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This is an MIT Sloan Management Review article. Commitment and competence are embedded in how each employee thinks about and does his or her work and in how a company organizes to get work done. It is, according to the author, a firm's only appreciable asset. As the need for intellectual capital increases, companies must find ways to ensure that it develops and grows. There are five tools for increasing competence in a firm, site, business, and plant: hire outside, new talent; invest in employee learning and training; hire consultants and form partnerships with suppliers, customers, and vendors to share knowledge, create new knowledge, and bring in new ways to work; remove employees who fail to change, learn, and adapt; and find ways to keep valuable workers. Companies also need to foster employees who are not only competent but committed. Employees with too many demands and not enough resources to cope with those demands quickly burn out, become depressed, and lack commitment. A company can build commitment in three ways: First, reduce demand on employees by prioritizing work, focusing only on critical activities, and streamlining work processes. Second, increase resources by giving employees control over their own work, establishing a vision for the company that creates excitement about work, compensating workers fairly, sharing information on the company's long-range strategy, and providing new technologies, among other things. Third, turn demands into resources by exploring how company policies may erode commitment, ensuring that new managers and workers are clear about expectations, understanding family commitments, and having employees participate in decision making.

Five years short of retirement, Alvarez is an experienced but uneducated mechanic working for a Venezuelan manufacturer of aluminum building products. In the A case, new North American management is concerned about Alvarez's grumbling and egocentric behavior and is pondering the impact of firing him. In the B case (UVA-OB-0661), management decides to fire Alvarez at a high cost. In the C case (UVA-OB-0662), Alvarez dies of a heart attack soon after being fired, adding poignancy to the decision to fire him. This case series provides an excellent opportunity to explore self-concepts, methods of personal mastery, cross-cultural management, and issues of managing personal change.

An updated version of the classic McKinsey "7-S" Model, this note is designed to help MBA students and practicing managers understand the dynamic relationship among an organization's superordinate goals, strategy, structure, systems, style, staff, skills, and shared values, and provides engaging, contemporary examples at each level of analysis. The note expands the classic model to include a fuller discussion of links among the external situation/stakeholders, internal Ss, and various metrics of organizational success. The note challenges students to provide leadership within their area of influence (e.g., to understand and promote corporate strategies in their business unit, function, or geography); to remedy misaligned aspects of the organization; and to foster change that would help the organization realize its superordinate goals, affirm its shared values, and enhance overall performance.

Jeanne Lewis, after six years with Staples, Inc., is promoted to senior vice president of marketing. She is to work for fifteen months alongside her predecessor, a legacy in the organization, "learning the ropes" before he moves on. This case is set nine months after she begins working with the marketing department. Staples has just emerged from a period of prolonged litigation around an FTC antitrust suit challenging Staples' attempted merger with Office Depot. Post-merger, Lewis must determine how the marketing department can most effectively and efficiently help the company maintain its competitive edge in an increasingly competitive and complex market. Looks at the challenges a middle manager faces "taking charge" and managing change in a revitalization situation in which a more evolutionary approach is appropriate.

Supplements the (A) case.

The orchestra conductor is a popular metaphor for managers today--up there on the podium in complete control. But that image may be misleading, says McGill University and INSEAD Professor Henry Mintzberg, who recently spent a day with Bramwell Tovey, conductor of the Winnipeg Symphony Orchestra, in order to explore the metaphor. He found that Tovey does not operate like an absolute ruler but practices instead what Mintzberg calls covert leadership. Covert leadership means managing with a sense of nuances, constraints, and limitations. When a manager like Tovey guides an organization, he leads without seeming to, without his people being fully aware of all that he is doing. That's because in this world of professionals, a leader is not completely powerless--but neither does he have absolute control over others. As knowledge work grows in importance, the way an orchestra conductor really operates may serve as a good model for managers in a wide range of businesses. For example, Mintzberg found that Tovey does a lot more hands-on work than one might expect. More like a first-line supervisor than a hands-off executive, he takes direct and personal charge of what is getting done. In dealing with his musicians, his focus is on inspiring them, not empowering them. Like other professionals, the musicians don't need to be empowered--they're already secure in what they know and can do--but they do need to be infused with energy for the tasks at hand. This is the role of the covert leader: to act quietly and unobtrusively in order to exact not obedience but inspired performance.

This is an MIT Sloan Management Review article. Global business today requires leaders to be like explorers, guiding their organizations through unfamiliar and turbulent environments. With markets, suppliers, competitors, technology, and customers around the world constantly shifting, traditional leadership models no longer work. The authors' three-year study across Europe, North America, and Asia indicates that companies seek more global leaders and desire future global leaders of higher caliber and quality. Research results reveal that every global leader needs certain core qualities: exhibit character, or the capacity to build relationships with people from different backgrounds and to act with high ethical standards; embrace duality, or know when and whether to act and initiate change, depending on country or region; and demonstrate savvy, or recognize worldwide market opportunities and understanding firm capabilities. Inquisitiveness--a sense of adventure and a desire to experience new things--must underlie each of these characteristics. Four strategies are particularly effective in developing global leaders: foreign travel, with immersion in the country's way of life; the formation of teams comprising individuals with diverse backgrounds and perspectives; training that involves classroom and action learning projects; and overseas assignments, which serve to broaden the outlook of future global leaders.

