Showing papers in "California Management Review in 2005"
TL;DR: The business case for corporate social responsibility has become increasingly influential as mentioned in this paper, and it is the central message of most books on CSR, it is widely believed by executives and many business students, and it underlies the business model of socially responsible investment funds.
Abstract: The business case for corporate social responsibility has become increasingly influential. It is the central message of most books on CSR, it is widely believed by executives and many business students, and it underlies the business model of socially responsible investment funds. It is attractive to many CSR advocates, since if CSR "pays," then the profit motive will drive corporations to act increasingly responsibly. However, the business case for CSR is weak. The results of studies that seek to correlate social and financial performance are inconclusive: socially responsible investment funds perform no better than non-socially screened funds and many relatively responsible companies have not been financially successful.
447 citations
TL;DR: In this article, the authors examine the market-oriented actions that are currently being taken by 136 large companies that are part of the Global 500 and present six market strategies that companies use to address climate change and that consist of different combinations of the market components available to managers.
Abstract: Companies face much uncertainty about the competitive effects of the recently adopted Kyoto Protocol on global climate change and the current and future regulations that may emerge from it. Companies have considerable discretion to explore different market strategies to address global warming and reduce greenhouse gas emissions. This article examines these strategic options by reviewing the market-oriented actions that are currently being taken by 136 large companies that are part of the Global 500. There are six different market strategies that companies use to address climate change and that consist of different combinations of the market components available to managers. Managers can choose between more emphasis on improvements in their business activities through innovation or employ compensatory approaches such as emissions trading. They can either act by themselves or work with other companies, NGOs, or (local) governments.
421 citations
TL;DR: In this paper, the authors present a set of analytical tools and frameworks that can enable firms to develop blue ocean strategies, which are not in existence today; they are untouched and uncontested.
Abstract: The market universe is composed of two types of oceans: red oceans and blue oceans. Red oceans are all the industries in existence today; they are increasingly characterized by intense competition. Blue oceans are all the industries not in existence today; they are untouched and uncontested. To prosper in the future, companies need to go beyond competing; they need to create blue oceans. The issue is how to do so. This article presents a set of analytical tools and frameworks that can enable firms to develop blue ocean strategies.
414 citations
TL;DR: In the United States, companies are taking advantage of the lack of a mandatory U.S. GHG emission reduction program to set targets at their own pace and in ways that complement their own strategic objectives as discussed by the authors.
Abstract: To date, the United States has declined to ratify the Kyoto Treaty to reduce greenhouse gas emissions. However, many companies are taking advantage of the lack of a mandatory U.S. GHG emission reduction program to set targets at their own pace and in ways that complement their own strategic objectives. Currently, as many as sixty corporations, with net revenues of roughly $1.5 trillion, have set voluntary reduction targets. Why are they doing this? Many of these companies are agnostic about the science of climate change or the social responsibility of protecting the global climate. The reasons that they are making these emission reductions are decidedly strategic. They are searching for ways to be prepared for the long term should GHG emission reductions become mandatory, while at the same time attempting to reap near-term economic and strategic benefits should new regulations not emerge.
299 citations
TL;DR: In this paper, the authors explain how practitioners can incorporate options thinking into contemporary IT project management and how they can be used for quantifying the value of strategic and operational flexibility associated with uncertain IT investments.
Abstract: Real options can be a powerful tool for quantifying the value of strategic and operational flexibility associated with uncertain IT investments. However, they also constitute a new way of thinking about how projects can be organized and managed to maximize upside potential while minimizing downside risk. This article explains how practitioners can incorporate options thinking into contemporary IT project management. Options thinking means recognizing real options and how they add value. Just as important is managing projects so that the option value that exists in theory is realized in practice. Several real-world examples illustrate how the value of embedded real options can be realized through active project management. There are pitfalls associated with each option, as well as benefits and limitations of different approaches to valuing options. Organizations must decide whether to undertake the challenges of adopting options thinking as a project management philosophy.
212 citations
TL;DR: In this paper, the differences between customer satisfaction and customer satisfaction are examined, and the benefits of satisfying customers rather than merely satisfying customers are discussed, as well as the potential pitfalls of doing so.
Abstract: While many researchers have made contributions to the now extensive literature on service quality, there is much less research on what constitutes delight in service quality and how organizations can delight customers. This article examines the differences between customer satisfaction and customer delight, notably the benefits of delighting rather than merely satisfying customers. It describes how to delight customers, outlines how to implement a successful customer delight program, shows how to measure customer delight, and discusses the potential pitfalls of doing so.
