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May 31, 2007
May 30, 2007
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May 29, 2007
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May 26, 2007
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May 25, 2007
Leadership Traits in Ocean's 11, Part 1
Theory
Chapter 11 of our textbook is entitled "Leadership Fundamentals." In Figure 11.1 the authors provide a "Framework for Studying Leadership" containing four major components, as shown above. These are (1) the leader's traits (2) the leader's behavior (3) situational variables and (4) effective results.
Although they concede that there is debate in certain circles about whether leadership makes a difference in organizational performance, the authors' point of view is clear: there is something that "sets apart those individuals who become leaders from those who do not." The broad name which they give to that "something" is "traits", specifically the "specific characteristics ... associated with leadership success." As shown in Figure 11.1, these traits include (1) Abilities (2) Personality and (3) Motivation.
The three most important abilities, according to the text, are the possession of interpersonal, cognitive, and technical skills. The first refers to "the ability to get along with people", as well as "persuasiveness, tact ,and diplomacy." Cognitive skills refers to having a level of intelligence that is higher than the followers, but not too much higher, and to having sound judgment and fluency of speech. By technical skills the authors mean "more than passing technical knowledge of relevant to the task undertaken by the followers" (p. 315).
Several personality traits are identified: energy level, stress tolerance, self-confidence, emotional maturity, and integrity. Another one, decisiveness, deserves special attention. About the authors state that one researcher found
...that the ability to initiate action decisively was related to the individual's level in the organization. The higher the person went in the organization, the more important this trait became; CEO's were more decisive than the middle managers, who were more decisive than supervisors.
Finally, the model includes four important aspects of the successful leaders' motivation: socialized power orientation, strong need for achievement, weak need for affiliation, and persuasiveness. About the first we are told that while leaders exhibit a high need for power, successful ones "act on that need in socially acceptable ways." That is to say, they work "within the system to accomplish socially-desirable outcomes"; they "use power for constructive purposes."
The "weak need for affiliation" construct doesn't mean that leaders don't care to associate or affiliate with others. Nor does it mean that they ought to be unfriendly or aloof or that they lack the ability to affiliate. Rather, it just means that the leader "would be more motivated by getting the task done than by interacting with other people." In other words, as the founder of CMU is famous for having said "My heart is in the work."
Continue reading "Leadership Traits in Ocean's 11, Part 1" »
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May 24, 2007
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May 22, 2007
Links to "Cases" for Business Policy & Strategy
To students of 70-440, Business Policy and Strategy, at Carnegie Mellon University Qatar: Please use the links below to access the assigned readings for the summer semester:
California Hotels Go Green With Low-Flow Toilets, Solar Lights
Are Drugmakers down for the count?
Zell Wants to End Web’s Free Ride
Why Major Airlines Aren’t Bouncing Back
Starbucks: To Drink or Not to Drink
Apple sets tune for pricing of song downloads
Borouge expansion to meet rising demand
Mecca Cola rides anti-West wave with café chain plan
Gap's sites 'leapfrog' e-commerce rivals
Ninety Nine Cents Stores: A Simple Philosophy (not available online)
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May 18, 2007
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May 17, 2007
Need for Over-Achievement
Theory
Here's how Wikipedia defines and describes Need for Achievement (N-Ach), one of many concepts developed by psychologists and later applied to organizational behavior:
N-Ach (Need for Achievement) is a term introduced by David McClelland into the field of psychology, referring to an individual's desire for significant accomplishment, mastering of skills, control, or high standards.N-Ach is related to the difficulty of tasks people choose to undertake. Those with low N-Ach may choose very easy tasks, in order to minimise risk of failure, or highly difficult tasks, such that a failure would not be embarrassing. Those with high N-Ach tend to choose moderately difficult tasks, feeling that they are challenging, but within reach.
People high in N-Ach are characterised by a tendency to seek challenges and a high degree of independence. Many entrepreneurs may fall in this group. Their most satisfying reward is the recognition of their achievements. Sources of high N-Ach include: Parents who encouraged independence in childhood; Praise and rewards for success; Association of achievement with positive feelings; Association of achievement with one's own competence and effort, not luck; A desire to be effective or challenged; Intrapersonal Strength.
