Articles

In a global economy, managers constantly negotiate with people from other cultures, whether the issue is coordinating operations within a multinational firm, arranging a joint venture, or convincing a foreign government to approve construction of a plant. Yet managers have had to rely on simplistic formulas -- following lists of "dos and don'ts" -- or very demanding ones -- "doing as the Romans do" -- to deal with the cultural aspects of these negotiations. Actually, a number of strategies are available. The author presents these strategies in a framework based on the parties' level of familiarity with each other's cultures and the extent to which they can explicitly coordinate their strategies. These factors determine the subset of strategies that are realistically feasible for an individual manager. Part 2 of this article, which describes a methodology for choosing among these strategies, appeared in the Spring 1994 issue.

Which model for the labor-intensive production of standardized products -- the Japanese production model represented by NUMMI or the holistic alternative represented by Uddevalla -- is really the best organizational design to support learning? The author revisits Paul Adler and Robert Cole's article from the Spring 1993 issue of Sloan Management Review and presents his own side of the debate. Adler and Cole's rejoinder appears at the end of the article.

Organizational performance is increasingly tied to intangible assets such as corporate culture, customer relationships, and brand equity. Yet controllers, who monitor and track firm performance, traditionally concentrate on tangible, balance-sheet assets such as cash, plants and equipment, and inventory. The authors argue that controllers can have an important role in tracking and analyzing off-balance-sheet resources. Here they envision this new role and its place in the organization.

Corporate banks are ideally suited for the new financial environment in which trade barriers will fall and national financial markets will open to capital transfers, borrowing, and investment. The author discusses the history of corporate banks, their structure, their functions, their links with subsidiaries, performance assessment, and the benefits and risks of setting up a corporate bank.

Firms in many industries are being squeezed by customer demands for both greater product variety and reduced delivery lead times. This is difficult for firms to achieve because quick delivery is usually based on standardization, whereas product variety requires the organization to be flexible and innovative. A common response to these demands is to start production of expensive, specialized products prior to receiving specific orders for them. Such a risky approach often can be avoided, the authors argue. They present a framework for determining the extent of your company's "customization-responsiveness squeeze" and choosing appropriate tactics to mitigate it.

Total Quality Management (TQM) is more than a fad or a buzzword, argue the authors. It is even more than a technique for controlling and motivating employees. TQM is a challenge to conventional management techniques and to the theories that underlie them. Therefore it cannot simply be grafted onto existing management structures and systems. If its benefits are to be fully realized, then companies need to prepare themselves for organization-wide change -- including top management's relinquishing of power. Furthermore, TQM practices cannot be combined with strategic initiatives, such as corporate restructuring, that are based on conventional management theories. The failure of one or both programs is inevitable.

To the extent that buyer-supplier relationships can be cooperative, value can be created for both customers and vendors. Regrettably, the traditional behavior of some industries, particularly the U.S. automotive industry, often precludes cooperation. The authors describe one successful case -- the experiences of ABB and the Ford Motor Company during the design and construction of a $300 million facility. The authors explain the key factors that led to ABB's and Ford's success and how value-adding cooperation between buyers and suppliers can be fostered.

Japan has no more rabbits to pull out of the hat -- its automotive production system has matured, and the industry is in decline. So argues the author, who shows how exchange rates, demographics, and the increasing sophistication of U.S. management are causing a shift in relative competitiveness. Furthermore, these changes affect most Japanese industries, and U.S. managers should be prepared to take advantage of them.

Recent developments in computer software have substantially improved the group brainstorming process. The authors describe research showing that electronic brainstorming groups are more productive than groups that use traditional, oral brainstorming -- and participants like the process more. Electronic brainstorming allows widely dispersed groups to interact, reduces problems associated with oral brainstorming, and improves the productivity of larger groups.

Managers have learned that, to exploit the advantages of new process technologies, they must adapt those technologies to fit the organization and its strategy. But exactly how and when to make those changes is not well understood. The authors argue that technological improvement is seldom a steady process but instead alternates between short episodes of intensive change activity and longer periods of routine use. Data from European and U.S. firms show that adaptation to new technologies often occurs in a "lumpy" or episodic pattern. Examination of several leading Japanese organizations reveals a similar pattern, with one important difference: managers in these operations actively exploit the episodic pattern of adaptation around a given technology. Drawing on these observations, the authors suggest that managing the uneven pace of adaptation can yield important benefits to firms pursuing both efficiency and change.