Articles

Simulation tools can help business leaders with strategy and stewardship.

Successful IT specialists work on trustworthiness and good client relationships at the same time.

Loyalty programs must enhance the overall value of the product or service and motivate buyers to make their next purchase.

To retain loyal managers, companies must nurture an apolitical culture that places high priority on meeting career needs.

Three forces are changing the customary rules of distribution channel management: proliferating customers' needs, shifts in the balance of power in channels, and changing strategic priorities. Many firms are outsourcing the distribution function to third parties. Others, using IT, direct marketing, database marketing, and other variations contact customers directly, so the roles of the distributor or dealer are evolving. And some firms are simultaneously experimenting with a number of distribution options before committing to one system. A personal computer, for example, may be available by direct mail or through a computer superstore or a specialty store. Firms are also dealing through specialists rather than generalists, because specialists tend to be more focused and nimble than the manufacturer in a turbulent environment. The authors propose a strategic approach to planning for future channel configurations, control of the channel, and resource commitment. The channel must address customers' needs, ensure that the customer sees the value in the company's offering, be cost-efficient, and handle any new products and services that emerge. Anderson et al. suggest that a company first assess its current distribution channels, each channel's profitability, its market coverage, and the cost of each channel function. Next, a company should choose a channel arrangement based on sound design principles that recognize that the distribution strategy must contribute to the business's overall objectives.

Audit failures rarely result from the deliberate collusion. Instead, auditors may find it psychologically impossible to remain impartial and objective.

Making an explicit link between people’s personal needs and business goals can benefit both the company and its employees.

Electric utility companies will have to reinvent themselves to change from vertical to & #x201C;virtual” integration based on value networks segmented into six areas: generation, transmission, distribution, energy services, power markets, and IT products and services.

Are strategic takeovers more profitable than financial deals, which are usually hostile transactions?

Traditional accounting-based performance measurement systems are unsuited to current organizations in which the relationships with employees, customers, suppliers, and other stakeholders have changed, say these authors. Established measures lack the focus to evaluate intangibles such as service, innovation, employee relations, and flexibility. A stakeholder approach to performance measurement captures strategic planning issues, while the choices a company makes in strategic planning direct the design of the performance measurement system. Atkinson et al. define two groups of stakeholders: environmental (customers, owners, and the community) and process (employees and suppliers). The company exists to serve the objectives of the stakeholders, which become its primary objectives. What the company expects from and gives to each stakeholder group to achieve its primary objectives are its secondary objectives. The company must plan for and negotiate explicit and implicit contracts with stakeholders and evaluate whether the plan meets the expectations of all stakeholders. Employees design, implement, and manage processes to achieve the secondary objectives, expecting the primary objectives to result. Therefore, according to the authors, the company's performance measurement system must evaluate all processes based on their contribution to achieving secondary objectives. In their view, the system, which is the heart of a company's control system, must: 1. Help evaluate whether the company is getting expected contributions from employees and suppliers and returns from customers. 2. Help evaluate whether the company is giving each stakeholder group what it needs to continue to contribute. 3. Guide the design and implementation of processes that contribute to the secondary objectives. 4. Help evaluate the company's planning and implicit and explicit contracts with its stakeholders. Performance measurement has a coordinating role, in which it directs attention to the company's primary and secondary objectives. It has a monitoring role, in which it measures and reports performance in meeting stakeholder requirements. And it has a diagnostic role, in which it promotes understanding of how process performance affects organizational learning and performance. The authors examine the performance measurement system at the Bank of Montreal, whose objective was to maximize long-term return on investment for shareowners. The bank wanted its system to: 1. Focus decision makers on what drives success. 2. Help management understand and communicate to people outside and inside the bank what contributes to primary financial objectives. 3. Diagnose what drives current profitability. 4. Form a basis for performance management. The authors' model is a vital system that includes both financial and nonfinancial measures of performance to help an organization's members understand and evaluate the factors for success.