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The organizational world is awash with talk of corporate culture--and for good reason. Culture has become a powerful way to hold a company together against the recent tidal wave of pressures for disintegration, such as decentralization and downsizing. But what is culture? Perhaps more important, is there one right culture for every organization? And if the answer is no, how can a manager change an organization's culture? Addressing those three questions, Rob Goffee and Gareth Jones begin the article with the assertion that culture is community. Moreover, they contend, because business communities are no different from communities outside the commercial arena--such as families, schools, clubs, and villages--they can (and should) be viewed through the lens of sociology.

Manufacturers and retailers traditionally have seen each other as adversaries, but the benifits generated by trusting relationships between such old foes as Procter & Gamble Co. and Wal-Mart Stores show that fear and intimidation may not be the most effective way for manufacturers and retailers to deal with each other after all. Studies of manufacturer-retailer relationships in a variety of industries reveal that exploiting power has three major drawbacks: it can come back to haunt a company if the balance of power changes; victims will ultimately seek ways to resist such exploitation; and working as partners allows retailers and manufacturers to provide customers with greater value than they can when they try to exploit each other. Moving a relationship from the power game to the trust game is difficult, requiring a change in culture, management systems, and attitudes. But the success of organizations such as Marks & Spencer, Kraft, and E.J. Ekornes all testify to the benefits of making the effort. In rapidly changing environments, success will go to those who learn to make the leap of faith.

Is interactivity the greatest marketing opportunity of all time? Or does it represent 101 ways to lose money? If it is an opportunity, how will it manifest itself? What will interactive marketing look like, and what will it mean for customers and for companies? Those were some of the questions explored in May 1996 at the Harvard Business School Conference on the Future of Interactive Marketing. HBR's Perspectives, introduced by conference chairman John Deighton, capture some of the highlights of the discussions. Commentator Martin Levin of Microsoft Corp., for example, stresses the importance of making sure a company's use of the Web is appropriate; Patrick Barwise of London Business School discusses security issues; Stephen Haeckel of IBM's Advanced Business Institute notes that surprises are fundamental to progress in exploiting interactive technology; Richard Tedlow of the Harvard Business School takes a skeptical stance with regard to the often dazzling claims made for high-tech interactivity. Eight other commentators from the busness world, academia, and government also offer insights.

The U.S. economy has been on the upswing for more than four years. Inflation is low, corporate profits are up, and the stock market has risen beyond anyone's dreams. Such changes are the by-product of the wrenching restructuring undergone by corporate America over the past decade--changes that indicate an apparent leap in productivity. But the picture may not be so rosy, warns Stephen B. Roach, chief economist of Morgan Stanley. The boost in productivity in recent years has been achieved by cost cutting, in particular, downsizing. And cost cutting does not produce real long-term gains in productivity. Rather, it leads to onetime increases in efficiency, as the surviving members of a workforce generate more output. Roach calls for a new productivity agenda in the United States. Public and private investment in education and technological innovation are essential. But corporate America must also swallow its medicine by rebuilding capacity and hiring new workers. A continued fixation on downsizing will wipe out opportunities for growth.

Something about management looks so easy that we all think we could succeed where others fail. But management is really not easy. Managers are expected to show skill in finance, product development, marketing, manufacturing, technology, and more. It's no wonder that most managers seem to underperform. Nevertheless, there are a few around who exemplify what it takes to achieve greatness. They aren't the usual suspects we read about. They include the managers many of us know personally. They include the generations of Rosenbluths at Rosenbluth Travel, who demonstrated the indispensable quality of imagination in reinventing their business again and again. They include Bill Sells of Johns-Manville, who personified integrity in the way he applied to its fiberglass business the harsh lessons of his company's experience with asbestos. They include Ralph Stayer of Johnsonville Sausage, whose determination to overcome his own need for complete control helped make him great. And they include the courageous George Cattabiani of Westinghouse Steam Turbine Divison, who threw himself into the lions' den of a hostile labor union and came out with, if not pussycats, at least partners.

Today's dynamic markets and technologies have called into question the sustainability of competitive advantage. Under pressure to improve productivity, quality, and speed, managers have embraced tools such as TQM, benchmarking, and reengineering. Dramatic operational improvements have resulted, but rarely have these gains translated into sustainable profitability. And gradually, the tools have taken the place of strategy. As managers push to improve on all fronts, they move further away from viable competitive positions. Michael Porter argues that operational effectiveness, although necessary to superior performance, is not sufficient, because its techniques are easy to imitate. In contrast, the essence of strategy is choosing a unique and valuable position rooted in systems of activities that are much more difficult to match.

