Twenty five years after its founding in members' homes, the non-denominational, evangelical Fellowship Bible Church of Little Rock, Arkansas had become a "mega-church", holding worship services on a 25-acre campus in one of the best locations in booming West Little Rock and attracting a combined 5,000 congregants on any given Sunday. But as the Fellowship congregation had grown, its leadership had come to believe that the Christian life must go beyond individual salvation and the responsibilities of family, friendship, and individual acts of charity and that church members must strive to be "socially responsible". In its effort to become a "church of irresistible influence", Fellowship Bible had taken the lead in organizing a massive citywide day of volunteer projects. In addition, ministries that had originated in small groups of church members-such as a sexual abstinence education program held in dozens of public and private schools-had taken on an independent life as well known free-standing organizations. Such efforts were made possible, in part, by charitable contributions made by Fellowship which totaled more than 25 percent ($3 million-plus) of its annual spending. This case tells the story of the next stage in church efforts to ameliorate social ills in Little Rock-an "external ministry" known as the "one church, one school, one neighborhood" project, announced in August 2004. Fellowship hoped that its assistance would demonstrably and measurably improve life in one of the city's most troubled areas-a 130-block area of central Little Rock. The project would include intensive mentoring of students one school in Little Rock's predominantly black South Midtown area (Fellowship itself was an almost entirely white congregation), efforts to work with African-American churches to encourage marriage in an area dominated by single-parent families, and an initiative to build new housing in the area. HKS Case Number 1780.0
Was Premier, Inc., a hospital group purchasing organization (GPO), guilty of ethical conflicts of interest? Premier was a GPO for more than 200 affiliated not-for-profit hospitals and health care systems in the United States. A series of investigative articles in The New York Times, beginning in March 2002, charged Premier with multiple conflicts of interest. Among its allegations, the newspaper argued that seller-paid fees; investments by Premier and its executives in vendors; and investments by vendors in Premier-sponsored equity funds, research institutes, and conferences all biased the selection process for medical products and services. As a result, Premier did not always choose items of the best quality or value for its affiliated hospitals. Moreover, The Times charged, new products--particularly those developed by small firms--were effectively locked out, suppressing medical innovation and hurting patient care. Richard A. Norling, CEO, and other top executives of Premier faced the difficult task of formulating an effective response to the charges raised by The New York Times. Received the Emerson Center Award for the Outstanding Case in Business Ethics for 2004.
Some leaders intimidate; others are unapproachable. But is that really the case? Confronting a leader in the right way can lead to pleasant surprises. High-performance leaders realize that more often than not they just don't know how their people really feel about their leadership. Push-back, having the courage to question a leader and point out that his or her behaviour is counter-productive, can help a leader make a better, truly informed decision. The wise and mature leader will welcome the push-back: And it will make his or her job easier.
Almost every organization needs - and has - a succession plan. But it's the quality of the plan that counts - and in too many cases, is lacking. Quick, or even ad hoc, decision making may be appropriate in certain situations, but choosing the next CEO is not one of them. Surprisingly, many organizations lack a proper succession plan. One reason is that they do not have an effective succession planning process. This author draws a detailed and comprehensive road map that every organization should use.
For nearly 60 years, Precision Steel Fabrication (PSF) had been making fabricated steel components for the contract furniture (commercial office furniture) industry. At the time of the case, the $10 million firm was emerging from a downturn in sales and seeing its first sales increase in three years, and was contemplating the purchase of a $1 million tube laser. The tube laser could do the work of three machines: a table saw, a hydraulic press, and a deburring machine. Should PSF purchase a tube laser? If so, how should three vendors' offerings be evaluated and what criteria are most salient? While the tube laser would greatly increase the firm's manufacturing efficiency, the decision itself is relatively risky. The case is written to provide the framework for evaluating an equipment purchase decision within the context of business and operations strategy, and in a small business environment.
Aegis Analytical Corporation was founded in 1995 by Gretchen L. Jahn and Justin O. Neway to provide process manufacturing software and consulting services to pharmaceutical and biotech manufacturers. Aegis developed a software program that quickly compiles disparate data into a single report. Within minutes, the program develops reports on drug tests and manufacturing quality that previously might take months to compile. With a target market of large pharmaceutical manufacturers, Aegis knew it faced a challenge of getting "in the door" of these companies and of convincing them that Aegis and its software would be around for awhile. To help with the marketing, Aegis formed two alliances with two companies that manufactured and sold complementary products to pharmaceutical manufacturing companies. While there were advantages to partnering with these divisions of Honeywell and Rockwell, most notably the visibility and credibility that these big names offered, many disadvantages developed. Most important is that Aegis's product was just one of many that Honeywell or Rockwell would promote. While there were incentives in place to encourage Honeywell and Rockwell to promote Aegis's product, after a year neither strategic alliance had resulted in a sale of Aegis's software. Aegis's founders were faced with the decisions of whether they should continue with either or both of the alliances. If they chose to continue the alliances, what could they as a small company do to encourage their much larger partners to promote the Aegis product? If they chose to terminate the alliances, can they rely only upon their internal sales staff to adequately promote and sell their product? What would be the effect on their reputation by no longer partnering with Rockwell or Honeywell? Another option might be to attempt to set up new alliances? If so, what steps should they take to increase the probability of success?