Two HBS MBA's leave McKinsey and Morgan Stanley to become entrepreneurs in Hong Kong. Together they start up a cinema chain throughout Asia. This case describes the experiences of managing a team in their Wuhan, China cinema. Looks at the challenges of managing growth in an entrepreneurial venture in an emerging market; leading a multicultural team; and coping with headquarter-field relationships.

Supplements the (A) case.

Supplements the (A) case.

In this interview with Harvard Business School professor Linda Hill and HBR senior editor Suzy Wetlaufer, Franco Bernabe discusses the six-year period in which he transformed his organization from an unprofitable, politically-controlled collection of operating companies into a lean, competitive, global enterprise. Few CEOs will face crises as disruptive and dramatic as those encountered--and overcome--by Bernabe. In 1992, when Bernabe was appointed CEO of Eni, Italy's large, energy-focused industrial group, his announced goal was to transform the company from a political quagmire into a clean, market-driven business ready for its first public offering. The resistance to his plans was intense, but that wasn't the worst of it. Soon after he took power, an investigation known as Mani Pulite--Clean Hands--led to the arrest of much of Eni's senior management team, including the company's chairman. One of those senior managers even made the false claim--based on hearsay--that Bernabe himself had taken a huge bribe. Simply put, Bernabe's story is not just that of a CEO steering a massive strategic reinvention. It is a story of leadership, and an unlikely one at that. In this interview, it becomes clear how Bernabe survived his tumultuous first months as CEO and then led the company's transformation. To begin with, he was unique in having both an encyclopedic knowledge of Eni's operations and a view of the company's future from 30,000 feet. But perhaps more than anything, Bernabe's power to lead has come from within. He follows, he says, an inner compass pointed toward humanity and justice. In difficult times, Bernabe seeks consultation from others. But ultimately, he makes all important decisions alone so as not to be buffeted by the needs, emotions, or agendas of others. Such solitude, he believes, is one of the burdens--and necessities--of leadership.

In this fictitious case study, HBR editor Regina F. Maruca explores the challenges of managing employees in the alternative workplace. Allison Scher is threatening to quit. Penny Ryan wants to run the team. The manager of these off-site workers, Craig Bedell, feels blindsided by their conflict. And the whole mess has Maggie Pinto, the head of HR, wondering if she should cancel the companywide rollout of the telecommuting program. How did this situation get to the boiling point so quickly? Craig doesn't really know. From his vantage point--inside the office--his department is doing the best work it has ever done before. And the flexible work arrangements, designed on a case-by-case basis, have increased productivity and boosted morale at the same time. Or so Craig believed--until a few days ago, when the E-mail messages started to come. There was trouble between Penny and Allison. How serious was the situation? It was hard to tell. Craig responded with E-mail and voice-mail messages of his own. Couldn't it all be put on hold until Monday, when the team would come together for its biweekly meeting? Then he got the final E-mail from Allison--the one in which she threatened "to seek alternative employment." Is the breakdown in communication irrevocable? Can Craig, who learned how to manage during a time when people showed up at the office every day, adjust to the conditions of telecommuting? Four commentators offer their advice on how the company can patch up the short-term problem and lay the foundation for a successful future. In 98405 and 98405Z, Robert M. Egan, Wendy Miles, John R. Birstler, and Margaret Klayton-Mi offer their advice on how the company can patch up the short-term problem and lay the foundation for a successful future.

In this fictitious case study, HBR editor Regina F. Maruca explores the challenges of managing employees in the alternative workplace. Allison Scher is threatening to quit. Penny Ryan wants to run the team. The manager of these off-site workers, Craig Bedell, feels blindsided by their conflict. And the whole mess has Maggie Pinto, the head of HR, wondering if she should cancel the companywide rollout of the telecommuting program. How did this situation get to the boiling point so quickly? Craig doesn't really know. From his vantage point--inside the office--his department is doing the best work it has ever done before. And the flexible work arrangements, designed on a case-by-case basis, have increased productivity and boosted morale at the same time. Or so Craig believed--until a few days ago, when the E-mail messages started to come. There was trouble between Penny and Allison. How serious was the situation? It was hard to tell. Craig responded with E-mail and voice-mail messages of his own. Couldn't it all be put on hold until Monday, when the team would come together for its biweekly meeting? Then he got the final E-mail from Allison--the one in which she threatened "to seek alternative employment." Is the breakdown in communication irrevocable? Can Craig, who learned how to manage during a time when people showed up at the office every day, adjust to the conditions of telecommuting? In 98405 and 98405Z, Robert M. Egan, Wendy Miles, John R. Birstler, and Margaret Klayton-Mi offer their advice on how the company can patch up the short-term problem and lay the foundation for a successful future.

