Bottger, P. & Barsoux, J. (2009). Do you really want to be a leader? First ask yourself these three question. Retrieved April 27, 2010 from: http://sloanreview.mit.edu/business-insight/articles/2009/5/5158/do-you-really-want-to-be-a-leader/
This article is published on the MIT Sloan Management Review Web site and challenges future leaders to examine themselves to determine whether or not they actually want to be a business leader and to what level of leadership do they aspire to. The authors state that most senior positions present tasks that are massive, complex and full of conflict and that the playing field and rules become less certain. “Also, the further an executive rises, the more he or she must deal with high-caliber people who know how to get what they want, are difficult, strong-willed and have a sharp appetite for power”. The authors state that aspiring leaders should ask themselves the following three questions so they can assess their own leadership potential: How far do I want to go? The higher an executive climbs the more tough decisions he or she has to make. What am I willing to invest? In other words, how much time and effort are you willing to put into your development and growth and give up other aspects of your life? How will I keep it up? You have to be willing to put up with times of criticism, resistance, and setbacks to succeed in the long run. I am including this annotation not to be a negative to aspiring leaders, but as a challenge to those that are serious because the higher you want to go, the harder you need to be willing work and the more you need to learn through formal education and through experiences. All aspiring managers, students, and workers in general should consider these questions so they can decide the best direction for their career path.
Tuesday, April 27, 2010
Monday, April 26, 2010
Creating a Performance Incentive System: Can Risk, Distortion, and Manipulation Be Successfully Balanced?
Weyhrauch, W. & Culbertson, S. (2009). Creating a performance incentive system: Can risk, distortion, and manipulation be successfully balanced? Academy of Management Perspectives, Aug2009, Vol. 23 Issue 3, p98-100, 3p. Retrieved April 23, 2010 from: http://web.ebscohost.com.ezproxy.waterfield.murraystate.edu/ehost/results?vid=2&hid=7&sid=9f186529-d742-4db5-8118-b0bb6bbc0d40%40sessionmgr4&bquery=(JN+%22Academy+of+Management+Perspectives%22+and+DT+20090801)&bdata=JmRiPWJ1aCZsb2dpbnBhZ2U9TG9naW4uYXNwJnR5cGU9MSZzaXRlPWVob3N0LWxpdmU%3d
This research brief was published in the Academy of Management Perspective, and discusses the creation and control of a performance incentive system. Employee’s job performances are measured using both objective and subjective indicators and both methods have shortfalls. Subjective indicators are based upon one individual’s perception of another and are subject to biases. Objective indicators can be flawed and not get a true measure of the employee’s value. In a study conducted by Michael Gibbs, et al, which is summarized in this research brief, states that “a network of diverse performance indicators highlighting strengths and balancing weaknesses may the way to create a fair and accurate system of performance incentives”. Using survey data from approximately 1,000 managers and owners of 326 automobile dealerships, the research team focused on the role of three performance measure properties: risk, distortion, and manipulation. Risk includes both controllable risk as well as risk the employee has no control over. Distortion refers to the extent a performance indicator incorrectly emphasizes certain aspects of performance. Manipulation refers to the degree a performance indicator could be manipulated by an employee to make their performance appear better than it actually is. This brief and study bring to light an interesting subject because in many business settings, an incentive program is an important motivator for employees and an important tool for managers. Finding ways to make these programs more effective and efficient is a very important task for a manager.
This research brief was published in the Academy of Management Perspective, and discusses the creation and control of a performance incentive system. Employee’s job performances are measured using both objective and subjective indicators and both methods have shortfalls. Subjective indicators are based upon one individual’s perception of another and are subject to biases. Objective indicators can be flawed and not get a true measure of the employee’s value. In a study conducted by Michael Gibbs, et al, which is summarized in this research brief, states that “a network of diverse performance indicators highlighting strengths and balancing weaknesses may the way to create a fair and accurate system of performance incentives”. Using survey data from approximately 1,000 managers and owners of 326 automobile dealerships, the research team focused on the role of three performance measure properties: risk, distortion, and manipulation. Risk includes both controllable risk as well as risk the employee has no control over. Distortion refers to the extent a performance indicator incorrectly emphasizes certain aspects of performance. Manipulation refers to the degree a performance indicator could be manipulated by an employee to make their performance appear better than it actually is. This brief and study bring to light an interesting subject because in many business settings, an incentive program is an important motivator for employees and an important tool for managers. Finding ways to make these programs more effective and efficient is a very important task for a manager.
