Organizations →
- 12 Aug 2009
- Working Paper Summaries
Culture Clash: The Costs and Benefits of Homogeneity
Culture clash is often considered a major cause for the failing of mergers and acquisitions, and for this reason it is an important consideration for corporate strategy. Although less publicized, culture clash has also plagued alliances and long-term market relationships. It provides a unique lens on the performance effects of corporate culture itself, and thus culture's potential to generate a competitive advantage. This paper develops an economic theory of the costs and benefits of corporate culture—in the sense of shared beliefs and values—in order to study the effects of culture clash in mergers and acquisitions. Key concepts include: Culture is the degree to which members have similar beliefs about the best way of doing things. In mergers and acquisitions, the costs of culture clash will typically show up immediately and affect mainly the operational efficiency of the merged firms. The benefits of culture clash will take more time to emerge and will affect more the fit with the environment. Closed for comment; 0 Comments.
- 10 Aug 2009
- Research & Ideas
High Commitment, High Performance Management
High commitment, high performance organizations such as Southwest Airlines, Johnson & Johnson, McKinsey, and Toyota effectively manage three paradoxical goals, says HBS professor Michael Beer. His new book explains what all companies can learn. Q&A Key concepts include: High commitment, high performance (HCHP) firms carry out performance alignment, psychological alignment, and the capacity for learning and change. HCHP transformations are a unit-by-unit process. HCHP firms allow employees to speak to power in honest, collective, and public conversations. Leaders must make conscious, principled choices. Leaders develop an institution that cares about people while understanding the importance of profits. Closed for comment; 0 Comments.
- 03 Aug 2009
- Research & Ideas
Corporate Social Responsibility in a Downturn
Financial turmoil is not a reason to scale back on CSR programs—quite the opposite, says HBS professor V. Kasturi "Kash" Rangan. As a marketing scholar Rangan is optimistic about strategic CSR efforts that provide value in communities and society. Q&A Key concepts include: Corporate social responsibility (CSR) means "activities undertaken by businesses that enhance their value in the community and society and thus benefit their reputation and brand," says Rangan. CSR should be treated as a business discipline and practiced with the same professionalism and rigor as other aspects of a firm's strategy. "For example, many of the programs that come under the umbrella of 'climate change' have the potential to benefit the environment as well as a company's bottom line," Rangan adds. Good examples are the early childhood literacy initiative of PNC, a financial services organization based in Pittsburgh, and the 10,000 Women initiative of Goldman Sachs, which facilitates a business education for underserved women. Companies should classify their CSR programs according to the ability to enhance and even transform the firm's business practices. Closed for comment; 0 Comments.
- 30 Jul 2009
- Working Paper Summaries
Fluid Teams and Fluid Tasks: The Impact of Team Familiarity and Variation in Experience
In the context of team performance, common wisdom suggests that performance is maximized when individuals complete the same work with the same people. Although repetition is valuable, at least up to a point, in many settings such as consulting, product development, and software services organizations consist largely of fluid teams executing projects for different customers. In fluid teams, members bring their varied experience sets together and attempt to generate innovative output before the team is disassembled and its individual members move on to new projects. Using the empirical setting of Wipro Technologies, a leading firm in the Indian software services industry, this study examines the potential positive and negative consequences of variation in team member experience as well as how fluid teams may capture the benefits of variation while mitigating the coordination costs it creates. Key concepts include: As organizations continue to depend on the output of teams, and teams, in turn, rely on members with varied prior experience, it becomes critical for teams to manage these differences and dependencies successfully. If the most valuable assets of many companies are their employees, then organizations need to shift from only thinking about their project portfolio to also considering their employee-experience portfolio. Managing employee-experience portfolios will require managers to consider the breadth of types of experience (e.g., customer, technology, etc.) captured across the members of a team as well as their familiarity with each other. Doing so may offer managers an important new lever for improving organizational performance. Closed for comment; 0 Comments.