In this fictitious case study, HBR editor Regina F. Maruca explores the challenges of managing employees in the alternative workplace. Allison Scher is threatening to quit. Penny Ryan wants to run the team. The manager of these off-site workers, Craig Bedell, feels blindsided by their conflict. And the whole mess has Maggie Pinto, the head of HR, wondering if she should cancel the companywide rollout of the telecommuting program. How did this situation get to the boiling point so quickly? Craig doesn't really know. From his vantage point--inside the office--his department is doing the best work it has ever done before. And the flexible work arrangements, designed on a case-by-case basis, have increased productivity and boosted morale at the same time. Or so Craig believed--until a few days ago, when the E-mail messages started to come. There was trouble between Penny and Allison. How serious was the situation? It was hard to tell. Craig responded with E-mail and voice-mail messages of his own. Couldn't it all be put on hold until Monday, when the team would come together for its biweekly meeting? Then he got the final E-mail from Allison--the one in which she threatened "to seek alternative employment." Is the breakdown in communication irrevocable? Can Craig, who learned how to manage during a time when people showed up at the office every day, adjust to the conditions of telecommuting? In 98405 and 98405Z, Robert M. Egan, Wendy Miles, John R. Birstler, and Margaret Klayton-Mi offer their advice on how the company can patch up the short-term problem and lay the foundation for a successful future.

A new science called evolutionary psychology--sometimes called Modern Darwinism because it is based on the theory of natural selection--is drawing widespread support and sparking fierce controversy. The reason: evolutionary psychology asserts that human beings today retain the mentality of our Stone Age ancestors. We are, in other words, "hard wired" for certain attitudes and behaviors. If that is so, what are the implications for managers? In this article, Nigel Nicholson, a professor of organizational behavior at London Business School and dean of the school's Division of Research, explores this provocative question. Of course, evolutionary psychology is still an emerging discipline, and its strong connection with the theory of natural selection has sparked significant controversy. But, as Nicholson suggests, evolutionary psychology is now well established enough that its insights into human instinct will prove illuminating to anyone seeking to understand why people act the way they do in organizational settings. Take gossip. According to evolutionary psychology, our Stone Age ancestors needed this skill to survive the socially unpredictable conditions of the Savannah Plain. Thus, over time, the propensity to gossip became part of our mental programming. Executives trying to eradicate gossip at work might as well try to change their employees' musical tastes. Better to put one's energy into making sure the "rumor mill" avoids dishonesty or unkindness as much as possible. Evolutionary psychology also explores the dynamics of the human group. Clans on the Savannah Plain, for example, appear to have had no more than 150 members. The message for managers? People will likely be most effective in small organizational units. As every executive knows, it pays to be an insightful student of human nature.

This article defines and explains the four essential elements of persuasion. Business today is largely run by teams and populated by authority-averse baby boomers and Generation Xers. That makes persuasion more important than ever as a managerial tool. But contrary to popular belief, author Jay Conger (director of the University of Southern California's Marshall Business School's Leadership Institute) asserts, persuasion is not the same as selling an idea or convincing opponents to see things your way. It is instead a process of learning from others and negotiating a shared solution. To that end, persuasion consists of these essential elements: establishing credibility, framing to find common ground, providing vivid evidence, and connecting emotionally. Credibility grows, the author says, out of two sources: expertise and relationships. The former is a function of product or process knowledge and the latter a history of listening to and working in the best interest of others. But even if a persuader's credibility is high, his position must make sense--even more, it must appeal--to the audience. Therefore, a persuader must frame his position to illuminate its benefits to everyone who will feel its impact. Persuasion then becomes a matter of presenting evidence--but not just ordinary charts and spreadsheets. The author says the most effective persuaders use vivid--even over-the-top--stories, metaphors, and examples to make their positions come alive. Finally, good persuaders have the ability to accurately sense and respond to their audience's emotional state. Sometimes, that means they have to suppress their own emotions; at other times, they must intensify them. Persuasion can be a force for enormous good in an organization, but people must understand it for what it is: an often painstaking process that requires insight, planning, and compromise.

The purchasing officer at the Hillview Hospital in London, Ontario, was reviewing four suppliers' quotes for antiseptic handsoap. He had asked for new quotes after receiving a large number of complaints from hospital staff about sudden problems with the current handsoap. Testing revealed that the current supplier had changed the soap's formulation without informing the hospital.

Why do some employees perform poorly? Most managers would answer this question by ticking off a list that includes weak skills, insufficient experience, inability to prioritize assignments, or sometimes even a lack of motivation. In other words, most managers would contend that poor performance is the employee's fault. But is it? Not always, according to Jean-Francois Manzoni, assistant professor at INSEAD, and Jean-Louis Barsoux, research fellow at INSEAD. Their research with hundreds of executives strongly suggests that it is bosses themselves--albeit accidentally and with the best intentions--who are often responsible for an employee's sub-par achievement. They call this dynamic "The Set-Up-to-Fail Syndrome," and in this provocative look at what makes--and sustains--dysfunctional work relationships, the authors conclude with a detailed description of how to break out of the negative spiral that can drain both individuals and organizations of valuable productive energy.

Describes Morgan Stanley's firmwide, 360-degree performance evaluation process. Evaluation forms are included as exhibits.

Supplements the (A) case.