199 citations
TL;DR: In this article, a dynamic analysis of the flat panel display industry is conducted through a dynamic framework that complements the competitive forces framework introduced in a static setting by Porter over two decades ago.
Abstract: In industries characterized by very large capital investment and fast-moving technological dynamics, cyclical behavior emerges as the setting in which firms have to strategize. The barriers to entry in such settings are extremely high, but they can be breached—as shown in the Flat Panel Display industry, which has seen successive entries by Japanese, then Korean, then Taiwanese firms over the course of the past decade. In its short history, this industry has already exhibited four cycles (the "crystal cycle") and a fifth downturn is now looming. However, the striking feature of the industry is that firms have successfully entered only during industry downturns, engaging in counter-cyclical investment; not a single firm has entered during an upturn. This provides the starting point for a strategic analysis of this fast-growing industry, conducted through a dynamic framework that complements the "competitive forces" framework introduced in a static setting by Porter over two decades ago. It is critical to draw on both dynamic and static frameworks to fully comprehend the strategic options open to firms.
162 citations
TL;DR: In this paper, scenario analysis is combined with real options analysis to help identify options in the future; help time the decision to exercise a real option; and provide an important input in the process of evaluating real options.
Abstract: Major shifts in the business environment can make whole investment strategies obsolete. In order to anticipate such shifts, the Royal Dutch/Shell Group of Companies uses scenario analysis, a method it pioneered three decades ago. Given that most investments are irreversible, scenario planning can be combined with real options analysis to help identify options in the future; help time the decision to exercise a real option; and provide an important input in the process of evaluating real options.
152 citations
TL;DR: In this article, the authors examine how firms find pathways to high performance with a simultaneous focus on their top and bottom lines by aggressively developing and managing their relationships with key stakeholders, including customers, suppliers, alliance partners, and intra-organizational business units.
Abstract: This article examines how firms find pathways to high performance with a simultaneous focus on their top and bottom lines by aggressively developing and managing their relationships with key stakeholders. Top-performing firms are shrinking their core while at once expanding their periphery. At the same time that they are contracting their organizational centers and outsourcing increasing portions of their activities, these firms are extending their organizational borders by trying to provide customers with greater sets of products and services. As companies refocus, they have become increasingly dependent on reinforcing mutually beneficial ties to four sets of critical stakeholders: customers, suppliers, alliance partners, and intra-organizational business units. In each of these relationship dimensions, successful firms work their way up a ladder in which they intensify their collaborative efforts with that particular constituent. This phenomenon, which is evident across an array of industries, is one of the hallmarks of a new operating model—the relationship-centered organization.
150 citations
TL;DR: In this article, the authors describe an organizational design that facilitates the integration of mature and new businesses by identifying what to forget and what to borrow from the mature business and then integrating the two units.
Abstract: Organizations struggle when trying to manage a mature business and a related new venture simultaneously. The endeavor is fraught with contradiction and paradox. In order to succeed, the organization's leaders must deal with two conflicting pressures. The new venture needs to forget much of what has made the mature business successful, and this argues for isolating the new venture from the mature business. However, the new venture also needs to borrow resources from the mature business, and this argues for integrating the two units. Based on in-depth field research at ten organizations, this article shows how to identify what to forget and what to borrow, and it describes an organizational design that facilitates both.
138 citations
TL;DR: In this paper, the authors explore how organizations can unlock business value from their IT investments by adopting a two-stage view of implementation, which distinguishes between "problem-based" interventions and "innovation-based interventions.
Abstract: Surveys continue to highlight that most senior business executives are dissatisfied with the value they believe their organizations are deriving from investments in information technology. What is often forgotten is that IT in itself has no inherent value. This value must be unlocked, and only business executives and users can do this. While most IT investments are usually accompanied by a technology implementation plan, few organizations ever construct a plan focused on realizing the business benefits. This article explores how organizations can unlock business value from their IT investments by adopting a two-stage view of implementation. This model distinguishes between "problem-based" interventions and "innovation-based" interventions. Unlocking business value from IT investments is a journey not a destination and this journey requires careful planning.
TL;DR: This article defines the fundamental information-processing problem associated with user design of customized products and articulates five principles of user design, and outlines actions that can be taken to improve user design systems.
Abstract: User design is a particular form of product customization that allows the customer to specify the properties of a product. User design has emerged as a mechanism to build brand loyalty, to fit products to the heterogeneous needs of a market, and to differentiate the offerings of a manufacturer. However, many consumers face daunting challenges in designing a product that fits their personal needs. This makes it essential for producers of customized goods and services to create user interfaces that are effective in supporting consumers in the user design process. This article defines the fundamental information-processing problem associated with user design of customized products and articulates five principles of user design. It then outlines actions that can be taken to improve user design systems.
