Organizations →
- 18 Sep 2008
- Working Paper Summaries
The Internalization of Advertising Services: An Inter-Industry Analysis
When are advertisers more likely to establish and maintain their own in-house agencies? Despite occasional indications to the contrary, such self-sufficiency has long been viewed by industry observers and scholars as more the exception than the rule in the U.S. advertising and marketing services business. With the background that vertical integration in this industry is a neglected domain of research, analysis by HBS professor emeritus Alvin J. Silk and colleagues suggests that while most large U.S. advertisers rely primarily on independent agencies for advertising services, many other advertisers operate in-house advertising units. Key concepts include: The organization of the advertising and marketing services industry is likely to undergo considerable change as it absorbs new communication and information technologies, creating challenges and opportunities for both managers and researchers. In the 1990s, almost half of all U.S. advertisers, large and small, operated some form of in-house advertising unit. Smaller advertisers and advertisers of technical, creative, or highly differentiated products were more likely to integrate. Closed for comment; 0 Comments.
- 04 Sep 2008
- Working Paper Summaries
Wellsprings of Creation: Perturbation and the Paradox of the Highly Disciplined Organization
Many organizations struggle to balance the conflicting demands of efficiency and innovation. Organizations can become more efficient in the short run by replacing costly, unpredictable problem solving activity with consistent, streamlined routines. However, this efficiency often comes at the cost of long-run adaptability. The more organizational activity is dominated by stable routines, the less the organization learns, and the more rigid and inflexible it becomes. To escape this fate, the authors of this working paper theorize that highly disciplined organizations must actively engage in strategic and selective perturbation of established routines. A perturbation interrupts an established routine and creates an opportunity to innovate and learn. Using illustrations from Toyota, the authors investigate the conditions under which perturbations can sustain exploration in highly disciplined organizations. Key concepts include: To sustain adaptability in the long term, perturbations must occur throughout the organization. In highly disciplined organizations, adaptability depends on the active participation of organization members in inducing and interpreting perturbations. Management must trust employees to perturb processes, teach them to detect and interpret perturbations, and motivate them to do so. In the long term, business success depends as much on the commitment and knowledge of frontline employees as on strategic decision-making by senior management. Closed for comment; 0 Comments.
- 31 Jul 2008
- Working Paper Summaries
Communication (and Coordination?) in a Modern, Complex Organization
Coordination, and the communication it implies, is central to the very existence of organizations. Despite their fundamental role in the purpose of organizations, scholars have little understanding of actual interaction patterns in modern, complex, multiunit firms. To open the proverbial "black box" and begin to reveal the internal wiring of the firm, this paper presents a detailed, descriptive analysis of the network of communications among members of a large, structurally, functionally, geographically, and strategically diverse firm. The full data set comprises more than 100 million electronic mail messages and over 60 million electronic calendar entries for a sample of more 30,000 employees over a three-month period in 2006. Key concepts include: Communication is heavily constrained by formal organizational structure: the vast majority of communication occurs within business unit and functional boundaries, not across them. This points to the importance of drawing the right organizational boundaries. Women, mid- to high-level executives, and members of the executive management, sales, and marketing functions are most likely to participate in cross-group communications. These individuals provide a bridge for distant groups in a company's social structure. Closed for comment; 0 Comments.
- 08 May 2008
- Working Paper Summaries
Organizational Design and Control across Multiple Markets: The Case of Franchising in the Convenience Store Industry
Chain organizations operate units that are typically dispersed across different types of markets, and thus serve significantly different customer bases. Such "market-type dispersion" is likely to compromise the headquarters' ability to control its stores for two reasons: Relative differences in local conditions make it difficult to monitor a store manager's behavior, and a chain with wide-ranging customer bases will have a harder time serving its customers and will need to rely more heavily on store managers' ability to adapt to local needs. This study identifies market-type dispersion as a factor that is systematically related to firms' organizational design choices. The results may help managers and consultants who deal with control challenges related to a chain's geographic expansion into different markets. Key concepts include: Chains experiencing higher levels of variation in customer demands across different locations are more likely to increase delegation and the provision of incentives through the organizational design choice of franchising. Stores are more likely to be franchised when their location characteristics are more divergent from the most prevalent location characteristics of the chain as a whole. Non-franchisor chains with higher levels of such market-type dispersion tend to decentralize operations to a greater extent. It is also possible that they provide higher variable pay. Closed for comment; 0 Comments.