- 29 Jul 2009
- Working Paper Summaries
Firsthand Experience and the Subsequent Role of Reflected Knowledge in Cultivating Trust in Global Collaboration
How can workers better collaborate across vast geographical distances? Distributed collaboration—in which employees work with, and meaningfully depend on, distant colleagues on a day-to-day basis—allows firms to leverage their intellectual capital, enhance work unit performance, face ever-changing customer demands more fluidly, and gain competitive advantage in a dynamic marketplace. Research over the last decade, however, has provided mounting evidence that while global collaboration is a necessary strategic choice for an ever-increasing number of organizations, socio-demographic, contextual, and temporal barriers engender many interpersonal challenges for distant coworkers and are likely to adversely affect trust between and among workers across sites. In this paper that examines employee relations at a multinational organization, HBS professor Tsedal Beyene and MIT Sloan School of Management professor Mark Mortensen find that firsthand experience in global collaborations is a crucial means of engendering trust from shared knowledge among coworkers. Their findings reinforce the important role of others' perceptions in our own self-definition, and suggest a means of addressing some of the problems that arise in cross-cultural global collaborations. Key concepts include: As organizations increasingly move toward more global designs, with greater intersite communication and mobility, a more highly socialized view of global collaborations is required. Direct knowledge entails knowledge about physical space and facilities, cultural traits of coworkers, work processes, people, and relationships. Reflected knowledge enables people to view how their home office is both presented to and perceived by others. In global collaboration there is the distinct and important role played by reflected knowledge as opposed to direct knowledge. Both types impact trust. While direct knowledge may help to identify barriers to collaboration, there is no guarantee that any particular person can ameliorate them. In contrast, reflected knowledge provides feedback about our own context and related factors that are more likely to lie within our control. While technology may be designed to mirror the other's view, it cannot provide the full breadth of reflected information typically gained while on-site. Managers would be wise to provide for subsequent reciprocal visits to ensure that the hosts of any first meeting gain firsthand experience of their collaborators' sites. Closed for comment; 0 Comments.
- 09 Jul 2009
- Working Paper Summaries
Performance Pressure as a Double-Edged Sword: Enhancing Team Motivation While Undermining the Use of Team Knowledge
Why do teams often fail to use their knowledge resources effectively even after they have correctly identified the experts among them? Project teams are a prominent feature of the knowledge-based economy, and member expertise has long been recognized as an important resource that can greatly affect team performance, but only to the extent that it is accurately recognized and used to accomplish the objective. The step between recognizing others' expertise and then actually applying it to achieve a collective outcome, however, is highly problematic: Even when individuals know who holds relevant task expertise, they are often unwilling or unable to give the experts appropriate influence over the group process and outcomes. HBS professor Heidi K. Gardner takes a multidisciplinary approach to develop theory explaining how interpersonal dynamics in teams affect members' use of each other's distinct knowledge, ultimately leading to differential performance outcomes. Key concepts include: Teams facing significant performance pressures tend to default to high-status members at the expense of using team members with deep knowledge of the client, with detrimental effects on team performance. The more important the project, the less effective the team: Excessive performance pressure results in the team reverting to less effective ways of divvying up influence over its end product, in turn leading to lower performance ratings for the whole team. Team process is important in enabling organizations to harness knowledge resources for the benefit of maintaining strong relations with their clients. Closed for comment; 0 Comments.
- 06 Jul 2009
- What Do You Think?
Are You Ready to Manage in an Irrational World?
It is becoming clear that human behavior is much less rational than we assumed, says HBS professor Jim Heskett. Judging from replies to this month's question, there are many nuances to managing in an irrational world. (Online forum now closed. Next forum begins August 7.) Closed for comment; 0 Comments.
- 29 Jun 2009
- Sharpening Your Skills
Sharpening Your Skills: Leading Change
Nothing like a global recession to test your change-management skills. We dig deep into the Working Knowledge vault to learn about building a business in a down economy, motivating the troops, and other current topics. Closed for comment; 0 Comments.
