The current discipline of project management is based on the model of the project life cycle or phased stage-gate approach to executing projects. This implies a clear definition of mission and system are given at the outset (to reduce uncertainty), and subsequent execution in phases with decision gates. It contrasts with the approach applied in the seminal projects that are credited with establishing the foundation of the discipline in the 1940s and 1950s. Those projects started out with missions that were beyond the currently possible; any solutions had to emerge over time. They succeeded by a combination of parallel trials (from which the best would then be selected) and trial-and-error iteration (allowing for the modification of solutions pursued over a period of time). Although the success of these approaches was well documented and explained by scientific study in the 1950s, today they seem to fly in the face of accepted professional standards, making managers uncomfortable when they are encountered. The project management discipline has been relegated to an "order taker niche"-the engineering execution of moderately novel projects with a clear mission. As a result, it has been prevented from taking center stage in the crucial strategic change initiatives facing many organizations today. The discipline of project management should be broadened in order to create greater value for organizations whose portfolios include novel and uncertain projects.
Behavioral biases can result in suboptimal acquisition decisions-with the potential for errors exacerbated in consolidating industries, where consolidators design serial acquisition strategies and fight escalating takeover battles for platform companies that may determine their future competitive position. To guide objective managerial judgment, and to rationally anticipate the irrational behavior of rival bidders or financial markets, this article proposes a modified option-game toolkit for serial acquisition strategy. It brings together insights from both strategy and finance, which quantify acquisition strategies, thus allowing executives to make rational intuitive decisions under uncertainty.
How do managers respond when confronted with the demands of activist stakeholders over whom they exercise no direct control? What strategies do managers adopt, and why? Which of these are most effective-and under what conditions? Increasingly, businesses today face difficult challenges in response to changing public expectations and newly emergent techniques of stakeholder influence. New communications technologies enable activists concerned about business behavior to mobilize supporters around the world in real time. Many firms conduct their work on a global stage, where damage to reputation in one location can quickly reverberate around the world. This article develops a typology of managerial strategies to respond to complex disputes with activist stakeholders. It argues that management strategies fall into four categories: wage a fight, withdraw, wait, or work it out. Which strategy is chosen is likely to vary according to: the firm's dependence on stakeholders for critical resources, the firm's power in the particular situation, and the urgency of the contested issue. Managers' effectiveness is, in large part, a function of their ability to assess these three conditions correctly.
Although firms from emerging markets are becoming significant global players, our knowledge about how these latecomers catch up with existing multinational firms remains limited. This article summarizes the patterns of internationalization strategies pursued by firms from these markets. These leading emerging markets firms can be best understood in terms of their levels of R&D intensity and marketing intensity and represent four types of firms: multinational challengers; global exporters and importers; OEM/ODM technology leaders and followers; and regional exporters and importers. Based on these analyses, this article develops a set of propositions that summarize the internationalization strategies of these firms.
This article explores what it is that managers actually do to successfully lead IT-enabled change. It is based on a three-year case study of the practice of leading IT-enabled change inside the global telecommunications company Ericsson. This organization managed to successfully change their finance and accounting department from an independent structure of numerous local finance and accounting organizations with their own information systems and their own way of doing things into one interdependent global network of shared service centers enabled by a single information system. Based on this and other studies, this article develops a commonality framework for IT-enabled change, which offers important guidelines to improve managerial practice.
In light of the trend towards open innovation, interorganizational technology transfer by means of alliances and licensing has often become a key component of open innovation processes. Inbound open innovation describes inward technology transfer, whereas outbound open innovation refers to outward technology transfer. Traditionally, inward technology transfer has received considerable attention because most practitioners and academics focus on the technology recipient's absorptive capacity. In contrast, the role of the technology source has been relatively neglected. This article addresses the concept of desorptive capacity, which refers to a firm's ability to identify technology transfer opportunities and to transfer technology to the recipient. The notion of market knowledge in the concept of desorptive capacity deepens our understanding of many firms' managerial difficulties in implementing active technology transfer strategies. Thus, desorptive capacity enriches our understanding of the dynamics of outward technology transfer. It provides new insights into the success or failure of interorganizational technology transactions.
For too long, boards have relied on rules of thumb and conventional wisdom when picking CEOs. New research offers some surprising insights that will better guide succession strategy.
Though we'd like to think that it always pays to be honest, new research from Harvard proves that it doesn't necessarily. A new study that compared viewers' reactions to a candidate's answers to questions in a debate reveals that when the candidate dodged a question eloquently, people liked and trusted him nearly as much as when he gave a direct response. What's more, they preferred artful dodges to honest but less articulate answers. That finding presents an interesting quandary for any leader who has to field difficult questions.
