The founders of Lynx Solutions have survived major challenges within their board of directors, the firing of Lynx's founder-CEO and departure of its successor CEO, and a crisis sparked by media allegations that it had been spying on its users. Now that the company is finally becoming profitable, the two remaining founders are embroiled in exhausting fights over how aggressively the company should try to grow, and those fights are threatening to derail Lynx's recent success.
Creating Centrino required Intel to make major changes to its strategy and organization. The development of Centrino was part of Intel's "right hand turn" toward increased performance measures, including improvements coming from increased power efficiencies and away from maximizing processor clock speed. This strategic shift, together with the introduction of new multi-core architectures, fundamentally changed the company's definition of success for the future. It was a dramatic move forced on the company, in part, by physics and changing industry and competitive forces; but also made possible, in part, by a radically innovative microprocessor architecture developed by its scrappy, geographically distant microprocessor design center in Israel.
The Yale Investments Office must decide whether to continue to allocate the bulk of the university's endowment to illiquid investments--hedge funds, private equity, real estate, and so forth. Considers the risks and benefits of a different asset allocation strategy. Highlights the choice between different subclasses, e.g., between venture capital and leveraged buyout funds.
Geotech Telecom (Geotech) is a small but successful 14-year old company that provides telecom consulting to two main clients, Rogers Telecom and Bell Canada. The company is facing the upcoming transfer of a large multimillion-dollar telecom contract from one of its largest clients, Bell Canada, to another provider. Geotech's president doubts whether Geotech will be able to compete for the project and, hence, a potentially disastrous future lies ahead for the company. At the same time, the widow of the company's founder wants to sell the company, and Geotech has received acquisition offers from larger telecom consulting companies. The president needs to decide what steps to take next.
Sarbanes-Oxley may be onerous, tedious and expensive. But it is also - and arguably the most important overlooked thing - a virtual and heretofore never-considered ally of corporate managers. In fact, as this author argues, learning to live with Sarbanes-Oxley can yield unanticipated dividends and make a manager's life a lot easier.
Organizations that fail to recognize and act on their Strategic Market Position may be at risk. First, however, you must know what Strategic Market Position is and how to use it. This author, who has written the book on Strategic Market Position, describes what it is and how to use it.
Most managers would admit that the COO plays a critical role in an organization and is highly visible within it. These coauthors have identified four conditions or rights that boards and organizations must satisfy to make the COO's role work and add value. They describe these rights in this article and what to do and not to do to make them work.
The founders of Just Us! Coffee Cooperative (Just Us!) are involved in a strategic planning process. The growing demand and acceptance of fair trade products is good news for the industry and opens many opportunities for Just Us!, but there are also risks. Just Us! will likely face increased market competition from major U.S. retail coffee brands and Canadian supermarket brands, pressure on margins as more brands crowd the shelves, and more competition for access to top quality sources of supply. Just Us! will have to make strategic choices and will have to develop a clear and focused marketing plan.
Two MTR Corporation (MTRC) managers are participating in a week-long program in financial management. For their next class, they need to calculate the cost of capital for MTRC. First, they will review the concepts of investor expectations and cost of capital. Then, they must calculate the cost of capital by using the financial statements provided to them by the instructor. The two managers discuss their understanding of these concepts as they prepare their assignment, which is due in two hours.
This case describes the hostile takeover bid by Mittal steel for Arcelor steel in what turned out to be one of the most acrimonious takeovers in European history. The battle began in January 2006 and lasted six months. From the outset, Arcelor's management resisted Mittal's deal using every possible defense involving politicians, bankers and public relations advisors, among others. There was even a proposed merger with a Russian company in a desperate effort to avoid the hostile takeover bid. Finally, on 25 June 2006, after the fierce battle that included allegations of racism and much animosity, Arcelor heeded its shareholders' wishes and accepted the bid. The initial offer was 18.6 billion and the final price paid by Mittal was 26.9 billion. During the six months, Mittal's share price had increased by almost 25%, with Arcelor's more than doubling.
Covers President Lula's challenges to reduce "Brazil cost" and grow like other BRIC countries (Brazil, Russia, India, and China). Experts agreed that for Brazil to grow like other BRIC countries, the Brazilian government would have to reduce the cost of doing business in the country ("Brazil cost"). At the same time, President Lula's challenge is to develop programs that accelerate growth without undermining the progress achieved in reducing inequality and poverty. Can the Brazilian government reverse inequality and grow at the same time? What development strategy should Lula follow in his second term? Does Brazil belong in BRIC? What do these countries have in common?
This case focuses on the conflict between the Hedge Funds and the Board and Management of Deutsche Börse, following Deutsche Börse's hostile offer for the London Stock Exchange. It allows participants to role play the perspectives of the Supervisory Board, led by Dr. Breuer, the CEO, Werner Seifert, the Hedge Funds (TCI, Atticus) and traditional investors (including Fidelity and Merrill Lynch).
This case describes the meteoric rise of Brita in the US market, following the acquisition of local rights by The Clorox Company in 1989, until a sudden decline in 1999. The case details the various failed strategies attempted by the brand between 1999 and 2006 and poses the question as to what Brita should do to turn its fortunes around. The case presents the results of a recent segmentation study, which holds the key to developing the turnaround strategy.
