It has become all-too-apparent of late that when faced with tough decisions, managers often act in accordance with their vested self-interest. What is less understood is that in many social situations, self-interest is channeled into a group or a society's interests, which can lead to a considerable change in our interpretations of ethics or morality. The authors explain how organizations can achieve a reduction in unethical behavior by establishing social support for moral action; espousing wide-ranging consideration of the moral consequences of individual and group decisions; and emphasizing the need for moral awareness, judgment, intent and action.

The term 'success' means many things to many people, say the authors, but their conversations with over 200 individuals who have made a difference in their fields taught them that success in the long run has less to do with finding the best idea or business model than it does with discovering what matters to us as individuals. Extraordinary people, teams and organizations are simply ordinary people doing extraordinary things that matter to them, they say. Your co-workers or competitors who love their work will try harder, move faster, and contribute more than people who only do things for a paycheck. The authors explain why in this excerpt from their book, Success Built to Last: Creating a Life That Matters (Wharton School Publishing, 2006).

The typical approach to reducing dishonesty - increasing the probability of being caught or the magnitude of punishment - isn't very effective. The authors argue that a psychologically-focused approach may be more effective. Whereas the standard economic perspective considers one cause for dishonesty - external reward mechanisms - and thus emphasizes the probability of being caught and the magnitude of punishment as the sole ways to overcome it, the authors uncover three other causes: they not only examine dishonest behavior caused by external rewards, but dishonest behavior caused by a lack of internalized social norms, by a lack of self-awareness, and by self-deception.

Economic indicators have for the most part served society well, say the authors. However, these indicators have glaring shortcomings as approximations of collective human well-being. Policy decisions at the organizational, corporate and government levels should be more heavily influenced by considerations related to well-being - people's sense of purpose and satisfaction with their lives. The authors define well-being and describe five of its key sources, then discuss possible ways to measure it going forward.

Integrative thinkers like Jack Welch, A.G. Lafley and Michael Dell share some common traits, which is good news for those who aspire to attain their level of decision-making prowess. Thes traits they share relate to three elements of their personal knowledge systems: their stance, tools and experiences. The author explains each of these in depth as well describing the decision-making process that integrative thinkers use.

Today's business leaders regularly face complex ethical challenges that impact them, their businesses, and other stakeholders. Unfortunately, they often unconsciously make decisions using underlying principles that predispose them to biases and errors in judgment. By recognizing some of these challenges, they can learn to avoid 'ethical danger zones' and become more effective leaders. The authors explain that developing a framework to improve ethical decision making entails a focus on three key areas: quality, breadth, and honesty. By identifying and confronting the biases outlined herein, managers can make more rational and ethical decisions

Global account management (GAM)--which treats a multinational customer's operations as one integrated account, with coherent terms for pricing, product specifications, and service--has proliferated over the past decade. Yet according to the authors' research, only about a third of the suppliers that have offered GAM are pleased with the results. The unhappy majority may be suffering from confusion about when, how, and to whom to provide it. Yip, the director of research and innovation at Capgemini, and Bink, the head of marketing communications at Uxbridge College, have found that GAM can improve customer satisfaction by 20% or more and can raise both profits and revenues by at least 15% within a few years of its introduction. They provide guidelines to help companies achieve similar results. The first steps are determining whether your products or services are appropriate for GAM, whether your customers want such a program, whether those customers are crucial to your strategy, and how GAM might affect your competitive advantage. If moving forward makes sense, the authors' exhibit, "A Scorecard for Selecting Global Accounts," can help you target the right customers. The final step is deciding which of three basic forms to offer: coordination GAM (in which national operations remain relatively strong), control GAM (in which the global operations and the national operations are fairly balanced), and separate GAM (in which a new business unit has total responsibility for global accounts). Given the difficulty and expense of providing multiple varieties, the vast majority of companies should initially customize just one--and they should be careful not to start with a choice that is too ambitious for either themselves or their customers to handle.