Application
A story appearing recently in the Health section of CNN.com entitled identifies high N-Ach as one of several contributing factors to the relatively high suicide rate among Asian-American women and girls:
May 16, 2007
Wal-Mart's Corporate Identity Crisis
Although Michael Porter's Five Forces Model is the most well-known of strategic management theories, there is a reason that it is only one of four or five that I teach. That reason is that like all theories, there are issues of importance that it does not address either in part or in full. Point in case is the role of corporate identity, or the lack thereof, in determining firm performance. Whether or not one thinks the role is minimal or substantial, it is clear that this issue does not fall neatly within the purview of Buyers, Suppliers, Barriers to Entry, Substitutes, or Rivalry. One theory that does posit a central role for corporate identity is Gary Hamel's Business Concept Innovation framework, as outlined in Chapter 3 of his most interesting and overlooked book from 2000, Leading the Revolution.
The four major components of BCI are Core Strategy, Strategic Resources, Customer Interface, and Value Network. The Core Strategy is defined as "the essence of how the firm chooses to compete" and its three aspects are:
Mission: the overall objective of the strategy- what the business model is designed to accomplish or deliver.
Product/Market Scope: where the firm does and does not compete, i.e. which customers, geographies, and product segments.
Basis for Differentiation: how the firm competes and, in particular, how it competes differently than its competitors.
Though the words "corporate identity" are not mentioned explicitly, it is clear that these three factors are important, if not central to it. Below is an example from a recent article in The Street.com about the role of corporate identity in explaining how Wal-Mart lost its way:
Hit the Road Jacques
Historians, both French and not, will be the final judge of the legacy of outgoing French President Jacque Chirac. Today, however, the punditocracy has their say. One of the best, fairest analyses I've seen or heard today comes from the BBC's Alan Little.
Exit Daimler, Enter the Hounds of Hell
Chrylser has gone to the dogs, literally:
Private equity firm Cerberus will buy a majority of DaimlerChrysler's struggling Chrysler Group for $7.4 billion, a fraction of the $36 billion deal that created the transatlantic car union nine years ago.Cerberus Capital Management gets an 80.1 percent stake in Chrysler and its related financial services business, DaimlerChrysler said on Monday, ending what was billed as a marriage made in heaven but never lived up to the name.
The deal, months in the making and set to close in the third quarter of the year, puts a major U.S. automaker in the hands of a private equity group for the first time.
Commentary
How ironic that this match-made-in-heaven ends up sold to a private equity shop named Cerberus- the 3-headed dog of Greek mythology who guards the entrance to Hell. I wonder if they will turn the iconic five-pointed Chrysler star upside down. 
May 15, 2007
Wal-Mart, Redi-Clinic, and the Healtcare "Crisis"
Yesterday's Wall Street Journal has an excellent article about some increasingly-attractive private-sector alternatives to hospital-based health care.
It's Friday evening and you suspect that your child might have strep throat or a worsening ear infection. Do you bundle him up and wait half the night in an emergency room? Or do you suffer through the weekend and hope that you can get an appointment with your pediatrician on Monday -- taking time off your job to drive across town for another wait in the doctor's office?Every parent has faced this dilemma. But now there are new options, courtesy of the competitive marketplace. You might instead be able to take a quick trip on Friday night to a RediClinic in the nearby Wal-Mart or a MinuteClinic at CVS, where you will be seen by a nurse practitioner within 15 minutes, most likely getting a prescription that you can have filled right there. Cost of the visit? Generally between $40 and $60.
These new retail health clinics are opening in big box stores and local pharmacies around the country to treat common maladies at prices lower than a typical doctor's visit and much lower than the emergency room. No appointment necessary. Open daytime, evenings and weekends. Most take insurance.
Continue reading "Wal-Mart, Redi-Clinic, and the Healtcare "Crisis"" »
Attribution Theory and Wal-Mart Performance
In his landmark 1958 book, The Psychology of Interpersonal Relations, psychologist Fritz Heider argued that people attempt to explain behavior by recourse to either internal or external attribution. The "12Manage" website describes the two processes:
External (Situational) Attribution: causality is assigned to an outside factor, agent or force. Outside factors fall outside your control. You perceive you have no choice. So your behavior is influenced, limited or even completely determined by influences outside your control. Therefore you feel not responsible. A generic example is the weather.
