Second term of office and foreign affairs


1506.jpgMay 2008 | By Leopoldo Calvo-Sotelo, Director of Master in International Relations at IE School of Arts and Humanities

International relations are the Achillesâ?? heel of many a president when they first come to power, and their first reaction is to place it in the hands of a professional. But everything changes when it comes to re-election.

North American political commentators have coined the term “second term blues” to refer to the problems that usually affect the presidents of the United States during their second term of office. Often it is said that they are a combination of tiredness and arrogance that comes from power exercised over a long time. The experience of Spanish democracy has still not given rise to this type of problem, but certain trends in second terms of office can be identified in the field of international relations. It is particularly interesting to analyse successive appointments to the post of minister of foreign affairs.

Ministers of foreign affairs have always enjoyed special prestige in democracies. In North America, the world fame of the secretary of state has, on exceptional occasions, rivalled that of the president himself. This occurred with Henry Kissinger during the last stage of Nixon´s office and during the presidency of Gerald Ford. Whatever the case, only the secretaries of state (and not all of them) appear next to the presidents in the photos and memories of an era. For example, the presidencies of Truman and Eisenhower are inseparable from the figures of Dean Acheson and John Foster Dulles, respectively.


Even more diverse!


April 2008 | By Margarita Alonso, Professor of Diversity Management at IE Business School

Ladies and gentlemen, we are now facing an even greater challenge than gender equality- that of non discrimination against homosexuals in the workplace. Learn how itâ??s done.

Many companies have still not managed to break down the barriers that discriminate against women and disabled workers, and still face challenges in terms of reconciling workers and finding imaginative formulas to attract and retain young talent. And now an even more difficult challenge has appeared: what to do with gays and lesbians.

More than a year ago now, a group of students took the initiative and set up IEOut, the first known LGBT network in a business school in Spain. It was a challenge that was not entirely free from controversy.

This experience, and several studies in progress, have enabled us to learn a great deal. We have achieved our objective in that we are now in a position to give guidelines and advice to firms that want to include this collective in their diversity policies.


Adapt or perish


April 2008 | By Javier Carrillo, Professor and Executive Director of the Centre for Eco-Intelligent Management at IE Business School

Renewable energies are revolutionizing the world energy scenario, bringing excellent business opportunities in Latin America, Asia and the US.

It is estimated that world investment in renewable energies broke through the $100,000 million ceiling in 2007, up 40% on the previous year. This trend promises consolidation in the context of unstoppable rises in oil prices and intense efforts to develop renewable energies by the industrialised nations committed to reducing their CO2 emissions.

The growth in turnover is being accompanied by a no less dynamic transformation of the structure of the sector, which is witnessing a progressive concentration of the ownership of once-independent companies in the hands of large multinationals. A growing number of participants in the renewable energy industry are also promoting the search for new opportunities in emerging markets and technologies. Special mention must be made of the Asian and Latin American markets as far as wind energy and biofuels are concerned. Outside the emerging countries, the United States market is also highly attractive, with a stable legislative framework that is becoming increasingly committed to renewable energies and offers an abundance of federal tax incentives for its development.


Spain's global companies

Original published by Forbes, One world; one gigantic marketplace. This year, 60 countries have global 2000 entries vs. 51 in our inaugural list in 2004. The Forbes global 2000 are public companies with the top composite scores based on their rankings for sales, profits, assets and market value. Our justification for using a composite…


Iberdrola: building a brand name in the Energy sector


April 2008 | By Ramon Diaz Bernardo, Professor of Marketing at IE Business School

For years now, the energy sector has spurned marketing, but changes in legislation and share structures have brought about a shift in attitudes. Iberdrola is a prime example.

Marketing in energy enterprises, especially electricity companies, is a relatively new phenomenon. Indeed, until a short time ago, many of these companies did not even have a marketing department. The nearest they had was the public relations function or relations with the media, but not much more.

