Answer To: Due Date: Jun 27, XXXXXXXXXX:59:59 Max Points: 300 Details: Previously, you located and annotated...
Ram Mohan answered on Jun 27 2020
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Running Head: Managing Information Technology
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Managing Information Technology
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Managing Information Technology
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Academic Institution
Author Note
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Professor
June 27, 2018
Managing Information Technology
Introduction
The case of the Purple Cloud illustrates how companies have to constantly innovate and keep ahead of the competitive curve to remain in the reckoning in the market. As can be seen from the case, Purple Cloud and Tecnoti are cognizant of the need to continuously grow and not rest on their laurels. As part of this laser like focus on sustainable growth, Tecnoti, wants to expand both domestically and internationally, and is on the lookout for potential partners for alliances as well as firms that can be acquired. Indeed, Tecnoti has hired a consultant to help him in this endeavor (Daft & Lengel, 1996).
Having said that, the case also presents information pertaining to the dilemmas faced by Purple Cloud and Tecnoti, relating to the handling of the acquisitions and the imperative for ethical and moral leadership. As can be seen from the resignation of Christianson, everything is not well in the company and this event can be seen as a cautionary note for Tecnoti, as he scours around for acquisitions and alliances in global markets. Thus, there are intertwined issues that present themselves to the consultant who has been tasked with formulating a strategy for Purple Cloud and Tecnoti, who has eventually decide on the options before him.
Leadership and Management Theories
As for the leadership and management theories that are applicable in diverse situations as far as this case is concerned, Purple Cloud is indeed led by a visionary leader who has displayed a knack for knowing what it takes to reach the top and acting on the same to pursue longer term goals. In addition, Tecnoti exemplifies a transformational leader who walks the talk as well as a transactional manager who is well aware of the nuts and bolts of execution. In short, Tecnoti embodies the necessary leadership and managerial traits that are needed in the present case (Senge, 2006).
Having said that, what are also needed at this juncture are leadership by example and management by objectives. To explain, Tecnoti and Purple Cloud need to demonstrate thoughtful leadership by setting an example to the employees to believe in sustainable growth as much as they are taken aback by the resignation of Christianson. What this means is that Tecnoti has to convince the former employees of ABCTech, now part of Purple Cloud that their interests would be protected and their needs would be taken care of. In addition, the management of Purple Cloud needs to set some objectives for the employees to achieve in the shared pursuit of sustainable growth (Cantor, 2015).
Potential Resolutions and Preferred Option
After considering the various options and alternatives as far as the mode of entry and the countries to expand to be concerned, it is the recommendation here that Purple Cloud acquires a company that is related in its business niche to the former in India and makes the country a regional hub for the Asia Pacific Region. While alliances and licensing agreements are ok, strategic acquisition would give more control to Purple Cloud and Tecnoti as they pursue a sustainable growth strategy. In addition, a Greenfield Venture has been ruled out since it is both time consuming and expensive given the present environment in which Purple Cloud operates and the niche and the domain that are specific to it (Fernsler, 2013).
In other words, with technology accelerating at an exponential rate, Purple Cloud has to
“get in there early” and move fast if it has to have a competitive advantage over its competitors. In addition, a cross border acquisition would be relevant to its present strategy wherein it has already acquired a domestic firm, ABCTech, as part of its growth strategy. In management theory, organic growth refers to the natural growth strategies that firms put in place wherein they expand due to the growth of their own business whereas inorganic growth refers to growth through mergers and acquisitions (Dutta, Geiger, & Lanvin, 2015).
Purple Cloud is well suited to grow inorganically, though cultural and personnel and human resource issues have to be taken into consideration as well. For instance, while it has integrated ABCTech into its organizational DNA, the exit of Christianson illustrates how Purple Cloud and Tecnoti in particular have to handle people integration in a better way. This is the reason why the recommendation here is to become a transnational organization wherein Purple Cloud retains the brand image and brand identity and at the same time, allows the acquired entity to be empowered and decentralized in its decision making process (ACM.org, 2016).