Internal (Dispositional) Attribution: causality is assigned to an inside factor, agent or force. Inside factors fall inside your own control. You can choose to behave in a particular way or not. So your behavior is not influenced, limited or even completely determined by influences outside your control. Therefore you feel responsible. A typical example is your own intelligence.
In the last few decades, several management scholars have applied the insights of attribution theory to managers explanations about their firm's performance. Though results of empirical are mixed, the general consensus is that external attribution is more frequently employed to explain poor or less-than-expected performance. Not surprisingly, market analysts are trained to look for this. A recent article about Wal-Mart in "The Street.com" provides a useful illustration:
Times are tough at Wal-Mart... The Bentonville, Ark., giant, which reports results before the bell Tuesday, is expected to post earnings of 68 cents a share on revenue of $87.1 billion, according to Thomson Financial. Wal-Mart has already warned, however, that its forecast of 68 cents to 71 cents would be difficult to achieve because of a tough sales environment in April. The month indeed turned out to be tough for the world's largest retailer. Same-store sales slid 3.5%, significantly worse than the 1.1% drop Wall Street projected. Goldman Sachs analyst Adrianne Shapira believes Wal-Mart likely will blame big-picture issues such as rising gas prices, the housing slowdown and lower consumer confidence for its sales woes.... Wal-Mart's problems, she maintains, are company-specific.
Commentary
Thus, as Attribution Theory would predict Wal-Mart managers point to industry, macro-environmental, and economy-level factors as explanations for poor performance. There is nothing inherently wrong or dishonest about this. Rather, it is just a recognition of a well-known human tendency to look inward for reasons explaining success and outward for reasons for explaining failure.
What is equally important as the attribution is the firm's plan of action for addressing the problematic performance. Explanations, by their very nature, are focussed upon explain what has already happened. Solutions that the same managers offer to address the deficits ought to be both proactive and prudent. That is to say, they should make clear what are the steps that are being and will be taken to correct the situation while also explicitly recognizing that there are always elements beyond management's ken and control. This is precisely what the article's author alludes to when he notes that "Wal-Mart isn't sitting back helplessly with subpar results. The company is remodeling stores in an attempt to appeal to a higher-end consumer. Additionally, it is focusing efforts on higher-margin items and departments." That quote highlights the difference between having a strategy (however effective or ineffective it may be) and waiting out a storm.
Tags: 
wal-mart
Wal-Mart to Carry Skype Product (Land)Line
One of the constant complaints about Wal-Mart is that its size and market power allow it tremendous leverage over its suppliers- and not just small ones. Even large firms have been known to complain that the behemoth of Bentonville has extracted economic concessions from them under extreme duress. True as this may be, there is a positive side to the story that rarely gets as much. That would be those instances where Wal-Mart starts to carry products and services that, for any number of reasons, have far less market penetration than they could or should. Today's announcement that Wal-Mart will now carry the Skype product line is a case in point:
Skype, the leading Internet communications company, today announced that it is teaming up with Wal-Mart, the world's largest retailer, to address the growing popularity and demand for Internet communications among U.S. consumers. Starting today, Wal-Mart is offering Skype Certified(TM) hardware in the Internet and voice communications area of 1,800 of its stores throughout the country, providing more opportunity and accessibility for people looking for affordable calling options. This partnership gives shoppers immediate hands-on access to headsets, webcams and handsets designed to work with Skype, as well as the first pre-paid cards for Skype available in the U.S.he addition of Skype Internet communications products to Wal-Mart stores comes at a time when Voice over Internet Protocol (VoIP) adoption among U.S. households is growing rapidly. According to the Telecommunications Industry Association, 9.9% of all landlines in the U.S. were VoIP lines in 2006, and this will rise to 34.1% by 2010. In addition, Skype is the number one software-based VoIP application in the U.S. by market share, according to a March 2007 report by In-Stat.
