The Importance of Matching Strategy, Design and Structure for Organizat

Many companies today face the challenge of global expansion while trying to maintain organizational effectiveness. There are several reasons why companies would want to expand their operations into other countries. If a company has achieved market saturation with its existing customer base, it may want to expand globally to reach a new group of customers. In order for the firm to be considered organizationally effective, it must maintain control over its new global environment (Jones, 2013, p. 16). A company may also want to take advantage of lower production costs, new skills and capabilities or scarce resources that can be found in other countries. These new ways of doing business lead to innovation, the second component of organizational effectiveness (Jones, 2013, p. 16). Finally, a company may want to expand globally in order to enhance their own core competences such as research and development or more efficient production methods. Efficiency is the third element review ed when companies evaluate their overall effectiveness (Jones, 2013, p. 16). In order to meet these three effectiveness goals, the company must first consider its strategy, design and structure to ensure that these elements are compatible with the countries into which they want to expand. The first question is what type of strategy will work best for the company’s global expansion. The strategy chosen will depend heavily on the local culture of the country and on what type of product or service the company is providing. It should be noted that a company may not use the same strategy in each country in which it does business. According to Gucharan Das, former chairman of Procter & Gamble in India (2006), â€Å"Globalization does not mean imposing homog... ...vital questions that companies must answer when expanding into the global marketplace. If any of these elements are missing, the company cannot properly service its customer base. Ultimately, increasing sales and effectively controlling costs will allow the company to succeed. As the company expands globally, its management must review the firm’s core competences and decide what type of strategy, design and structure will allow them to be the most effective while staying ahead of their competition. Works Cited Jones, Gareth R. (2013), Organizational Theory, Design, and Change, Seventh Edition, Upper Saddle River, New Jersey: Pearson Education, Inc. Rabin, J., Miller, G., & Hildreth, W. (2000), Handbook of Strategic Management, New York: M. Dekker. Steers, Richard M., & Nardon, Luciara (2006), Managing in the Global Economy, Armonk, N.Y.: M.E. Sharpe.

Metapath Case Report Essay

1. PURPOSE The purpose of this briefing note is to provide recommendations for Metapath Software Corp. (â€Å"Metapath†) on its financing offers received in September 1997. These two offers came from 1) a fund consortium led by Robertson Stephens Omega Fund (â€Å"RSC†) and Technology Crossover Ventures (â€Å"TCV†) and 2) CellTech Communications (â€Å"CellTech†), a vendor of wireless technology which had recently gone IPO. 2. EXECUTIVE SUMMARY Metapath has made good progress in developing its business since its inception – generating $6.4m revenue in the September quarter of 1997 with representation of three large customers. However, with the ambition to win a good chance of IPO within the next two years, more capital needed to be raised to gain traction in customer acquisition and smooth out current quarter-to-quarter revenues. Metapath has received two offers as at September 1997 and they are discussed as follows: RSC and TCV consortium offered to buy $11.75 million of stock at a $76 million pre-money valuation (â€Å"Series E Preferred†). The proposed stock instrument was a participating convertible stock (â€Å"PCPT†). This instrument functions the same as the convertible preferred stock in the event of a qualified public offering whereas in the event of a sale, RSC and TCV consortium not only receives the face value of the consideration, but also gets the equity participation. CellTech offered Met apath’s shareholders to receive common stock at closing in CellTech at $115 million. 3. STATEMENT OF THE PROBLEMS The problems associated with the offers from RSC and TCV consortium are listed as follows: Proposed stock instrument is extremely dilutive to the founders in the event of a sale where the liquidity preference will reduce  the amount of funds available to the other four tranches from previous investments. If the Metapath goes public, the percentage of ownership for C & D tranches will be further diluted, after RSC and TCV consortium exercises its liquidity preference. The problems associated with the offers from CellTech are listed as follows: CellTech’s liquidity and financing issues. Strategic/Business fit between CellTech and Metapath. 4. ANALYSIS Comparing the term sheet of the offer from RSC and TCV consortium to that of CellTech, RSC and TCV’s PCPT had a much more dilutive impact to Metapath upon exit. Under liquidation, the term sheet stipulates that the Series E investors is entitled to claim its initial investment of $10.75 million plus any accrued but unpaid dividend. Any proceeds after this claim will then be distributed to all common and Series E Preferred shareholders on an as-converted pro-rata basis. This double dipping means that RSC will not only recover its initial investment of $5 millions, but also enjoys the convertible benefits. As a result, if the sale occurs before 2000, the profitability for A-D tranches will be negatively impacted by the ‘preferred’ characteristic in the Series E. However if the sale occurs after 2000, A and B tranches will be gradually redeemed on an annual basis, which will leave C and D tranches to be mostly impacted adversely by the preferred characteristic in the Series E stock. Under the circumstance of an IPO, tranches C, D and E will convert to common at their negotiated prices while A & B will be redeemed. However, on the flip side, the price offered by RSC and TCV consortium was $6, which was significantly higher than the first three rounds of financing (tranches A,B and C) at $1.05 and final round (tranche D) at $1.62. PCPT instrument was created to enable the consortium to mitigate the risks in the event of a sale/liquidation that would be of the founders’ interests and  value destroying. CellTech’s valuation of $115 million was certainly attractive for a company like Metapath with a revenue run rate of $25.6 million. However, this represents approximately 30% of the totally capitalisation. The willingness from CellTech to sacrifice such a large amount of capital indicates that either CellTech genuinely believed that Metapath would contribute significantly to the synergies to the NewCo or there could be asymmetric information hidden from the management. It signalled CellTech’s underlying business might have limited upside. This issue needs to be further investigated if offer is accepted from CellTech. In addition, CellTech’s balance sheet indicated ongoing liquidity and financing risks. As we can see from the table below, the company continued to face liquidity pressure where its cash ratio and quick ratio deteriorated over the course from 1995 to 1997. CellTech had six consecutive quarters operating loss, which indicated that its unhealthy operating cash flow ratio. Doubts were raised whether CellTech was a good strategic fit to Metapath’s business model. This is due to the fact that CellTech’s products were mostly hardware-based and installed in the field with cellular base stations, whereas Metapath’s products largely consisted of software running on standard server platforms in the wireless switching office. The only benefit gauged regarding this point was that some of CellTech’s engineers could potentially be useful to Metapath’s development group. 5. CONCLUSIONS The recommendation for Metapath is to take the offer from RSC and TCV consortium. Even though CellTech has performed well since the IPO and bullish views from the stock analysts, its potential information asymmetry issues and liquidity risk could harm the value of Metapath post acquisition. The limited strategic fit is also of our concern, which might constrain Metapath’s growth potential. With our ambition to lead Metapath to IPO, we see RSC and TCV consortium as a better fit in this case. Tranches A and B’s  interests will be protected through their initial capital structures. Tranches C and D’s interests will be diluted; however it enables Metapath to continue its growth momentum with limited downside.