This case is about a manufacturer of textile products in the Czech Republic. Founded in 1991 by Jitka Entlichová and her husband Milan Fiedler, EnFi manufactured an extensive line of standard and customized bath and table linens, bedding, draperies, chair covers and display banners for upscale restaurants, conferences, receptions, hotels and boutique retailers. EnFi purchased fabrics from the Czech Republic and abroad, mostly from France, Spain, Italy, India, and Slovakia. In 2004, EnFi had over 1,200 hotel, resort, restaurant, and business customers throughout Bohemia. The Czech Republic had rapidly changed from a controlled economy prior to 1989 to a vibrant international marketplace by the time it entered the European Union in 2004. As competition and costs increased, Entlichová had to reposition her company over the years. With limits on Chinese textile imports set to be lifted in 2005, Entlichová again had to decide the direction her company should take.
Discusses the structure of the Seven-Eleven Japan supply chain in terms of its facilities network, inventory management, distribution, and information.
Intellectual property rights are a major source of wealth creation in our modern global economy and continue to grow in strategic significance. For managers and entrepreneurs to take advantage of the strategic options that IPs offer, it is helpful to be conversant in the unique aspects of these legal rights regimes. Provides a comprehensive and easy-to-understand overview of the IP rights regimes, consisting of trade secrets, patents, copyrights, trade dress, and trademarks.
Studies the U.S. credit card industry in the late 1990s and early 2000s. After an industry background review, a discussion of generic strategies follows in which strategies, like product proliferation and cost improvements, are achieved through superior IT. These strategies are exemplified using the leading players in the industry. On the other hand, these strategies are easily imitable, the basic product is standardized, and the industry is highly fragmented. What accounts then for the exceptional level of profitability enjoyed by this industry?
As the modern economy has evolved, business has increasingly used management science and information technology in an attempt to generate reliability - predictable outcomes on a consistent basis. The author argues that despite these efforts, there is little evidence that the ability of organizations to accurately understand the world and predict the future has increased one iota. Massive spending on these systems has not prevented corporations from being ambushed by new competitors and changing markets, and the author argues that the reason for this is a natural tension between the pursuits of reliability and validity. Reliability seeks to produce consistent, predictable outcomes by utilizing a system that is restricted to the use of objective data - for instance, predicting a customer's future purchases by using data collected in their Customer Information File (CIF) in a CRM system. Considering judgmental factors such as the mood of the customer or their attitude towards new products would be seen as an abomination in a reliable system. Validity, on the other hand, seeks to produce outcomes that meet the desired objective, even if the system employed can't produce a consistent, predictable outcome. The author describes three key implications of the obsession with reliability for management and says that to succeed in the next 20 years, firms will have to figure out how to become a more welcoming place for validity-oriented systems and for people who are more comfortable handling 'fuzzy' data and using their judgment.
Design is now understood as a core activity that confers competitive advantage by bringing to light the emotional meaning products and services have - or could have - for consumers, and by extracting high value from such emotional connections. This understanding is creating more design-focused enterprises in a wide variety of industries -- organizations that use consumer-centered product development to move quickly and effectively from intimate customer knowledge to successful product and service offerings. The authors explain how a focus on design translates into a focus on customers' true needs and unarticulated aspirations, ultimately creating better-informed, more nimble companies. They review six design strategies that can be used to bring a design focus to any organization.
Innovation is a rallying cry for today's organizations. Yet encouraging both innovation and the superb execution of routine work concurrently runs the risk of sending a mixed message that can end up accomplishing neither. The author defines the concepts of 'psychological safety' and 'evaluative pressure' and their effects on employees' willingness to experiment, and shows how creating a consistent work environment containing psychological safety can reduce employees' fear of failure and promote experimentation. She presents findings that creativity is related to organizational culture, reward systems, supervisory encouragement and trust.