"We applaud Wal-Mart for recognizing the popularity of Skype and making it more accessible to Wal-Mart shoppers. This relationship with Wal-Mart will increase exposure for Skype and our hardware partners in a single dedicated Internet communications section," said Don Albert, vice president and general manager of Skype North America. "Our research suggests that when users add a Skype Certified accessory like a headset, handset or webcam, it greatly enhances their experience and they use Skype more to connect with family, friends and business colleagues."
Continue reading "Wal-Mart to Carry Skype Product (Land)Line" »
May 8, 2007
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May 5, 2007
Save the SpongeBobs
Who lives in a pineapple under the sea? If you have a child under ten years of age or if you are just a 10 year old at heart, you know the answer- SpongeBob Square Pants, that's who! For those not in the know, here's Nickolodeon's description of this cartoon character:
Deep down in the Pacific Ocean in the city of Bikini Bottom lives a square yellow sea sponge named SpongeBob SquarePants. SpongeBob lives in a pineapple with his pet snail, Gary, loves his job as a fry cook at the Krusty Krab, and has a knack for getting into trouble without really trying. When he's not getting on his cranky neighbor Squidward's nerves, SpongeBob's usually smack in the middle of a strange situation with his best starfish buddy, Patrick, or his thrill-seeking squirrel pal, Sandy Cheeks.
What Nick doesn't tell us is that while the inhabitants of Bikini Bottom have lead an idyllic existence, the real-life residents of the sea floor have been facing a strange situation of their own- having their habitat turned upside down and an inside out. But thanks to the good folks from Greenpeace, that's about to come to an end: The Australian Broadcasting Corporation explains:
More than 20 countries have agreed to work together to end a method of deep-sea fishing which they say causes huge damage to the environment. The agreement covers a quarter of the world's oceans and will restrict fishing vessels from dragging huge weighted nets across the sea floor. Called 'bottom sea trawling', it is a multi-million dollar industry, but experts say it destroys deep-water coral. Executive director of Greenpeace New Zealand, Bunny McDiarmid, says it is a very indiscriminate and destructive way of fishing. "Ahead of the net they have some steel rollers that clear the path for the net to come behind, so that the net doesn't snag on anything," she said. "But pretty much anything that's in the way of the net, like corals or sponges, any kind of sea lice is kind of bowled over to make way for the net behind."
I think it is fitting that someone named "Bunny" is making the real life Bikini Bottoms safe. I wonder if the creators of the SpongeBob series could create a Greenpeace-like, environmentalist character. Maybe Bunny could be seen visiting the Bottom after descending from The Rainbow Warrior. And if so, there may also be room for a few villains in the mold of Boris and Natasha from the old Bullwinkle cartoon series. As the article above noted in its concluding lines: "China, the United States, France, Japan, Chile and South Korea were among the countries signing the agreement. Russia however did not sign and says it will continue fishing in the same way." Clearly the male villain should be named Vladimir, maybe Vlad the Bottom Trawler.
A Fourchette in the Road
"Fourchette" is French for "fork." According to Simon Heffer, columnist of the Times (UK), there's an enormous one in the road that the French have traveled the last six decades. A choice has to be made and the consequences, particularly the economic ones, are equal part profound and unavoidable:
It rarely happens to a country that a clear opportunity is presented to it to save itself from ruin. ...The decision France has to take tomorrow, when it chooses between Nicolas Sarkozy and Ségolène Royal for its new president, is whether it finally has the courage to move out of the 1940s, or is determined to stay there to the point of utter economic destruction. Ask any Frenchman or woman, and they will tell you of the three great economic difficulties facing their country: and they are all, of course, related to each other. The first is chomage, or unemployment. The second is the absence of croissance, or growth. And the third is the weakness of pouvoir d'achat, or purchasing power. What money people earn doesn't seem to go very far in France.
