strategic decision making
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This document summarizes a lecture on strategic decision making. It discusses four decision making styles: directive, analytic, conceptual, and behavioral. It also outlines the characteristics of strategic decisions and strategies, including the tensions between short and long-term orientations. The document presents a case study on TelkomVision, a struggling PayTV business unit of Telkom Indonesia. It describes the problem recognition, information gathering, alternative strategies considered, and decision to pursue a strategic partnership through partial sale of TelkomVision to optimize its value.
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strategic decision making
- 1. Mata Kuliah Proses Stratejik & Pengambilan Keputusan “STRATEGIC DECISION MAKING” Muhammad Awaluddin 120430130510 Program Doktor Manajemen Bisnis Fakultas Ekonomi dan Bisnis Universitas Padjadjaran 5 April 2014
- 2. OUTLINE STRATEGIC DECISION MAKING • Decision Making Style • Characteristic of Strategic Decision • Strategic Paradox • Case: Retrenchment TelkomVision PSPK M. Awaluddin 2
- 3. DECISION MAKING STYLE • Directive Style: A person has this style if they have a low tolerance for ambiguity and are efficient, rational, and logical in their way of thinking. They focus on the short term and are quick to make decisions, usually resulting in a decision that has been made with minimal information and not carefully analyzing other alternatives. • Analytic Style: As opposed to the directive style, a person with an analytic decision-making style has greater tolerance to ambiguity. They are careful decision makers that like to be well informed and thoroughly assess their options. They usually have the ability to adapt or cope with unique and challenging situations. • Conceptual Style: Conceptual decision makers are generally very broad in their approach and consider all available alternatives. They are long-term oriented and are usually capable of formulating creative solutions to problems. • Behavioural Style: People with a behavioral decision-making style work well with others, are open to suggestions, and are concerned about the achievements of their team. They generally try to avoid conflict and place importance on their acceptance by others. Source: Robbins, 2006 PSPK M. Awaluddin 3
- 4. Analytical Conceptual • Prefer complex problems • Carefully analyze alternatives • Enjoy solving problems • Willing to use innovative methods Directive Behavioral PSPK M. Awaluddin 4 DECISION MAKING STYLE Tasks and Technical Concerns People and Social Concerns Value Orientation Low High • Prefer simple, clear solutions • Make decisions rapidly • Do not consider many alternatives • Rely on existing rules • Socially oriented • Humanistic and artistic approach • Solve problems creatively • Enjoy new ideas • Concern for their organization • Interest in helping others • Open to suggestions • Rely on meetings Source: Robbins, 2006
- 5. CHARACTERISTIC OF STRATEGIC DECISION Keputusan stratejik merupakan keputusan yang dianggap akan berdampak baik pada jangka panjang Strategic Decision Keputusan Stratejik harus ditujukan untuk penciptaan nilai, dibutuhkan lebih dari Competitive Advantage untuk penciptaan nilai tersebut. Sumberdaya utama harus dikerahkan dalam keputusan stratejik agar bisa memberi dampak signifikan. Keputusan stratejik yang sudah diambil sulit untuk dirubah, tetapi fleksibilitas untuk menghadapi masa akan datang yang tidak bisa diprediksi harus dijaga. Keputusan stratejik harus didukung dengan komitmen jangka panjang, tercermin pada budaya perusahaan. Source: Peter Fitzroy, 2005 PSPK M. Awaluddin 5
