Monthly Archive for April, 2010

The Economist Manifesto

Published on April 30, 2010 in News and Newsletter. 0 Comments

From Amartya Sen, NewStateman20100421_201016smith_w

The Theory of Moral Sentiments, Adam Smith’s first book, was published in early 1759. Smith, then a young professor at the University of Glasgow, had some understandable anxiety about the public reception of the book, which was based on his quite progressive lectures. On 12 April, Smith heard from his friend David Hume in London about how the book was doing. If Smith was, Hume told him, prepared for “the worst”, then he must now be given “the melancholy news” that unfortunately “the public seem disposed to applaud [your book] extremely”. “It was looked for by the foolish people with some impatience; and the mob of literati are beginning already to be very loud in its praises.” This light-hearted intimation of the early success of Smith’s first book was followed by serious critical acclaim for what is one of the truly outstanding books in the intellectual history of the world.

After its immediate success, Moral Sentiments went into something of an eclipse from the beginning of the 19th century, and Smith was increasingly seen almost exclusively as the author of his second book, An Inquiry into the Nature and Causes of the Wealth of Nations, which, published in 1776, transformed the subject of economics. The neglect of Moral Sentiments, which lasted through the 19th and 20th centuries, has had two rather unfortunate effects.

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Management Journal Award Finalists

Published on April 28, 2010 in Journal and Newsletter. 0 Comments

Congratulations to to all of the International Award for Excellence finalists:

The Imitation Economy: Innovation is Overrated. It’s Time to Appreciate the Power of the Copycat.

Published on April 27, 2010 in News and Newsletter. 0 Comments

From Drake Bennett, Boston.com

Two weeks after it went on sale, the iPad is still the toast of the tech world, with its image gracing magazine covers, market analysts speculating about whether it will transform the worlds of publishing and entertainment, and consumers buying the gadget at a healthy clip. This at a cost of at least $500 each, at a time when Americans are still cautious about large nonessential purchases, and for a device that remains difficult to succinctly describe, much less figure out the purpose of.

It’s early yet, but it looks like another success for a company that, more than any other consumer brand, is synonymous with the new. Apple has forged a unique and lucrative reputation for creating irresistible, intuitive objects of techno-desire, shaping along the way how we work, communicate, and procrastinate, and the look and feel of the electronic gadgetry that increasingly fills our lives.

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Risk: The Story of America’s Greatest Idea

Published on April 26, 2010 in News. 0 Comments

From John Dickerson, Slate

Risk has taken a beating recently, thanks to the financial crisis. Risk is supposed to be about choice and consequence. You take a chance and you win or you lose. But then banks and insurance companies found ways to pervert this. They devised ever more esoteric ways to pass risk on to others, so there was, in fact, no risk to them at all. In this distortion, insurance techniques, created to limit risk, exposed millions to it. The laws of probability, originally devised to solve a moral dilemma—how to equitably distribute winnings in a game of chance—wound up inequitably distributing losses to people who didn’t even know they were at the table. The architects of these gambles left their jobs with enormous bonuses, and companies that helped cripple the financial system were repaid by the government bailout. They took a chance, and lost—but they still won.

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Bursting a Balloon:Using the Myth of Talent as a Smokescreen for Corporate Plunder

Published on April 24, 2010 in News. 0 Comments

From David Bolchover, The Economist

In these times, the overpaid fat-cat in the corner office makes a barn door of a target. Particularly in the financial services sector, where even at those companies bailed out by the taxpayer, senior executives have been quick to return to obscene bonuses, often coupled with poor performance. To add insult, such behaviour is justified by the alleged need to “let the markets decide” or to ensure that talent is “justly rewarded”.201016wbp505_290

Typically, sanctimoniousness at the top comes with a veiled threat to pack up and head abroad if the government even thinks about reining them in. Understandable, then, that many feel fury at such a sense of entitlement and enrichment, and that sensible discussion tends to evaporate in a flare of mass indignation.

Understandable but ultimately unsustainable. Such populist anger risks taking down innocent entrepreneurs and financial firms as the blunt instrument of regulation is wielded. More reasoned debate about the issue of excessive executive pay is needed. This is David Bolchover’s ambition in his highly readable and punchy polemic.

