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During the dot-com frenzy of the late 1990s, most large, traditional companies had trouble finding successful e-business strategies to fight off aggressive new challengers. Many turned over their Internet efforts to the CIO and the information-technology organization. But that was not always a good idea, say management thinkers Glenn Rifkin and Joel Kurtzman. Enlightened corporations, they say, have made the Internet work for them by assigning e-business efforts to senior-level executives who know the business side intimately & #8212; and by getting the most out of technology-focused CIOs in the role of partner. They contend that someday all business will be e-business, so even in an economic downturn it’s important for companies to keep moving forward by integrating e-channels with their other business channels. The authors maintain that a downturn offers laggards a chance to get back into the game. Thus large companies with ineffective Web presences should take advantage of the current window of opportunity to make improvements. That means resisting the temptation to fob off e-business onto the IT department and instead treating it as a long-term, strategic, integral part of the enterprise. The authors report on the rare traditional companies that offer these valuable lessons: Integrate the new channel with other channels, build on your strengths, don’t let technical considerations be the tail that wags the dog, find a CIO who thinks like a business leader, and have a business expert head the operation. As Meg Whitman, the president and CEO of Internet star eBay, has said, “You can teach the dot-com stuff quickly, but you can’t teach the business quickly, so hire someone who knows the business.”

What shapes strategy today and how has it changed? While many executives were focused on the implications of the Internet, a more powerful force was at work, contends Stanford University professor Kathleen M. Eisenhardt: globalization. Globalization has quietly transformed the economic playing field. The traditional strategic paradigms (positioning, core competence and the like) are not dead, but they are less germane than they were. Schumpeter’s “creative destruction” and similar economic views are coming into their own. The new economics is more entrepreneurial. It centers on disequilibrium, fleeting opportunities to capture competitive advantage, and the creation and destruction of wealth. Successful strategy in today’s world is simple; it uses a few clear guidelines and allows for flexibility. It is supported by organizational design; it is not handed down from on high. And timing is everything. Eisenhardt cites Colgate’s use of simplicity in a key strategic process, global product management. Colgate has found success through allowing product managers considerable freedom within a couple of simple guidelines (Maintain the Brand; Keep Relative Product Positioning Stable). That thinking also has been a boon to Ispat International, which uses uncomplicated rules for choosing and integrating acquisitions and has thus become one of the world’s fastest-growing steel companies. In contrast, Intel and SAP stumbled with their joint venture for e-commerce services, Pandesic. Although the companies had ample resources and a clear vision of their desired strategic position, their plan’s complexity kept them from adjusting as the market unfolded. Eisenhardt explains how managers can refocus their strategy on key processes and simple rules, mapping their individual businesses to market opportunities and employing an evolutionary form of timing to move from one competitive advantage to the next.

Despite lip service paid to the idea that employees are a company’s greatest asset, too often they are sacrificed in the name of cutting costs and boosting efficiency. But that does not have to be the case. Intensive research by Boston Consulting Group’s Morten Hansen and Michael Deimler reveals that the Internet technology that brought us B2B and B2C is now bringing us B2E: business-to-employee management. By cultivating employees the way it cultivates customers, a company can develop a more satisfied, more productive work force, achieve greater productivity, cut costs and beat its competitors. Hansen and Deimler identify three components in a comprehensive B2E program: online business processes, online people management and online services to the company community. The mode of delivery is the integrated enterprise portal, which provides employees with the tools they need to access information and services at a single location. When business processes are moved online, both the company and its employees gain benefits springing from reduced interaction efforts. Flight crew at Delta Air Lines, for example, bid for shifts and receive their schedules online, which saves the company time and is more convenient for the employees. Online people management is driven by self-service and mass customization: Employees can manage their own training, tailor their own health-care packages and take care of introductory human-resources formalities online. Online community services are driven by the somewhat counterintuitive notion that allowing employees to accomplish certain personal business online at work will make them more productive. The online marketplace offered by Coca-Cola Co. is popular with employees and management alike. To design a successful enterprise portal, companies should follow the model of the online store: Supply features that customers (in this case, employees) want first, and then add features that the company wants the employees to use. Building a portal can be expensive, and it requires a high level of expertise, but the results can transform the company.