This is an MIT Sloan Management Review article. Because of two trends--rising R&D costs and decreased product revenues (due to shorter product life cycles)--companies are finding it increasingly difficult to justify investments in innovation. Business models that embrace open innovation address both issues. The development costs of innovation are reduced by the greater use of external technology in a firm's own R&D process. This saves time as well as money, and the firm no longer restricts itself to the markets it serves directly. Now it participates in other segments through licensing fees, joint ventures, and spin-offs, among others. These different streams of income create more overall revenue from the innovation. To partake more fully in the benefits of open innovation, companies need to develop the ability to experiment with their business models, finding ways to open them up. Building that capability requires the creation of processes for conducting experiments and assessing their results. Although that might seem obvious, many companies simply do not have such processes in place. In most organizations, no single person short of the CEO bears responsibility for the business model. Instead, business unit managers (who are usually posted to their jobs for just two to three years) tend to take the business model for granted. To understand how an organization can open its business model, the author provides case examples of IBM, P&G, and Air Products, three companies that operate in different industries with vastly different technologies and products. Each used to function with a very internally focused, closed business model, and each has since migrated to a business model that is substantially more open.
Many technology-intensive companies today depend on employees with specialized technical skills, and managers may not fully understand the work these employees do. Moreover, managers and technical employees may have very different worldviews, and their worldviews may conflict during the process of business innovation. After researching the movement of Internet and computing pioneers among various organizations during a period between the early 1960s and the mid-1990s, the authors identified two personality types (stewards and creators) that are vital to successful technological innovation--but whose mindsets often clash. Stewards are usually managers; their goal is the careful allocation of the organization's resources, with an aim of achieving an optimal return on investment. Creators are often skilled, specialized employees whose have a grand vision and mission; they frequently view business concerns as secondary. According to the authors, conflict between stewards and creators is, to some extent, inevitable. However, when such conflict is managed poorly, the organization's capacity to innovate effectively may be impaired. The authors suggest eight guidelines for managing steward-creator conflict. These guidelines include: (1) keep talented creators around, although they can be difficult to manage; (2) balance the influence of stewards and creators in the organization, so neither group always wins; (3) cultivate people who have credibility with both creators and stewards and can help resolve conflicts; (4) use peer review to more accurately evaluate creators' specialized technical work; (5) structure the innovation process so that creators produce tangible results regularly; (6) realize that there will always be some conflict between an organizations' creators and its stewards; (7) avoid overly prescriptive control mechanisms that may alienate creators; and (8) ensure that closure on projects is achieved neither too quickly nor too slowly.
This is an MIT Sloan Management Review article. Contrary to the beliefs of many managers, their companies' products and corporate brands cannot truly be managed, much less owned. That much has become clear in recent years as many well known brands have seemed to take on lives of their own, changing in the minds of many even though management may think of them as immutable. In this article, the authors introduce the concept of a "brand manifold" in order to bring out two overlooked factors: first, that brands have multiple dimensions depending on who is valuing them, and second, that those dimensions change in space and time. Drawing on automotive industry examples such as Maybach, Morgan, and BMW's Mini, the authors demonstrate the importance of managing a brand's evolution so that the brand does not lose its roots in the past. They go on to highlight the importance of understanding that brands have a life and meaning independent of what their initiators intended--as embodied by the thriving user community around Apple Computer's long-obsolete Newton handheld and evident in the influence of Harley-Davidson owners over many of the company's strategic decisions.
This is an MIT Sloan Management Review article. Today, as consumer choices on one side of the planet affect living conditions for people on the other side and complex supply chains span the globe, businesses are facing a host of "sustainability" problems--social and ecological imbalances created by that globalization. Beginning in the late 1990s, organizational members of the Society for Organizational Learning (SOL--including Shell, Harley-Davidson, HP, Xerox, and Nike, among others) began a series of initiatives focusing on collaborative solutions to a variety of sustainability issues. The group's goals have included the application of systems thinking, working with mental models, and fostering personal and shared vision to face these complex sustainability issues. Through its work, SOL (of which two of the authors are founding members) has learned that successful collaborative efforts embrace three interconnected types of work--conceptual, relational, and action-driven--which together build a healthy "learning ecology" for systemic change. In this article, the authors offer examples from particular projects in which learning ecology provided an important foundation for substantive progress, and they draw lessons for companies and managers regarding each of the three types of work. Ultimately, the authors conclude that conceptual, relational, and action-driven work must be systemically interwoven and that there is little real precedent for that. They offer several guidelines for how it can be accomplished, emphasizing leadership and transactional networks. Finally, they pose three questions that must be answered if systemic solutions are to be successful: (1) How can we get beyond benchmarking to building learning communities? (2) What is the right balance between specifying goals and creating space for reflection and innovation? and (3) What is the right balance between private interest and public knowledge?
This is an MIT Sloan Management Review article. Many multinational companies attempt to monitor working conditions in suppliers' factories in developing countries through corporate codes of conduct, along with monitoring to determine compliance. There is considerable debate about the merits of this approach. As part of a larger research project on globalization and labor standards, the authors conducted a comparison of two Mexican garment factories that supply Nike. Both plants (referred to as Plant A and Plant B) received very similar scores on a Nike factory audit, and both manufacture T-shirts for Nike and other companies. Workers in both plants are unionized. However, a closer examination reveals that working conditions in the two factories are in some respects quite different. Compared to workers in Plant B, those in Plant A earn more per week, report greater job satisfaction, and have greater say in workplace decisions. Furthermore, in Plant A overtime is voluntary and kept within Nike workweek limits, but in Plant B both forced overtime and excessive overtime occur. What factors contribute to these differing working conditions? The authors conclude that, while there are a number of differences between the factories, a key variable is the way each plant is managed. Plant A has made the transition to lean manufacturing and, in the process, workers received training and were empowered to participate in more decisions on the shop floor. Quality, worker productivity, and worker salaries all increased at Plant A. The authors conclude that global brands could help improve working conditions in supply chain factories by working with suppliers to help them introduce new management systems.