TL;DR: The garage entrepreneur is a highly popular contemporary legend, but not quite accurate as discussed by the authors, because it suggests an undersocialized view of the entrepreneurial process, which suggests that entrepreneurs acquire confidence, business knowledge, and social connections via prior experience at existing organizations.
Abstract: There exists a common belief that entrepreneurs commonly start businesses in garages (or basements or dorm rooms or kitchens). The garage entrepreneur is a highly popular contemporary legend, but not quite accurate. An emergent notion in academic research is that entrepreneurs are often organizational products. They typically acquire confidence, business knowledge, and social connections via prior experience at existing organizations. These psychological and social resources aid entrepreneurs in forming companies. Although the belief of the garage entrepreneur contributes to the preservation of the American ideals of opportunity and upward social mobility, it offers misleading insights to would-be entrepreneurs because it suggests an undersocialized view of the entrepreneurial process. Individuals, companies, policy makers, and business schools will benefit from recasting the garage as a contemporary legend and focusing instead on the lessons that can be derived from an understanding of entrepreneurs as organizational products.
TL;DR: In this paper, the authors examine three different formation paths for R&D consortia and address three critical questions in managing the formation process: How do we assess initial conditions? What are the specific managerial priorities we need to set? What other managerial challenges do we foresee?
Abstract: The increasing importance of collaborative efforts to corporate strategy makes central the decisions about when, with whom, and how to collaborate. This is particularly true for R&D consortia, where there is even greater uncertainty and ambiguity about the need for and outcomes from collaboration than in other strategic alliances. Too often, managers do not know how to structure these R&D consortia effectively. This article examines three different formation paths. While there are commonalities among these formation processes, each occurs under different combinations of initial onditions. The strength of congruent interests and of social and strategic relationships produces distinctive sets of managerial activities and different outcomes. To help managers improve the odds of success in relying on R&D consortia, this article addresses three critical questions in managing the formation process: How do we assess initial conditions? What are the specific managerial priorities we need to set? What other managerial challenges do we foresee?
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TL;DR: The authors describes two hard-wired principles that influence food acquisition and consumption, and identifies four reversible drivers of food consumption that marketers could use to help consumers better control what and how much they eat.
Abstract: Although catering to our biological interests, food companies have been recently accused of contributing to the growing problem of obesity. As a result, managers are torn between trying to satisfy consumers and trying to satisfy concerned public policy officials who bring threats of taxes, fines, restrictions, and legislation. Although the situation appears perplexing, there are profitable "win-win" solutions. This article describes two hard-wired principles that influence food acquisition and consumption, and it identifies four reversible drivers of food consumption that marketers could use to help consumers better control what and how much they eat.
TL;DR: The authors examines General Motors and its exploitation of the learning opportunity created by NUMMI, its California-based alliance with Toyota, and describes how GM transferred the "sticky" knowledge of NUMMI to the initially skeptical GM manufacturing community.
Abstract: Although alliances often create valuable learning opportunities, the exploitation of the opportunities is a difficult, frustrating, and often misunderstood process. More often than not, firms learn little from their alliance partners. This article examines General Motors (GM) and its exploitation of the learning opportunity created by NUMMI, its California-based alliance with Toyota. Over the past few decades, GM has steadily and significantly improved its quality and productivity relative to its main rivals. A key factor in this improvement has been knowledge transferred from Toyota to NUMMI and NUMMI to GM. This article describes how GM transferred the "sticky" knowledge of NUMMI to the initially skeptical GM manufacturing community. The learning mechanisms employed included managerial assignments to NUMMI, visits and tours to NUMMI, a technical liaison office for managing learning activities, leadership commitment and involvement in the learning process, and a learning network to articulate and spread the knowledge.
TL;DR: In this article, the authors explore the role of an academic anchor in the development of a high-tech region by looking at an illuminating case, the relationship between Stanford University and Silicon Valley, the quintessential hightech entrepreneurial region.
Abstract: What role should the academic anchor play in the development of a high-tech region? Based on analysis of historical data and archival documents, this article explores the question by looking at an illuminating case, the relationship between Stanford University and Silicon Valley, the quintessential high-tech entrepreneurial region. During the Valley9s crucial formative years (1945-1965), Stanford had four principal programs of outreach to the local business community. In each case, Stanford9s default mode of industrial outreach was to seek satellite operations of established firms based elsewhere (such as Lockheed), while its assistance to indigenous firms (and start-ups) was ancillary at best. For those trying to establish a high-tech region elsewhere, the lesson may be not to try to replicate Silicon Valley9s contemporary university-industry relationship and the central role of entrepreneurship. The Valley9s formative years offer a different model for the contributions of an academic anchor to the development of a high-tech region.