- 21 Apr 2008
- Research & Ideas
The New Math of Customer Relationships
Harvard Business School professor emeritus James L. Heskett has spent much of his career exploring how satisfied employees and customers can drive lifelong profit. Heskett and his colleagues will soon introduce a new concept into the business management literature: customer and employee "owners." Key concepts include: Service profit chain concepts are global, subject only to local cultural practices. Businesses are experimenting with the idea of creating "owners" out of both customers and employees, who create the highest lifetime value to the organization. During times of economic stress, relationships between customer and employee satisfaction, loyalty, and productivity become more critical. Closed for comment; 0 Comments.
- 26 Mar 2008
- Sharpening Your Skills
- 05 Mar 2008
- What Do You Think?
Where Will Management Innovation Take Us?
Management could change a lot in the coming years, says HBS professor Jim Heskett. A few reasons: continued development of the Internet and the transparency and communities it has spawned, and new attitudes toward work. But will innovation in management mostly be confined to entrepreneurs? What do you think? Online forum now closed. Closed for comment; 0 Comments.
- 13 Feb 2008
- Working Paper Summaries
Unconventional Insights for Managing Stakeholder Trust
Most organizations understand the need to manage stakeholder trust. The bad news: Most organizations don't really understand how to manage the difficult job effectively. However, for those companies wishing to reap the benefits of improved cooperation with suppliers, increased motivation and productivity among employees, enhanced loyalty among customers, and higher levels of support from investors, managing stakeholder trust is a prudent, if not critical investment. Trust management may require an appreciation for some unconventional insights regarding the appropriate investment of resources. Stakeholders differ in regard to the kinds and degrees of vulnerability they face; what they need to believe before they will trust also differs. Would-be trust managers will be wise to consider these varying needs and to anticipate the tradeoffs that exist in strengthening relationships with specific stakeholders. Key concepts include: Trust is multidimensional, and it is not obvious which dimension you need to focus on when dealing with any particular stakeholder group. Stakeholder groups have different needs and vulnerabilities. Efforts aimed at solving one trust problem can exacerbate others. Stakeholders of all types are interested in associating with organizations with whom they can identify, and with whom they perceive a match in values. Closed for comment; 0 Comments.
- 30 Nov 2007
- What Do You Think?
What Is Management’s Role in Innovation?
Online forum closed. It's an open question whether management, as it is currently practiced, contributes much to creativity and innovation, says HBS professor Jim Heskett. What changes will allow managers, particularly in larger organizations, to add value to the creative process? What do you think? Closed for comment; 0 Comments.
- 14 Nov 2007
- Research & Ideas
Growing CEOs from the Inside
Who is the best CEO candidate? An insider with intimate knowledge of your company, or an outsider who is ready to put sacred cows out to pasture? The answer, says HBS professor Joseph L. Bower, is both. In this Q&A, he discusses his new book, The CEO Within, and why inside-outsiders are the key to succession planning. Key concepts include: Effective succession planning is a hallmark of many top-performing companies, but most firms pay little attention to the process. In many cases an ideal candidate for CEO will come from the inside but carry an outsider's perspective. Closed for comment; 0 Comments.
- 17 Oct 2007
- Research & Ideas
Why Global Brands Work
Japanese automakers create single products and brands for worldwide consumption, while Ford customizes products for local markets. You know who won. Why do global brands work? What makes them work? Professor John Quelch provides some answers. Key concepts include: For decades, Ford has created specialized products for different countries while Toyota, Nissan, and Honda sold standard products under a single brand umbrella. Ford's strategy resulted in added manufacturing and supply chain costs, a balkanized bureaucracy, and deteriorating market share, financial performance, and stock price. There are 5 characteristics that all top global brands have in common. Closed for comment; 0 Comments.
