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The general manager, sales, of Marico Industries Ltd. India, is thinking about the future of the company's central sales organization (CSO). The central sales organization has been around for five years and has met all its original objectives. However, with a rapidly changing industry, the very success of the CSO is making it seem less relevant for the future. He must decide if this is true, or if the CSO could transform itself to cater to the changing needs of the Indian fast-moving consumer goods market.

Geoffrey West, president of the Santa Fe Institute, a unique research community that innovates by mixing disciplines, talks about why free thinking matters.

Whom do you turn to for advice when the stakes are high? Do you value others' opinions when the stakes are low? New research looks at how people weigh--and misuse--counsel.

Business students nowadays are not, for the most part, poets. A growing proportion come to business school with a background in investment banking or management consulting and an undergraduate business major, rather than a degree in the arts and sciences. MBA students are already very familiar with business. A number of scholars and businesspeople have begun to question the scientific model that dominates business research and teaching. Formalized management tools work well enough if you're studying techniques for financial valuation, but less so when you're studying leadership and organizational behavior. Some argue that students could learn a lot more about these subjects if they took a course in literature. Examples from fiction can be as instructive as any business textbook. HBR senior editor Diane Coutu recently met with Joseph Badaracco Jr. for a wide-ranging discussion of what leaders can learn from literature. For the past decade, Badaracco, the John Shad Professor of Business Ethics at Harvard Business School, has used classical literature to provide well-rounded, complex pictures of leaders in all walks of life--particularly leaders whose psychological and emotional challenges parallel those of senior executives. Fiction provides some of the most powerful and engaging case studies ever written. Unlike contemporary management literature, which is relentlessly upbeat, classical literature is unsparingly realist. Leaders often struggle and sometimes fail--and the stakes are high. When business leaders read about the conflicts of literary characters, they can better understand their own circumstances. We pay far too little attention to the inner lives of leaders. Business school courses seem to suggest that you can treat executives like lab animals and control their behavior through their environment. But behaviorism is not enough. Literature suggests that leaders should learn more about themselves if they want to succeed.

When employees believe they are being treated fairly--when they feel heard, when they understand how and why important decisions are made, and when they believe they are respected--their companies will benefit. Research shows that practicing process fairness reduces legal costs from wrongful-termination suits, lowers employee turnover, helps generate support for new strategic initiatives, and fosters a culture that promotes innovation. What's more, it costs little financially to implement. Yet, few companies practice it consistently. Joel Brockner examines this paradox, exploring psychological and other reasons that cause managers to resist embracing process fairness. The fact that it's relatively inexpensive to implement, for instance, may be why some numbers-oriented executives undervalue it. Many managers believe that they practice process fairness, but 360-degree feedback tells another story. Some corporate policies actually undermine it--such as when the legal department won't let managers fully explain decisions for fear that disclosure could expose the firm to lawsuits. And, frequently, managers simply follow the all-too-human tendency to avoid uncomfortable situations. But the good news is that organizations can take concrete steps to promote greater process fairness. Many studies have shown that training programs make a big difference, and the author describes the most effective format. In addition, warning your managers that they may experience negative emotions when practicing fair process helps prepare them to cope with those feelings. Finally, role modeling fair process on the executive level helps spread the practice throughout the organization. The fact is, process fairness is the responsibility of all executives, at all levels, and in all functions; it cannot be delegated to HR. The sooner managers realize that and work to make it a company norm, the better off the organization will be.

DaVita, one of the largest operators of kidney dialysis centers in the United States, underwent a remarkable turnaround between 2000 and 2005, a transformation based on building a strong values-driven culture, with an emphasis on fact-based decision making and the theme of "one for all, all for one" and an emphasis on company as community. Now the company's top management faces a number of challenges, including the integration of one of its largest competitors just acquired in a merger, ensuring management succession and not being too CEO-centric, and dealing with the operational issues confronting a company heavily dependent on Medicare and Medicaid reimbursements that do not fully cover the cost of treatment while competing for employees in the health care industry.

Michelle Levene discovers that she is pregnant a few days before receiving an offer for her dream job. The new position would require Levene to travel extensively, something she would not be able to do towards the end of the pregnancy and while caring for a newborn. Levene has been with biotech leader Genzyme Corp. for two years and cannot imagine a better professional opportunity than the new position at this stage in her career. Should she accept the job, telling her new manager that she is pregnant? Should she accept the job but wait a few months to discuss the pregnancy--after all, this is her first baby and who knows what might happen? Or should she meet with the new manager and tell him that under the circumstances, she would expect him to rescind the verbal offer?

Supplements the (A) case.

Supplements the (A) case.

David Langstaff, the CEO of Veridian, a defense company, struggles with the decision of selling the company. Langstaff has concerned himself with inculcalating his organization with the values necessary for superior achievement over the long term. But as a fiduciary, he had to come up with a single value to monetize the reputation the company had built. Langstaff wondered what was best for the firm and its customers and what his other options were. He also was concerned with how the prospect of selling the firm would square with Veridian's commitment to its constituencies and values-based leadership.

