GfK | Consumer Confidence Stalls at Zero Do Brexit jitters explain 18-point fall since March 2015 in sentiment over future prospects for general economy? GfK’s long-running Consumer Confidence Index remained at zero in March. Two of the measures used to calculate the Index saw decreases this month, with one measure showing an increase and the remaining two measures staying the same.
What Corporate Strategists too Often Get Wrong CEOs and their staff must ask themselves if there are good reasons for taking certain paths and avoiding others. A new book by Professor Phanish Puranam from INSEAD and Professor Bart Vanneste from UCL School of Management provides these corporate strategists with the tools needed to understand the alternatives that lie behind major strategic choices. Based on over two decades of research and teaching in the world’s leading business schools, Corporate Strategy: Tools for Analysis and Decision-Making modernises the typical textbook format by focusing on decisions, rather than theories. The authors tackle the big decisions that determine whether multibusiness companies thrive or falter. These include the choice between retaining or divesting businesses, inorganic or organic growth, mergers/acquisitions or alliances, and directive or evaluative control by headquarters.
Joe Staton, Head of Market Dynamics at GfK, says: “Are we seeing Brexit jitters at work now? Whilst UK consumers remain resolutely upbeat about their personal financial situation, even showing a +1 point increase this month when asked about expectations for the year ahead, concerns about prospects for the general economic situation continue to dampen our mood. Looking at how consumers see the wider economy developing over the next 12 months, we are 18 points lower this month than in March 2015. So, despite good economic headlines about low inflation, interest rates and prices in the shops, concerns about Brexit and the ongoing Eurozone crisis appear to be hitting home.” UK Consumer Confidence Measures – March 2016
“Too often, corporate strategists are led by their professional advisers into the consideration of a particular industry, acquisition target, or alliance partner, as vital to their growth plans. It’s a bit like facing the magician who forces you to pick the card he wants you to pick. Strategists – by which we mean CEOs and their staff – must know how to take a sophisticated look at the roads not taken. By asking the right questions, they must figure out of if there were indeed good reasons for avoiding them,” says Phanish Puranam, who holds the Roland Berger Chair Professorship in Strategy and Organisation Design at INSEAD. “Decisions about corporate strategy are some of the most – if not the most – consequential decisions that CEOs of multi-business firms can take,” says Bart Vanneste, Associate Professor in Strategy at UCL School of Management. “Since the competition for the CEO is a mutual fund manager who can assemble similar portfolio of businesses, the only way to survive in today’s markets is for a CEO to get the corporate strategy right. Making sure that individual businesses do well, is quite often not enough.” The book, which is now available on Amazon, combines the latest thinking on designing organisations with corporate finance – both key ingredients for a corporate strategist, but which rarely appear together in contemporary books on the topic.
World’s Top Engineers Call for Protection of Research and Development Funding Some of the world’s leading engineers and business people – all members of the Queen Elizabeth Prize for Engineering’s trustee board and judging panel – have penned a letter in The Times of London, calling on global governments to preserve education and Research and Development (R&D) spending across their respective countries. This letter marks the opening of public nominations for the 2017 QEPrize winner and Her Majesty The Queen’s 90th birthday. Within the letter the judges and trustees reflect on Her Majesty’s life and the role engineering and technology has played in it over the last 90 years. The 250 word letter has been signed by the QEPrize judges and trustees, comprising academics, business leaders and heads of engineering associations from the UK, Germany, America, Japan, India, Switzerland and Singapore.
The Overall Index Score is unchanged this month at zero. Personal Financial Situation The index measuring changes in personal finances during the last 12 months has decreased by one point this month to +4; this is six points higher than March 2015. The forecast for personal finances over the next 12 months has increased one point to +9 this month; this is two points higher than March 2015. General Economic Situation The measure for the General Economic Situation of the country during the last 12 months is unchanged this month at -10; this is 11 points lower than March 2015. Expectations for the General Economic Situation over the next 12 months are unchanged this month at -12; this is 18 points lower than this time last year. Major Purchase Index The Major Purchase Index has decreased one point this month to +11; this is two points higher than this time last year. Savings Index The Savings Index is unchanged at -2; which is four points higher than March 2015 6
June 2016 Corporate INTL
Collectively the 18 signatories cite engineering as a driver of productivity and emphasise technology’s increasing impact on human life as a reason for safeguarding education and R&D funds. “We collectively appeal to those who control government budgets for education, research and development to protect funding for the next generation of engineers, even in these straitened times. Their work will sharpen our vision of the future and drive greater productivity for the next 90 years.” Lord Browne of Madingley, Chairman of the Queen Elizabeth Prize for Engineering Foundation, said: “In order for governments to reap the benefits from engineers they need to protect their research and development budgets. Through protecting this investment, engineers will be empowered and able to continue solving the world’s greatest challenges. Some of these engineers may go on to be the next QEPrize winner, but if not, they will at the very least provide their governments with more vital skills, goods and services which can be exported or traded to benefit their country.” Professor Sir Christopher Snowden, Chairman of the judging panel, added: “There is currently a skills deficit in the number of engineers coming out of the education system across all our countries. We need to protect STEM education’s funding, and encourage those who shape primary and secondary education to allow more children to learn through a more hands-on approach, applying their formal academic knowledge and developing the necessary skills to grow into the engineers and scientists of tomorrow.”