This case looks at the issues facing a Hong Kong-based trading company, which links hundreds of factories in India and Asia with major customers like Gap and the Limited in Europe and in the United States. The company has recently launched a dot-com operation to allow its extraordinary network of factories in Asia to target much smaller retail chains in Asia and Europe than they were able to do before.

This is an MIT Sloan Management Review article. Today's workforce is increasingly made up of volunteers--at least in spirit if not in fact. How will the traditional management tasks of motivating and directing employees change in the face of that new reality? The authors answer this question by examining an example of an economic enterprise that acts in many ways like a voluntary organization: the open-source software movement. The authors pose the following essential questions: What motivates people to participate in open-source projects? How is participation governed in the absence of employment or fee-for-service contracts? The answers revealed some important lessons for traditional organizations about the challenges of keeping and motivating knowledge workers and the process of managing in the new arena of networked or virtual organizations. First, traditional organizations should plan for a broader array of employee motivations than they often do today. Money is only one. Professional contributors are also motivated by the personal benefit of using an improved software product and by a number of social values such as altruism, reputation, and ideology. Second, traditional organizations should consider ways to shift from the management of knowledge workers to the self-governance of knowledge work. Despite their clear potential for chaos, open-source projects are often surprisingly disciplined and successful by means of multiple, interacting governance mechanisms. Membership management, rules and institutions, monitoring and sanctions, and reputation build on the precondition of a shared culture to self-regulate open-source projects.

This is an MIT Sloan Management Review article. Companies such as LEGO, British Petroleum, Baxter, Virgin, and Unilever are reversing the law of diminishing returns by redefining what business they are in and then practicing a powerful kind of customer focus. The author defines customer focus as obtaining value for customers (even if you sometimes help them buy from your competitors) and from customers (who voluntarily continue to patronize your company because of that value). To achieve a high level of customer focus, LEGO, for example, must see itself as being in the "edutainment" business, not the construction toy business. Focusing on what customers want in the edutainment market space, LEGO can find numerous growth opportunities. Traditionally, businesses have concentrated on getting more market share and moving more products and services at the maximum margins. But that approach is too easy for competitors to emulate, and cost advantages eventually diminish. The author delves into the six vital components for a successful strategy based on customer focus: giving power to the customer, getting customers to choose a particular business over its competitors, articulating new market spaces, delivering an integrated experience, taking advantage of abundant and reusable resources such knowledge and information, and creating reinforcing interactions.

This is an MIT Sloan Management Review article. Grooming in-house candidates for leadership roles is critical for companies that want to stay competitive. Leadership experts Robert M. Fulmer, Philip A. Gibbs, and Marshall Goldsmith provide insights about today's best leadership development practices, basing their observations on a recent study that benchmarked six best-practice companies. Arthur Andersen, General Electric, Hewlett-Packard, Johnson & Johnson, Shell, and the World Bank all recognize that keeping a steady stream of leaders moving up is important to the strategic vision. The authors pinpoint five essential elements of success: awareness (learning about the latest approaches to leadership development), anticipation (using forward-looking scenarios to envision the future needs of the business), action (finding ways to use executive learning programs to support strategic initiatives), alignment (ensuring that company documents used for performance appraisal, succession planning, and education are consistent), and assessment (evaluating how leadership education has improved business results). Approaches vary. The World Bank gives future leaders a stint in impoverished countries so they can do a better job of supporting the bank's goal of reducing poverty. At GE, the company's famed Six Sigma quality-improvement program and creative ideas for expansion in emerging economies flowed from presentations made at leadership development events. In the best-practice organizations, the most senior people set an example of support for leadership development programs.

This is an MIT Sloan Management Review article. As adapting to globalization becomes increasingly necessary, business customers are pressuring suppliers to accept global pricing contracts (GPCs). However, before signing a contract, suppliers should do due diligence. Purchasers may promise a supplier access to international markets, guaranteed production volumes, and improved economies of scale and scope--but too often they fail to deliver. According the authors, suppliers must fully understand the customer's global strategy and the business conditions in its respective markets. They also need a firm grasp of their own strategy and local practices. Which GPCs would be suitable and which would be detrimental? Using data collected from interviews with global account managers in diverse industries on four continents, the authors help suppliers navigate the uneven terrain. By exploring why customers want GPCs, under what circumstances the contracts are likely to profit suppliers, and how to implement contracts successfully, the authors identify preparation as the key to success. The more information suppliers can gather (for example, about variances in their own pricing in different markets, the cost to serve the customer, exchange rates, and local regulations), the better their negotiating position.

This is an MIT Sloan Management Review article. Unless an enterprise generates new knowledge and pumps it efficiently throughout its network, it will soon be playing tomorrow's game with yesterday's tools. Many rely on an information technology infrastructure; but no matter how sophisticated, it is not the key to effective knowledge management. Success, say the authors, depends more on the social system in which people operate--the social ecology of a company. Social ecology drives people's expectations, defines who will fit in, shapes individuals' freedom to pursue actions without prior approval, and affects how they interact with both insiders and outsiders. Focusing on Nucor Corp.'s success in the 1980s and 1990s, the authors suggest that it was the company's social ecology that contributed to it becoming one of the most efficient steel producers in the world. Through effective management of knowledge, Nucor developed and constantly upgraded its main strategic and proprietary competencies: plant construction and start-up know-how, manufacturing process expertise, and the ability to adopt breakthrough technologies earlier than competitors. Nucor's social ecology also allowed, among other things, excellence in the tasks associated with sharing and mobilizing knowledge: identifying opportunities to share knowledge, encouraging individuals to share knowledge, building effective and efficient transmission channels, and convincing individuals to accept and use the knowledge received. The authors explain how others can maximize knowledge sharing by setting stretch goals, providing high-powered incentives, cultivating empowerment, equipping every unit with a well-defined "sandbox" for experimentation, and cultivating an internal market for ideas. It's a difficult challenge. But its very difficulty means that companies tackling it successfully will have a competitive advantage that rivals cannot beat merely by buying the same software.