In 2001, Libby Sartain, chief people officer, arrived at Yahoo! to find a demoralized Internet company without a well-defined culture, a coordinated method to communicate with employees, or developed processes, policies, and procedures. In Sartain's first year at Yahoo!, the company was sent reeling by the collapse of the dot-com bubble. For the first time in its history as a public company, Yahoo! was forced to lay off a substantial part of its workforce. Predictably, morale at Yahoo! was shaken. There was also uncertainty at the senior executive level. Many of the company's top officers departed during the turmoil, leaving the newly installed chairman and CEO, Terry Semel, with an incomplete executive team. Moreover, Semel had yet to articulate his vision and strategy for the company, and the economic landscape was deteriorating. Almost three years had passed since Sartain's arrival, and the company overcome some crucial challenges. For the moment at least, it seemed the worst was over. Sartain had been working hard at launching an internal branding campaign at Yahoo! to transform the company's start-up culture into a more traditional one.

As Paul Kennedy sits in Cleveland's endless morning traffic, his thoughts are going in all sorts of directions, even if he's not. He's worried about his wife, who may be coming down with a cold right before their wedding anniversary. He's worried about the pitching and fielding assignments he'll have to make for tonight's Little League game. He's worried about the health of his boss, Larry, who recently had a heart attack. He's worried about his associate, Lisa, whose mother is ill and whose work is slipping. He's worried about the Cleveland Browns. He's excited too, though, about his plans to expand Daner Associates into Europe and the reorganization he's recommending, which would take a load off Larry by ceding day-to-day operations of the "new media" company to a new CEO--probably Paul, from all the hints he's heard. "I could swear Larry's been doing the nudge-nudge, wink-wink in my direction," Paul says to himself. And why not? He's been there for 10 years; he knows every facet of the operation. Customers, vendors, and employees love him. But when he meets with his boss that afternoon, Paul is in for a rude shock. Larry is considering hard-nosed George for the top slot and Paul for the No. 2 role. Paul has many of the right ingredients to be CEO, Larry explains, but he's got to get tougher. "What does that mean?" Paul thinks indignantly, back in traffic, on the way home that night. "Become an absolute jerk like George?" What can Paul do to show he's CEO material? In R0602A and R0602Z, four experts--Google CEO Eric Schmidt, author Stephen R. Covey, AVL North America CEO Don Manvel, and executive coach Maggie Craddock--comment on this fictional case study.

After Disney's Michael Eisner, Miramax's Harvey Weinstein, and Hewlett-Packard's Carly Fiorina fell from their heights of power, the business media quickly proclaimed that the reign of abrasive, intimidating leaders was over. However, it's premature to proclaim their extinction. Many great intimidators have done fine for a long time and continue to thrive. Their modus operandi runs counter to a lot of preconceptions about what it takes to be a good leader. They're rough, loud, and in your face. Their tactics include invading others' personal space, staging tantrums, keeping people guessing, and possessing an indisputable command of facts. But make no mistake--great intimidators are not your typical bullies. They're driven by vision, not by sheer ego or malice. Beneath their tough exteriors and sharp edges are some genuine, deep insights into human motivation and organizational behavior. Indeed, these leaders possess political intelligence, which can make the difference between paralysis and successful organizational change. Like socially intelligent leaders, politically intelligent leaders are adept at sizing up others, but they notice different things. Those with social intelligence assess people's strengths and figure out how to leverage them; those with political intelligence exploit people's weaknesses and insecurities. Despite all the obvious drawbacks of working under them, great intimidators often attract the best and brightest. In the author's research, some individuals reported having positive relationships with intimidating leaders--some being profoundly educational and transformational. So before we dispose of the great intimidators, we should stop to consider what we would lose.

Leaders make decisions every day of their lives, but how they do it changes dramatically over the course of their careers. At lower levels, the job is to get widgets out the door; action is at a premium. At higher levels, the job involves decisions about which widgets to offer and how to develop them. To climb the corporate ladder and be effective in new roles, managers need to change the way they use information and evaluate options. Based on a study of the decision-making profiles of more than 120,000 executives, the authors found that people make decisions very differently in public than they do in private and that the decision styles of successful managers evolve in highly predictable patterns. The most successful managers and executives become increasingly open and interactive in their leadership (or public) styles, and more analytic in their thinking (or private) styles, as they progress in their careers. The research shows that decision-making profiles do a complete flip over the course of a career; that is, the decision profile of a successful CEO is the opposite of a successful first-line supervisor's. When does the major change in focus occur? Executives find that somewhere between the manager level and the director level, formerly effective decision styles no longer work so well. At this point, decision styles fall into a "convergence zone," where managers use all styles more or less equally. From then on, the executives continue to evolve their styles. The most successful managers come to the convergence zone quickly and continue to adjust their styles as their careers progress. Low performers seem to stagnate once they hit the convergence zone; their styles do not evolve in new directions. Clearly, relying on past successes and habits is no guarantee of success--indeed, it may be the road to failure.