How do you deal with the talented manager whose perfectionism paralyzes his direct reports? Or the high-performing expert who disdains teamwork under any circumstances? What about the sensitive manager who avoids confrontation of any kind? Do you ignore the behaviors? Get rid of the managers? James Waldroop and Timothy Butler suggest that you coach them. They have found that coaching--helping change the behaviors that threaten to derail a valued manager--is often the best way to help that manager succeed. Executives increasingly recognize that it is people management skills that are the key both to their personal success and to the success of their business. And being an effective coach is a crucial part of successful people management.

This is an MIT Sloan Management Review article. Why do so many organizations fail to learn? According to the author, such failures may be caused not by resistance to change, human nature, or poor leadership, but by the lack of communication among three cultures: operating, engineering, and executive. The culture of operators is based on human interaction. Operators may use their learning ability to thwart management's efforts to improve productivity. The engineering culture represents the design elements of the technology underlying the organization and how the technology is to be used. The executive culture revolves around maintaining an organization's financial health and deals with boards, investors, and capital markets. According to the author, when organizations attempt to redesign or reinvent themselves, the cultures collide and failure occurs. Executives and engineers are task focused and assume that people are the problem. Executives band together and depersonalize their employees. Executives and engineers can't agree on how to make organizations work better while keeping costs down. Each culture must learn how to learn and to analyze its own culture. Then enough mutual understanding must be created among the cultures to evolve solutions that all groups can commit to.

This is an MIT Sloan Management Review article. Provides an overview of the future role of the IT organization, examining the business and technological changes that effect change in many IT units. The four major process changes in the way firms operate all have a major impact on the IT unit: reengineering operational processes, reengineering support processes, rethinking managerial information flows, and redesigning network processes. A distributed computing environment, new development software methods, capabilities like the Internet and other networks, new entrants in the computer industry, and outsourcing are the technological changes affecting the IT organization. The authors cite eight imperatives in which IT organizations must excel to succeed: achieve two-way strategic alignment; develop effective relationships with line management; deliver and implement new systems; build and manage infrastructure; reskill the IT organization; manage vendor partnerships; build high performance; and redesign and manage the federal IT organization.

Presents the results of a national survey of environmental manufacturing practices. Efforts by firms to improve manufacturing processes and increase productivity create substantial opportunities for environmental improvement. The adoption of advanced manufacturing process innovations provides incentives for the adoption of environmentally conscious manufacturing strategies. Close relationships across the production chain, between end-users and suppliers in particular, facilitate the adoption of this related bundle of environmental and industrial innovations. Firms and plants that are R&D-intensive and manufacturing innovators possess the capacity to both improve productivity and reduce environmental costs and risks.

Although many firms enter strategic alliances with specific learning objectives, these objectives are often not realized. Drawing on a study of North American-Japanese joint ventures, this article analyzes the question of why some firms are more effective than others at exploiting alliance learning opportunities and develops a framework for alliance learning. The framework incorporates knowledge management processes--a set of organizational actions that establish the basis for accessing and exploiting alliance knowledge--and facilitating factors--the conditions that promote a favorable climate for effective alliance knowledge management. The primary obstacle to successfully learning from alliances is a failure to execute the specific organizational processes necessary to access, assimilate, and disseminate alliance knowledge.

The quality of both strategic thinking and action rely, in important ways, on the quality of the strategic conversations underway at all levels in the organization. The design of these conversations is the defining contribution of the strategy-making process. When these strategic conversations about the design of the future operate successfully at both local and organizational levels, they create a "meta-capability" for strategy-making capable of both furthering intended strategy and for recognizing opportunities for emergent strategy.

The nonprofit performing arts industry in America, along with many performing arts organizations around the world, are facing crises on a variety of fronts. Accordingly, arts organizations must learn new ways to attract the resources they need to sustain their mission and quality. Arts managers must improve their skills in increasing and broadening their audience base, improving accessibility to various art forms, and learning how to better meet the needs of specific audience segments and contributors. To accomplish this, they must develop a better understanding of their own business and of the interests, attitudes, and motivations of their customers. They must professionalize their marketing and management skills and learn to be accountable to all their publics: their artists, their funders, and their audiences. Then they can create offerings, services, and messages to which the target audience will enthusiastically respond, without compromising their artistic integrity.

