The nation-state has begun to crumble. What is emerging in its place is the region-state, which is defined by economic activity, not political borders. The factors behind the shift are threefold: First, people, capital, and information can move across borders so quickly that economic decisions are often based on the fear that needed resources will go elsewhere. Second, as consumers see how other people live, they pressure their governments to give them access to the best and cheapest products. And third, as governments defer to special interests and try to provide constituents with a civil minimum of services, they invest inefficiently and as a result destroy wealth. Although political leaders will resist acknowledging the demise of the nation-state, only those who can accept it and promote region-states within and across their borders will be able to provide the best quality of life for their constituents.
The use of derivatives--a broad term referring to such diverse instruments as futures, swaps, and options--has become increasingly popular in recent years as corporations look for new and better ways to manage risk. The high-profile losses of Procter & Gamble, Metallgesellschaft, and other companies are sending an important signal to senior managers: financial decisions that were previously designed and implemented by specialists need to be monitored more closely from the very top of organizations. In "Framework for Risk Management" (November-December 1994), Kenneth A. Froot, David S. Scharfstein, and Jeremy C. Stein present a guide for helping managers develop a coherent risk-management strategy. This issue's Perspectives section opens up the discussion on derivatives to a group of experts.
George Marlow, a manufacturing vice president at SportsGear, had been looking forward to this month's companywide meeting. Martin Griffin, SportsGear's CEO, was going to announce a new era of empowerment at the company. And as Martin gave his speech, he seemed to fill the entire auditorium with his enthusiasm. But Harry Lewis, a SportsGear veteran of more than 20 years, was not so sure. "What in the world does empowerment mean?" he asked. And indeed, Harry's concerns proved well founded. George led the team from manufacturing that was to be the test case for implementing empowerment at SportsGear. The team began the project in high spirits, eager to accomplish its goals. But when the time came to present their reports, the members were shocked: Martin was called away from the meeting, and the department heads formed a wall of resistance. It appeared that the team's efforts had been a waste of time. Can empowerment work at SportsGear? In 95111 and 95111Z, J. Richard Hackman, Elios Pascual, Mary V. Gelinas, Roger G. James, and W. Alan Randolph offer advice on this fictional case study.
George Marlow, a manufacturing vice president at SportsGear, had been looking forward to this month's companywide meeting. Martin Griffin, SportsGear's CEO, was going to announce a new era of empowerment at the company. And as Martin gave his speech, he seemed to fill the entire auditorium with his enthusiasm. But Harry Lewis, a SportsGear veteran of more than 20 years, was not so sure. "What in the world does empowerment mean?" he asked. And indeed, Harry's concerns proved well founded. George led the team from manufacturing that was to be the test case for implementing empowerment at SportsGear. The team began the project in high spirits, eager to accomplish its goals. But when the time came to present their reports, the members were shocked: Martin was called away from the meeting, and the department heads formed a wall of resistance. It appeared that the team's efforts had been a waste of time. Can empowerment work at SportsGear? In 95111 and 95111Z, J. Richard Hackman, Elios Pascual, Mary V. Gelinas, Roger G. James, and W. Alan Randolph offer advice on this fictional case study.
George Marlow, a manufacturing vice president at SportsGear, had been looking forward to this month's companywide meeting. Martin Griffin, SportsGear's CEO, was going to announce a new era of empowerment at the company. And as Martin gave his speech, he seemed to fill the entire auditorium with his enthusiasm. But Harry Lewis, a SportsGear veteran of more than 20 years, was not so sure. "What in the world does empowerment mean?" he asked. And indeed, Harry's concerns proved well founded. George led the team from manufacturing that was to be the test case for implementing empowerment at SportsGear. The team began the project in high spirits, eager to accomplish its goals. But when the time came to present their reports, the members were shocked: Martin was called away from the meeting, and the department heads formed a wall of resistance. It appeared that the team's efforts had been a waste of time. Can empowerment work at SportsGear? In 95111 and 95111Z, J. Richard Hackman, Elios Pascual, Mary V. Gelinas, Roger G. James, and W. Alan Randolph offer advice on this fictional case study.
