Emerging economies such as India have become an increasingly important part of the global business landscape. Until recently, multinational corporations (MNCs) relied on joint ventures (JVs) with local companies to exploit these business opportunities. Lately, however, there has been a marked reduction in the formation of new JVs between MNCs and local companies. Moreover, many earlier JVs also are increasingly being terminated, often with great acrimony. Highlights how "regulatory liberalization" of the business environment in India has played a big role, directly and indirectly, in driving this change. Also demonstrates how three other factors--"resource complementarity (or lack thereof) between partners," the "race to learn" between partners, and "returns to globalization to MNC partners"--are affecting the formation of JVs in an increasingly liberalized environment.
The quest for information and research-based insight is an obsession in the capital markets. There is a veritable industry of analysts, investment bankers, portfolio managers, and investors who seek any informational advantage, which is one reason that academics who study finance have been recruited to work on Wall Street and with money managers. Yet, the potential payoff for using valid evidence is even greater when it comes to managing organizations. At the same time, however, imitation is much slower and less effective in the world of management practices, in part because such practices depend on tacit knowledge and implementation skill, on knowing not just what to do but how to do it. In addition, management practices and logic resist copying because of the power of precedent and ideology. Most managers actually try to act on the best evidence. They follow the business press, buy business books, hire consultants, and attend seminars featuring business experts. Although companies sometimes benefit from these efforts, there is surprisingly little rigorous use or serious appreciation of evidence-based management. Explores these obstacles and offers guidelines to enable managers to practice evidence-based management better.
The true role of performance measurement is to provide a means of management learning, rather than simply a means of management control. It is widely believed performance measures are essential if managers are to track progress and establish whether their organization is moving in the desired direction. In essence, this is the basic philosophy that underpins ideas of management control. However, the power of measurement extends far beyond simply tracking progress to three other areas. First, the act of deciding what to measure helps clarify the organization's strategy. Second, clear measures, underpinned by an explicit theory of how the business works, assist in the process of communicating strategy and achieving organizational alignment. Third, measurement data can be used to generate performance insights. These, in turn, can be used to challenge the tacit or explicit assumptions that are held about how the business operates. Makes explicit the hidden potential of performance measurement by highlighting how measurement systems can contribute to the organization's systems for management learning as well as management control. Also illustrates how more value can be extracted from the data that exist in organizations than has traditionally been recognized.
Ongoing efforts to reduce medical errors and enhance quality of patient care focus primarily on technological innovations. However, important management issues that underlie about two-thirds of adverse events have commanded insufficient attention. Examines two alternative management philosophies--control based and commitment based--premised on opposite sets of assumptions about human motivation, and develops a model linking the overall management philosophy with medical errors and quality of care. The current control-based culture and management systems in health care organizations are inherently inadequate in delivering high-quality patient care and safety. To bring further improvements in clinical outcomes, it is necessary to transform them. Implementing commitment-based management will foster collaboration, communication, coordination, and teamwork--the essential mechanisms for reducing medical errors and rendering high-quality health care.
Whether your goal is to develop new products or services, a new way of marketing to your customers, or to reinvent your entire business model, 'design thinking' holds valuable clues as to how to get there faster and more efficiently. The author explains how to translate inspiration into implementation, providing seven steps to turning design thinking into design doing, By consciously fostering the right kind of emotional environment and following the seven guidelines outlined herein, an organization will be well equipped to follow suit.
Dr. Richard Florida wrote the book on creativity; in fact, he wrote two. In this interview he talks about why creative capital is drawn to certain places, the fate of 'second-tier' cities, and the dangers of our increasingly 'spikey' world, whereby a handful of cities are attracting a disproportionate number of what he has termed 'the creative class'. Florida describes how the creative class is looking for three things in life: a job that excites and challenges them; a place to live that is rich with cultural activities; and an ability to 'be themselves'. Organizations - and regions - who want to attract them, should take note.
There is growing recognition that fostering a culture of innovation is critical to business success. Having optimized operations and finances, firms now recognize that growth through innovation is their best strategy to compete in a world marketplace in which some of the players may have lower-cost resources. Whether you sell consumer electronics or financial services, the frequency with which you must innovate is rapidly increasing. The author describes ten distinct 'innovation personalities' and how they contribute to an organization. In a post-disciplinary world where job descriptors can be constraining, these new roles can empower a new generation of innovators, giving individuals permission to make their own unique contribution to the social ecology and performance of a team. This article is excerpted from The Ten Faces of Innovation: IDEO's Strategies for Beating the Devil's Advocate & Driving Creativity Throughout Your Organization (Doubleday, 2005).
Organizations are increasingly dependent on diverse teams for developing innovative products and improving efficiency, and they will be more efficient if they bring together a diverse set of experts to solve complex problems. Working in diverse teams can be challenging, however: although more perspectives may be beneficial, the very nature of team diversity can make it difficult for team members to communicate, coordinate their work, and perform. To better understand how diversity influences teams, the authors discuss different types of diversity and how they relate to information use, focusing on two types of diversity that are particularly relevant to the performance of complex cognitive tasks: diversity of education and of nationality.