- 6. CHARACTERISTIC OF STRATEGY Strategi merupakan pola perilaku yg mendasari pengambilan keputusan stratejik Incremental or Revolutionary • Incremental Strategy: mengarahkan aktifitas saat ini untuk penciptaan nilai yang tinggi •Revolutionary Strategy: merubah permainan dipasar STRATEGY Corporate/Business Level •Corporate Level Strategy: visi, objektif, budaya, sinergi, pengaturan SBU • Business Level Strategy: Strategi bagaimana agar SBU sukses berkompetisi dan menciptakan nilai di pasar Building Competence •Kompetensi merupakan gabungan keahlian (skill) dan kemampuan (ability) yang lebih baik dibanding kompetitor. •Kompetensi tidak statis dan harus dibangun untuk mendukung strategi Resolving Paradox • Strategi diarahkan untuk bisa menjaga kemampuan perusahaan berfungsi dengan baik di kedua ujung paradoks Source: Peter Fitzroy, 2005 PSPK M. Awaluddin 6
- 7. STRATEGIC PARADOX SHORT TERM - LONG TERM ANALYTICAL - CREATIVE • Pendekatan analitik mendorong pada strategi yg reliable, rational dan tidak bias, namun kadang cenderung lambat • Pendekatan kreatif cenderung lebih beresiko namun cepat, sehingga bisa memberi dampak yang lebih signifikan Strategic Paradox “The essence of paradox is that the firm must be at both end of the spectrum simultaneously” COMMITED - FLEXIBLE COMPETITIVE - COOPERATIVE Pada umumnya perusahaan dituntut bisa memenangkan persaingan di pasar, namun kemenangan tidak hanya bisa dicapai dengan mengalahkan lawan, tapi dengan bekerja sama (Cooperation). Strategi harus bisa mencapai komposisi yang seimbang untuk mengawal bisnis yang berjalan saat ini dengan tetap memikirkan inovasi untuk jangka panjang. Dibutuhkan komitmen agar strategi bisa mencapai visi dan misi perusahaan, dengan lingkungan bisnis yang sangat dinamis, kemampuan untuk membelokkan strategi harus tetap dijaga (flexible). Source: Peter Fitzroy, 2005 PSPK M. Awaluddin 7
- 8. CASE: Retrenchment TelkomVision Decision Making Process Problem Recognition Information Search Problem analysis Alternative Evaluation Decision Decision Environment Source: Materi Kuliah PSPK, Prof. Sucherly PSPK M. Awaluddin 8
- 9. CASE: Retrenchment TelkomVision Problem Recognition Latar Belakang: • TelkomVision merupakan anak perusahan Telkom yang bergerak di bisnis PayTV. TelkomVision mengalami kerugian usaha semenjak berdiri tahun 1997, hingga tahun 2012 (15 tahun). • Berbagai usaha telah dilakukan untuk memperbaiki performa bisnis TelkomVision, termasuk memberi suntikan dana, 7 kali penggantian CEO serta sinergi dengan internal TelkomGroup Problem Recognition: • Bagaimana membalikan performa TelkomVision agar jadi menguntungkan dan memberi nilai pada TelkomGroup Source: Data Telkom Indonesia PSPK M. Awaluddin 9
- 10. CASE: Retrenchment TelkomVision Information Search & Problem Analysis Strategic Rationale Keputusan Telkom untuk bermain di bisnis PayTV merupakan perwujudan visi “Leading TIMES Player in the Region” yang dicapai melalui “Converged TIMES Portfolio”. Digital Media Television, termasuk PayTV, merupakan portofolio bisnis yang menarik, telkom sendiri punya kompetensi dan daya saing level menengah di bisnis tersebut, maka strategi yang ideal adalah cooperative strategy/partnership Hasil penelitian AT Kearney mengungkapkan ada 3 cara memenangkan bisnis TV di Indonesia, yaitu: Membeli Free To Air TV (FTA TV) Berkonsolidasi dengan with FTA Mengembangkan low cost payTV Opsi pertama sudah pernah dicoba namun menemui jalan buntu dan kini nilai FTA TV sudah terlalu tinggi. Konten menjadi faktor kunci dalam kesuksesan bisnis PayTV, Konten merupakan komponen biaya terbesar dalam bisnis ini. Kompetensi Telkom terkait konten masih rendah, sehingga alternatif yang tersedia adalah bekerjasama dengan FTA TV (Free to Air TV). Sumber pamasukkan utama PayTV masih berasal dari biaya berlangganan saja, untuk meningkatkannya bisa melalui pemasukan periklanan. Source: Data Telkom Indonesia PSPK M. Awaluddin 10
- 11. CASE: Retrenchment TelkomVision Information Search & Problem Analysis Analisa Internal: • Kompetensi Telkom di bisnis TV di level menengah. • Infrastruktur Broadband Telkom kuat Analisa Eksternal: • Digital Media TV merupakan indistri yang menarik (Pay TV penetration rendah, Growh opportunity tinggi) • Kemunculan dari Low Cost TV • Sudah banyak pemain di industri PayTV (Kompetisi tinggi) • Konten merupakan faktor kunci dan menjadi biaya utama Source: Data Telkom Indonesia PSPK M. Awaluddin 11
