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Art of Being Middle Man

Art of Being Middle Man

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Published by: csun138 on Jan 29, 2010
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10/23/2011

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To be tolerant towards risk taking is one way to sustain long term growth (Burns, 2005;
Canals, 2000) and at Fagerhult, F1 states that the risk taking is healthy, however F2 thinks
that the risk taking is currently relatively high, which could be a result of Fagerhult´s suc-
cess that has lead to increased self-confidence among personnel that in turn resulted in risk
taking (Ahrens, 1992). In terms of business opportunities both respondents were unsure
whether Fagerhult had denied any business opportunities, but both thought that it had oc-
curred. Cartwright´s (2002) argument that it is better to turn down some business opportu-
nities; since they can cause longer term deterioration, is possibly reflected in Fagerhult´s
strategic decisions.

When it comes to risk taking Scandinavian Photo takes risk with caution, according to S1
and S2, and if they do take risks they are not gambling, S2 declares. Still, de Geus (1997)
argues that managers need to be tolerant to risk taking if the company wants to experience
growth. S1 is aware that opportunities arise quite often, but as mentioned before only one
acquisition has been pursued so far and also S2 states that sometimes Scandinavian Photo
denies business opportunities. However, S2 argues “At the same time you cannot be too careful;
either you decide to be in our out”. As it seems Scandinavian Photo is probably not pursuing any
risky short term opportunities and thus Cartwright´s (2002) argument does not seem to be
valid in this context. As S1 declares Scandinavian Photo have safe and sound worked their
way up.

In terms of risk taking at Hogia BS, H1 states that they take risk, but that it differs be-
tween areas and H2 argues similarly that they are partly risk taking, but the careful control
makes it possible to spot potential problems directely. In contrast, H3 believes that the risk
taking at Hogia BS is small, but within the group other companies are allowed to take more
risks. De Geus (1997) argues that a tolerance towards risk taking is needed to experience
growth. However, since the Hogia group consists of so many companies the risk differs

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and we cannot say how the overall tolerance towards risk is. Although, Hogia BS seems to
be a less risk taking company, which could make sense as they are operating in a mature
market. When it comes to business opportunities H2 and H3 are not aware if any offers
have been denied, however H1 states that it has occurred, since Hogia BS must reach its
profitability goal. Thus Cartwright´s (2002) argument does not really fit, since it deals more
with taking too much risk than being limited in terms of profitability to make investments,
which in itself could be a risk.

In regards to the risk taking all respondents state that Rapid is not a risk taking company,
thus this could indicate that managers should be more tolerant towards risk taking to ex-
perience growth (de Geus, 1997) or that employees are not satisfied with their compensa-
tion according to Hornsby et al. (2000). I1 argues that the strategy is to make reliable acqui-
sitions; however it could be argued that any acquisition could be considered as a risk, espe-
cially since acquisitions often are associated with problems of coordination (Ahrens, 1992).
I2 also emphasize the cautious aspect of their decisions, however I3 argues that Rapid has
been standing still the last three years and that the middle managers are not good at taking
decisions or take risks. This is influencing the growth negatively, since a high participation
among employees in the decision making process and intended risk taking is facilitating
growth (Antonioni, 2000), the aspect of decision making will be further evolved later on in
this thesis.

In regards to risk taking, it seems as if Fagerhult has a healthy to relatively high risk taking,
according to the middle managers perceptions. Furthermore, the respondents at Scandina-
vian Photo agree that they take risk with caution. At Hogia BS, again the perceptions differ
between the respondents, and H1 and H2 regard the risk taking to be partly risky, while H3
states that the risk taking at Hogia BS is very small. All respondents at Rapid agree that the
company is not risk taking.

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