As Paul Kennedy sits in Cleveland's endless morning traffic, his thoughts are going in all sorts of directions, even if he's not. He's worried about his wife, who may be coming down with a cold right before their wedding anniversary. He's worried about the pitching and fielding assignments he'll have to make for tonight's Little League game. He's worried about the health of his boss, Larry, who recently had a heart attack. He's worried about his associate, Lisa, whose mother is ill and whose work is slipping. He's worried about the Cleveland Browns. He's excited too, though, about his plans to expand Daner Associates into Europe and the reorganization he's recommending, which would take a load off Larry by ceding day-to-day operations of the "new media" company to a new CEO--probably Paul, from all the hints he's heard. "I could swear Larry's been doing the nudge-nudge, wink-wink in my direction," Paul says to himself. And why not? He's been there for 10 years; he knows every facet of the operation. Customers, vendors, and employees love him. But when he meets with his boss that afternoon, Paul is in for a rude shock. Larry is considering hard-nosed George for the top slot and Paul for the No. 2 role. Paul has many of the right ingredients to be CEO, Larry explains, but he's got to get tougher. "What does that mean?" Paul thinks indignantly, back in traffic, on the way home that night. "Become an absolute jerk like George?" What can Paul do to show he's CEO material? In R0602A and R0602Z, four experts--Google CEO Eric Schmidt, author Stephen R. Covey, AVL North America CEO Don Manvel, and executive coach Maggie Craddock--comment on this fictional case study.

As Paul Kennedy sits in Cleveland's endless morning traffic, his thoughts are going in all sorts of directions, even if he's not. He's worried about his wife, who may be coming down with a cold right before their wedding anniversary. He's worried about the pitching and fielding assignments he'll have to make for tonight's Little League game. He's worried about the health of his boss, Larry, who recently had a heart attack. He's worried about his associate, Lisa, whose mother is ill and whose work is slipping. He's worried about the Cleveland Browns. He's excited too, though, about his plans to expand Daner Associates into Europe and the reorganization he's recommending, which would take a load off Larry by ceding day-to-day operations of the "new media" company to a new CEO--probably Paul, from all the hints he's heard. "I could swear Larry's been doing the nudge-nudge, wink-wink in my direction," Paul says to himself. And why not? He's been there for 10 years; he knows every facet of the operation. Customers, vendors, and employees love him. But when he meets with his boss that afternoon, Paul is in for a rude shock. Larry is considering hard-nosed George for the top slot and Paul for the No. 2 role. Paul has many of the right ingredients to be CEO, Larry explains, but he's got to get tougher. "What does that mean?" Paul thinks indignantly, back in traffic, on the way home that night. "Become an absolute jerk like George?" What can Paul do to show he's CEO material? In R0602A and R0602Z, four experts--Google CEO Eric Schmidt, author Stephen R. Covey, AVL North America CEO Don Manvel, and executive coach Maggie Craddock--comment on this fictional case study.

Identifies stages in the development of corporate citizenship in large organizations. Drawing on a combination of U.S. and global executive surveys, a longitudinal study of 10 companies advancing their citizenship agendas, and several case studies, this article posits that a series of challenges that firms encounter determines the pace of development of citizenship. Describes these evolutionary stages and circumstances that trigger movement and illustrates characteristic company attitudes and practices at each stage. Concludes by examining the institutional, environmental, and organizational factors that shape and constrain the development of corporate citizenship within firms.

A $385 million loss for the final months of fiscal year 1994 signaled Continental might go bankrupt. Could new CEO Gordon Bethune turn Continental around? Continental was in dire straits because the deregulation of the commercial airline industry in 1978 ushered in a new era focused on mergers and acquisitions and bitter employee-management relations. Venerable airline brands with a commitment to quality, like Continental, were prime takeover targets. After Texas Air Chairman Frank Lorenzo (HBS 1963) secured Continental in his hostile takeover bid, tensions escalated between Lorenzo and the old guard--especially when Lorenzo declared Continental bankrupt in the fall of 1983 and then fired and replaced half his staff with cheaper nonunion labor. In October 1994, five months after Continental exited its second bankruptcy, Bethune was elevated to CEO and created a Go Forward Plan to return Continental to profitability. Two years after unveiling the Go Forward Plan, Continental was at the top of the industry in a number of important performance metrics.

Under Jack Rivkin's leadership, Shearson Lehman's research department rose from relative obscurity to the highest ranking research department on Wall Street within three years. When Rivkin is promoted to head of equity, he wonders how to succeed in his new position.

Supplements the (A) case, 906034.