Sunday, April 25, 2010
How to Compete and Grow: A Sector Guide to Policy
Manyika, J. et al. (2010) How to compete and grow: A sector guide to policy. McKinsey & Company. Retrieved April 24, 2010 from: http://www.mckinsey.com/mgi/reports/freepass_pdfs/competitiveness/Full_Report_Competitiveness.pdf
This report, conducted and published by McKinsey & Company, summarizes extensive research done in the field of policy making supposedly designed to make companies and countries more competitive. As the economies of the world improve, many governments are taking measures to help firms in their respective countries become more competitive. The authors state that many governments fail in the task because they look through an “economy-wide lens” instead of looking at the different sectors within their economy. They state that this form of policy making fails to take into consideration that each sector is affected differently and “that the conditions that promote competitiveness differ significantly from sector to sector”. Additionally, many governments look at the mix of their economies and the research shows that they should be more concerned with the competitiveness of the individual sectors instead. The most successful countries do not have the best industry mix; “their individual sectors are more competitive”. They also state that there is too much focus on trying to capture big manufacturing companies but that the best way to produce jobs is to become competitive in the service-sector. Additionally, they explain that competitiveness in new innovative sectors does not produce enough jobs to boost economy-wide employment and growth. McKinsey has categorized six sector groups that companies within them share characteristics and respond to similar approaches to enhancing competitiveness: infrastructure services, local services, business services, research and development-intensive manufacturing, manufacturing, and resource-intensive industries. The report concludes that governments should tailor policies to suit each sector group and how regulatory policy affects the sectors. This report gives a lot of insight into how governments control the economy and ways the researchers believe would be better. This is an important subject that managers should understand and should play and active role in making sure that their elected policy makers are representing their interest the way they should or be accountable if they are not.
This report, conducted and published by McKinsey & Company, summarizes extensive research done in the field of policy making supposedly designed to make companies and countries more competitive. As the economies of the world improve, many governments are taking measures to help firms in their respective countries become more competitive. The authors state that many governments fail in the task because they look through an “economy-wide lens” instead of looking at the different sectors within their economy. They state that this form of policy making fails to take into consideration that each sector is affected differently and “that the conditions that promote competitiveness differ significantly from sector to sector”. Additionally, many governments look at the mix of their economies and the research shows that they should be more concerned with the competitiveness of the individual sectors instead. The most successful countries do not have the best industry mix; “their individual sectors are more competitive”. They also state that there is too much focus on trying to capture big manufacturing companies but that the best way to produce jobs is to become competitive in the service-sector. Additionally, they explain that competitiveness in new innovative sectors does not produce enough jobs to boost economy-wide employment and growth. McKinsey has categorized six sector groups that companies within them share characteristics and respond to similar approaches to enhancing competitiveness: infrastructure services, local services, business services, research and development-intensive manufacturing, manufacturing, and resource-intensive industries. The report concludes that governments should tailor policies to suit each sector group and how regulatory policy affects the sectors. This report gives a lot of insight into how governments control the economy and ways the researchers believe would be better. This is an important subject that managers should understand and should play and active role in making sure that their elected policy makers are representing their interest the way they should or be accountable if they are not.
Saturday, April 24, 2010
Corporate Ethics, Personal Ethics: One in the Same?