The American health care system is undergoing a market and organizational transformation analogous to the deregulation of the transportation, communication, utility, and finance industries, with price competition replacing rate controls, new entrants displacing organizational incumbents, innovation disrupting stability, and individual choice supplanting governmental oversight. These turbulent changes are generating uncertainty, hostility, and a backlash towards re-regulation. This article compares the evolution of the health care sector with the experiences of other deregulated industries, highlighting four effects that cut across all sectors. Deregulation and the role of price competition has led everywhere to: lower costs, due to better capacity utilization and improved productivity; increased differentiation of prices and products, moving away from the one-size-fits-all patterns characteristic of regulated industries; dynamic changes in both market and organizational structures, culminating in consolidation into multi-product, geographically diversified firms; and political backlash, fueled by uncertainty, organized producer groups, and selected groups of consumers who do not benefit from the overall cost and product improvements.

The role of American corporations as purchasers of health insurance for their employees has changed dramatically over the past several decades from a passive stance to an aggressive purchasing and policy-making role. The transformation has caused purchasers to question the appropriateness of their health benefit interventions for legal, ethical, and financial reasons. Recent research about the role of "medical necessity" in California managed care decision making reveals a number of problems purchasers face and describes solutions recommended by some purchasers to those problems.

Managing an organizational transformation is a risky and difficult endeavor. This article examines the lessons learned from the transformation of the Veterans Health Administration (VHA), one of the largest agencies in the federal government. The transformation, which has proven to be highly successful, has focused on changing the agency from a health care delivery system emphasizing inpatient-oriented tertiary care to a health care delivery system that can meet the growing needs of veterans for outpatient-oriented primary care. The VHA's experience reveals the importance of selecting leaders whose qualifications match the needs of the transformation, developing a coherent transformation plan, maintaining a focus on key transformation goals, and managing external changes to complement internal ones. In addition, the VHA's experience reminds us that a transformation often raises significant issues concerning employee training and education, communication with frontline employees, and the balance between centralized control and operating unit flexibility.

A recent report from the Institute of Medicine has focused attention anew on the incidence of medical errors in the health care industry. While there is a relatively large body of research on how organizations can operate in a highly reliable manner, and thus avoid such errors, little of that work has been done in the health care field. This article discusses the ways in which the health care industry has failed to meet systematically the standards for achieving high reliability, based in part on two existing theories about the management of high-hazard environments--High Reliability Organization Theory (HROT) and Normal Accidents Theory (NAT).

Creemore Springs Brewery, a small, independent brewer, offered new, high quality alternatives to premium beer connoisseurs. Continuing quality problems with the company that cleaned its bottles prompted the president of Creemore Springs Brewery to decide whether or not to recommend moving the bottle cleaning operation from the external contractor and bring it in-house. To assess the company's options he must analyse the qualitative and quantitative costs and benefits of making such a move by performing a task analysis, reviewing the production process and calculating the payback.

Describes the situation faced by GCI.com in April 2000, soon after raising $12 million for their new venture. After hiring an advertising agency, management needs to decide on the nature of the advertising campaign to target the right set of customers with the right message.

Creemore Springs Brewery, a small, independent brewer, offered new, high quality alternatives to premium beer connoisseurs. Continuing quality problems with the company that cleaned its bottles prompted the president of Creemore Springs Brewery to decide whether or not to recommend moving the bottle cleaning operation from the external contractor and bring it in-house. To assess the company's options he must analyse the qualitative and quantitative costs and benefits of making such a move by performing a task analysis, reviewing the production process and calculating the payback.

IBM must adapt its research process to the volatility of the Internet market. Issues include incentives, research charter, reward systems, and linkages to business units and customers.

Steve Briggs, a PhD biologist, is asked to propose a strategy to take global life-science giant Novartis into the rapidly expanding field of plant genomics.

Presents an original business plan. Students are challenged to develop assumptions and create financial projections and statements based on business plan text.

Radio One (NYSE: ROIA and RIOAK), the largest radio group targeting African-Americans in the country, had the opportunity to acquire 12 urban stations in the top 50 markets from Clear Channel Communications, Inc. (NYSE: CCU) in the winter of 2000. The stations were being sold by Clear Channel Communications, Inc. to obtain Federal Communications Commission (FCC) approval for its acquisition of AMFM, Inc. (NYSE: AFM). Radio One was also negotiating the acquisition of nine stations in Charlotte, North Carolina, Augusta, Georgia, and Indianapolis, Indiana. The proposed acquisitions would double the size of Radio One. The case focuses on the strategic and financial evaluation of the proposed acquisitions.

As cable operators across Europe go digital, they will require a means of remotely upgrading the applications software on subscribers' digital set-top boxes, using some kind of loader software to do so. Intellibyte Inc., a small Canadian software firm, has developed the only remote loader software that currently meets the specifications of the European Cable Communications Association. However, it must sell the software to manufacturers of set-top boxes before cable operators can use it. The competition is no more than two years behind. The president must decide among several pricing and positioning alternatives for intellectual property products in a complex industry.

South African Breweries (SAB) was the only profitable international brewer in the crowded and hyper-competitive beer market in China. SAB's keen understanding of emerging market environments allowed it to develop a unique strategy for the Chinese market that resulted in large market shares in each of the provinces in which it was present. However, it served only 5% of China's immense population. The managing director was faced with decisions: how to expand to other markets where SAB's approach would be replicated, how SAB could expand its successful business model to new markets, and what would happen when it ran head-to-head with a global giant or a well-positioned local competitor.