Articles

The good word from devoted customers may not always be the most effective promotional tool.

Throughout history, all business, innovation and even cognition have been based on localized cultural context. Pointing to the literature on the cultural antecedents of information and knowledge management (IKM), the authors make the argument that such cultural biases are the very spark of global innovation. They find it curious then that Western analytical assumptions currently dominate IKM research and development. Information and knowledge management models and frameworks that exclude the influence of national and regional culture have seriously undercut their potential effectiveness, particularly in global applications. If history is any guide, say the authors, these cultural influences must be encouraged if powerful new ideas for practical and theoretical IKM are to emerge.

Strategies for mitigating the negative effects of nasty on-the-job encounters.

To conduct business with customers, suppliers, partners and other external parties, companies have three options: arm's-length, socially embedded and virtually embedded ties. Arm's-length ties are connections that exist solely for a particular business transaction. The problem with arm's-length ties is that they have difficulty handling transactions that are uncertain, complex or opportunistic. Embedded ties are connections that overcome the weaknesses of arm's-length ties by inserting the transaction in a supportive context, either social or virtual. With a socially embedded tie, trust, sharing of proprietary information and joint problem solving form the foundation for an economic relationship to minimize the risk of transactions. In a virtually embedded tie, an economic relationship is facilitated and maintained through the use of electronic technologies that help minimize the risk of transactions through increased transparency, widespread information sharing and community-based problem solving. Companies in different environments are likely to benefit from the use of different combinations of those types of connections.

The marketing function has been under increasing pressure to deliver. Its challenge is to see new business opportunities before they become obvious, to lead the market and not be led, to have a proactive vision rather than a copycat mentality. To accomplish that, a ""facts-based"" analysis -- using quantitative data from customer surveys, market studies and other sources -- can help tremendously, but such approaches can sometimes be dysfunctional, leading to endless statistical analyses that obfuscate key points. Companies thus need a broadened approach to marketing research that takes into account conversations with customers, observations from the field and insights from executives, among other alternative sources of valuable information. The author enumerates seven key tasks that marketing must perform within an organization to enable -- not stifle -- innovation.

Recent corporate scandals have made many U.S. boards question the wisdom of combining the chairman and CEO positions. But a knee-jerk decision to adopt the British model of separating the two top jobs without understanding the model's complexities is hardly the answer. Corporate governance across the Atlantic has its own characteristic problems. For example, although a separate chairman makes the board more independent of the CEO, the arrangement can lead to confusion regarding the company leadership. And a poor relationship between the chairman and CEO can easily lead to conflicts and power struggles. U.S. boards need independent leadership, but achieving such leadership by splitting the two positions is not necessarily a clear improvement over the U.S. model. Instead, the authors argue, for most large U.S. companies, the addition of a competent lead director or presiding director will likely strike the right balance between effective governance and leadership.

Corporate boards in the United States have recently been on the hot seat. Stimulated by high-profile scandals, investor dissatisfaction with board performance and questions about the level of executive compensation, regulators have introduced significant reforms in the rules that govern boards. But will such reforms actually contribute to the effectiveness of boards? A real danger exists that the mandated changes not only will fail to enhance how companies are governed but also could possibly lead to a number of negative unintended consequences. To investigate such issues, the authors conducted a study that compared the board practices and effectiveness of Fortune 1000 companies in 1998 versus 2003. They looked specifically at three areas: board leadership, the conditions governing board membership, and the performance evaluations of boards, individual board members and CEOs. The results have helped to determine which practices in those three areas are actually related to overall board performance.

Most startup companies today consider overseas expansion from their inception. Yet, says the author, entrepreneurs and their managers often underestimate the cost of expansion and lack a clear conceptual framework for it. On the basis of studying 50 entrepreneurial ventures in more than 20 countries, he concludes that such ventures follow a variety of different expansion paths. The most successful are those that best manage the constant tensions between resources and opportunities, each of which run the gamut from purely local to worldwide. He offers a framework that defines the choices a venture has at its inception and throughout its life, then shows how the framework can be used to assess and direct a venture and mitigate developing tensions by anticipating a variety of strategic, financial, organizational and regulatory factors. This is illustrated with case examples of a software company that took a balanced or “diagonal” path (the most common), an air-freight delivery service that progressed from pursuing local opportunities with local resources to pursuing cross-border opportunities with local resources, and a consumer-loan provider that began by pursuing a local opportunity with local resources, then added cross-border resources. Other examples include London-based fashion e-tailer Boo.com, Boston-based Internet Securities Inc. and the Georgian Glass and Mineral Water Co. in the Republic of Georgia.

A business case for sustainability requires more difficult change than most are ready to consider.

As companies struggle to enable long-distance collaboration, technology becomes key to keeping virtual teams working together. However, some tools work better than others. Managers seek solutions that provide the benefits of face-to-face contact without the expense or disruption. The authors bring together the latest research developments in virtual-team communication, discussing the trend toward the establishment of "virtual workspaces" that enable teams to communicate through the use of complex technologies -- such as virtual whiteboards, collaborative document editors and instant messaging -- helping team members to work in tandem more effectively. They detail the need for managers to tailor the use of each technology to the type of team and activity, and the benefits of virtual workspaces.