Supply chain management (SCM) is a competitive differentiator for many types of businesses, and CEOs who neglect it may be putting their firms in jeopardy. So say Slone, the executive vice president of supply chain at OfficeMax, and two of his colleagues at the University of Tennessee. The authors identify key areas where CEOs can influence their supply chains and show them how to assess the influence they currently exert. Good SCM starts with finding the right people to lead a company's supply chain operation, from the most senior on down the ranks. CEOs need to participate in hiring a top-notch supply team that will use customer-focused metrics and best-practice benchmarking to bring about cross-functional alignment and achieve efficiencies, which the CEOs should personally review. Articulating the strategies to reach those goals--including effective use of supply chain technologies--and rewarding the employees, suppliers, and customers who make positive contributions are part and parcel of SCM success. Sales and operations planning (S&OP) is an essential component of SCM. A well-devised S&OP process can eliminate cross-functional disconnects and thereby reduce product complexity and obsolete inventory--two serious threats to the supply chain. This approach should also extend to business planning, promotional programs, and customer-contract negotiations, with their inherent supply chain ramifications. Even the best supply chain planning can be undermined, however, if its scope is only short-term. For example, sales strategies that don't align monthly and quarterly goals with long-term SCM objectives can lead to end-of-period surges, with potentially costly consequences for your company and its suppliers, partners, and customers. Attention to the supply chain requires attention to the long haul.

When Bruce Nolop was an investment banker, he saw only the glamorous side of acquisitions. Since becoming executive vice president and chief financial officer of Pitney Bowes, however, he's learned how hard it is to pull them off. In this article, he shares the lessons his organization has learned throughout its successful six-year acquisition campaign, which comprised more than 70 deals: Stick to adjacent spaces, take a portfolio approach, have a business sponsor, know how to judge an acquisition, and don't shop when you're hungry. Pitney Bowes's management and board of directors now use these five basic rules to chart the company's growth course. For example, when evaluating a potential acquisition, Pitney Bowes distinguishes between "platform" and "bolt-on" acquisitions to set expectations and guide integration efforts; the company applies different criteria, depending on the type. According to Nolop, any company can improve its acquisition track record if it is able to learn from experience, and he suspects that Pitney Bowes's rules apply just as well to other organizations. Buying a company should be treated like any other business process, he maintains. It should be approached deliberately and reviewed and improved constantly. That means mapping a complex chain of actions; paying attention to what can go right or wrong at different stages; and using standard, constantly honed, approaches and tools.

Flayton Electronics is showing up as a common point of purchase for a large number of fraudulent credit card transactions. It's not clear how responsible the company and its less than airtight systems are for the apparent data breach. Law enforcement wants Flayton to stay mute for now, but customers have come to respect this firm for its straight talk and square deals. A hard-earned reputation is at stake, and the path to preserving it is difficult to see. Four experts comment on this fictional case study in R0709A and R0709Z. James E. Lee, of ChoicePoint, offers lessons from his firm's experience with a large-scale fraud scheme. He advises early and frank external and internal communications, elimination of security weaknesses, and development of a brand-restoration strategy. Bill Boni, of Motorola, stresses prevention: comprehensive risk management for data, full compliance with payment card industry standards, and putting digital experts on staff. For the inadequately prepared Flayton, he suggests consulting an established model response plan and making preservation of the firm's reputation its top priority. John Philip Coghlan, formerly of Visa USA, discusses the often-divergent positions of data-breach stakeholders and puts customers' interests first. Swift disclosure by Flayton, he argues, would empower consumers to protect themselves against further fraud and might even enhance the company's reputation for honesty. Jay Foley, of the Identity Theft Resource Center, recommends that Flayton emphasize quality of communication over speed of delivery. More broadly, he advocates cautious management to prevent data thefts, which are proliferating and could have long-term consequences.

