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In this case, presented in the form of two memos, a grocery store prepares for renegotiating a contract with the Grocery Workers International Union. The grocery store wants to discuss issues including high employee turnover rates and problems presented by the store's new service-intensive products. The union has issues involving management trying to sidestep seniority. Carol R. Goldberg, president and COO of the Stop & Shop Companies and CEO of Bradlees Department Stores; Gerald L. Good, president and CEO of Blue Cross and Blue Shield of Virginia; James T. Boyle, business representative of Local 464A, United Food and Commercial Workers International Union; and David Lewin, professor of business and director of the Industrial Relations Research Center, Columbia University Graduate School of Business, discuss how the grocery store and its union can deal with a problematic confrontation.

Entente--the forging of an alliance--goes against the grain with most managers, who have been taught never to share control of a company. But alliances are necessary in a world of rapid globalization. Customer needs and preferences all over the world are converging. Technology is dispersing as well; no one company can keep the relevant technology in-house. As a result, companies face increasing fixed costs, which, in turn, point toward forging alliances.

Executives who become trustees for nonprofit organizations frequently get bogged down in operating details while ignoring issues that could determine the enterprise's success or failure. An administrative model, identifying six policy levels - major, secondary, functional, minor, standard operating procedures, and rules - can guide their interventions. In general, board members should devote their energies to policy levels having the most impact on the organization's future and let the rest of the issues go. They also must attend to the four phases of policy development - establish objectives, formulate a statement, implement, and evaluate. Finally they must recognize that information is their most critical resource.

A company needs reliable information on product costs. But sometimes it's difficult to know if a cost system is failing to deliver. It's time to redesign a cost system when, for instance, manufacturing managers want to drop products that seem to earn the biggest profits. Chances are those items are more troublesome than the cost system reflects. Also, when departments develop their own cost systems, it probably means the old one is no longer working properly. Sometimes changes in a company's product market strategy or competitive environment can render a cost system obsolete. When margins are paper thin, companies need more accurate costs than ever.

Managers who commit their companies to designing more manufacturable products encounter the problem of how to organize their professional staff. How should design and manufacturing engineers be encouraged - or made - to work together? What changes does the team approach to design entail? Here are four organization approaches to designing for manufacture, each with advantages and drawbacks: 1) the manufacturing sign-off approach; 2) the integrator approach; 3) the cross-functional team approach; and 4) the product-process design department. Hybrid approaches may well be better than any individual one.

Collaboration between competitors is in fashion. But the rise of competitive collaboration has triggered unease about its long-term effects. Companies that benefit most from competitive collaboration never forget that their partners may be out to disarm them. They know that harmony is not the most important measure of success; indeed, occasional conflict may be the best evidence of mutually beneficial collaboration. Successful companies also guard against competitive compromise by informing employees at all levels what skills and technologies are off-limits to the partner. Finally, they learn from their partners, viewing each alliance as a window on their partners' broad capabilities.

Forward-looking companies, installing marketing and sales productivity (MSP) systems, are seeing increases of up to 30% in sales and sales force productivity. MSP systems automate routine tasks and gather and interpret data that was either scattered or uncollected before. They not only upgrade sales and marketing efficiency but also improve the timeliness and quality of executives' decision making. Viewed as a corporate strategic investment, companies can exploit the synergies possible from linkages with other parts of the organization.

Too many managers do not understand what it is that makes experts so valuable to their organizations. Experts combine analytical reasoning with intuitive judgment, sharpened by long experience. The result is problem-solving ability that cannot be taught or easily learned. Few organizations are structured to recognize the worth of experts financially or through advancement. Companies should make room in the reward system for honoring expertise.

Women managers cost more to employ than men. Turnover is higher, and they are more apt to plateau or to interrupt their careers. Career primary women are effective managers and serve as beacons for younger women. Career-and-family women are willing to trade ambition for the flexibility to raise their families; their willingness to forgo advancement but still give their best can greatly upgrade middle management. Opportunity, flexibility, and family support are the keys to retaining the best women and eliminating the extra cost of employing them. McKinsey Award Winner.

Startup companies face a difficult tension: they need the best managers, but they lack the resources or financial stability to match the compensation and benefits these managers can get elsewhere. Evaluate compensation and benefits choices from four perspectives. How do they affect cash flow? What are the tax implications? What is the accounting impact? What is the competition doing?

