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Joint ventures are common methods of managing projects that involve different countries. Managers need to consider whether a shared management or dominant parent approach works best for a specific enterprise. Thirty-seven experiences point up the difficulties of working with more than one parent. Dominant parent ventures, those managed by one company like wholly-owned subsidiaries, are more successful than shared management ventures, where both companies contribute functional personnel. Problems often arise in shared situations because managers of international ventures have communication problems and different attitudes regarding: time, the importance of job performance, material wealth, and the desirability of change.

The loan negotiation process between bankers and company managers is not always skewed in the banker's favor. Success depends on negotiating strategy. Managers need to learn to think like the banker and identify the bank's objectives in making the loan, meet those objectives with the least damage to their company's position, order the restrictive covenants by priority so they can give in on one or two without hindering the company's overall objectives, and influence the banker to relax or withdraw noncrucial restrictions.

A corporation can and should have a conscience. Organizational agents such as corporations should be no more and no less morally responsible (rational, self-interested, altruistic) than ordinary persons. The analogy that holds between the individual and the corporation makes it possible to project to corporations the concept of moral responsibility as it applies to persons.

A survey of 345 Fortune "1000" industrial companies in 1979 shows that portfolio planning is becoming a popular method for managing the diversity of businesses within large organizations. Despite the described limitations of portfolio planning, most of the companies find portfolio planning worth pursuing because it helps them focus on the unique contribution each subsidiary makes to the business of the corporation.

The capital asset pricing model (CAPM) is a theoretical representation of the way financial markets behave. It can be used to estimate a company's cost of equity capital in investment management decisions. Managers can also use CAPM to calculate divisional hurdle rates and risks of acquisitions. CAPM is based on specialized assumptions including frictionless markets without imperfections, such as transaction costs, taxes and restrictions on borrowing and short selling. It requires limiting assumptions concerning the statistical nature of securities' returns and investors' preferences, and it assumes investors' agreements on likely performance and risk of securities.

A set of twelve questions provides executives with a framework to test pragmatically the ethical content of business decisions. The inquiry draws on traditional philosophical frameworks while avoiding the utopian and anticapitalistic bias prevalent in current applied business philosophy. The ethical inquiry method articulates corporate responsibilities and lays them open for examination.

Consistently high profits have led to complacency and resistance to change throughout the commercial banking industry. The banking industry faces a new era of deregulation, technological change, and new competition that extends across industry lines and geographic boundaries and within the industry itself. In the coming decade, profitability, and in some cases survival, will depend on bank management's attention to measurements of competition and performance in six distinct areas: innovation; cost accounting and pricing; management of interest risk; people management; marketing; and planning and strategy formulation.

Factors that potential owners should evaluate prior to starting a new venture include: type of business, yearly income, and balance sheet net worth; potential market size; the advantages of multiple-product businesses over one-product businesses; the superiority of repeat sale products to single-sale products; the avoidance of elementary and unfashionable products; the intensity of initial capital outlay; pricing in relation to gross profits; the existing market's profit structure; division of stock ownership; and future prospects of the venture's price earnings relationship.

A study of 26 large nonunion companies suggests nine factors that improve employee relations and aid productivity: strong management concern for employees; consideration to plant location and size; close ties between ownership and management; employment security; promotion from within; centralized, influential personnel departments; competitive pay and benefits; solicitation of employee viewpoints; and the conscientious selection of managers. The attractive work environment created by the corporations studied results in a high degree of employee loyalty, a low rate of turnover and absenteeism, and a low degree of worker resistance to technological change.

Managers avoid information system (IS) failure by determining the risk of their projects, singly and as a portfolio, in advance of implementation. Elements of risk include project size, experience with technology, and project structure. Companies should use risk assessment questionnaires to highlight risks and to suggest alternative ways of conceiving and managing the project. A periodic review of the questionnaire reveals major changes. During the feasibility study stage, it is also useful to consider the issues that influence the risk profile of project portfolios. The risk profile includes projects that come from outside software houses as well as those of internal systems development groups.

