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Case
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Reference no. UVA-F-1330
Published by: Darden Business Publishing
Published in: 2001

Abstract

In March 2001, the Chief Investment Officer of this UK-based asset management company is reflecting on the dramatic transformation of the firm in the 1990s, and on how the firm must continue to adapt in the future. Henderson is the 50th largest asset management company in the world. Ongoing forces of change in the industry compel a careful re-examination of the firm’s strategy and structure. Three discrete questions are addressed: a) the extent of centralization vs. decentralization; b) the location of equity analysts (centrally in London, or ''on the ground'' in various regions of the world), and c) the suitablility of Henderson’s top down, theme-based approach that emphasizes sector analysis. The case was prepared for use in both executive and degree programs, as a ''program opener'' because it raises many themes, and creates a sense of drama about the strategic turbulence within the asset management industry. In other words, this case helps set the stage for more detailed case problems, and motivates the student to examine carefully any assumptions about the evolution of the global asset management industry. Three chief lessons emerge from a discussion of this case: Corporate transformation is driven by strategic turbulence in the industry. It is necessary to understand the sources of turbulence as a foundation to setting strategy and designing the structure of an organization. In the asset management industry the key sources of turbulence are globalization, technological change, deregulation, increasing integration of capital markets, and demographic change. Core competencies are a useful point of focus in considering the design of strategy and organization. Traditional strategic planning is focused on market position. More recent approaches employ an analysis of core competencies which create strategic advantage. The large question for Henderson is how to exploit competencies it now has, and how to build new ones. Change leadership is, in essence, process management. The case affords a number of opportunities to discuss leadership of change and the opportunities and pitfalls that might confront the business executive. Ian Buckley, the protagonist in the case, affords an interesting profile of the change leader.

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Abstract

In March 2001, the Chief Investment Officer of this UK-based asset management company is reflecting on the dramatic transformation of the firm in the 1990s, and on how the firm must continue to adapt in the future. Henderson is the 50th largest asset management company in the world. Ongoing forces of change in the industry compel a careful re-examination of the firm’s strategy and structure. Three discrete questions are addressed: a) the extent of centralization vs. decentralization; b) the location of equity analysts (centrally in London, or ''on the ground'' in various regions of the world), and c) the suitablility of Henderson’s top down, theme-based approach that emphasizes sector analysis. The case was prepared for use in both executive and degree programs, as a ''program opener'' because it raises many themes, and creates a sense of drama about the strategic turbulence within the asset management industry. In other words, this case helps set the stage for more detailed case problems, and motivates the student to examine carefully any assumptions about the evolution of the global asset management industry. Three chief lessons emerge from a discussion of this case: Corporate transformation is driven by strategic turbulence in the industry. It is necessary to understand the sources of turbulence as a foundation to setting strategy and designing the structure of an organization. In the asset management industry the key sources of turbulence are globalization, technological change, deregulation, increasing integration of capital markets, and demographic change. Core competencies are a useful point of focus in considering the design of strategy and organization. Traditional strategic planning is focused on market position. More recent approaches employ an analysis of core competencies which create strategic advantage. The large question for Henderson is how to exploit competencies it now has, and how to build new ones. Change leadership is, in essence, process management. The case affords a number of opportunities to discuss leadership of change and the opportunities and pitfalls that might confront the business executive. Ian Buckley, the protagonist in the case, affords an interesting profile of the change leader.

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