This is an MIT Sloan Management Review article. Uses two different studies--a survey of CIOs at 256 enterprises in the Americas, Europe, and the Asia/Pacific region and a set of 40 interview-based case studies at large companies such as Johnson & Johnson, Carlson Companies, UPS, Delta Air Lines, and ING DIRECT--to conclude that when senior managers take the time to design, implement, and communicate IT governance processes, companies get more value from IT. Toward that end, they offer a single-page framework for designing effective IT: a matrix that juxtaposes the five decision areas (principles, architecture, infrastructure, business application needs, and prioritization and investment decisions) against six archetypal approaches (business monarchy, IT monarchy, federal, duopoly, feudal, and anarchy). Illustrates how successful companies use different approaches for different decisions to maximize efficiency and value for both IT and the overall enterprise. Offers recommendations to guide effective IT governance design.
This is an MIT Sloan Management Review article. How do managers and companies quickly transform new hires into productive employees, a process called "rapid on-boarding"? Contends that companies that are more successful at rapid on-boarding tend to use a relational approach, helping newcomers to establish rapidly a broad network of relationships with coworkers that they can tap into to obtain the information they need to become productive. Most organizations realize the importance of integrating new employees, but many fail in this regard, often because of pervasive myths about the process. Because of those misconceptions, managers frequently rely on practices that can actually hinder new employees from becoming productive.
This is an MIT Sloan Management Review article. Most start-up companies today consider overseas expansion from their inception. Yet, says the author, entrepreneurs and their managers often underestimate the cost of expansion and lack a clear conceptual framework for it. On the basis of studying 50 entrepreneurial ventures in more than 20 countries, the author concludes that such ventures follow a variety of different expansion paths. The most successful are those that best manage the constant tensions between resources and opportunities, each of which run the gamut from purely local to worldwide. Offers a framework that defines the choices a venture has at its inception and throughout its life and shows how to use the framework to assess and direct a venture and mitigate developing tensions by anticipating a variety of strategic, financial, organizational, and regulatory factors. Uses case examples of a software company that took a balanced or "diagonal" path (the most common), an air-freight delivery service that progressed from pursuing local opportunities with local resources to pursuing cross-border opportunities with local resources, and a consumer-loan provider that began by pursuing a local opportunity with local resources, then added cross-border resources.
This is an MIT Sloan Management Review article. Corporate boards in the United States have recently been on the hot seat. Stimulated by high-profile scandals, investor dissatisfaction with board performance and questions about the level of executive compensation, regulators have introduced significant reforms in the rules that govern boards. But will such reforms actually contribute to the effectiveness of boards? A real danger exists that the mandated changes not only will fail to enhance how companies are governed but also could possibly lead to a number of negative unintended consequences. To investigate such issues, the authors conducted a study that compared the board practices and effectiveness of Fortune 1000 companies in 1998 vs. 2003. They looked specifically at three areas: board leadership, the conditions governing board membership, and the performance evaluations of boards, individual board members, and CEOs. The results have helped to determine which practices in those three areas are actually related to overall board performance.
This is an MIT Sloan Management Review article. To optimize a portfolio of brands, companies can use a step-by-step approach: decide on the brands to review; analyze each brand with respect to its contribution to the company; assess the brands according to current market performance (traction) and future prospects (momentum); and classify the brands along those three dimensions (contribution, traction, and momentum), allowing managers to identify both challenges and opportunities. The process enables companies to sort their brands into different categories: power (a brand that needs to be defended ferociously and deployed judiciously), sleeper (a brand that with a little fast tracking can build into a power brand), slider (a valuable brand that has lost momentum, is slipping backwards, and needs immediate intervention to prevent meltdown), soldier (a solid brand that contributes quietly without the need for much management attention), black hole (a brand that sucks up resources and may or may not ever pay out), rocket (a brand that is on its way to power-brand status), wallflower (a small, underappreciated brand with very loyal customers, often underpriced and undermarketed), and discard (a brand that should have been mothballed years ago). Companies can then tie together the objectives for each brand into an overall plan, which will include brand architecture and resource allocation.
Two-party, multi-issue, scoreable negotiation regarding a prenuptial agreement, calling for a balance of substantive and relationship concerns. Marlene Mayberry and Jacques Parker are young adults planning their marriage. After dating for 3 years, they have prepared a list of 10 assets that they have decided to include in a prenuptial agreement. The items include a joint checking account, a car, an apartment, furniture, an art gallery, Jacques' artwork, a portrait of Marlene, California real estate, a $1 million inheritance, and a pet dog. Jacques and Marlene are given confidential instructions that outline specific point values and resistance points for these items. They will each be awarded "Tangible Points" for the assets they claim for themselves in the prenuptial agreement.