India as a Natural Choice
Apart from this, the country chosen for entry is India, which given its established software industry makes it a natural choice for entry for a firm like Purple Cloud. Indeed, the Indian Software Industry is mature and well developed and some of the cities such as Bangalore and Hyderabad are hubs for world class startups and unicorns. So, this means that Purple Cloud can acquire any of the numerous software firms in India specializing in cyber security so that the acquisition supplements and complements its own business expertise and core competencies (BCG, 2012).
Indeed, the key point to note here is Purple Cloud must actualize synergies from the acquisition so that it can reap the efficiencies from the same. This can take the form of identifying a firm that is also in the line of business that Purple Cloud is in and acquiring the same. In addition, Tecnoti should also put in place an organizational structure wherein the acquired firm is absorbed into the broader organization that is Purple Cloud and at the same time, becomes a regional hub for the Asia Pacific Region (Bhadra, 2013).
The main benefit of this transnational corporation model is that centralized control coexists with regional autonomy which can prevent episodes such as the resignation of Christianson from recurring in the acquired entity. Having said that, this does not mean that
Purple Cloud loses its brand identity in the Indian venture. Instead, a Glocal approach where Purple Cloud thinks globally and acts locally should be the strategy to be followed here (Friedman, 2005).
Pros and Cons of the Option and How it Makes Sense for All the Stakeholders
The mode of entry into India through a strategic acquisition and as a transnational corporation makes sense from a variety of stakeholder perspectives. The stakeholders would be considered for evaluation here include the Purple Cloud and Tecnoti, the management and the employees of the acquired entity, the regulators in both the United States and India, the shareholders of both firms, and the other stakeholders such as customers and societal groups. These stakeholders benefit from the acquisition in a variety of ways that form the basis for subsequent discussion (Clydesdale, 2016).
To start with, Purple Cloud would acquire a global footprint by entering the lucrative Asian market where China, India, and countries in Southeast Asia as well as South Asia have large swathes of people who are online and that too, for extended periods that necessitates protection from cyber intruders and hackers. Moreover, many local and foreign firms in these countries have a need for enterprise wide solutions as far as cyber security is concerned and hence, there exists a potentially lucrative market for Purple Cloud and the acquired entity’s products (Sinha, 2015).
Next, Tecnoti can exercise control over the operations of the new entity in the same manner in which Jeff Bezos handles the many subsidiaries and foreign ventures of Amazon. As can be seen from Amazon’s strategies in India, there is significant decentralization of decision making without the brand image of Amazon being dented and what more, Amazon does use its leverage as a globally recognized brand to significant effect abroad. Having said that, Amazon and Bezos also have overall control over marketing and strategic decisions and at the same time, leave the nuts and bolts of execution to local and regional as well as national managers (Bhushan & Mukherjee, 2017).
Thus, Purple Cloud can actualize the same strategies which would allow it to integrate itself into the Indian market and carve a space for itself in the competitive niche for cyber security products. Indeed, as mentioned earlier, Tecnoti and Purple Cloud have to move fast if they are to reap the benefits of the first mover advantage. Moreover, unlike China, India does not have significant disadvantages as far as theft of IP or Intellectual Property is concerned and in addition, pirated versions of software, though prevalent, do not pose that much a threat like in China (Choudhry, 2016).
Another compelling reason why Tecnoti and Purple Cloud would be better off entering India is mainly due to its relatively laissez-faire regulatory environment which does not constrain foreign firms to the extent that other Asian countries do. Indeed, while China receives more FDI or Foreign Direct Investment, it is also a demanding place for foreign firms due to the many regulatory constraints such as the requirement for technology transfer and the widespread threat of copying and imitating rivals who cannot be hauled up legally due to its weak judicial system (Ninan, 2015).