One of Sarkozy's proposals is to scrap the infamous 35-hour work week, the effect of which has been dampening and hampering to the French economy and worker productivity:
Unlike in Britain, small businesses are not engines of growth, because bureaucracy and high taxes make it very hard for them to grow. ... The other factor that makes it so hard for energetic and enterprising French people to prosper is that they are usually prevented by law from working more than 35 hours a week. This law, brought in under the socialist government of Lionel Jospin, is now widely condemned, even by some supporters of Miss Royal, for the effect it has had on suppressing growth, living standards, wealth creation and productivity. That Mr Sarkozy has said that he will not only scrap it, but will make the earnings for work done in excess of the 35 hours free of taxes both for the employee and the employer, is indicative of the hand grenade he intends to throw into the dormant French economy. But will they let him?
With a 10% lead in the polls for Sarkozy, it seems the answer is "oui." We who promote the economic liberalism and the free-enterprise system certainly hope so.
May 4, 2007
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May 2, 2007
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May 1, 2007
How do you say Entrepreneur in French?
How do you say Entrepreneur in French? According to Anne Applebaum of the Washington Post, you don't. Or at least you don't in France these days:
To anyone steeped in the thousand-year history of Anglo-French enmity...the highlight of France's presidential election campaign was surely the speech that Nicolas Sarkozy, the center-right candidate (and now the very precarious front-runner) gave this year in London. Standing in the heart of London's financial district, Sarkozy heaped compliments upon his country's historic enemy. The British capital was, he said, a "town that seems more and more prosperous and dynamic every time I come here." More important, it had become "one of the great French cities." He understood, furthermore, that hundreds of thousands of Frenchmen had moved to Britain because "they are risk-takers, and risk is a bad word" in France.
How odd and tragic that the language and people that gave us the word "entrepreneur" (someone who organizes a business venture and assumes the risk for it) so excels at placing institutional barriers in entrepreneurs way and denies the inherent value of their defining characteristic- calculated risking-taking. The consequences for the French economy of such behavior is hard to understate:
With distinctly un-English passion (some things never change) he pleaded with them: "Come home, because together we will make France a great country where everything will be possible, where fathers won't fear for the future of their children, and where everyone will be able to make their plans come true, and be responsible for their own destiny."Unfortunately, it seems that even a Sarkozy victory in the final round of voting on Sunday won't persuade all of the 2 million-plus French exiles to go home. Asked by a French polling company, TNS Sofres, "Are you satisfied with your life abroad?" 93 percent of French emigres surveyed recently said "yes." Asked, "When do you expect to return to France?" 25 percent answered "never."
But Royal too knows that no country can afford to lose 2 million of its most able and enterprising citizens.
Countries such as Poland and France may soon be forced to scrap those regulations and taxes that hamper employment, however much the French unions and the Polish bureaucracy want to keep them: If they don't, their young people won't come home. Leaders in those countries may also have to alter their rhetoric. Sarkozy's Socialist opponent, Segolene Royal, now uses words such as "entrepreneurship" at least some of the time, too.
Should she win, Ms. Royal should use it more, and follow the words up with deeds if she hopes to avoid hearing a million or so more "Au revoirs" minus the "a demains."
If you can't beat them, enjoin them
Over at The Belmont Club there's a short post about the possible KIA of al-Qaeda-in-Iraq-leader Abu Ayyub al-Masri. In the post itself, as well as in the ensuing comment thread, there's some speculation about whether the $5 Million bounty on said leader's head served as a motivation to the Sunni insurgents believed to have punched his ticket.
The question is relevant for a number of reasons. Any and every economist will tell you that incentives, both economic and intrinsic, are powerful motivators of behavior. Commenter "PeterBoston" rightly notes that the job of al-Qaeda-in-Iraq leader doesn't have much security. Short tenure aside, there appear to be an unlimited number of jihadis willing to take his place and to fill the lower ranking positions on that gory path to glory. Fortunately for us, our friends the Saudis are hard at work reducing the appeal of jihadism among would-be replacement killers :
Alarmed to find that detainees are emerging from the Guantanamo Bay prison camp and other U.S. detention centers more devoted than ever to radical Islam, Saudi Arabia is offering counseling, financial aid and even matchmaking to pull young militants away from terrorism. ... The program pays special attention to those released from the U.S. prison in Guantanamo Bay, Cuba. Nearly every Saudi returning from American captivity undergoes up to 10 weeks of intense psychological tests, starting with an evaluation on the private plane that whisks him home from the American prison...
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