- 24 Jun 2009
- Working Paper Summaries
Don’t Just Survive—Thrive: Leading Innovation in Good Times and Bad
The financial crisis provides a sobering reminder of what happens when innovation fails to drive productive economic growth. For over a decade, money from around the world poured into the United States seeking innovation. Despite these massive investments, when adjusted for inflation, U.S. GDP grew slowly with much of the growth coming from government, professional, and business services, including real estate and outsourcing. What's more, inflation adjusted wages stalled for many, even as consumer spending increased. This paper argues that innovation is not a side business to a real business: rather, innovation is the foundation of a successful business. Key concepts include: Entrepreneurs can be found and a culture of entrepreneurship can be developed in companies of any size and age. Entrepreneurial leaders must relentlessly—but not recklessly—pursue opportunity. They must look beyond the resources currently controlled to harness the power, resources, and reach of their organizations and networks. Breakthrough innovations that change people's lives and the very structure and power dynamics of industries cannot be managed as "silos," tucked away in corporate, university, or government research labs, in incubators, or within venture capital funded entrepreneurial start-ups. Access to the marketplace is needed to help speed commercialization and adoption. Emerging opportunities must be nurtured and the transition to high growth must be managed. Once breakthrough innovations catch hold, growth must be funded and managed to exploit the full value of the opportunity. Incremental innovations must ensure that businesses that have passed through the high-growth stage can continue to deliver the resources, capabilities, and platforms needed to fuel the emerging opportunities of the future. Different organizational structures, cultures, governance and risk management systems, and leadership styles are needed to manage the business innovation lifecycle from an initial idea to a sustainable business that leverages entry position and capabilities to exploit the full potential for growth and evolution over time. Closed for comment; 0 Comments.
- 20 May 2009
- Working Paper Summaries
On Good Scholarship, Goal Setting, and Scholars Gone Wild
When confronted by anecdotal evidence and some causal evidence, how should scholars—and indeed businesses and society—react? In this response to a critique in the journal Academy of Management Perspectives, the authors articulate the aims of their article "Goals Gone Wild: How Goals Systematically Harm Individuals and Organizations," describe points of disagreement with the critics, offer a definition of good scholarship, and suggest a program of research for future studies of goal setting. Key concepts include: Future research should investigate both the constructive and harmful effects of goals. These studies will require new and creative approaches. Anecdotal evidence matters. Given that one large negative effect can overwhelm the influence of many positive effects, anecdotes and empirical results linking goals with harmful outcomes deserve more attention and systematic research. As financial crises, Ponzi schemes, and the collapse of the automotive industry demonstrate, the combination of unethical behavior, risk-taking and poor judgment can be toxic. Three areas of research with significant prospects for illuminating potential problems are the links between goal setting and unethical behavior, goal setting and excessive risk-taking, and goal setting and judgment. Closed for comment; 0 Comments.
- 01 May 2009
- What Do You Think?
Do Innovation and Entrepreneurship Have to Be Incompatible with Organization Size?
Like a good case study, this month's question divided respondents nearly down the middle, says professor Jim Heskett. Can managers lead both a large, established organization and encourage intrapreneurial effort inside it? Readers weighed in. (Online forum now closed. Next forum begins June 5.) Closed for comment; 0 Comments.
- 24 Apr 2009
- Working Paper Summaries
Corporate Social Entrepreneurship
Accelerated organizational transformation faces a host of obstacles well-documented in the change management literature. Because corporate social entrepreneurship (CSE) expands the core purpose of corporations and their organizational values, it constitutes fundamental change that can be particularly threatening and resisted. Furthermore, it pushes the corporation's actions more broadly and deeply into the area of social value creation where the firm's experiences and skill sets are less developed. The disruptive social innovations intrinsic to the CSE approach amplify this zone of discomfort. Fortunately, the experiences of innovative companies such as Timberland and Starbucks show how these challenges may be overcome. Key concepts include: Values-based leadership, the synergistic generation of social and economic value, and strategic cross-sector alliances are key ingredients to achieving a sustainably successful business. For companies to move their corporate social responsibility (CSR) activities to the next level, they need to rethink their current approaches to CSR, tapping into the creativity of each individual. Like all entrepreneurship, CSE is about creating disruptive change in the pursuit of new opportunities. It combines the willingness and desire to create joint economic and social value with the entrepreneurial redesign, systems development, and action necessary to carry it out. Closed for comment; 0 Comments.
- 26 Jan 2009
- Research & Ideas
Where is Home for the Global Firm?
Global markets are changing the relationship between firms and nation-states in important ways, says HBS professor Mihir A. Desai. His new working paper, "The Decentering of the Global Firm," offers a practical framework for business leaders to think strategically about where to locate their company's financial and legal homes, and managerial talent. Q&A with Desai. Key concepts include: Three critical aspects of a firm's national identity—its legal and financial home and its center for managerial talent—are increasingly distributed worldwide. There are benefits and costs to decentering, says Desai. The challenge for managers is to choose each home wisely. Firms that have left their traditional homebase include News Corporation, Shire Pharmaceuticals, Halliburton, and WPP Group, among others. Closed for comment; 0 Comments.
