Wednesday, February 1, 2012

HUNTER Mark Lee, CAPRON Laurence, BOULOS Fares
Lloyds TSB (A, B, C)
© 2012 INSEAD Case Study
Also available: Teaching Note




After the transformation of Lloyds Bank from an unfocused and underperforming group to a focused highly-performing bank under Brian Pitman (1983-1996), the incoming CEO takes on the challenge of redefining the bank’s strategy and operations, facing difficult choices regarding the firm’s scope and internationalization. Ultimately, Lloyds’s board of directors end up facing significant corporate governance issues with long-term implications for the future of the company.

Pedagogical Objectives: 1.To examine the transformation of a business portfolio and the drivers of portfolio choices - financial, resource-based and industry-based criteria. 2.To examine the role of corporate parents in defining a) the overarching governing principle, b) the corporate domain, c) the value creation logic, d) the organizational context of their company. 3.To discuss the role of the CEO in shaping corporate strategy, capability development, and organizational and cultural fit. 4.To examine the role of value-based management in shaping corporate strategy. 5.To examine the tensions between managers and shareholders, notably in mature markets, between short-term and long-term objectives, as well as between exploitation and exploration. 6.To discuss the role of the board of directors in managing the tension inherent between finding and sustaining a profitable growth path on the one hand, and the risk parameters posed by overly aggressive growth plans on the other.