This is an MIT Sloan Management Review article. A number of factors, both external and internal, are increasingly demanding a strategic approach to corporate communications. Yet, despite regulatory imperatives, organizational complexities, and a growing need for companies to increase their credibility with their constituencies, many companies still take a tactical, short-term approach to communication that is not only nonstrategic but may, in fact, be inconsistent with their corporate strategy or even impede it. The authors conducted more than 50 interviews with CEOs, CFOs, and heads of corporate communications and investor relations at companies that represent the state of the art in corporate communications, companies that have faced and survived major crises, and some that are great corporate communicators but not usually recognized for their efforts. Offers best practice lessons and a framework to enable executives to think carefully about their organization's objectives for each specific communication, determine which constituencies are critical to meeting that objective, and understand what kinds of messages to deliver through which channel.
On October 2, 2003, on the eve of a special election to choose a new Governor of California, the Los Angeles Times published a lengthy investigative article about allegations of sexual misconduct on the part of the leading candidate: movie star turned Republican gubernatorial hopeful Arnold Schwarzenegger. The result was surprising. As much as it made Schwarzenegger the subject of discussion, so too did it do the same for the Times itself. In part because it appeared within days of the election and, in part because of a history of criticism of the newspaper for what its critics alleged was a liberal political bias, the Times found itself having to defend publicly its decision to do what it understood to be a key responsibility of a major daily newspaper-scrutinizing the record of a politician. HKS Case Number 1790.0
Companies face much uncertainty about the competitive effects of the recently adopted Kyoto Protocol on global climate change and the current and future regulations that may emerge from it. Companies have considerable discretion to explore different market strategies to address global warming and reduce greenhouse gas emissions. Examines these strategic options by reviewing the market-oriented actions that 136 large companies that are part of the Global 500 are currently taking. Companies use six different market strategies to address climate change, consisting of different combinations of the market components available to managers. Managers can choose between a greater emphasis on improvements in their business activities through innovation or employing compensatory approaches such as emissions trading. They can either act by themselves or work with other companies, NGOs, or (local) governments.
To date, the United States has declined to ratify the Kyoto Treaty to reduce greenhouse gas (GHG) emissions. However, many companies are taking advantage of the lack of a mandatory U.S. GHG emission reduction program to set targets at their own pace and in ways that complement their own strategic objectives. Currently, as many as 60 corporations, with net revenues of roughly $1.5 trillion, have set voluntary reduction targets. Many of these companies are agnostic about the science of climate change or the social responsibility of protecting the global climate. The reasons are decidedly strategic. So why are they doing this? They are searching for ways to be prepared for the long term should GHG emission reductions become mandatory, while at the same time attempting to reap near-term economic and strategic benefits should new regulations not emerge.
Organizations struggle when trying to manage a mature business and a related new venture simultaneously. The endeavor is fraught with contradiction and paradox. To succeed, the organization's leaders must deal with two conflicting pressures. The new venture must forget much of what has made the mature business successful, which argues for isolating the new venture from the mature business. However, the new venture also must borrow resources from the mature business, which argues for integrating the two units. Based on in-depth field research at 10 organizations, this article shows how to identify what to forget and what to borrow and describes an organizational design that facilitates both.
The market universe is composed of two types of oceans: red oceans and blue oceans. Red oceans are all the industries in existence today; they are increasingly characterized by intense competition. Blue oceans are all the industries not in existence today; they are untouched and uncontested. To prosper in the future, companies need to go beyond competing; they need to create blue oceans. The issue is how to do so. Presents a set of analytical tools and frameworks that can enable firms to develop blue ocean strategies.
The adoption of information technology has had a major impact on firm and industry structure. The personal computer industry has evolved from a value chain with well-defined roles for firms in different industry segments to a flexible global value network through which PC firms outsource many of their activities to increasingly capable suppliers. The industry's value network is organized mostly through market mechanisms, particularly for routine activities. A smaller number of complex activities involve closer trust-based relationships, but market discipline is used to reduce the risk of opportunism. IT has played a major role in this transformation. For routine activities, IT enables standardization and automation of processes, allowing effective coordination via market transactions. For more complex activities, IT supports the close integration of activities through internal IT systems or customized interorganizational systems.
Advances in information technology, together with increasing economic globalization, are creating dilemmas regarding the levels of definition of property rights that exist with respect to knowledge-based resources. The issues at stake include enforcing property rights of companies without alienating consumers and making knowledge-based resources affordable. Proposes a framework to help resolve these dilemmas and predict the costs vs. benefits of defining the property rights over resources. The costs vs. benefits are mainly determined by: capture costs and rent dissipation created by nonexclusivity of the resource; exchange and policing costs related to the resource; costs of reduced investment created by nonexclusivity of the resource; exchange value of the resource; and the social costs of exclusivity of the resource.