Madden-Hallett, Helen, (2009). Corporate ethics, personal ethics: One in the same? Identifying ethical captains of industry. Journal of Business Systems, Governance and Ethics, Vol. 4, No. 3, Oct. 2009. Retrieved April 23, 2010 from: http://www.jbsge.vu.edu.au/issues/current.html
This article was written by Helen Madden-Hallett from Victoria University in Melbourne, Australia. It explores the relationship between the ethical standing of a corporation and that of its employees within the framework of eight dynamics. These dynamics are listed as: one’s self, family, groups of individuals, Mankind, all living things, the physical universe, energy, space and time, the spiritual realm, and the Supreme Being. Ethics in this paper is defined as “behavior which seeks the best level of survival, or the greatest benefits to the greatest number of dynamics and conversely, unethical behavior is that which offers the poorest solution and bring the greatest harm to the most number of dynamics”. As quoted in the paper, consumers are no longer satisfied with corporations believing they have fulfilled their fiduciary duty by doing no harm; consumers’ expectations are that corporations should proactively seek to do good deeds and to contribute to society. There is a positive side of ethical behavior for the business also. The author quotes a study that shows a correlation between adherence to ethical principles and increased profits. Employee’s ethical behavior is highly influenced by that of their superior’s. The author states that ethical philosophies come to naught if managers do not exhibit ethical behavior in the workplace. This article discusses a very important subject that managers should spend a lot of time on. Not only is ethical behavior the right thing to do, but there are many studies that show that companies that practice good ethical behavior are more successful also.
This article was written by Helen Madden-Hallett from Victoria University in Melbourne, Australia. It explores the relationship between the ethical standing of a corporation and that of its employees within the framework of eight dynamics. These dynamics are listed as: one’s self, family, groups of individuals, Mankind, all living things, the physical universe, energy, space and time, the spiritual realm, and the Supreme Being. Ethics in this paper is defined as “behavior which seeks the best level of survival, or the greatest benefits to the greatest number of dynamics and conversely, unethical behavior is that which offers the poorest solution and bring the greatest harm to the most number of dynamics”. As quoted in the paper, consumers are no longer satisfied with corporations believing they have fulfilled their fiduciary duty by doing no harm; consumers’ expectations are that corporations should proactively seek to do good deeds and to contribute to society. There is a positive side of ethical behavior for the business also. The author quotes a study that shows a correlation between adherence to ethical principles and increased profits. Employee’s ethical behavior is highly influenced by that of their superior’s. The author states that ethical philosophies come to naught if managers do not exhibit ethical behavior in the workplace. This article discusses a very important subject that managers should spend a lot of time on. Not only is ethical behavior the right thing to do, but there are many studies that show that companies that practice good ethical behavior are more successful also.
Empowering Your Employees to Empower Themselves
Goldsmith, M. (2010). Empowering your employees to empower themselves. Retrieved April 24, 2010 from: http://blogs.hbr.org/goldsmith/2010/04/empowering_your_employees_to_e.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+harvardbusiness+%28HBR.org%29
This article is published on Harvard Business Review’s Web site and discusses ways and benefits of empowering employees. Goldsmith states that employees want to be treated as partners rather than employees and they want information to also flow upward and not just down to them. However, many managers are just not willing to give up enough of their control to allow the empowerment of their employees. He states that it is time for managers to let their employees do what they need to do to get the job done. But he also states that the manager cannot empower the employee, they have to empower themselves. The manager’s role is to encourage and support the decision-making environment and to give the employees the tools and knowledge they need to make and act upon their own decisions, which helps them reach an empowered state. The author list four things leaders should do to build an environment that encourages empowerment: 1. Give power to those who have demonstrated they can handle the responsibility. 2. Create a favorable environment in which employees are encouraged to grow their skill level. 3. Don’t second guess others’ decisions and ideas unless it’s absolutely necessary. 4. Give the employee discretion and autonomy over their task and resources. This is an important subject that managers should understand. Empowered employees are the future leaders and they not only become more satisfied employees but the company they work for can receive a lot of benefit from the empowered employee as well.
This article is published on Harvard Business Review’s Web site and discusses ways and benefits of empowering employees. Goldsmith states that employees want to be treated as partners rather than employees and they want information to also flow upward and not just down to them. However, many managers are just not willing to give up enough of their control to allow the empowerment of their employees. He states that it is time for managers to let their employees do what they need to do to get the job done. But he also states that the manager cannot empower the employee, they have to empower themselves. The manager’s role is to encourage and support the decision-making environment and to give the employees the tools and knowledge they need to make and act upon their own decisions, which helps them reach an empowered state. The author list four things leaders should do to build an environment that encourages empowerment: 1. Give power to those who have demonstrated they can handle the responsibility. 2. Create a favorable environment in which employees are encouraged to grow their skill level. 3. Don’t second guess others’ decisions and ideas unless it’s absolutely necessary. 4. Give the employee discretion and autonomy over their task and resources. This is an important subject that managers should understand. Empowered employees are the future leaders and they not only become more satisfied employees but the company they work for can receive a lot of benefit from the empowered employee as well.