Sixty years of executive attention to human resource management (HRM) theories fail to make employees productive, loyal, and motivated because of unrealistic management expectations, contradictory theories regarding employee performance and relations, the problematic role of personnel management in corporate decision making, and the undermining nature of management assumptions regarding employee motivation. A new approach to human resources planning depends on management's ability to replace mistaken assumptions with premises that emphasize the importance of the personnel function in corporate development, and concentrate on basic HRM skills such as supervision and communication.

Contrary to popular opinion, the secret of Japanese manufacturing success lies not in the use of futuristic techniques but in an emphasis on manufacturing basics. First-hand observation of six Japanese companies reveals that the Japanese direct special attention to several areas: maintenance of an orderly workspace, minimization of inventory, solution of problems before they reach the plant floor, prevention of machine overload, the use of comprehensive equipment monitoring and early warning systems, and creation of a no-crisis atmosphere. Japanese managers achieve high quality by regarding all problems as important. McKinsey Award Winner.

Cost pressures and the need for increased flexibility in marketing programs give rise to new communications approaches that include national account management, demonstration centers, telemarketing, and improved forms of catalog selling. The four major steps for developing an effective program include careful analysis of communications costs, precise specification of communications needs, formulation of a creative and coherent program, and meticulous monitoring of the total system.

Resource poverty distinguishes the management of small businesses from that of big businesses. An examination of fundamental financial concepts, such as cash flow, break-even analysis, return on investment, and debt-equity ratio demonstrates how small businesses adapt these financial management tools to their particular situation. An emphasis on liquidity, rather than profit, helps small businesses overcome the problems of strained financial resources, lack of trained personnel, and short-range management perspective imposed by a volatile competitive environment.

Rather than distinguishing between the marketing of services or goods, it is more useful to identify companies according to whether they sell intangibles such as travel or tangibles such as automobiles. Companies that sell tangibles emphasize intangible benefits, including status and comfort, to enhance their products. Tangibilizing intangible products presents more difficulties because of their people-intensive production and delivery which increase the chances for personal discretion and error.

Corporate financial officers (CFOs) who successfully second-guess stock market analysts observe three requirements: they avoid the trap of equating a low price-earnings multiple with evidence of undervaluation; they monitor the leading analysts' perceptions for significant variations from company forecasts; and they translate these forecasts into estimates of economic value. The recommended dividend valuation model uses as its basis a company's fundamental detriments of value, including its prospects for profitability and its long-run investment opportunities. While companies can profit by outguessing the market, corporate management should assume the correctness of market prices unless disproven by the CFO's thorough, fundamental valuation.

Earnings per share, return on investment, return on equity, and other conventional accounting-oriented approaches for evaluating corporate strategy fail to answer basic questions regarding the creation of shareholder value. With discounted cash flow analysis as a basis, the recommended shareholder value approach uses readily available data to determine the value-creating prospects for alternative strategies at the business unit and corporate levels. A case example illustrates the sequential steps of the shareholder value approach.

A dangerous and self-defeating pattern develops when managers hold three simple assumptions that, in combination, prevent the formation of trust: important issues naturally fall into two opposing camps, exemplified by either/or thinking; hard data and facts are better than what appear to be soft ideas and speculation; and the world is a dangerous place requiring a person to adopt a position of pervasive mistrust to survive.

An analysis of more than 1,200 businesses participating in the Profit Impact on Market Strategies (PIMS) program shows that gains in market share relate to product quality improvements, new product introductions, and marketing budget increases. Successful strategic approaches for strengthening market share usually involve a balanced, consistent marketing program or a mix of several competitive factors.

To many business people and public officials in the West, the postwar success of the Japanese economy is both an impressive and a puzzling achievement. The success is obvious and measurable; the reasons for it, far less so. Seeking explanations, Western observers often fasten with wide-eyed enthusiasm on the mysterious workings of "Japan, Inc.," that fabled edifice of business-government cooperation. To it they ascribe a continuous application of single-minded energy; from it they expect a continual flow of industrial miracles. In this article, Peter Drucker, long recognized as an authority on Japanese business, takes pointed issue with this familiar myth. No such thing exists, he argues, at least not in the form commonly attributed to it. The accomplishments of Japanese industry are the result not of some all-powerful structure but of Japan's having defined more ably than any other industrial nation some of the essential rules for managing complex organizations in the modern world.