What do managers and executives believe and feel about workplace spirituality or assessments of its purported benefits? In this article, the authors present the results of a two-year empirical study based on face-to-face interviews and questionnaires. Participants differentiated strongly between religion and spirituality, viewing religion as a highly inappropriate form of expression and spirituality as a highly appropriate subject for the workplace. Most believed strongly that organizations must harness the immense spiritual energy within each person in order to produce world-class products and services. Meaning and purpose on the job are imparted by (ranked from highest to lowest in importance): (1) "the ability to realize my full potential as a person"; (2) being associated with a good organization or an ethical organization; (3) interesting work; (4) making money; (5) having good colleagues and serving humankind; (6) service to future generations; and (7) "service to my immediate community." Beyond a certain threshold, the authors point out, pay ceases to be the most important factor in work life, and higher needs prevail; the desire for "self-actualization" becomes paramount. The authors observed five basic designs or models in which organizations are religious or spiritual: -- The religious-based organization may be positive toward religion and spirituality or positive toward religion and negative toward spirituality. -- The evolutionary organization begins as strongly associated or identified with a particular religion and moves toward a more ecumenical position. -- The recovering organization adopts the principles of Alcoholics Anonymous as a way to foster spirituality. -- The socially responsible organization is led by someone guided by strong spiritual principles or values that are applied directly to the business for the betterment of society. -- The values-based organization is guided by general philosophical principles or values that are not aligned or associated with a particular religion or even with spirituality. -- Characterized by the underlying principle of hope, the models appear to have been precipitated by a critical event that caused intense difficulties for the company founders, heads, or the entire organization. All incorporate a principle or mechanism for limiting greed -- both the unlimited accumulation of money and the unrestrained pursuit of power. With a few notable exceptions, people who consider their organizations as being spiritual also see them as better than their less spiritual counterparts.

To survive today, firms must become adept at developing products that deliver the quality and functionality that customers demand while generating the desired profits. To ensure that products are sufficiently profitable when launched, many firms subject them to target costing, a profit management technique. The authors studied the mature, highly effective target costing systems of seven Japanese companies and documented their costing procedures. Although practices differ among these firms, the authors identified an underlying generic approach for implementing target costing systems. A highly disciplined process, effective target costing comprises the following facets that the authors discuss in detail: -- Market-driven costing consists of three companywide tasks -- setting the company's long-term sales and profit objectives, structuring product lines to achieve maximum profitability, and establishing a product's target selling price -- and two steps applicable to new products -- setting a target profit margin consistent with the company's long-term profit objectives and computing the product's allowable cost (by subtracting the target profit margin from the target selling price). -- Product-level target costing comprises setting a reasonably achievable product-level target cost, imposing discipline upon the development process to attain the target cost (whenever feasible), and achieving the cost goal without sacrificing functionality and quality (primarily through value engineering and other engineering-based cost reduction techniques). -- Component-level target costing includes decomposing the product-level target cost to the major functions or subassemblies (e.g., in a car, the engine, transmission, cooling system, air conditioning system, and audio system), setting component-level target costs, and managing suppliers (clearly conveying to them the competitive cost pressures facing the lean enterprise). The cardinal rule of the companies studied is: "Never exceed the target cost." They enforce this rule in three ways -- by offsetting design improvements that result in increased costs with savings elsewhere in the design, by not launching products that exceed the target cost, and by carefully managing the transition to manufacturing in order to achieve the target cost.

Firms can derive significant benefits from consciously, proactively, and aggressively managing their explicit and explicable knowledge, which many consider the most important factor of production in the knowledge economy. Doing this in a coherent manner requires aligning a firm's organizational and technical resources and capabilities with its knowledge strategy. However, appropriately explicating tacit knowledge so it can be efficiently and meaningfully shared and reapplied -- especially outside the originating community -- is one of the least understood aspects of knowledge management. This suggests a more fundamental challenge, namely, determining which knowledge an organization should make explicit and which it should leave tacit -- a balance that can affect competitive performance. The management of explicit knowledge utilizes four primary resources that the author details: repositories of explicit knowledge; refineries for accumulating, refining, managing, and distributing the knowledge; organization roles to execute and manage the refining process; and information technologies to support the repositories and processes. On the basis of this concept of knowledge management architecture, a firm can segment knowledge processing into two broad classes: integrative and interactive -- each addressing different knowledge management objectives. Together, these approaches provide a broad set of knowledge-processing capabilities. They support well-structured repositories for managing explicit knowledge, while enabling interaction to integrate tacit knowledge. The author presents two case studies of managing explicit knowledge. One is an example of an integrative architecture for the electronic publishing of knowledge gleaned by industry research analysts. The second illustrates the effective use of an interactive architecture for discussion forums to support servicing customers. Zack also discusses several key issues about the broader organizational context for knowledge management, the design and management of knowledge-processing applications, and the benefits that must accrue to be successful. In summary, organizations that are managing knowledge effectively (1) understand their strategic knowledge requirements, (2) devise a knowledge strategy appropriate to their business strategy, and (3) implement an organizational and technical architecture appropriate to the firm's knowledge-processing needs.

Processes to solidify and streamline supplier-customer relationships can result in mutually beneficial commercial success.