- 22 Dec 2008
- Research & Ideas
10 Reasons to Design a Better Corporate Culture
Organizations with strong, adaptive cultures enjoy labor cost advantages, great employee and customer loyalty, and a smoother on-ramp in leadership succession. A book excerpt from The Ownership Quotient: Putting the Service Profit Chain to Work for Unbeatable Competitive Advantage by HBS professors Jim Heskett and W. Earl Sasser and coauthor Joe Wheeler. Closed for comment; 0 Comments.
- 15 Dec 2008
- Research & Ideas
The Surprisingly Successful Marriages of Multinationals and Social Brands
What happens when small iconic brands associated with social values—think Ben & Jerry's—are acquired by large concerns—think Unilever? Can the marriage of a virtuous mouse and a wealthy elephant work to the benefit of both? Professors James E. Austin and Herman B. "Dutch" Leonard discuss their research. Closed for comment; 0 Comments.
- 08 Dec 2008
- Research & Ideas
Thinking Twice About Supply-Chain Layoffs
Cutting the wrong employees can be counterproductive for retailers, according to research from Zeynep Ton. One suggestion: Pay special attention to staff who handle mundane tasks such as stocking and labeling. Your customers do. Closed for comment; 0 Comments.
- 31 Oct 2008
- Working Paper Summaries
Technology, Identity, and Inertia through the Lens of ‘The Digital Photography Company’
Why do established firms find some technological change so challenging? While existing research has identified numerous sources of inertia in established firms exploring new technological domains, identity is a critical piece of the puzzle. As the core essence of an organization, identity directs and constrains action. The routines, procedures, capabilities, knowledge base, and beliefs of an organization all reflect its identity. So when a technology is identity-challenging to an organization—when pursuing it would violate the core beliefs of both insiders and outsides about what the firm represents—organizations face significant obstacles to adopting it. This study by Tripsas highlights the importance of recognizing and evaluating the tradeoffs associated with technological opportunity and organizational identity. Key concepts include: Identity serves as a lens that filters a firm's technical choices. It influences what gets noticed, how it is interpreted, and what action is taken. Opportunities that challenge identity may simply pass by unnoticed. The self-reinforcing dynamics among internal identity, external identity, organizational action, and the industry and technological context create a strong impediment to change. Closed for comment; 0 Comments.
- 20 Oct 2008
- Research & Ideas
The Seven Things That Surprise New CEOs
In the newly released book On Competition, Professor Michael E. Porter updates his classic articles on the competitive forces that shape strategy. We excerpt a portion on advice for new CEOs, written with HBS faculty Jay W. Lorsch and Nitin Nohria. Key concepts include: Most new chief executives are taken aback by unfamiliar new roles, time and information limitations, and altered professional relationships. The CEO must learn to manage organizational context rather than focus on daily operations. The CEO must not get totally absorbed in the role. Closed for comment; 0 Comments.
- 14 Oct 2008
- Research & Ideas
Should You Bring Advertising Expertise In-House?
Advertising agencies have traditionally offered services to firms that couldn't afford or didn't find value in having that expertise in-house. But a recent study indicates more firms than previously thought are developing internal advertising units. Q&A with HBS professor emeritus Alvin J. Silk. Key concepts include: The likelihood of a firm internalizing advertising services decreases as the size of its advertising expenditures increases. Cost efficiencies and savings are the major reasons for pursuing the in-house advertising route. Some industries more than others develop in-house advertising expertise, particularly technology-based and creative industries. The make or buy decision relating to advertising services is complex, and should be based on a careful economic analysis. Closed for comment; 0 Comments.
SuperCorp: Values as Guidance System
In her new book SuperCorp, professor Rosabeth Moss Kanter details how vanguard companies such as IBM, Cemex, and Omron are rewriting the nature of the business enterprise and how firms will gain sustainable prosperity in the 21st century. Read our excerpt. Key concepts include: Grounding strategy in a sense of wider societal purpose provides many significant advantages and only a few potential disadvantages. Vanguard companies gain both a moral compass and an entire guidance system. To be strategic, a principles-based initiative must contribute to the fundamental way the company makes money, with customers and clients in mind. Closed for comment; 0 Comments.