- 12. CASE: Retrenchment TelkomVision Alternative & Alternative Evaluation Strategy Paradox : Cooperation vs Competition Digital Media Television Cooperation Strategic Partnership with FTA Partnership with The Best Indonesian FTA Competition Develop Low Cost TV MLTV (More for Less TV) PSPK M. Awaluddin 12
- 13. 0 (20,000) (40,000) (60,000) (80,000) (100,000) (120,000) (140,000) (160,000) CASE: Retrenchment TelkomVision Alternative & Alternative Evaluation Skenario Capital Injection kepada TelkomVision Net Income vs Investment 2010 2011 2012 2013 2014 2015 2016 2017 Bila tidak terjadi perubahan/transformasi Business Model, maka: Kenaikan Revenue yang di-generate oleh Capital Injection tidak dapat menutup kenaikan Expense yang utamanya di-drive oleh Depresiasi dan Allowance/Penyisihan History 1000M 900M 600M 300M 100M Source: Data Telkom Indonesia PSPK M. Awaluddin 13
- 14. CASE: Retrenchment TelkomVision Alternative & Alternative Evaluation Retrenchment merupakan jenis strategi yang dilakukan perusahaan bila dalam posisi persaingan bisnis yang lemah disuatu industri yang berakibat pada kinerja yang buruk, tingkat penjualan yang semakin menurun, dan profit berubah menjadi kerugian terus menerus. Retrenchment Strategy Turn Around Strategy Captive Company Strategy Exit Strategy Contraction Consolidation Outsourcing Sole Supplier Preferred provider Contact grower Sell-out Divest Bankruptcy Liquidation Source: Popy Rufaidah, 2012 PSPK M. Awaluddin 14
- 15. Transaction Structure Considerations BusPlan : Needs Capex for Leveraging Bus+Op Performance BOD & BOC Desision : Strategic Partnership thru Strategic Sale As Is Scenario Needs Capex : 158-178 IDR B Sale More Than Total Cash Injection : 650/851 B IDR CSS : Managing Portfolio Metra as IME Portfolio Parent Optimizing Value Significant Majority Sale for Premium Price Protect and Optimize Benefit in SHA 10% 20% 30% 40% 16-18 M actual Equity injection 32-35 M actual equityinjection 47-53 M actual Equity injection Premium price Quite low share Hard to get Perpetual Protection In SHA Premium price Low share Possible to get Perpetual Protection In SHA PSPK M. Awaluddin 63-71 M actual Equity injection No risk to achieve > 850 B IDR No risk to achieve > 850 B IDR Medium risk to achieve > 850 B IDR high risk to achieve > 850 B IDR Metra exercise Telvis’ right issue Final Diluted Basis If 158=10% 100%Eq= 1.6-1.7 T Metra exercise Telvis’ right issue Final Diluted Basis If 158=20% 100%Eq= 800 – 900 M Metra exercise Telvis’ right issue Final Diluted Basis If 158=30% 100%Eq= 527-593 M Metra exercise Telvis’ right issue Final Diluted Basis If 158=40% 100%Eq= 395-445 M Most Desirable / Straightforward Probability to be happened Least Desirable / Straightforward Probability to be happened normal price Low share No need Protection Clause BOD/BOC Rep lower price Med Low share No need Protection Clause BOD/BOC Rep CASE: Retrenchment TelkomVision Alternative & Alternative Evaluation 15 Source: Data Telkom Indonesia
- 16. CASE: Retrenchment TelkomVision Decision • Keputusan yang diambil Telkom terhadap TelkomVision adalah Strategic Partnership dengan pemain FTA terbaik di indonesia. • Tindak lajut dari pemilihan strategi tersebut adalah: • Evaluasi kandidat Strategic Partner. • Evaluasi struktur dan skema Strategic Partnership. Divestasi 80% saham TelkomVision pada Strategic Partner. Source: Data Telkom Indonesia PSPK M. Awaluddin 16
- 17. CASE: Retrenchment TelkomVision DECISION MAKING STYLE Source: Data Telkom Indonesia PSPK M. Awaluddin 17
- 18. CASE: Retrenchment TelkomVision Characteristic of Strategic Decisions Strategic Decision • Create Value by Strategic Partnership, • Leveraging Partner’s Competency & Best Contents in TV Industry. • Economic of Scale of Contents. Divest 80% of Telkomvision Share to Strategic Partner The Strategic Partnership is a long-term commitment, because it’s in Telkom CSS: both for Telkomvision & Low Cost TV Business The divestment is difficult to reverse. Yet, Telkom is still flexible by maintaining 20% Share of Telkomvision and Developing Low Cost TV Business Source: Data Telkom Indonesia PSPK M. Awaluddin 18