In 1988 Playto Industries' Teach-Her doll, the company's first new product since Jim Clayton became president, was a winner in the East. Clayton planned to take Teach-Her national and to introduce another toy, Playto's Labs. But he needed $30 million--almost as much as the company's existing capitalization--to grow. Monument National Bank would lend no more than $20 million. The best option seemed to be subordinated bonds. Rates were high, but if Playto made the bonds convertible, rates fell from 12.5% to a more manageable 8.75%. Now Clayton has a knot in his stomach: interest coverage might drop to half of that in 1988, a competitor might imitate Teach-Her, Playto's Labs might flop--the company could end up in serious trouble. Five finance experts discuss the case.

The microwave oven was invented in the United States 40 years ago, but it is a Korean company that now produces the most ovens. Samsung's story is told in this article adapted from The Silent War: the Global Battles Shaping America's Future, and it's a lesson on how companies in developing countries are becoming world-class competitors. Dedicated people, company policy that encourages investment in minds as well as technology, and timely opportunity all helped Samsung's rise.

Because technology now develops faster than before, in the future managers will be able to choose the kind of organization they want. New structures, associated with adhocracies, networks, or "cluster organizations," will spring up around old ones. Information technology will enable cluster-type organizations to have the benefits of small scale and large scale simultaneously. Teams will accomplish most work, with leadership shared among members, and workers will be better trained, more autonomous, and more transient. Finally, expert systems will make decision making better understood, and computers will allow control to be exercised separately from reporting relationships.

Today time is a source of competitive advantage. Through new organization practices and design, companies can take time out of operations and provide customers with better products and services and lower costs. Fast-cycle companies: 1) organize as much work as possible around small, self-managing, multifunctional teams; 2) track cycle times for individual activities and for the delivery system as a whole; and 3) build learning loops to inform everyone about customers, competitors, and the company's operations.

When a customer turns combative during a negotiation, it is important to avoid confrontation or compromise. Instead, a salesperson should lure the customer into a search for creative solutions to tough problems. To do this, salespeople should: 1) increase their variables and know their walkaway, because the more options, the greater the chances of success; 2) keep aggressive customers talking and listen for valuable information about the customer's business; 3) pause often and summarize the progress to reassure the customer; 4) assert their own company's needs to prevent making concessions; 5) try to make the customer commit to a full solution that works for both partners; 6) save the hardest issues for last; 7) start high, concede slowly, and know the value of every concession; and 8) avoid giving in to emotional blackmail and always refuse to fight.

Leaders and followers are often the same people, since most managers have both bosses and subordinates. But while companies often nurture leadership skills, they ignore good followership skills. Four steps that can develop good followers are: 1) redefining followership and leadership roles as equal but different activities, 2) teaching the skills that make effective followers, 3) carrying out performance evaluation on the basis of followership capacities, and 4) building organizational structures (like leaderless groups and rotating leadership assignments) that encourage followership.

When the product market changes quickly, companies have to respond fast if they want to preserve their positions. But being fast to market is no advantage if the product isn't right. A better approach is to determine what the entry risks and opportunity costs are, and then use the appropriate strategy plotted on the product development map. For some products, it makes sense to use a step-by-step approach that breaks the development task into smaller, more manageable steps. For others, it may be better to develop a hybrid product. At other times, the best plan is to acquire the needed technology or to exit the market completely.

The plan meeting is where a project becomes real; it is where people make the decision to go forward with an idea or not. Yet managers often overload a plan presentation with unimportant facts or simply supply inadequate information. CEOs want four questions answered before they'll approve a plan: What is the plan? Why is it recommended? What are the goals? How much will it cost? You should be able to answer each of these questions clearly and in a way that can lead to an agreed-on course of action.

In today's competitive environment, strategy means paying painstaking attention to customers' needs: rethinking what your product is; what it does; and how you design, build, and market it. It is also about avoiding competition wherever and whenever possible. The problem of strategy is acute for Japanese companies. The Germans have captured the high-cost, top-of-the-line market, and the Koreans are attacking the low-cost, high-quality, entry-level market. The Japanese answer is to get back to strategy by creating value for customers.

This article explains the concept of market orientation in a new unconventional way. It helps the reader to understand that market orientation is a process with distinct characteristics and much more than "being or getting close to the customer." It stresses data gathering, the nature of the decision making process, and implementation.