Much popular thinking in the business world is shaped by delusions--fundamental errors of judgment that distort our understanding about company performance. One of the most important delusions is the halo effect, which is the tendency to attribute many positive features to successful companies and to make the opposite attributions when companies falter. The halo effect, in turn, contaminates the data used in many large-scale studies of company performance, including some of the most popular studies of recent years. The result is a misplaced belief that companies can follow formulas to achieve high performance, when in fact performance is better understood as relative, not absolute. To achieve high performance, companies must do more than follow formulas--they must differentiate themselves from rivals by making choices under conditions of uncertainty.
Colgate-Palmolive, the U.S.-based consumer products firm, has long emphasized international experience for its managers and has developed a comprehensive policy to manage expatriate assignments. The rise in dual-career families has made some managers reluctant to accept foreign assignments, causing Colgate-Palmolive to reexamine the way it manages international career development.
Nike and Reebok, the two largest athletic footwear companies, look to contractors in Asia to manufacture their shoes. Sourcing from Asia offers advantages of low cost and flexibility, but raises questions about human rights and corporate responsibility. How Nike and Reebok have addressed these questions is the focus of this case.
The note examines the relationship of national culture to management. Offers a definition of culture, explains the scope of culture and its many dimensions, and describes how culture is manifested in business settings. The research of Edward Man, Geert Hofstede, and others is discussed.
After many years as a German luxury car producer, Mercedes-Benz announced two major strategy shifts in 1992, toward a full line of automotive products and toward a globally diverse set of plans and activities. As part of this shift, Mercedes planned to build a major plant in Alabama for the manufacture of sports-utility vehicles.
Rhone-Poulenc, France's largest chemical firm, with revenues of more than $7 billion in 1985, seeks to dramatically expand its presence in the United States. From 1986 to 1990, Rhone-Poulenc undertakes 18 separate acquisitions, ranging from small entrepreneurial firms to large divisions of Union Carbide, Monsanto, and Stauffer Chemicals. Having made these acquisitions, however, the French firm is faced with challenges of integrating many disparate operations into a coherent American affiliate. The problem is complicated by differences in the nature of competition (global agrichemicals versus domestic basic chemicals), differences in the attitudes of the acquired employees, and an initial lack of confidence on the part of the acquiring firm. By the end of the case, Rhone-Poulenc management faces a specific choice regarding the best way to integrate several recent acquisitions in the field of specialty chemicals.
Rhone-Poulenc, France's largest chemical firm, has achieved a major position in the United States as the result of an ambitious series of acquisitions. As it expanded in the United States from 1986 to 1990, Rhone-Poulenc management sought to take a "hands-off" approach and allowed the local management to build a coherent and stable U.S. operation. By 1991, however, there is a perceived imperative for the global management of all product lines. A proposal is made to shift the major axis of the firm toward a worldwide product structure, with the effect of changing the role of the U.S. country management. Whether this move makes sense, what the best structure might be, and how any changes are to be implemented are all topics for discussion in this case.
As CEO of Primerica, Sandy Weill has built a $6.6 billion company from acquisitions and underperforming firms. The case examines Weill's distinctive approach to building, managing, and leading an organization that seeks the benefits of scale without the problems of bureaucracy. The 1992 acquisition of 27% of Travelers is posed as a final topic for discussion. Illustrates one distinctive general manager's approach to leading a high-performing firm.
ACCOR, a French-based lodging and restaurant company, is described from its founding in 1967 to its 1990 acquisition of Motel 6. Particular attention is devoted to ACCOR's co-chairmen, Paul Dubrule and Gerard Pelisson, and the management policies they have put in place. ACCOR's venture into North America raises strategic, organizational, and integration challenges.
In July 1991, Microsoft has achieved record growth and profitability in the PC software industry. The case focuses on Microsoft's founder and CEO, Bill Gates, and his top management team, as they seek to retain the innovation and spirit of a small company in a rapidly growing and changing environment. Specific issues include the management of organizational complexity, cultural change, CEO and COO interaction, compensation, and leadership.