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5: Management Tools

5.1 Introduction

It is clear from the previous chapters that only a rigorous examination and reorientation of services and business models towards the digital age will enable future success potential beyond the next couple of years. Tools suited to the digital age are required for this purpose, and that is the subject of this chapter. Business management instruments that allow firms to detect trends that are relevant to success and to derive the right consequences for their own business model, will first be shown in their classic form, before being expanded by the dimensions that are necessary for the successful analysis of the trends of the digital age.

5.2 The St. Gallen Management Model as a Reference Model

By examining in a structured manner the potential impact of current and future trends on their own business model, banks can derive the necessary consequences for their future success positions. Even if gut feeling often rules in successful periods, neat strategic work makes a difference. IBM, for example, was the only company that managed to adapt successfully to the changes in the computer industry with two relevant technological advances—thanks to an intelligent linking of trend analyses and implementation in the current business environment (Downes and Mui 1998).}}

The control of the “WHAT” and the “HOW” of the activities of companies can be substantiated by means of different models, which illustrate the level of knowledge with regard to the best practices of business administration. The reference framework for this book is provided by the St. Gallen Management Model (Fig. 5.1).

It distinguishes between four trend dimensions (society, nature, economy and technology). As well as the trend dimensions there are stakeholders, who are

Fig. 5.1 The new St. Gallen management model (Source Ru¨egg-Stu¨rm 2003, p. 22)

significant for a bank. Aside from competitors there are other stakeholders who influence the development of the bank: governments and states, the public, customers, suppliers, employees, investors and society. The activities, values and norms of these groups are also essential influencing factors. Thus, for instance, a change in regulations can restrict a bank's scope of activity just as strongly as the better strategic work by a competitor or a change in values among a relevant customer group.

Trends and stakeholders influence the current and future success positions for banks. The St. Gallen Model explains a company's provision of the price/performance configuration in three ordering dimensions: strategy, structure and culture. Strategy deals with the question “where do we want to go?” The structural design addresses the coordination of resources for providing the price/performance package. Ultimately, the company culture—with the sum of the embodied norms and values in providing the service—can be the decisive difference for customers, for only that which can be perceived in reality can be appreciated by the customer. With regard to culture, the St. Gallen Management Model distinguishes between phases of change and renewal and gives different recommendations for action with regard to managing the necessary changes (Ru¨egg-Stu¨rm 2003).

The individual dimensions of this model will be outlined below and applied to banks. Section 5.3 is concerned with strategy, and Sect. 5.4 with structure.

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