Articles

Some companies are implementing interorganizational information systems (IOSs) with trading partners that allow them to share data and software across organizational boundaries. The authors explore the effect of IOSs on cash management from a managerial perspective and present a case study of Motorola and Citibank. Motorola's strategy has evolved from an internal cost saving initiative to a supply chain focus yielding significant strategic benefits. Cooperation between Motorola, its suppliers, and Citibank has brought cash flows in line with product flows. Motorola and Citibank have effectively meshed parts of their organizations and information systems together to provide a mechanism for the seamless collection and disbursement of cash payments between Motorola companies and their suppliers. The key results are just-in-time money and the integration of financial processes throughout the cash supply chain. Finally, the authors compare the results with existing management/information systems theories on globalization and competition.

How can a board of directors be strengthened so that it can more effectively evaluate a company's performance, assess its management, and act to change the course of a corporation? The authors suggest eleven steps to reform a board's character and fortify its monitoring function. Among them are composing a completely independent board, with no company employees except for the CEO; establishing a lead director; aligning management's and directors' compensation with shareholders' interests; and strengthening the audit committee.

In traditional theories of how information technology (IT) is applied, a firm develops a business strategy, then chooses the structure and management process, aligns IT, and ensures that employees are trained and their roles are well designed. The authors describe and analyze a case in which business transformation occurred along a different, almost reverse, path to fit, through the incremental adoption of IT. At Flower and Samios, a small architectural firm, business strategy emerged gradually and was an outcome, rather than a driver, of change. The case shows how individual mastery, organizational learning, and the management of risk are critical components of a strategic change in which IT becomes an integral part of a firm's core business processes.

Conventional approaches to decision making focus on generating and evaluating alternatives. According to the author, however, alternatives are relevant only as means to achieve values. Values, not alternatives, should be the primary focus of decision making. In this article, he describes "value-focused thinking," which involves clearly defining and structuring your fundamental values in terms of objectives and using these objectives to guide and integrate decision making. He explains techniques for creating better alternatives for your decision problems and for identifying more appealing decision opportunities than those that confront you. These ideas are relevant both to organizational and personal decisions, and they are illustrated by their application at Conflict Management, Inc.

Can a company constantly strive to exceed customers' expectations by providing service that "delights" or "amazes" them? Or is this just another marketing trend that really doesn't ensure that the customer will purchase the service again? Are customers always right, or are there some who may not be profitably worth satisfying? Do customers judge service on the core offering (e.g., the plane flight) or on the supplemental "frills" (e.g., the movie and meal during the flight)? The authors point out that the concept of customer satisfaction is nothing more than good marketing, something companies should have been striving for all along. They poke holes in a number of marketing trends and suggest that, rather than embracing every new fad that comes along, managers should think creatively and choose their own paths to successful marketing.

Why are some information systems that companies have invested millions of dollars in developing never used or avoided by the very people who are intended to use them? In building systems, the company may optimize one part of a process and end up creating less than optimal performance for the process as a whole. The authors argue that companies should approach system building as business process reengineering and ensure that implementability is built in. They present a case study of an expert system for sales reps at a computer company, show why the reps were reluctant to use it, and offer suggestions for how the system could have been redesigned to solve the company's problem.

Restructuring seems to be an unavoidable and inevitable part of doing business today. Too often, companies focus on reducing head count and fail to consider the qualifications and morale of the employees who remain after the restructuring. How can a company restructure and develop a revitalized organization that is positioned for the future and staffed with the best qualified people? The authors explain their strategy-driven approach to restructuring in which people are "redeployed" in a positive way. Their method focuses first on describing and redesigning the work to be done in the new company and only then on the people to do the work.

By strategically outsourcing and emphasizing a company's core competencies, managers can leverage their firm's skills and resources for increased competitiveness. The authors suggest ways to determine what those core competencies are and which activities are better performed externally. They assess the relative costs and risks of "making" or "buying" and present methods for containing risks while enjoying the benefits from their dual approach.

Some of the results of continuous improvement in just-in-time manufacturing and rapid product development have not always been favorable. As the author points out, Japan is suffering from increased traffic due to JIT deliveries, a shortage of blue-collar workers, too many product variations, overly stressed suppliers, and a lack of money for new product development. This situation offers an opportunity to companies in the rest of the world to catch up to the Japanese, modify lean production and product development to create a more balanced approach, and seek competitive advantage in new areas, for example, in more flexible automation, new materials and technologies, innovative product features, and expansion into developing markets.

Manufacturing site location has received limited exposure in strategic planning literature. Approaches often emphasize quantitative data such as transport costs, exchange rates, taxes, labor rates, and other cost-based variables. Yet location decisions based primarily on cost underestimate the importance of qualitative factors that are more likely to provide long-term advantages. This article examines the impact on location of recent trends in the global trading environment, new production systems, and new technologies. These suggest that global corporations of the future will develop a manufacturing network of decentralized plants based in large, sophisticated, regional markets. Each plant will be smaller and more flexible than is typical today. The location of such plants will be based more on regional infrastructure and local skill levels than on purely cost-based factors.