The Chimney Sweeper - 824 Words

The Chimney Sweeper Thesis Blake uses many literary devices to portray the hopeless life of the young chimney sweeps. I. Irony II. Imagery III. Symbolism William Blake masterfully uses many literary devices to portray the hopeless life of a young chimney sweep in his poem â€Å"The Chimney Sweeper†. The poem has a young, nameless first person narrator which gives the poem a sense of youthful innocence and anonymity that is in direct contradiction to the horrible conditions they suffer. Most of the poem has dark tones that is punctuated by a happy dream of freedom and joy with his true father his creator. The poem ends with a bleak and almost sinister twist of irony that leaves the reader feeling sorrow and shame for the chimney†¦show more content†¦He cries when it is shaved but is told it is for the better because the black soot will only ruin it. Tom dreams of thousands of boys sleeping in dark coffins which are opened by an angel. In line 11, the boys are given names which personalize the boys as individuals and rehumanize them for the reader. They are all let free to run and play and cleanse themselves in a river and feel the sun. These images again invoke a sense of childlike innocence that the sweeps were not allowed. We see the boys floating on clouds, playing in green fields, splashing in a river all of which can be equated with heaven and peacefulness. The images of the dream and the reality of the situation are very polarized and help the reader sense the bleak, helpless mood of the poem. Symbolism is evident throughout the poem as well. The color black runs through the poem and symbolizes death or evil just as the black soot of the chimneys brings the death of the sweeps at the hands of their evil masters. Being in a chimney would be very much like being in a black coffin as described in line 12. In line 17, the boys are naked and white which are symbols of birth, life and freedom. The coffin is a symbol of death associated with the chimney. The boys swept chimneys and slept in soot which is very dark and symbolizes death that the sweeps will certainly succumb to. The angel in Tomâ⠂¬â„¢s dream is a symbol of freedom for the boys. It is the only part of the poem that is hopeful and bright. ChristiansShow MoreRelatedThe Chimney Sweeper1038 Words   |  5 PagesPOETRY ESSAY The Chimney Sweeper Thesis Sometimes people are forced to grow and live in the harshest of conditions, it can be hard to see God in those dark and bleak times but those who can, are truly blessed and know that their sufferings will only be temporary. Outline I. Introduction- Bringing to light an appalling state of affairs regarding children who have no loved ones The Chimney sweeper Overview: Sold into child slavery atRead MoreSimilarities And Differences Between The Chimney Sweeper And The Chimney Sweeper877 Words   |  4 PagesBoth â€Å"The Chimney Sweepers† poems were written during the industrial revolution. During the industrial revolution families were living in poverty, and times were challenging. Often times for families to survive they would sell their children to master sweeps, or master sweeps would welcome orphans and homeless children into the industry of menial labour. They used children between the ages of five to ten depending on their size. Parents would often sell their children younger, because their smallRead MoreAnalysis Of The Chimney Sweeper868 Words   |  4 Pagesâ€Å"The Chimney Sweeper† William Blake wrote two poems with the same name but very different meanings. 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TomRead MoreEssay On The Chimney Sweeper774 Words   |  4 PagesSet in the times of the Industrial Revolution, Blake’s The Chimney Sweeper is a powerful attempt to fight one of the biggest social injustices at the time: child labour. He illustrates the heartbreaking life story of thousands of kids through two different points of view, one is exposed in the poem pertaining to Songs of Innocence (1789) and the other one is exposed in Songs of Experience (1794). Both poems share the same outline; however, it is the narrator’s view the one that changes drasticallyRead MoreThe Chimney Sweeper Essay765 Words   |  4 Pagesâ€Å"The Chimney Sweeper by William Blake† In William Blake’s poem, the reader will read about the first person point of view of a child going through a neglected life of child labour and slavery. In the poem, â€Å"The Chimney Sweeper†, Blake’s use of onomatopoeia conveys the emotions of the character in the poem. 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