However, for a few years now, electricity companies have been discovering the world of marketing and the question is: why? What has led these companies to invest in marketing? Like almost everything in this sector, the answer has to do with changes to sector legislation and changes to the companies´ capital ownership structures. Yet, in my opinion, until the domestic consumer has the real capacity for choosing his electricity supplier, there will be no real competition. The introduction of a certain level of competition among electricity companies has led them to start investing in their corporate image and it has given rise to a concern for building a differentiated position. In addition, the electricity companies have invested heavily in marketing aimed in some cases at attracting investors (in the case of public invitations to bid) and in others at defending their “independence” (in the case of public takeover bids, especially if they are hostile).


Financial storm or perfect storm?

1488.jpgApril 2008 | By Francisco Lopez Lubian, Professor of Finance at IE Business School

The subprime crisis, which began with problems of liquidity, is now a confidence and profit crisis with a marked impact on the real economy. The virtuous circle could be turning vicious.

The financial crisis unleashed last summer was previously announced and summarised by reports from international organisations such as the IMF and the BIS. Essentially, the message at the time was: the real economy, fine; but be careful with the excesses of the financial economy.

At present, can we confirm that the crisis is essentially financial or are we in a situation where the elements necessary for a perfect storm have been blown together?

One summary of the facts could be the following:

1) Recent years of expansive monetary policy with negative interest rates in real terms, which has allowed intense growth in consumerism and investment (homes, corporate takeovers) based on significant family and corporate leverage.
2) A widespread development of financial products, especially credit risk transfer (CDS, CLO/CDO), on both a national and international scale.
3) An increase in the securitisation of credits, which has enabled an apparent alienation of risk and profits obtained simply from the structure.
4) The purchase of this securitised debt by investors who were looking for a higher level of profitability than that offered by the traditional markets on a scenario of very low interest rates.


Pronovias: take your partner


1470.jpgMarch 2008 | By Ramon Solé, Professor of Strategy at IE Business School.

Pronovias is a world reference in the bridal gown business, thanks to a happy marriage between prêt a porter and top designers.

Last week, the fashion world enjoyed one of its most emotional and important moments in many years: the world recognition of Valentino, the grand master of haute couture, in the presentation of his latest fashion collection. However, Valentino´s creations will continue to fire the enthusiasm of his followers, with the wedding dresses he makes and distributes all over the world under an exclusive agreement with Pronovias. Pronovias has found its perfect partner in Valentino. The partnership combines the Italian designer´s Renaissance talent with the entrepreneurial vision and tenacity of the renowned Spanish entrepreneur Alberto Palachi. It is yet another milestone in a successful business story, the results of a marriage between rigorous work and the right strategic vision.

Pronovias is a good example of this essential combination for reaching the position of world leader that it holds and strengthens at each of the various stages of its evolution.

The pioneering idea is based on using the prêt-à-porter business model in the wedding dress market, and the use of a direct retail management system. Pronovias continues to control the entire process from the design of the collection to relations with the end customer.


Different ages, different viewpoints

1468.JPGMarch 2008 | By Cristina Simon, Professor of HR Management at IE Business School.

Much has been said about cultural, religious or sexual diversity, but there has been little talk of how to balance different generations that have different ways of seeing the world and business.

The enterprise world is starting to take notice of new aspects that form part of employees´ personalities and that will most probably affect their effective management. Although the recognition of the differences among genders, races or cultures has been consolidated in many companies, one of the things that greatly determine the way we see the world in this sense is the experiences we have had and share with the people from our own age group.

Besides our private and personal experiences, we all remember milestones that have marked the different stages of our life and that often serve as common references among our contemporaries. These experiences are shared by a large social group within a certain age range and we refer to this group as a generation. The important part of determining a generation group is not so much the fact of belonging to a certain age group (there may be considerable variations), but rather the cohesion of the group as a result of experiences, values and a shared way of life.


Spanish business leaders maintain silence

Spain is in the grip of election fever. With less than a week to go before polling day on March 9, the campaign is receiving blanket media coverage, while politicians on the hustings talk themselves hoarse. But the countryâ??s business community remains quiet. Unlike in other western countries, Spainâ??s corporate figures will not publicly endorse candidates. Nor is it acceptable to criticise the government during an election campaign. And, if Spainâ??s business leaders are natural allies of the opposition Popular party (PP), they are discreet in their support.