This is a very important consideration from the point of shareholders of Purple Cloud as profitability is not eroded due to time consuming legal procedures though foreign firms operating in India do face some constraints as well. In addition, people integration is much easier in India thanks to a large English speaking and Westernized youthful population, especially in the software industry that gives it an edge over China. Moreover, unlike Mexico, India does offer a relatively stable political and social system, though China is streets ahead as far as its ability to maintain law and order in the country is concerned (Choudhry, 2016).
Purple Cloud, Conscious Capitalism, and India
Turning to the last recommendation of the consultant which is the need to embrace a conscious capitalism narrative and embed it into the sustainable growth strategy of Purple Cloud, it goes without saying that this is a noble approach that Tecnoti and his team can implement. First, let us define what conscious capitalism and sustainable growth mean in the context of the acquisition strategy of Purple Cloud in India. The country is place that is in dire need of sustainable development as far as environmental and social responsibilities are concerned. Moreover, given the wide disparities in income and wealth, Purple Cloud can indeed actualize conscious capitalist strategies by putting in place recruitment policies from a social justice perspective (Perks, 2006).
These can range from hiring more employees from diverse ethnic and racial categories and more importantly, consider recruiting more women. Moreover, given the breathtaking diversity on display in India as far as ethnic, cultural, racial, and gender categories are concerned, Purple Cloud can walk the talk by hiring employees from various categories. Indeed, this is a strategy that is being followed by other transnational corporations such as Goldman Sachs to good effect and Tecnoti can take a leaf from their strategy playbooks and implement similar strategies (Quinn & Cameron, 2004).
In addition, Purple Cloud can follow compensation policies that are in line with its international best practices such as allowing employees to own stocks and put in place a comprehensive policy of ESOP Plan or an Employee Stock Option Plan that grants them with Purple Cloud stocks based on their performance. This is an option that has a Double Impact since employees are motivated to perform better and at the same time, have a stake in the sustainable growth of the firm. Already many Indian software companies have clearly defined and well executed ESOP plans in place and firms such as Infosys embody the highest ideals of conscious and compassionate capitalism (Elm & Radin, 2012).
Talking about compassionate and conscious capitalism, Tecnoti can well benefit from interactions with Indian business leaders such as the founders of Infosys and Wipro as far as their sustainable growth strategies are concerned. In this context, it is worth noting that one of the founders of Infosys, NR Narayana Murthy, who is an icon and pioneer of the Indian software industry has recently been championing the virtues and the benefits of compassionate capitalism and hence, his advice and suggestions as well as guidance would be especially useful for startup firms such as Purple Cloud as they seek a more ethical and moral way of doing business. Thus, the consultant’s recommendation can be followed (Clydesdale, 2016).
Need for Continuous Innovation
The discussion so far has focused on multiple frames of analysis on how Purple Cloud can forge a new path for itself in the uber competitive market environment in which it operates without losing sight of its ethical and moral imperatives. Turning to the imperative to innovate on an ongoing basis, it goes without saying that given the industry that Purple Cloud is in, which is the highly technology driven cyber security space, continuous innovation is the only way out and with exponentially accelerating technology, even normal rates of linear innovation are insufficient (Quinn & Cameron, 2004).
In other words, Purple Cloud has to either innovate or perish and this is where its Indian foray can add value given the deeply innovative workforce in India and its history of pioneering efforts as far as software is concerned. Indeed, Purple Cloud can benefit from synergies between its core competencies and the acquired firm’s know how and expertise and this is where Tecnoti has to ramp up on staffing the acquired entity with enough mind power through its resources that can challenge existing firms (Cantor, 2015).
Lastly, anyone wishing to advice Tecnoti and Purple Cloud in the future would have to research the cultural issues that might arise from the merging of Western and Eastern approaches to organizational practice and this is where, further research can focus on. To conclude, Tecnoti has taken the first step towards excellence and if Purple Cloud adopts some of the recommendations presented in this report, it would benefit the firm and its employees.
References
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