TL;DR: In this article, the authors describe a pioneering study of marketing knowledge transfer based on the experiences of executives in relatively large nonprofit organizations who migrated across sectors, revealing that the use of marketing concepts and tools in the nonprofit sector is much lower than in the private sector.
Abstract: As many nonprofits have grown larger, they are adopting concepts and tools from the private sector to improve their own operations and effectiveness For such growth and adaptation to continue, it is important to understand how knowledge is transferred across sectors This article describes a pioneering study of marketing knowledge transfer based on the experiences of executives in relatively large nonprofit organizations who migrated across sectors The study reveals that the use of marketing concepts and tools in the nonprofit sector is much lower, and it offers explanations rooted in cultural and organizational differences This article provides recommendations for promoting more cross-sector transfer of marketing knowledge
TL;DR: The personal computer industry has evolved from a value chain with well-defined roles for firms in different industry segments to a flexible global value network through which PC firms outsource many of their activities to increasingly capable suppliers as mentioned in this paper.
Abstract: The adoption of information technology has had major impacts on firm and industry organization. The personal computer industry has evolved from a value chain with well-defined roles for firms in different industry segments to a flexible global value network through which PC firms outsource many of their activities to increasingly capable suppliers. The industry9s value network is organized mostly through market mechanisms, particularly for routine activities. A smaller number of complex activities involve closer trust-based relationships, but market discipline is used to reduce the risk of opportunism. IT has played a major role in this transformation. For routine activities, IT enables standardization and automation of processes, allowing effective coordination via market transactions. For more complex activities, IT supports close integration of activities through internal IT systems or customized interorganizational systems.
TL;DR: In this paper, the authors propose two generic B2B strategies: modularization and architectural entrepreneurship, which allow a firm to rent out its internal capabilities to others in its industry and alter the supply chain by allowing a central coordinating firm to facilitate arrangements that trust issues and information asymmetries had previously made impossible.
Abstract: Business-to-business information technology systems are becoming increasingly important in firm supply chains. Utilizing the concept of modularity, this article clarifies the strategic implications of B2B technology. There are two generic B2B strategies: modularization, which allows a firm to rent out its internal capabilities to others in its industry; and architectural entrepreneurship, which alters the supply chain by allowing a central coordinating firm to facilitate arrangements that trust issues and information asymmetries had previously made impossible. Which modular strategy is appropriate depends on the role the focal firm plays in the supply chain and their supply chain indispensability. Only firms with deep architectural knowledge can take full advantage of these modular strategies.
TL;DR: In this paper, the authors argue that technology is more than a means to the end of satisfying consumer needs and wants, it is an active force which frequently escapes the control of the marketer.
Abstract: Marketing tends to view technology as a means to meeting customer needs and desires. This view has led some marketers to focus perhaps too exclusively on the customer to the detriment of a deep understanding of technology and its interaction with society. Drawing on the ideas of the philosophers Heidegger and Popper, this article contends that technology is more than a means to the end of satisfying consumer needs and wants, it is an active force which frequently escapes the control of the marketer. The article explores the ways in which technologies, firms, customers, and society interact, and it suggests how firms might adopt different strategies towards technology to take advantage of these emergent interactions.
TL;DR: A survey of B2B exchanges shows that participating firms can extract value from internal activity management and from interorganizational network participation, which improves efficiency and exploits partnership opportunities as discussed by the authors.
Abstract: Many B2B exchanges have failed in recent years, while a few operators survived the hype and reached the break-even point. Since the operators in these exchanges are business service providers, their survival is linked to the value they render to user firms (just as for any other intermediate service activity), while potential participants will join the exchange only if this choice may improve their competitiveness and increase value. This article proposes a different perspective to discuss the role of these exchanges, in which the competitive impact provided becomes the main driver for participant firms— and the main driver for the success of exchanges. A survey of B2B exchanges shows that participating firms can extract value from internal activity management and from interorganizational network participation, which improves efficiency and exploits partnership opportunities. Specific resources support these drivers of value creation with different competitive features. For firms, participation in B2B exchanges should become a deliberate long-term strategy to sustain their competitive positions. B2B operators need to address their business models to the competitive needs of potential users.
TL;DR: In this article, the authors analyse the multiple innovation trajectories and changes in competitive strategy in Singapore as it evolves from an industrial economy to a knowledge-based economy, which emphasizes a special role for the academic sector in the innovation milieu.
