. The Atlanta-based institution kicked off in
October 1995, a full three years before most of the others. The technologists
who ran the bank used it primarily as a platform for their experimental online
banking systems. They split the company in 1998, keeping the technology division,
which became Security First Technologies, and selling the bank for $20 million
to Royal Bank of Canada. Security First's account base had reached
10,000 by the time of the Royal Bank purchase but was showing signs of
stagnation. Instead of immediately re-starting the growth engine, Royal Bank
executives reexamined the online business model and the investments required to
exploit its full potential. They decided they needed to capture detailed
customer information to effectively cross-sell other products and services. For
that reason, Security First invested in "fat server" technology that
enables both the bank and customer to retrieve and view instantly all current
and historical account data. This approach, however, costs more than the simpler
"thin server" technology used at other Internet banks. While Web banks share the industry's cross-selling
aspirations, the options are fewer, again demonstrating the limits of the
Internet-only business model. Cyber-banks, by definition, offer fewer products
and services than traditional branch banks. Lacking physical locations, they
can't provide cash management services for small business or safety deposit
boxes for consumers, for example. This raises the strategic question as to
whether even well-endowed Web banks can capture customers' primary banking
relationships, or whether they are destined to become specialty players. At the opposite end of the strategic spectrum
is Houston's CompuBank, which offers deposit products only. CompuBank executives
see the Internet as a place where customers ferret out value wherever they can
find it. The bank's role, in their view, is to focus on a few core competencies
and let customers take other business elsewhere. "Anyone who thinks they
can draw a big fence around themselves on the Internet is misjudging the average
Internet consumer, who wants choices and options," says Jonathan H. Lack,
CompuBank's executive vice president of marketing and planning. Looming on the horizon, however, is a powerful
financial services package that could elicit a lot of customer response and
loyalty. This is the banking/brokerage combination, heralded by E*Trade's
purchase of Telebanc. Given the high customer acquisition costs in Internet
banking, analysts expect Telebanc to grow faster and cheaper by cross-selling
its services to E*Trade's one million online brokerage customers. "Telebanc's
officers realized that the E*Trades of the world are driving consumer interest
in online financial services," says Ian Rubin, senior analyst with the
Tower Group. "They wanted to align themselves with somebody who could
sustain that interest." Having an array of different channels is a
huge competitive advantage, once the full-service banks understand what they
must do, and make the necessary investments, it will be hard for Internet-only
banks to sustain their advantage. AD
ON INTERNET AND APPLICATIONS IN TURKEY Asst.
Associate Prof. Dr. İbrahim Kırcova
Introduction:
Internet, as it was leading to create the information society, its influences in
everywhere can be seen. A new type of on-line shopping is named e-commerce that
allows customers to select from numbers of product. Of course the advertisement
has taken its place on Internet for e-commerce. 1. How to make an AD on Internet? :
Most known method is banners that play on the web pages somewhere. Surfers on
the web can visit another sites clicking on these banners. Another way of
advertising is to send e-mails to Internet users. There are links of relevant
sites on these e-mails. 2. Features of AD on Internet:
2.1. Duration between AD and
presentation: Every factors
of an conventional AD in media subject to restrictions such as duration, content,
cost, etc. Because of low-cost, it is possible to use long duration ADs on
Internet. Passing to the presentation is on the moment so duration between AD
and presentation is very short. As for effectiveness of the AD, this factor is
very important since the expenses for ADs on Internet increasing as expected
that it will be 7.7 billion dollars in 2002. 2.2. Reciprocal communication:
Unlike ADs on TV it is possible to reach the source of an Internet AD. Both the
banner way and e-mail are personal is noticeable because the organizations have
to assign a person to answer them on the moment and also have to keep open the
communication lines. 2.3. Multi segmented market:
There are very different countries, cultures, languages, customs and regulation
on Internet. Communication language is common. 2.4. A new AD language:
Language for conventional ADs has
to be short and low-cost, and ADs to be delivered to large consumer groups is
essential. It is very important to assign proper materials in proper times.
Against this there is no any restriction for Internet ADs but because Internet
users are come from elite class of people, ADs must have rich content and say
the truth. 3. Advantages of Internet ADs:
Apart from the edges like low-cost and free subscriptions there are other
advantages as below: ü
Rapid presentation: Easy to
prepare the content in short time compare with traditional one. ü
Modifiability: It can be
modified easily. Traditional ADs cannot be modified. ü
Cost: Especially the cost of
ADs on TV doesn’t fit to little businesses. ü
Coverage: More time, rich
content, view and sound effects are available for the ADs on Internet. 3.1.
Advantages of Internet for organizations to give ADs: ü
Possibility to keep true
records about visitors. ü
Possibility to create a
separate profile for each regular visitor. ü
Possibility to give
information about activities like on-sale campaigns, to make celebrations on
special days then invite the visitors for shopping. 3.2.
Advantages of e-mail for organizations to give ADs: The systems named “Mailboat” or “Mail
Reflector” are used to evaluate the messages arriving from customers. Answers
can be sent back in a couple of minutes by this way and it gives dynamic aspect
to the ADs. 4. Basic principals of Internet
ADs: ü
Web site should be placed on more search engines. ü
Address of the site should be put on cards, envelope headers and all
media. ü
Web site should be checked out continuously and renewed. ü
Presence of the site should be trumpeted to
discussing groups that in hot communication which each others will increase the
number of visitors. ü
Target people should be determined carefully.
Proper discussing groups and posting lists should be fixed. ü
Organizations on Internet should learn the more
about it. 5. Internet ADs in Turkey: Turkey is taking its place amongst the countries that are not
progressive level. E-commerce hasn’t been understood properly and not become
widespread. According to some organizations opening a page on Internet means an
AD. Organizations using banners are more than using e-mail lists. Different
banners can be seen on the sites of the newspapers that are leaders of Turkish
media. Nevertheless, it isn’t possible to mention about Internet
advertisements sector in Turkey. 6. Result and proposals: It’s true that Internet brings the possibility to activate on very
different and larger areas. Users of it and the trade volume are ever increasing.
Organizations in Turkey should start for building sites on Internet instead
doing nothing about it. Especially the organizations open to foreign markets
should assign an Internet designer. If this way not proper because of heavy cost
they may have professional companies to design their web sites. Further,
organizations that have large AD budgets should take the Internet into
consideration apart from media.
|