The reasons for this seeming political impartiality at election time are manifold, say experts. Culturally, it is considered bad taste in Spain for business leaders to make public their grievances with government policy. Most lobbying efforts are channelled less directly, through business associations or private meetings.
However, this public neutrality is also motivated by fear, according to Fernando Casado, general manager of the Family Business Institute in Madrid. â??There is still quite a bit of political intervention in the Spanish economy,â? he says. â??Itâ??s not in any chief executiveâ??s interest to favour one side or the other. It could cost you business.â?


IE Business School presents the GEM Spain Report for 2007

gem1.jpgEntrepreneurial activity in Spain grew by 4.11% in 2007, as shown by the results of the GEM (Global Entrepreneurship Monitor) Report, the leading international observatory on entrepreneurial activity worldwide.

Experts from IE Business School lead the Spanish arm of the project, sponsored by the Department for SMEs at the Spanish Ministry of Industry, Banesto and the Incyde Foundation. The presentation of the new edition of the GEM Report took place on Thursday, February 28, 2008 at IE Business Schoolâ??s Madrid campus, and was attended by Spainâ??s General Secretary for Industry Joan Trullén, the Spanish Director General of Policy for SMEs, María Callejón, and other key players from the field of entrepreneurship.

One of the main conclusions of the report is that there was moderate growth of entrepreneurial activity in Spain 2007. The TEA (Total Entrepreneurial Activity), an index used to measure the number of business start-ups, stands at 7.6% for 2007 in comparison with 7.3% for the previous year. This rate of growth places Spain in 4th position among EU countries and 8th among the OCDE countries analyzed by the GEM Report. Moreover, the â??death rateâ? of business start-ups in Spain has dropped by 16.6%, pointing to higher rates of consolidation. In the words of Ignacio de la Vega, Director of the GEM Report in Spain and Professor at IE Business School, â??2007 was a good year for entrepreneurial activity as a whole. In addition to an increase with regard to 2006, which saw spectacular rates of growth, business start-ups are growing in quality and dimension, and are based on increasingly solid business models which translate directly into a marked drop in business death ratesâ?.


Homeless: a unique style

February 2008 | By Rosario Silva, Professor of Strategy at IE Business School.     Homeless, a quality designer brand named after street people, has achieved success using a unique strategy that distinguishes it from the rest of the sector. This fashion company, created in 1994 under the name of Homeless and rechristened Hoss Intropia…


The European Union again looks to the future

1460.jpgFebruary 2008 | By Dr. Javier I. García González, Professor at IE University


The recently signed Lisbon Treaty has brought new lifeblood to the EU after the failed Constitution, and now looks set to play a greater role in international politics.

We probably will not hear it referred to as the failed “European Constitution”, but the Lisbon Treaty aims to form part of our lives over the coming years. On 19 October, 2007, European leaders managed to finish a job they more or less completed in June, thanks to a successful German presidency. The reward for the current Portuguese presidency will be that the new document that will govern the life and workings of the European Union will bear the name of the country´s capital, where it was signed by the heads of government on 13 December, 2007. From that moment, a process for the ratification of the treaty by each member state began which, if all goes according to plan, will lead to the re-written text coming into effect at the beginning of 2009 (except for certain provisions that have been postponed until 2014), replacing the current Nice Treaty.

Hence we see the beginning of the end of a crisis that has not been the first and will not be the last, and one that has set the members of the European Union against each other on matters that are fundamental for defining its very nature, modus operandi and future. The now discarded “Constitutional Treaty” addressed many of these issues by shaping a European Union with a high level of integration, not only in economic terms, but also on a political, social and even symbolic level; however, the idea proved to be too ambitious. The history of European integration shows us that the Union has progressed better in short steps (albeit quickly at times) than in leaps and bounds and the misnamed Constitution was seen by many citizens as a large leap, beginning with its very denomination. In hindsight, the halt in the process for the building of Europe during these two years may even have helped a Europe that is growing in both size and complexity put its feet back on the ground, immersed in a world that is becoming increasingly small and interconnected.