The Balanced Scorecard was developed to measure both current operating performance and the drivers of future performance. Many managers believe they are using a Balanced Scorecard when they supplement traditional financial measures with generic, non-financial measures about customers, processes, and employees. But the best Balanced Scorecards are more than ad hoc collections of financial and non-financial measures. The objectives and measures on a Balanced Scorecard should be derived from the business unit's strategy. A scorecard should contain outcome measures and the performance drivers of those outcomes, linked together in cause-and-effect relationships.

"Create shareholder value" has become management's mantra. Managers have developed an extensive set of tools for determining which parts of their businesses add to or subtract from shareholder value. Unfortunately, merely applying the tools of value-based analysis does not suffice to add shareholder value; these tools focus on financial management and what top managers do, whereas value creation results from actions by individuals and groups throughout the firm. A comprehensive value-based management (VBM) system must engage, motivate, and reward people throughout the organization who create shareholder value. The system offered here targets five stages of development: value-based analysis; management of commitment and stretch targets; VBM training and open-book management; employee empowerment and task-focused training; and sharing the value. The VBM system continues with dialogue among top managers about where stretch goals should be focused in the future and the involvement of all employees in determining the best means to achieve those goals. Equally important is an ongoing commitment to training in VBM and the tasks that derive from it. VBM cannot create a strategic vision for a company. But when it is focused on creating both economic value and enhanced customer value, and is an integral part of the culture, the firm maximizes its future prospects.

Companies that enjoy enduring success have a core purpose and core values that remain fixed while their strategies and practices endlessly adapt to a changing world. The rare ability to balance continuity and change--requiring a consciously practiced discipline--is closely linked to the ability to develop a vision. Vision provides guidance about what to preserve and what to change. A new prescriptive framework adds clarity and rigor to the vague and fuzzy vision concepts at large today. Managers who master a discovery process to identify core ideology can link their vision statements to the fundamental dynamic that motivates truly visionary companies--that is, the dynamic of preserving the core and stimulating progress.

What should managers working abroad do when they encounter business practices that seem unethical? Should they, in the spirit of cultural relativism, tell themselves to do in Rome as the Romans do? Or should they take an absolutist approach, using the ethical standards they use at home no matter where they are? Many business practices are neither black nor white but exist in a gray zone, a moral free space through which managers must navigate. Levi Strauss and Motorola have helped managers by treating company values as absolutes and insisting that suppliers and customers do the same. And, perhaps even more important, both companies have developed detailed codes of conduct that provide clear direction on ethical behavior but also leave room for managers to use the moral imagination that will allow them to resolve ethical tensions responsibly and creatively.

Thousands of businesses have reengineered work to focus employees on processes that clearly provide value to customers. They have done away with their functional silos and created process-complete departments, each able to perform all the cross-functional tasks required to meet customers' needs. Although many of those efforts have paid off in the form of lower costs, shorter cycle times, and greater customer satisfaction, many others have resulted in disappointment. What went wrong? In a study of U.S. electronics manufacturers, the authors found that process-complete departments had faster cycle times than functional departments only when their managers had used one or more of four ways to cultivate collective responsibility: structuring jobs with overlapping responsibilities, basing rewards on unit performance, laying out the work area so that people can see one another's work, and designing procedures so that employees with different jobs are better able to collaborate.

Product recalls can destroy brands and even companies. But according to the authors, if a company handles recalls strategically, it can decrease the negative impact and maybe even reap some benefits. The authors maintain that a strategic approach to recalls should address the implications of a recall for all relevant business functions and should deal with all stages of a recall, from readiness before the fact to product reintroduction after a recall has ended. The authors offer step-by-step guidelines on handling recalls effectively. With forethought and planning, the authors assert, unavoidable recalls can have long-term favorable outcomes.

Many companies today are searching for growth. But how and where should they look? Breaking compromises can be a powerful organizing principle. Even in the most mature businesses, compromise breakers have emerged from the pack to achieve breakaway growth--far outpacing the rest of their industry. Examples include Chrysler Corp., Contadina, CarMax, and the Charles Schwab Corp. Compromises are concessions customers are forced to make. Unlike trade-offs, which are the legitimate choices customers make between different product or service offerings, compromises are imposed. The authors propose a number of alternative approaches to finding the compromises hidden in any business.