- 01 Oct 2007
- Working Paper Summaries
Team Familiarity, Role Experience, and Performance:Evidence from Indian Software Services
In contexts ranging from product development to service delivery, a significant amount of an organization's work is conducted by "fluid teams" that strive for innovative output. Fluid project teams exist only for the duration of a single project, and are comprised of members who may join or leave a team during the course of a project. In such settings, simple measures of cumulative output may not accurately capture team experience, particularly when changes in team composition are substantial over time. This study of an Indian software services firm, Wipro Technologies, considers an approach for capturing the experience held by fluid teams. It extends the concept of team fluidity in a way that allows for greater granularity in the measurement of team experience and a finer understanding of the determinants of team performance. Key concepts include: The findings underscore the need to use caution in assuming cumulative output wholly captures experience when team membership is not constant from one project to the next. These results build on previous research on team familiarity by considering longitudinal data on the individual members of teams. The findings also emphasize the importance of considering role experience and studying experience at different levels of seniority. Closed for comment; 0 Comments.
- 01 Oct 2007
- Research & Ideas
Encouraging Dissent in Decision-Making
Our natural tendency to maintain silence and not rock the boat, a flaw at once personal and organizational, results in bad—sometimes deadly—decisions. Think New Coke, The Bay of Pigs, and the Columbia space shuttle disaster, for starters. Here's how leaders can encourage all points of view. Key concepts include: All organized human groups are susceptible to suppression of views deemed contentious or disruptive to an organization's foundational beliefs. Decisions are seldom better for silence, and overcoming that is a key task for the leader of any organization. Candor should be rewarded and incentives designed to encourage opposing points of view. An aware, open, and inquiring senior team is critical to sound decision-making. Closed for comment; 0 Comments.
- 20 Aug 2007
- Research & Ideas
HBS Cases: Using Investor Relations Proactively
Investor relations has a delicate balancing act. It communicates with stakeholders, of course, but can also help employees take a step back and analyze their firm as outsiders do. Harvard Business School's Gregory S. Miller, Vincent Dessain, and Daniela Beyersdorfer explain where IR is going, with energy giants BP and Total leading the way. Key concepts include: Good news for stockholders can be bad news for other stakeholders. IR should be consistent and proactive on all fronts. Investors increasingly care about geopolitics, the environment, and social responsibility; financial communication will need to factor this in. Develop IR in a way consistent with your firm's unique operating position. Outside information is important, but the extent to which it should influence a firm's decision-making is an open question. Closed for comment; 0 Comments.
- 14 Aug 2007
- Working Paper Summaries
Improving Patient Outcomes: The Effects of Staff Participation and Collaboration in Healthcare Delivery
Health-care organizations have a well-documented, industry-wide need to improve their processes. To that aim, the Institute of Medicine has made at least 2 recommendations that focus on front-line staff—physicians, nurses, and respiratory therapists. The first recommendation states that front-line staff should be involved in unit decision-making and the design of work processes and workflow (participation). The second emphasizes respectful interactions among front-line staff, including information-sharing and coordinating activities to achieve organizational goals (collaboration). This study provides preliminary supporting evidence for the Institute of Medicine's recommendations to use a dual, front-line strategy of participation and collaboration to improve patient outcomes. Key concepts include: Shared decision-making and respectful collaboration are vital to enabling improvement in health-care organizations. Front-line staff participation in process improvement can solve a common problem: lack of commitment from health-care professionals to implement new practices. Units with more collaboration—as measured by staff perception and use of collaborative work practices—experienced greater improvement in risk-adjusted mortality among patients. Participation in process improvement may be an effective strategy for other service organizations that face staff resistance to new routines. Closed for comment; 0 Comments.
- 02 Aug 2007
- What Do You Think?
How Will Millennials Manage?
Gen Yers or "millennials"—those born beginning in the late 1970s—are generally bright, cheery, seemingly well-adjusted, and cooperative, says Jim Heskett. Their work styles are sometimes confounding, though. As managers, how will they shape organizations of the future? Online forum now closed. Closed for comment; 0 Comments.
