HOW TO THRIVE IN TURBULENT MARKETS

Case/Assignment No: 01

Course No: EMBA- 5303

Course Title: International Business

Submitted To
Dr. Md. Noor Un Nabi
Professor
Business Administration Discipline
Khulna University

Submitted By
Anupam Mondol EMBA-180323
Sourav kumar Saha EMBA-180340
Manash Kabiraj EMBA-180341
Md. Shohidul Islam EMBA-180342
Md. Shahidul Hasan EMBA-170367

1st Year, 3rd Term

Business Administration Discipline
Khulna University

Date of Submission: 30th April, 2019.

In his article, “How to Thrive in Turbulent markets “Donald Sull discusses how business
organization succeed uncertainty or a volatile market.

A company always faces the threats comes not only from any direction and but also in any form.
Farms must change continuously their strategic decision with the change of market to thrive the
turbulent market

In today's volatile world, doing business feels like competing in a heavyweight boxing ring. To
prevail, should your company rely on agility (nimbleness) to quickly spot and exploit market
changes? For instance, shifting resources from struggling divisions to more promising ones can
spur revenues. Or should you rely on absorption (toughness) to withstand punches? For example,
keeping a lot of cash on hand might enable your firm to weather unexpected threats.

D.Sull recommends agile absorption: deploying both capabilities in various combinations as

needed. Through agile absorption, you consistently identify and seize opportunities while also
retaining the structural heft your company needs to thrive.

Agility
In business, agility is the ability to make timely, effective and sustained change when and where it
provides performance advantage for the organization. This is not just scaling agile across IT-
department. Business agility is being agile at the organization level.

In order for a firm to be agile and it has to have a consistent identity and capture the business
opportunities more quickly venire rivals do. According to Mckinsey a company survey found that
nine out of ten executives today ranked this agile method. It is most critical to business success and
growth importance over time. This linked to higher revenue, greater customer satisfaction and
increased market share. Be aware of coning challenge that marketplace may be bring

There are several different types of agility. Those are Operational agility, Portfolio agility, and
Strategic agility.
Operational Agility
An organization’s ability to exploit both revenue-enhancing and cost-cutting opportunities within
its core business more quickly, effectively, and consistently than rivals do is the source of
operational ability. Managers cannot predict the form, magnitude, or timing of these opportunities
in advance. They can, however, boost the odds of beating their rivals to them. While there are a
number of important steps executives hoping to build operational agility can take.

Specific organizational capabilities to be operationally agile include

 Accurate and detailed real-time market data-

--- Market data allows you both to see current prices of investment products, and to
identify historical trends.
 Focused corporate priorities
-- Agility stalls in the boardroom when top executives deluge the organization with multiple
and often conflicting priorities
 Clear performance goals for teams and individuals
--- A lack of clear performance expectations is cited by readers as a key contributing factor
to their happiness or unhappiness at work
 Control, mechanisms to hold people accountable and to reward them

As for example introducing of new products or services, cost reductions, quality improvements and
so on.

Portfolio agility
A set of common pathologies often gets in the way when companies with diverse business
portfolios try to shift resources out of less promising areas and into more promising ones. Resource
allocation in most large, complex organizations follows a bottom-up trajectory: frontline
employee’s spot opportunities, middle managers lend their support to promising projects, and
senior executives rubber-stamp proposals from trusted subordinates.

This process stalls in reverse, however, and fails to foster disinvestment, since managers rarely
recommend killing projects that might damage their reputations or endanger the livelihoods of their
subordinates. Specific organizational capabilities to be Portfolio agile include
  A diversified portfolio of business units
--- A diversified company is a company that has multiple, unrelated businesses.
 A cadre of general managers who can be transferred across units
 Central corporate control over key resources
- Available Recourse Company that importance for productivity keep on eye.
 Structured processes for decreasing investments or selling off units
-- The process may be an important component in the firm's strategy for building a
competitive advantage.

Strategic agility
Many complex interactive systems—such as weather patterns, seismic activity, and traffic—follow
what mathematicians call an inverse power law: the frequency of an event is inversely related to its
magnitude. In turbulent markets, an inverse power law implies that companies face a steady flow
of small opportunities, periodic midsize ones, and the rare chance to create significant value.
Examples of golden opportunities include major acquisitions, transformational mergers, the
opening of booming markets such as China or India, launching a breakthrough product like the
iPhone, or securing hard assets on favorable terms during an economic crisis.
Specific organizational capabilities to be strategically agile include

 Strong capability to finance big bets

 A Company does well that improves business and differentiates the business in the
market.
 Flexible governance structure
 Technique to facilitate productivity and organization with lasting results.
 Long-term perspective by shareholders and executives