Flayton Electronics is showing up as a common point of purchase for a large number of fraudulent credit card transactions. It's not clear how responsible the company and its less than airtight systems are for the apparent data breach. Law enforcement wants Flayton to stay mute for now, but customers have come to respect this firm for its straight talk and square deals. A hard-earned reputation is at stake, and the path to preserving it is difficult to see. Four experts comment on this fictional case study in R0709A and R0709Z. James E. Lee, of ChoicePoint, offers lessons from his firm's experience with a large-scale fraud scheme. He advises early and frank external and internal communications, elimination of security weaknesses, and development of a brand-restoration strategy. Bill Boni, of Motorola, stresses prevention: comprehensive risk management for data, full compliance with payment card industry standards, and putting digital experts on staff. For the inadequately prepared Flayton, he suggests consulting an established model response plan and making preservation of the firm's reputation its top priority. John Philip Coghlan, formerly of Visa USA, discusses the often-divergent positions of data-breach stakeholders and puts customers' interests first. Swift disclosure by Flayton, he argues, would empower consumers to protect themselves against further fraud and might even enhance the company's reputation for honesty. Jay Foley, of the Identity Theft Resource Center, recommends that Flayton emphasize quality of communication over speed of delivery. More broadly, he advocates cautious management to prevent data thefts, which are proliferating and could have long-term consequences.

Flayton Electronics is showing up as a common point of purchase for a large number of fraudulent credit card transactions. It's not clear how responsible the company and its less than airtight systems are for the apparent data breach. Law enforcement wants Flayton to stay mute for now, but customers have come to respect this firm for its straight talk and square deals. A hard-earned reputation is at stake, and the path to preserving it is difficult to see. Four experts comment on this fictional case study in R0709A and R0709Z. James E. Lee, of ChoicePoint, offers lessons from his firm's experience with a large-scale fraud scheme. He advises early and frank external and internal communications, elimination of security weaknesses, and development of a brand-restoration strategy. Bill Boni, of Motorola, stresses prevention: comprehensive risk management for data, full compliance with payment card industry standards, and putting digital experts on staff. For the inadequately prepared Flayton, he suggests consulting an established model response plan and making preservation of the firm's reputation its top priority. John Philip Coghlan, formerly of Visa USA, discusses the often-divergent positions of data-breach stakeholders and puts customers' interests first. Swift disclosure by Flayton, he argues, would empower consumers to protect themselves against further fraud and might even enhance the company's reputation for honesty. Jay Foley, of the Identity Theft Resource Center, recommends that Flayton emphasize quality of communication over speed of delivery. More broadly, he advocates cautious management to prevent data thefts, which are proliferating and could have long-term consequences.

The huge sums that private equity firms make on their investments evoke admiration and envy. Typically, these returns are attributed to the firms' aggressive use of debt, concentration on cash flow and margins, freedom from public company regulations, and hefty incentives for operating managers. But the fundamental reason for private equity's success is the strategy of buying to sell-one rarely employed by public companies, which, in pursuit of synergies, usually buy to keep. The chief advantage of buying to sell is simple but often overlooked, explain Barber and Goold, directors of the Ashridge Strategic Management Centre. Private equity's sweet spot is acquisitions that have been undermanaged or undervalued, where there's a onetime opportunity to increase a business's value. Once that gain has been realized, private equity firms sell for a maximum return. A corporate acquirer, in contrast, will dilute its return by hanging on to the business after the growth in value tapers off. Public companies that compete in this space can offer investors better returns than private equity firms do. (After all, a public company wouldn't deduct the 30% that funds take out of gross profits.) Corporations have two options: (1) to copy private equity's model, as investment companies Wendel and Eurazeo have done with dramatic success, or (2) to take a flexible approach, holding businesses for as long as they can add value as owners. The latter would give companies an advantage over funds, which must liquidate within a preset time-potentially leaving money on the table. Both options present public companies with challenges, including U.S. capital-gains taxes and a dearth of investment management skills. But the greatest barrier may be public companies' aversion to exiting a healthy business and their inability to see it the way private equity firms do-as the culmination of a successful transformation, not a strategic error.