- 05 Jun 2007
- Working Paper Summaries
Leading and Creating Collaboration in Decentralized Organizations
No matter how a multi-divisional organization is designed, it will need to find effective ways for its units to spontaneously and responsively cross boundaries. This paper discusses 3 key barriers to collaboration and information-sharing within an organization, and offers 3 strategies to overcome them. Key concepts include: The first barrier is intergroup bias: the systematic tendency to treat one's own group or its members better than another group and its members. Company funding, access to markets, intellectual property rights, and other organizational assets are all potentially scarce resources over which groups may have to, or feel they have to, compete. Recommendation to counteract this barrier: Link group interests to overarching interests. The second barrier is group territoriality expressed through behavior and physical symbols that separate "us" from "them." Territoriality stems from a group's needs for identity, efficacy, and security. Recommendation: Frame collaboration as the solution to group needs. The third barrier consists of poor strategies that members of different organizational divisions use when they negotiate with each other. Errors include the belief in a "fixed pie" in negotiations, the failure to carefully consider the decision processes of one's negotiation partner, and the failure to recognize opportunities for negotiation in the first place. Recommendation: Enable and encourage effective negotiation skills. Closed for comment; 0 Comments.
- 31 May 2007
- Working Paper Summaries
Organizational Designs and Innovation Streams
Ambidextrous organizational designs are those that sustain current success while simultaneously building new products, services, or processes. This research looks at a sample of 13 business units and describes the relations between alternative organizational designs and innovation streams. These business units used 4 distinct organizational designs in service of innovating and improving existing products: functional, cross-functional, spinouts, and ambidextrous. The researchers also used longitudinal data in order to explore how designs evolve over time and how design transitions affect innovation success. Key concepts include: Ambidextrous organizational designs are composed of an interrelated set of competencies, cultures, incentives, and senior team roles. These designs are significantly more effective for serving innovation than are functional, cross-functional, and spinout designs. Business units that switched to an ambidextrous design improved their innovation outcomes while transitions to cross-functional or spinout designs did not. Ambidextrous designs for carrying out innovations helped the performance of existing products. Closed for comment; 0 Comments.
- 30 May 2007
- Working Paper Summaries
Ambidexterity as a Dynamic Capability: Resolving the Innovator’s Dilemma
Can organizations adapt and change—and if so, how does this occur? There are two major camps in the research on organizational change: those that argue for adaptation, and those that argue that as environments shift, inert organizations are replaced by new forms that better fit the changed context. There are data to support both arguments. This paper discusses the idea and practicality of ambidexterity and shows how the ability to simultaneously pursue emerging and mature strategies is a key element of long-term success. Key concepts include: Ambidexterity, the ability of a firm to simultaneously explore and exploit, is one solution to the innovator's dilemma as outlined by HBS professor Clayton Christensen. Under the appropriate conditions, organizations may be able to explore new avenues as well as exploit their existing capabilities. Strategic contradictions can be resolved by senior leaders who design and manage their own processes and, in turn, ambidextrous organizations. Leadership is therefore key. Closed for comment; 0 Comments.
The Silo Lives! Analyzing Coordination and Communication in Multiunit Companies
A new Harvard Business School working paper looks inside the communications "black box" of a large company to understand who talks to whom, and finds the corporate silo as impenetrable as ever. Q&A with professor Toby E. Stuart. Key concepts include: Inside the studied company, practically speaking, little interaction occurred across three major corporate boundaries: business units, organizational functions, and office locations. Communication patterns were extremely hierarchical: Executives, middle managers, and rank-and-file employees communicated extensively within their own levels, but there were far fewer cross-pay-grade interactions in the firm. Junior executives, women, and members of the salesforce were the key actors in bridging the silos. Relative to men, women participate in a greater volume of electronic and face-to-face interactions and do so with a larger and more diverse set of communication partners. Server logs can provide valuable information to managers on communication flows within their own organizations. Closed for comment; 0 Comments.