Literature Review Women on boards and in TMTS and firm performance114 4 7 Conclusion In this paper I analyze the history of CONERGY an integrated systems supplier in the field of renewa ble energies over the period from 1998 to 2007 From its beginnings as a private equity financed start up CONERGY rapidly grew to a globally ope rating Group focusing on the lucrative because sta te promoted sector of solar technology The Group expanded to international markets and diversified into adjacent renewable energy technologies by both numerous acquisitions and foundation of sub sidiaries Since 2002 Group sales had grown at an annual rate of 57 percent while the GAGR of staff was even 72 percent In 2007 CONERGY achieved annual sales of EUR 719 0 million with nearly 80 subsidiaries worldwide and employed roughly 2 500 people However 2007 marked the year of CONERGY s fall Due to delays in delivery on the suppliers side the Group suffered from revenue losses in the area of EUR 130 million Fixed costs and other operating expenses had risen sharply so that CONERGY s profitability was deep in the red with EUR 210 0 million Its working capital to sales ratio stood at disastrous 38 percent At the same time cash requirements were very high The Group experienced a severe liquidity crisis which nearly led to its insolvency I find that CONERGY s aggressive expansion was advanced first and foremost by founder and CEO Martin Rueter I refer to key findings of behavi oral finance to understand Rueter s strategy and behavior and show how over optimism and over confidence likely impacted Rueter s decisions My analysis yields several insights that may have contributed to CONERGY s severe crisis in 2007 from which it has failed to recover Firstly Rue ter presumably subject to an optimistic bias may have overestimated his own prospects for success as well as his individual skills and competencies Consequently he could have overvalued his own expansion strategy and his ability to manage his projects Second there are numerous indicators of overconfidence That means that Rueter could have underestimated potential risks or at least perceived these to be manageable and controllable Third the supervisory board apparently failed in its func tion to monitor and control the CEO s actions It la cked the necessary professional distance between the CEO and the board with Rueter s uncle being the Chairman and his brother being a board mem ber Fourth being cash rich after the IPO in 2005 Rueter advanced with unrestrained expansion also through heightened acquisitiveness which is again indicative of overconfidence His overinvestment in company growth led to a sharp rise in costs cash requirements as well as a significant increase in complexity within the Group Having abundant internal resources at his disposal Rueter conduc ted a large number of acquisitions with doubtful strategic sense and lacking sustainable value thus decreasing enterprise value Striving to achieve his vision of becoming world market leader in renewable energies founder and CEO Rueter can be held responsible for both the spectacular rise and fall of the CONERGY Group CEO optimism and overconfidence

Vorschau DIRK-Forschungsreihe Band 21 Workforce diversity and personal policies Seite 114
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