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Indecision-Making

Published on April 22, 2010 in News and Newsletter. 0 Comments

From Virginia Postrel, The New York Times

Sheena Iyengar is the psychologist responsible for the famous jam experiment. You may have heard about it: At a luxury food store in Menlo Park, researchers set up a table offering samples of jam. Sometimes, there were six different flavors to choose from. At other times, there were 24. (In both cases, popular flavors like strawberry were left out.) Shoppers were more likely to stop by the table with more flavors. But after the taste test, those who chose from the smaller number were 10 times more likely to actually buy jam: 30 percent versus 3 percent. Having too many options, it seems, made it harder to settle on a single selection.postrel-t_ca0-articlelarge

Wherever she goes, people tell Iyengar about her own experiment. The head of Fidelity Research explained it to her, as did a McKinsey & Company executive and a random woman sitting next to her on a plane. A colleague told her he had heard Rush Limbaugh denounce it on the radio. That rant was probably a reaction to Barry Schwartz, the author of “The Paradox of Choice” (2004), who often cites the jam study in antimarket polemics lamenting the abundance of consumer choice. In Schwartz’s ideal world, stores wouldn’t offer such ridiculous, brain-­taxing plenitude. Who needs two dozen types of jam?

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Management Journal Award Winner

Published on April 22, 2010 in Journal and Newsletter. 0 Comments

management_frontCongratulations to Tracy Freeze the winner of the International Award for Excellence in the area of knowledge, culture and change in organisations with their paper Transforming the Cynic: Recommendations for Leaders Implementing Organizational Change.

Paper abstract: This paper reviews the theoretical and empirical literature on attitudes, employee cynicism toward organizational change and transformational leadership. Many researchers agree that successful implementation of organizational change is essential to the health and progress of organizations (e.g., Armenakis & Bedeian, 1999; Stanley, Meyer, & Topolnytsky, 2005). One barrier to the successful implementation of organizational change is cynicism. Cynicism in the work context is considered to be a state-based attitude and consequently, may be amenable and responsive to leadership behaviors such as those outlined by transformational leadership theory (e.g., Bommer, Rich, & Rubin, 2005; Reichers, Wanous, & Austin, 1997). It is hypothesized that current research and knowledge from the areas of attitude theory, employee cynicism and transformational leadership can inform leaders and offer recommendations for the successful implementation of organizational change. More research is needed to determine the effectiveness of transformational leadership behaviors in the context of employee cynicism toward organizational change. If transformational leadership behaviors are found effective in transforming cynicism, future research should focus on furthering a framework for understanding the underlying determinants of that effectiveness as well as examining the possible detrimental effects of suppressing cynical attitudes.

If you have read this paper and would like to make comments please add a review.

Belgians in Beijing Reginald Hubbard, an MBA Student at the Vlerick Leuven Gent Management School, Learns the Theory of Doing Business in China

Published on April 20, 2010 in News. 0 Comments

From The Economist

Last Friday morning my MBA class was sitting in a classroom at the Vlerick Leuven Gent Management School in Belgium taking an exam in operations management. A couple of days later we were in China, visiting a pork-processing plant, a dairy and a jelly producer, seeing whether all of the theory we had learned manifests itself in the real-life business of each food producer. 201016wbp504

Before coming to China, we were divided up to research a specific business situation in China, about which we could advise potential clients. Cases ranged from seeking ways to introduce a cutting-edge technology for soil pollution to creating incentive structures for the local workforce. Each project aimed to bring together different aspects of personnel, strategic and cultural management that business leaders must be aware of when seeking to do business across cultures.

Our instruction began with an introduction to Confucian ideals which, we learned, form the foundation of Chinese culture and are in many ways inseparable from the way the Chinese do business. We were taught about guanxi too: the importance of building and maintaining relationships with family, friends and colleagues. Also on the agenda was the significance of group harmony, collectivism and courtesy. I am an American attending an MBA programme in western Europe. Both of these cultures tend to be more individualistic and direct than in China. When doing business in here, we learned, efforts must be made to foster relationships and to avoid aggression in advancing an agenda. Failure to appreciate the cultural foundation of Chinese business can lead to wasted time and capital.

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