- 19. CASE: Retrenchment TelkomVision CHARACTERISTIC OF STRATEGY Incremental or Revolutionary • Incremental: Strategic Partnership untuk Telkomvsion • Revolutionary: Masuk ke bisnis Low Cost TV Building Competence Resolving Paradox STRATEGY Corporate/Business Level • Dengan menerapkan Strategic Partnership dengan pemain terbaik di industri tersebut untuk memperoleh kompetensi • Strategic Partnership di TelkomVision dan pengembangan bisnis Low Cost TV adalah Corporate Level Strategy yang di desain dalam Corporate Strategic Scenario • Long-term vs short-term • Cooperative vs competitive • Analytical vs creative • Committed vs Flexible Source: Data Telkom Indonesia PSPK M. Awaluddin 19
- 20. CASE: Retrenchment TelkomVision STRATEGIC PARADOX SHORT TERM - LONG TERM ANALYTICAL - CREATIVE • Short-term: Divestment of 80% TelkomVision Share to Strategic Partner could be seen as short-term since it quickly eliminates the loss & potential loss attributed to TelkomGroup as well as gaining competencies required for TV industry • Long-term (innovation): In addition to the development of low cost TV business, the strategic partnership itself is a long-term partnership, by retaining 20% share and anticipate potential synergy. • Analytical: The decision to strategic partnership for Telvis was carried out through a series of analysis and study, one ot them is done by AT Kearney and internal analysis to find the best alternatives and minimize risk • Creative: despite the fact that the conducted analysis and study had not remove all the risk, the BOD made a strategic decision to strategic partnership in light of their intuition, judgement, discretion due to their experience Strategic Paradox COMMITED - FLEXIBLE COMPETITIVE - COOPERATIVE • Cooperative: The strategic partnership between TransCorp (80%) and TelkomGroup (20%) in Telkomvision is a cooperative relationship • Competitive: Yet, Telkom still develop Low Cost TV business platform to develop new portfolio which might be somehow competing with Telkomvision, because no non-competing agreement in SPA (Sales Purchase Agreement) & SHA (Shareholder agreement) of Telkomvision • Committed: For about 15 years Telkom had been committed to giving best efforts to improve Telkomvision performance: capital injection, Change of Telvis BOD with best talents, synergy with TelkomGroup • Flexible: However, realizing that Telvis needed different strategy, Telkom showed flexibility by deciding to have Strategic Partnership with the best Indonesian FTA player and develop Low Cost TV business platform PSPK M. Awaluddin 20
- 21. REFERENCE Fitzroy, Peter & Hulbert, James M., 2005, Strategic Management: Creating Value in a Turbulent World, John Wiley &Sons, Inc. Rufaidah, Popy, 2012, Manajemen Strategik, Humaniora, Bandung. Robbins, S, Bergman, R, Stagg, I & Coulter, M, 2006, Foundations of Management 2nd edition, pp 204-205, Pearson Education Australia, Frenchs Forest PSPK M. Awaluddin 21
- 22. TERIMA KASIH PSPK M. Awaluddin
Editor's Notes
- #2: yahdi
- #4: Dimensions of Decision-Making Styles Value orientations Task and technical concerns People and social concerns Tolerance for ambiguity Low tolerance: require consistency and order High tolerance: multiple thoughts simultaneously
- #5: Dimensions of Decision-Making Styles Value orientations Task and technical concerns People and social concerns Tolerance for ambiguity Low tolerance: require consistency and order High tolerance: multiple thoughts simultaneously
- #18: Dimensions of Decision-Making Styles Value orientations Task and technical concerns People and social concerns Tolerance for ambiguity Low tolerance: require consistency and order High tolerance: multiple thoughts simultaneously