Two decades ago, people began using the "glass ceiling" catchphrase to describe organizations' failure to promote women into top leadership roles. Eagly and Carli, of Northwestern University and Wellesley College, argue in this article (based on a forthcoming book from Harvard Business School Press) that the metaphor has outlived its usefulness. In fact, it leads managers to overlook interventions that would attack the problem at its roots, wherever it occurs. A labyrinth is a more fitting image to help organizations understand and address the obstacles to women's progress. Rather than depicting just one absolute barrier at the penultimate stage of a distinguished career, a labyrinth conveys the complexity and variety of challenges that can appear along the way. Passage through a labyrinth requires persistence, awareness of one's progress, and a careful analysis of the puzzles that lie ahead. Routes to the center exist but are full of twists and turns, both expected and unexpected. Vestiges of prejudice against women, issues of leadership style and authenticity, and family responsibilities are just a few of the challenges. For instance, married mothers now devote even more time to primary child care per week than they did in earlier generations (12.9 hours of close interaction versus 10.6), despite the fact that fathers, too, put in a lot more hours than they used to (6.5 versus 2.6). Pressures for intensive parenting and the increasing demands of most high-level careers have left women with very little time to socialize with colleagues and build professional networks--that is, to accumulate the social capital that is essential to managers who want to move up. The remedies proposed--such as changing the long-hours culture, using open-recruitment tools, and preparing women for line management with appropriately demanding assignments--are wide ranging, but together they have a chance of achieving leadership equity in our time.

Negotiators often fail to achieve results because they channel too much effort into selling their own position and too little into understanding the other party's perspective. To get the best deal--or, sometimes, any deal at all--negotiators need to think like detectives, digging for information about why the other side wants what it does. This investigative approach entails a mind-set and a methodology, say Harvard Business School professors Malhotra and Bazerman. Inaccurate assumptions about the other side's motivations can lead negotiators to propose solutions to the wrong problems, needlessly give away value, or derail deals altogether. Consider, for example, the pharmaceutical company that deadlocked with a supplier over the issue of exclusivity in an ingredient purchase. Believing it was a ploy to raise the price, the drug maker upped its offer--unsuccessfully. In fact, the supplier was balking because a relative's company needed a small amount of the ingredient to make a local product. Once the real motivation surfaced, a compromise quickly followed. Understanding the other side's motives and goals is the first principle of investigative negotiation. The second is to figure out what constraints the other party faces. Often when your counterpart's behavior appears unreasonable, his hands are tied somehow, and you can reach agreement by helping overcome those limitations. The third is to view onerous demands as a window into what the other party prizes most--and use that information to create opportunities. The fourth is to look for common ground; even fierce competitors may have complementary interests that lead to creative agreements. Finally, if a deal appears lost, stay at the table and keep trying to learn more. Even if you don't win, you can gain insights into a customer's future needs, the interests of similar customers, or the strategies of competitors.

A critical new battleground is emerging in China: It's the "good-enough" market segment--home of reliable-enough products at low-enough prices to attract the cream of the country's fast-growing cohort of mid-level consumers. Traditionally, foreign multinationals have dominated China's premium segment, while a plethora of domestic companies have served the low end, often unprofitably. But as middle-class buying power increases, and the tolerance for high markups at the top end wanes, the middle market is growing quickly. Thriving in a market so big is clearly important in itself. But, argue Bain chairman Gadiesh and Bain partners Leung and Vestring, competition in this particular arena has more far-reaching implications. Companies that flourish in China's middle market today are learning valuable lessons they need to compete worldwide: multinationals are discovering how to focus products downscale to break out of the premium tier, and domestic firms are building scale and marketing expertise to move up. Both are positioning themselves to export their China offerings to other large emerging markets such as India and Brazil--and, after that, to the developed markets. Ultimately, the authors warn, the good-enough space, where multinationals and Chinese firms are going head-to-head, is the one from which the world's leading companies will emerge. The authors describe three strategies for entering and prevailing in this strategically vital space. Multinationals can attack domestic players from above, Chinese firms operating in the low end can burrow up from below, and both can acquire their way into it. The experiences of such players as Colgate-Palmolive, GM, GE, Huawei Technologies, Haier, and Ningbo Bird show how challenging it is to gain a foothold in the middle market but also how much potential there is to use it as a springboard for global expansion.