The management team at Electrohome's Projection Systems Division must decide what to do in response to a surprise new product introduction by Sony Projection Systems. The new product threatens Electrohome's position at the high end of the market. This case focuses on competitive analysis as three players from three differnet regions of the world vie for profitable positions in the industrial projection systems market.
The object is to define what is meant by mergers and acquisitions and to understand why they happen. The impact of these deals on shareholders of both the acquiring and acquired companies is investigated, and the reasons why some mergers succeed while other fail are examined. Finally, in order to determine the value of a firm, some valuation frameworks are provided.
In 1994, both United Airlines and Continental Airlines launched low-cost airlines-within-an-airline to compete with Southwest Airlines. From 1991 to 1993, Southwest had increased its market share of the critical West Coast market from 26% to 45%. Considers how Southwest had developed a sustainable competitive advantage and emphasizes the role of human resources as a lever for the successful implementation of strategy. Asks whether competitors can successfully imitate the Southwest approach.
During his successful 1991 bid for the indianapolis mayoralty, Stephen Goldsmith is clear about his preference for privatizing city services. Once in office, however, Goldsmith decides on a different, more complex approach. The inefficiency of publicly-provided services, he reflects, may not be the result of their being public but rather a reflection of the lack of competition over who will provide them. In that light, Goldsmith undertakes a bold experiment: to force city departments to bid against private providers. This case focuses on the first stages of the Goldsmith experiment, a time in which city public works crews must, for the first time, compete against private firms for a pothole repair contract. The case raises core questions as to how to structure public-private competitions to ensure that valid comparison will be possible, as well as how to determine the exact nature of public costs. In addition, it allows for discussion of more theoretical questions as to whether some functions must always be public, while others should be private and still others privately-provided but publicly-financed. HKS Case Number 1270.1
Presents results from a study of how young managers define ethical issues, think about these issues, and resolve them. Several patterns emerge from this study. First, in many cases, young managers received explicit instructions from their middle-manager bosses or felt strong organizational pressures to do things that they believed were sleazy, unethical, or sometimes illegal. Second, corporate ethics programs--codes of conduct, mission statements, hot lines, and so forth--proved to be of little help to these young managers. Third, many of them believed that their companies' executives were out-of-touch on ethical issues, either because they were too busy or because they sought to avoid responsibility. Fourth, the young managers resolved the dilemmas they faced largely on the basis of personal reflection and individual values, not through reliance on corporate credos, company loyalty, the exhortations and examples of senior executives, or philosophical principles or religious reflection. Ironically, however, while the interviewees typically described their experiences as difficult or even traumatic, many believed they had learned important lessons about themselves and their work.
A business strategy must be congruent with the capabilities of a firm as well as both its market and nonmarket environments. The market environment includes those interactions between the firm and other parties that are intermediated by markets or private agreements. The nonmarket environment includes those interactions that are intermediated by public institutions. A business strategy must integrate both market and nonmarket components.
Chronicles BP Oil's process of developing, implementing, and assessing its global branding, along with key decision points at three critical areas along the way. BP Oil International is the retail/consumer marketing division of a company that is historically known for oil exploration and production. Its advertising manager is pressing the company to pay more attention to its brand equity, specifically consumer awareness and brand associations (image). The advertising manager and his boss have put together a proposal to create a global brand equity program (Brand Image Program), the keystone of which is a global advertising campaign. Now they must persuade the Marketing Strategy Group, a central oversight body, to approve the program.
During his successful 1991 bid for the indianapolis mayoralty, Stephen Goldsmith is clear about his preference for privatizing city services. Once in office, however, Goldsmith decides on a different, more complex approach. The inefficiency of publicly-provided services, he reflects, may not be the result of their being public but rather a reflection of the lack of competition over who will provide them. In that light, Goldsmith undertakes a bold experiment: to force city departments to bid against private providers. This case focuses on the first stages of the Goldsmith experiment, a time in which city public works crews must, for the first time, compete against private firms for a pothole repair contract. The case raises core questions as to how to structure public-private competitions to ensure that valid comparison will be possible, as well as how to determine the exact nature of public costs. In addition, it allows for discussion of more theoretical questions as to whether some functions must always be public, while others should be private and still others privately-provided but publicly-financed. HKS Case Number 1270.0