Creative enterprises bring together contributions from of a wide variety of individuals, making the effective management of creativity a key focus for such organizations. Managers face two serious challenges in increasing the creativity of their organizations, says the author: first, the cost of investing in creativity is immediate, while the benefits often won't be apparent for a long time; and second, the demands of day-to-day operations often push creativity aside. It is up to managers to recognize the strategic importance of creativity and keep it front and center. The author provides six strategies for building creative organizations along with tips for both hiring and managing creative people. Along the way he shows that the challenge before us is much broader than encouraging innovation: it lies in cultivating a creative approach and curiosity in life and work, challenging and testing our current mental models, and engaging in active experimentation with new mindsets and approaches.
The problems with traditional approaches to strategic planning have long been recognized: they attempt to make a 'science' of planning, with its subsequent loss of creativity; there is an excessive emphasis on data; the drive for administrative efficiency at the expense of substance; and the dominance of single techniques, inappropriately applied. Yet today's strategists continue to struggle to propose clear alternatives to traditional processes. Design offers a different approach and suggests processes that are more widely participative, dialog-based, issue-rather-than-calendar-driven, and conflict-using rather than conflict-avoiding, all aimed at invention and learning, rather than control. The author describes the elements of the 'design approach' and ten steps organizations can take if they want to take design seriously.
Coming up with fresh ideas for new or existing products, services and processes is widely recognized as the key to enduring economic advantage, and as a result, employee creativity has taken center stage in discussions of innovation. But how can creativity be actively fostered and sustained in the workplace? Paying attention to employee emotions is critical, say the authors. Organizations are emotion-laden environments, and while research has begun to validate affective (i.e. emotional) influences on a number of work outcomes (including task quality, productivity and efficiency), little is known about how naturally-occurring affective experiences in the flow of our daily work lives relate to creative thinking on the job. The authors show that the emotion-creativity system is a cycle, whereby influences at any point can begin a dynamic pattern of increasing or decreasing positive affect and creativity.
Something is tragically missing from modern management practice and education, say the authors: an image of the manager as an idea generator who gives form to new possibilities with a well-developed vocabulary of design. Achieving this requires the development of a 'design attitude', which goes beyond default solutions to create new possibilities for the future. The authors describe the differences between a 'design attitude' and the 'decision attitude' that is so prevalent in business today. They explain why creativity needs the guiding energy of a design attitude in order to focus our efforts on results that will be truly innovative and produce long-lasting organizational betterments. This article is excerpted from Managing as Designing (Stanford Business Books, 2004), edited by the two authors.
The paradigmatic shift taking place in economic value creation requires organizations to move away from an obsession with reliability and towards a more welcoming environment for validity. A reliable process is one that produces a consistent and predictable result, over and over. To enhance the reliability of any process, one has to reduce the number of variables considered and use quantitative, bias-free measurement. On the other hand, to increase the validity of any process, one must consider a much wider array of relevant variables and use intuition and gut instinct. Ultimately, reliability and validity anchor down opposite ends of a spectrum: more reliability requires fewer variables and therefore less validity, and vice versa. How does this trade-off relate to design, and why should it matter to today's business leaders? Because design possesses an inherent bias toward validity: great designers seek deep understanding of the user and the context, which entails the consideration of many variables; they don't limit their considerations to aspects that can be thoroughly quantified; they worry less about whether they can replicate a particular process, and more about producing a valid solution to the problem before them. The author presents five strategies for being effective in a reliability-obsessed organization.
Are hedge funds heroes or villains? Management of Blockbuster, Time Warner, Six Flags, Knight-Ridder, and Bally Total Fitness might prefer the "villain" appellation, but Enron, WorldCom, Tyco, and HealthSouth shareholders might view management as the real villains and hedge funds as vehicles to oust incompetent corporate managers before they run companies into the ground or steal them through fraudulent transactions. Could the pressure exerted by activist hedge funds on targeted companies result in increased share prices, management accountability, and better communication with shareholders? Or does it distract management from its primary goal of enhancing long-term shareholder value?
Most cases on M&As focus on the value of an individual deal (synergies, price, integration issues). In the case series "Acquisition Wave in the Fine Chemicals Industry", we take another perspective. We aim to describe how managers' decisions to make an acquisition and to determine the acquisition price are likely to be influenced by the merger activity in their industry and their competitors' actions. Driven by shareholder pressure to focus their portfolios, leading specialty and fine chemicals players such as Degussa, Clariant and Rhodia entered into major fine chemicals acquisition in 2000 and overpaid. Subsequently, this led to decreasing stock prices and financial turmoil. The fact that the other firms overpaid, despite publicly available signals from stock markets indicating the overpayment, and the nature of the chemicals industry and management, are clear indicators for irrational herd behavior.