The relationship between value creation and job creation is more tenuous now than it has been for a century. Revenues report that the economy is doing well, but unemployment numbers remain high. Nitin Nohria, dean of Harvard Business School, contends that this fundamental change is a symptom of a deeper structural issue.
Companies that can offer a scarce and coveted good or service that others cannot, will win. Goods and services that are scarce are those that are difficult to conceive, to make, and perhaps at first even to sell. The default for most organizations is to do easy work, such as running a factory, opening a big-box store, making and shipping a product. That used to be the way to grow an organization, but no longer. The only way to avoid the race to the bottom is to create something difficult and valuable, something that people will pay more for. Examples of difficult work include creating things that are tangibly or conceptually beautiful, finding an elegant solution to a problem, and connecting with and leading people.
The case illustrates the intriguing development path of a famous design entrepreneur in Hong Kong, who was not trained formally as a designer but managed to build an entrepreneurial career out of his hobby of collecting designer toys. This case is suitable for teaching MBA and senior undergraduate students about resources acquisition at the startup, development and expansion stages in an entrepreneurship course. It can also be utilized in product development and innovation management courses for business, engineering and design school students.
Husk Power Systems, a young but widely celebrated firm based in India, needs $1.5 million to $2.5 million of expansion capital to grow quickly beyond the small footprint it had established in northeast India. It is a successful green energy enterprise that aimed to provide electricity to millions of rural Indians in a financially viable way. With 10 "mini power plants" that use rice husks as a fuel source and a presence in 25 isolated Indian villages as of April 2009, the company's goal was to reach 350,000 to 400,000 consumers in 400 villages by the end of 2011. It is offered a convertible note financing structure by a cleantech private equity firm and needs to assess whether it suits the company's and founders' interests.
Tom Chong is the country manager in Malaysia for Jextra Stores (Jextra), a multinational retailer with supermarkets throughout Asia. The company is based in Hong Kong. Jextra operates ten Neighborhood Market supermarkets in Malaysia. Chong has two issues he must resolve. One involves a recent conversation with the mayor of a town in which Jextra would like to build a new store. The mayor suggested that Jextra's application for rezoning would be more likely to be approved if Jextra contributed to building a new primary school. The mayor also wants Jextra to help pay for a flyover at the road intersection for the proposed site. Chong's other issue involves one of his category managers. The manager may be accepting money and gifts from suppliers. Although Chong has no proof that the manager is acting inappropriately, there are many rumors floating around Jextra's office.
In April 2010, the SEC brought fraud charges against Goldman Sachs for its structuring and marketing of Abacus 2007-AC1, a complex mortgage-related security. Less than two years after the onset of the great financial crisis, and in the midst of political posturing to shape agendas for the financial reform, the case discusses the market reaction to the lawsuit and the dilemma facing Lloyd Blankfein, Goldman's CEO. The deal structure is analyzed in detail within the context of the market for mortgage-backed securities. The case can be used in a course on financial market regulation or in a course on financial markets and institutions. Instructors may also assign a technical note "The Financial Regulatory Environment" (UVA-GEM-0103) to give students more background on the U.S. regulatory environment.
On July 15, 2010, the U.S. Senate obtained the 60 votes needed to pass the Dodd-Frank Wall Street Reform and Consumer Protection Act. On the same day, the SEC reached a $550 million settlement with Goldman Sachs relating to its April 16 lawsuit by dropping its fraud charges. Supporters of both sides claimed the settlement was a victory. This short case is the epilogue to "The SEC vs. Goldman Sachs" (UVA-GEM-0101).
The financial regulatory environment in the United States covers the insurance, banking, and securities industries. This note summarizes the regulation of all three as of July 31, 2010. This compact technical note is intended to provide students with a summary of U.S. financial regulatory history. It traces regulatory agencies and the most relevant congressional acts from 1863 to 2010. Its original intent was to be used as background for the "The SEC vs. Goldman Sachs" cases (UVA-GEM-0101 and UVA-GEM-0102). It could also serve as a supplement for a class on financial markets and institutions, the history of U.S. financial crises, or the general history of business regulation in the United States.
This background reading looks at reverse engineering in the context of piracy and knock-offs in emerging markets like China. It first considers legal aspects of reverse engineering in strong property rights regimes like the United States as a way of unpacking the legal issues. It considers the importance of tacit or unexposed knowledge, and whether modularizing a system facilitates the recovery of design intent. Finally we look at the role of reverse engineering in the development of capabilities and how it enhances a firm's absorptive capabilities. It is intended to be used as a background reading for the case "From Imitation to Innovation: Zongshen Industrial Group," HBS No. 610-057.