Abstract: This article analyzes the multiple innovation trajectories and changes in competitive strategy in Singapore as it evolves from an industrial economy to a knowledge-based economy. In addition to the existing national innovation system in the well-heeled industrial manufacturing sectors such as electronics, chemicals, and precision engineering, a new mode of innovation has been evolving in the research-intensive biomedical industries cluster, which emphasizes a special role for the academic sector in the innovation milieu. Biotech investments at the moment appear to pose high risks due to the rather amorphous and unclear market signals coming out of the industry. However, as technologies become more speculative, governments do need to spread their bets more widely to enable more possibilities to emerge. The challenges and opportunities Singapore faces have relevance to other states seeking to adopt new policies for gaining competitiveness and national comparative advantage in an era of globalization.
TL;DR: In this article, the authors argue that to manage the business cycle to gain competitive advantage over rivals, firms must develop a "business cycle orientation" which must include five important capabilities: the "Business cycle literacy" of the top management team; the skillful deployment of various forecasting tools; an organizational structure that facilitates the timely acquisition, processing, and dissemination of macroeconomic information; application of a set of business cycle-sensitive management principles; and an organizational culture that supports business cycle sensitive management activities.
Abstract: To manage the business cycle to gain competitive advantage over rivals, firms must develop a "business cycle orientation." Such an orientation must include five important capabilities: the "business cycle literacy" of the top management team; the skillful deployment of various forecasting tools; an organizational structure that facilitates the timely acquisition, processing, and dissemination of macroeconomic information; application of a set of business cycle-sensitive management principles; and an organizational culture that supports business cycle-sensitive management activities. Successfully managing the business cycle does not necessarily depend on the ability to accurately forecast its movements. Rather, all that is required in many instances is that a firm be able to strategically or tactically respond more swiftly than its rivals.
TL;DR: In this article, the authors present a simple framework that all firms can use to design successful strategies where the tactical details can be clearly spelled out at the design stage, which allows managers to see more choices in developing new business models.
Abstract: Simply copying the strategies of existing players is not enough for competitive success. Whether it's an existing market or a new market, it is important to devise methods to add more value at a lower cost—to expand the value frontier. For most firms this is an ad hoc process that can rarely be structured. Further, existing frameworks such as the value chain are very good at explaining strategy after the fact but not as good in helping managers design a strategy from the ground up. This article develops a simple framework that all firms can use to design successful strategies where the tactical details can be clearly spelled out at the design stage. This framework allows managers to see more choices in developing new business models.
TL;DR: A leadership seminar was held at the University of California, Berkeley on November 17, 2003 as discussed by the authors, which brought together four distinguished scholars and business leaders to converse about leadership, not only from the perspectives of the different experiences the participants have in business, foundation, and academic institutions, but also with respect to issues such as: What is laudable and what is despicable leadership? What is the role of leadership in business school research and curriculum? How does governance temper leadership?
Abstract: This article is based on the proceedings of a leadership seminar held at University of California, Berkeley on November 17, 2003. As an introduction to the topic, this article first discusses some of the central issues in the field of leadership, some internal tensions in the field, and the relationship between leadership theory and practice. The seminar brought together four distinguished scholars and business leaders to converse about leadership, not only from the perspectives of the different experiences the participants have in business, foundation, and academic institutions, but also with respect to issues such as: What is laudable and what is despicable leadership? What is the role of leadership in business school research and curriculum? What is the relation between leaders and managers? How does governance temper leadership? The panelists were: John Reed, known for his long-term leadership role as CEO of CitiCorp (and most recently as interim chairman and CEO of NYSE); Eric Wanner, President of the Russell Sage Foundation; Professor James March, Stanford University; and Professor David Teece, University of California, Berkeley.
TL;DR: In this paper, the authors propose a framework that can help resolve these dilemmas and predict the costs versus benefits of defining the property rights over knowledge-based resources over resources.
Abstract: Advances in information technology, together with increasing economic globalization, are creating dilemmas regarding the levels of definition of property rights that exist over knowledge-based resources. The issues at stake indude enforcing property rights of companies without alienating consumers and making knowledge-based resources affordable. This artide proposes a framework that can help resolve these dilemmas and predict the costs versus benefits of defining the property rights over resources. The costs versus benefits are mainly determined by: capture costs and rent dissipation created by non-exdusivity of the resource; exchange and policing costs related to the resource; costs of reduced investment created by non-exdusivity of the resource; exchange value of the resource; and the social costs of exdusivity of the resource.