Articles

It can be good or bad, depending upon what kind it is and in what cultural context it occurs.

Organizations often try to include as many people as possible in the decision-making process, but sometimes it's just not possible to involve anyone beyond a small group. The need for confidentiality and speed are constraints, as is the sheer difficulty of polling an entire organization of thousands of employees regarding decisions that will affect the entire company. Managers or executives must sometimes "download" a decision to their people after the fact -- and this is where many a decision crashes on rocky shoals. Mergers fail as key employees leave and others resist change; union contracts are rejected after months of negotiation; and changes in employee benefits meet with strident protest. What's behind these failures, and what can be done to avert them? The authors lay out reasons for ineffective downloading: a disconnect between the two sides as the negotiating party fails to see the negatives of a decision; a failure to clarify responsibilities that result in rumor and word of mouth being the primary channels of communication; a desire to inform people quickly -- which often means superficially; and a paternalistic desire to protect members of an organization when people would prefer just to hear the truth. Against this record of mistakes and misguided notions, the authors set their four-stage process for a robust decision downloading. Their process is informed by survey research of several hundred employees in a variety of organizations, as well as interviews with dozens of executives.

Many multinational companies attempt to monitor working conditions in suppliers' factories in developing countries through corporate codes of conduct, along with monitoring to determine compliance with these codes. There is considerable debate about the merits of this approach. As part of a larger research project on globalization and labor standards, the authors conducted a comparison of two Mexican garment factories that supply Nike Inc. Both plants (referred to as Plant A and Plant B) received very similar scores on a Nike factory audit, and both manufacture T-shirts for Nike and other companies. Workers in both plants are unionized. However, a closer examination revealed that working conditions in the two factories are in some respects quite different. Compared to workers in Plant B, workers in Plant A earn more per week, report greater job satisfaction and have greater say in workplace decisions. Furthermore, in Plant A overtime is voluntary and kept within Nike workweek limits, but in Plant B both forced overtime and excessive overtime occur. What factors contribute to these differing working conditions? The authors conclude that, while there are a number of differences between the factories, a key variable is the way each plant is managed. Plant A has made the transition to lean manufacturing, and, in the process, workers received training and were empowered to participate in more decisions on the shop floor. Quality, worker productivity and worker salary all increased at Plant A. The authors conclude that global brands could help improve working conditions in supply chain factories by working with suppliers to help them introduce new management systems.

Since the 1980s, the percentage of obese Americans has risen from one-sixth of the population to nearly one-third -- and the problem is particularly acute among children and adolescents, where the obesity rate has tripled in 30 years. While this problem is certainly, in the first instance, one of personal responsibility and self-control, business leaders should be concerned, too -- for at least four reasons. The first reason is simple self-preservation: Food and beverage companies could find themselves in the trial lawyers' crosshairs. The second reason is closely related to the first: The food and beverage industry is the target of the public's increasing ire over portion sizes and unhealthy ingredients. Third, companies will not be able to function efficiently if a significant proportion of their current and future employees suffer from obesity. And finally, opportunity knocks: Companies have the chance to develop new products and create a positive brand image that will fatten the corporate bottom line while simultaneously helping obese Americans shed dangerous pounds. The authors explain how several companies are actively pursuing several strategies to help solve America's other "energy crisis" -- too much consumption and too little movement.

How leading companies use price, speed, quality and flexibility to drive innovation and shareholder value.

The multitrillion-dollar IT industry's status of freedom from liability for consequences of product and service failure is historically unique and extraordinary, argues the author, and it is nearing its end. In a world increasingly dependent on software to run critical systems, including cardiac devices, financial markets and transportation systems, the potential for catastrophic and lethal failures increases. However, in the U.S. and elsewhere, at least where life and limb are not involved, it is technology users, not providers, that are regulated. Technology providers have benefited from a series of inhibiting factors including early legal settlement, corporate users being unwilling to offend their IT providers, and aggressive self-regulation in the industry. Eventually, the author argues, this will not be enough to stem the tide of IT regulation, and IT providers must be prepared for that day.

As companies are increasingly taking on the challenge of global sustainable development, they are forced to rethink the standard business plan based on increasing consumption of products. Drawing from case studies involving Gage Products, PPG Industries Inc. and Xerox Corp., the author shows that some companies are already building their business plans around services and a few key products, and that they are seeing benefits both to the bottom line and in customer retention and acquisition. The author identifies six keys to the new model: building on existing service strengths, redesigning contracts to redefine the basis of profit to create win-win situations when product consumption is reduced and services are improved, communicating the new business plan to current customers, changing sales incentives, acquiring new organizational skills to ensure a better understanding of consumption, and learning to highlight the potential benefits from taking steps to improve the environment.

Coaching increases performance, productivity and job satisfaction at all levels.

For several years now, marketers have been urged to embrace one-to-one marketing and to offer microsegmented consumers customized products and services through targeted outreach. While the "market of one" approach can pay off, says the author, it requires a significant upfront investment, including: implementing customer relationship management software applications; filtering, enhancing and cleaning customer data; and personalizing interactions (e-mail, billing, offers and so on). These activities take time and coordination of multiple parts of the organization (marketing, customer service, sales, information technology), which can be daunting for companies trying to react quickly to a changing environment. In addition, those systems have often produced disappointing results because their use was not well integrated with corporate strategy. Also, micro-marketing strategy, on its own, is too narrow. Companies still need to reach broad groups of people with messages that are not dependent on an individual's decision to open an envelope (whether virtual or physical), pick up the phone or click on a box. But broad-based, broadcast media is ineffective and expensive. Fortunately, there are alternative solutions, such as one-to-one targeting and the broadcasting of 30-second television spots. The author's research on trends in marketing spending and consumer attitudes about advertising reveals four strategies available to companies that want to reach broad groups of people without breaking their marketing budget. The strategies are liberally illustrated with examples of Nike, Microsoft, UBS, Delta, Sony, Procter & Gamble, Citibank, Nextel, Honda, Nokia and McDonald's, among others.

Conventional wisdom has it that most innovations eventually become commodities, bought on the basis of price and nothing else. Citing a quotation by a Columbia Business School professor that epitomizes that point of view -- "In the long run, everything is a toaster" -- the author uses the technological history of toast to persuasively undermine that notion. Drawing on the wisdom of economists Ronald Coase, Paul Samuelson, John Maynard Keynes and Adam Smith, he makes a historical case that commodity is not destiny, and uses brands such as Starbucks, Evian, Dasani, Scott Paper, Yahoo and Google, Hoover and Dyson to illustrate the point. The danger, he says, is that executives, entrepreneurs and investors may buy into the commodity designation far more often than they should, making the commodity ideology a self-fulfilling prophecy. Businesses that believe that today's breakthrough is tomorrow's toaster understandably fear rapidly diminishing returns from their innovation investments, and the economics of "good enough" innovation become good enough. The potential of ideas is inherently undervalued. Sustainable innovation opportunities are either missed or dismissed. Intense price competition, the author argues, may not signal the prolific presence of substitutable commodities but rather an arid absence of innovation. That signal, he says, should give a clear and present incentive for executives and entrepreneurs to innovate in order to differentiate; to identify hidden or untapped potential for new value creation.