Absorption
Absorption is the ability or capacity of a company or organization to withstand hard, severe or
turbulent circumstances by creating buffers or defense mechanisms against sudden shifts in the
external or Competitive Environment. While Organizational Agility tries to deal with these
circumstances in an adapting, flexible and offensive way, the focus of organizational absorption is
on defensive mechanisms. Typical ways in which organizations can build absorption capacity and
weather storms or unexpected crises are

 Low fixed costs

 Weather a wide range of changes that improved margins, improved liquidity and De-
risking the business
 War chest of cash
 The ability of a business to handle these unexpected cash needs may mean the
difference between success and failure, between new growth and missed
opportunities.
 Diversified cash flows
 Withstand downturns in specific units
 Vast size
 Enable downsizing during crisis
 Tangible resources
 To generate profits in the future
 Intangible resources
 To insulate the firm against short term market shifts
 Customer lock-in
 To buy time when competitive dynamics shifts that create barriers to market entry
may result in antitrust action against a monopoly.
 Protected core market
 To provide a safe stream of cash to weather storms
 Powerful patron
 To provide extra resources or a buffer from market shifts during times of change

Agile absorption
The key piece of this article is the finding the balance and the gray areas between agility and
absorption. These strategies don’t work in all situation organization will be fall. The strongest
organization always need knowledge about taking decision. Because what path they will be chose
so they need to know whether they need to be agile or whether they need absorption.
Absorption and agility are complements, not substitutes. They resemble yin and yang, the two
opposing but complementary forces that coexist in all living things, according to traditional Chinese
philosophy. Yin, the passive element, corresponds to absorption, while yang is the active element,
resembling agility.

The balance between yin and yang is constantly shifting, and their effectiveness increases by getting
the combination right, rather than relying too heavily on one or the other. Agile absorption refers
to an organization’s capability to consistently identify and seize opportunities while retaining the
structural characteristics to weather changes in the market.

How organization apply those to every given situation. So one alternative approach to combining
absorption and Agility, because this seems to be sense. A large organization not be agile a way to
navigate the space is to break down a large organization multiple independent smaller organization
That can navigate their individual markets more nimbly and the don’t have to rely on the massive
organization to make it for a make decision
Reference
S, Donald.,2009; How to Thrive in Turbulent Markets, Harvard business review, 87.
Question 1:

In which dimension central issues of this paper relative to international business generically
.Explain.

Solution:

Global market is very complex marketplace .In this paper key term is agile absorption. How agile
absorption strategy help to improve uncertain marketplace. To keep stay in market Theas strategy
is very effective. International businesses have quite a number of challenges to overcome to meet
their goals of reaching new clients and boosting profits

In international market place a company have face treat by competitor or other involve group. Agile
absorption relate area of international business are –

 Technology
 Political or legal
 Sociocultural

Technology: New innovation of technology coming international market almost every day .So
adopt the technology and use for comparative Advantage from it, otherwise firm maybe fail to
achieve desire goal. Here agile absorption help to make decision ‘frim should or should not apply
the new technology ‘.

Political or legal: International business influence by local government and international business
policy .New law may be change the frim current business policy.

Sociocultural: when firm will be start new product or new place where always exiting firm strategy
may not work .Combination of agile and absorption that make new strategy for firm.

Question 2:

Which key tools (Solutions) advised in this paper? Among them which one you found as unique to
influence international business and why?

Solution:

This paper advised to use of Combination of agility and absorption because absorption and agility
are complements, not substitutes. Paper advised ---

 More good fats, fewer bad fats

 Actively manage trade-offs
 Build an agile culture on an absorptive asset base
Build an agile culture on an absorptive asset base as unique to influence international business,
because organizations follow a similar arc. Early agility wins them the trappings of success—size,
cash, and a secure position. These sources of absorption, however, gnaw away at the cultural roots
of agility. Bureaucracy, politic al infighting, complacency, and arrogance sprout in their place.

Question 2:

Are the key issue and solutions lauded in this paper are relevant in for an outgoing company from
Bangladesh? If they are to be put in practice in such an organization what adjustments have to be
bought in? Explain

Solution:

Yes, the key issues and solution lauded in this paper are relevant in for the outgoing company from
Bangladesh. The adjustments have to be brought in to be practices in such organization are
described below. Organizations should have capacity for agile absorption, they should keep in mind
that what works in one industry, may prove totally inappropriate in other sectors. No matter what
the source of agility and absorption within the organizations. Especially they can ask themselves a
series of questions: how agile are we? How absorptive are we? Where does our absorption currently
come from? Are these the best source? Are there alternative ways to boost our absorption that
would enhance our agility? Organization should understand the sources of agility and absorption
and their combine power as a one-two punch, and by actively balancing those over time, leaders
can increase their organization’s ability to go the distance of uncertain business world.