When a CEO takes office, stakeholders dissect his or her intellectual, physical, and emotional capacities as they try to gauge whether the new leader will help them fulfill their aspirations and protect them from trouble. For the heir to a family business, the challenge of turning stakeholders into followers is particularly thorny: he or she must manage many constituencies--family members, directors, senior executives, investors, trade unions--that may not be convinced the successor has earned the right to hold the top spot. Making matters worse, says Lansberg, a family business expert, corporate scions usually ignore or greatly underestimate stakeholders. They don't realize that, particularly after they are formally anointed as CEOs, they must establish their credibility with and authority over these spheres of influence. Smart CEOs understand that their success depends on how well they respond to the iterative testing process that stakeholders use to make judgments about would-be leaders. This article offers a road map for managing the four kinds of tests that constitute iterative testing: Qualifying tests are assessments based on criteria--such as formal education, work experience, and professional awards--that executives can cite as evidence of suitability for the top job. Self-imposed tests are expectations that leaders themselves set and against which they assume stakeholders will measure their performance. Circumstantial tests are unplanned challenges or crises, during which stakeholders can observe the leader coping with the unexpected. And political tests are challenges from rivals who want to enhance their own influence, often by undermining the leader.

In the United States, the president has the Constitutional authority to negotiate international trade agreements. But the Congress has the ultimate authority over trade. This arrangement blunts the negotiating power of the United States in trade talks because other countries know that any commitments made at the table could be altered or rejected by Congress. Therefore, from 1974 to 1993, Congress granted the president fast track authority by committing to an expeditious yes-or-no vote on trade implementing egislation with no amendments or changes in return for regular consultations and timely notification on the part of the administration. However, beginning in the early 1990s, fast track became the subject of fierce political debate and a focal point for concerns about global trade liberalization. HKS Case Number 1660.3

In 2006 planners in the City and County of San Francisco were promoting an overhaul of the city's parking policy that they claimed would correct unfair and unwise subsidies for automobile users. The effort was designed to allow market forces to play a greater role in determining parking costs by, among other things, raising the price of residential on-street parking in neighborhoods where it was scarce, and raising parking meter rates on downtown streets, and amending zoning provisions that specified the minimum numbers of off-street parking spaces that developers of new residential and commercial projects had to provide. The parking reform proposals are controversial and can be used to support a discussion of the nature of economic efficiency and the possibilities for making efficiency-minded reforms politically acceptable. HKS Case Number 1877.0

Those familiar with transatlantic trade relations are well aware of the longstanding US-EU dispute over trade in beef. This note traces the history of the quarrel, beginning with the introduction of the use of growth-promoting hormones for raising beef cattle. In 1989, Europe banned the use of these hormones. The ban covered all beef, including meat imported from the United States where growth-enhancing hormones were widely used. In retaliation, the United States imposed punitive tariffs on approximately $100 million worth of European food imports. In the years that followed, the rules changed. New multilateral institutions and agreements were put in place to govern disputes like the beef quarrel such as the SPS Agreement negotiated during the Uruguay Round of trade talks. Despite these changes, the story was very much the same a decade later. Though the new World Trade Organization (WTO) ruled against the European ban, the EU continued to refuse beef raised with growth-promoting hormones. In 1999, once again, the United States imposed punitive tariffs on approximately $117 million on foods imported from Europe. The rules had changed, but the endgame remained much the same. At the core of the dispute lay fundamental disagreements about trade in food. The United States argued that the European regulatory process had been captured by politics. US officials were frustrated by what they saw as a political move to protect the EU beef market by invoking scientifically unsupported claims about the detrimental health effects of hormones. The real issue, Europe retorted, was that the US trade system had been captured by industry-the United States had soured the entire transatlantic trade relationship by capitulating to the demands of the corporate beef lobby. Furthermore, some consumer groups argued that it was not the role of a group of trade lawyers and diplomats at the WTO to make decisions related to health and safety. HKS Case Number 1677.3