U. S. Capitalism: A Tarnished Model?
Whitley, Richard. U.S. capitalism: A tarnished model? Academy of Management Perspectives, May 2009, Vol. 23 Issue 2, p 11 – 22, 12p. Retrieved April 24, 2010 from: http://web.ebscohost.com.ezproxy.waterfield.murraystate.edu/ehost/pdfviewer/pdfviewer?vid=5&hid=15&sid=5bf6b5d6-7f83-4277-94bb-9ca09fbf232e%40sessionmgr10
This article discusses the viability of capitalism as it is practiced in the United States and whether it is now a tarnished model after the financial collapse and ensuing recession that followed. The essay takes the reader through some of the history that leads to today’s capitalistic economy, starting with the WWII postwar era. In the 1950s and 1960s the American model, at least in manufacturing, consisted of a lot of large diversified companies that made use of mass production of standardized goods and distributed those goods largely through mass marketing. The companies were operated by a managerial hierarchy that specified and controlled the routine operations with mostly semiskilled workers. This is referred to as a Fordist strategy and its focus is on achieving high levels of labor productivity. By increasing productivity and keeping costs low, firms were able to compete primarily on price in large consumer markets for standard goods. The next era discussed starts after the recession of the early 1990s, which is largely driven by the Internet and dotcom companies. The so called “Silicon Valley” pattern of economic organization became very appealing during this period. One of the major shifts in this model is concerning “the flexibility of firms and the ability to reconfigure the nature and organization of core activities and skills to respond to rapid and radical changes in markets and technologies”. The labor force in this model is different also; instead of semiskilled workers, these firms need technical workers whose knowledge and contributions are crucial to the firms’ success, “but whose knowledge and skills are vulnerable to environmental changes”. The author makes five points regarding the likely effects of the financial crisis and recession on the influence of the U.S. capitalism model on forms of economic organization elsewhere in the world. First, there is little doubt that the expanded role of the financial services sector in the U.S. and U.K. will decline. The deregulation of the past has enabled lenders to avoid responsibility for their decisions and to exit quickly from commitments. Secondly, “the expansion of such transaction-based banking business models and rapid exits from financial commitments seem likely to reinforce more general doubts about the viability of ultraliberal market economies in which ownership rights can be traded very easily with few constraints on short-term economic opportunism”. Third, there is growing interest in different business systems, which highlights the variety of effective forms of economic organization to be found in the U.S. and other capitalistic societies. Fourth, despite the reaction against ultraliberal market contracting, the Silicon Valley model will probably remain popular to some because it offers hope economic growth. Lastly, more government control and regulations, due to the current financial crisis is likely to follow. This article is very informative in the subject of how a capitalistic economy works and where its future is likely heading. This subject is important for managers to understand because it affects their firms and their competitor’s as well. It is also an important political subject because if a manager is interested in which way the U.S. economy is going to be regulated and steered, he or she must know the point of view of the candidates for public office they are voting for.
This article discusses the viability of capitalism as it is practiced in the United States and whether it is now a tarnished model after the financial collapse and ensuing recession that followed. The essay takes the reader through some of the history that leads to today’s capitalistic economy, starting with the WWII postwar era. In the 1950s and 1960s the American model, at least in manufacturing, consisted of a lot of large diversified companies that made use of mass production of standardized goods and distributed those goods largely through mass marketing. The companies were operated by a managerial hierarchy that specified and controlled the routine operations with mostly semiskilled workers. This is referred to as a Fordist strategy and its focus is on achieving high levels of labor productivity. By increasing productivity and keeping costs low, firms were able to compete primarily on price in large consumer markets for standard goods. The next era discussed starts after the recession of the early 1990s, which is largely driven by the Internet and dotcom companies. The so called “Silicon Valley” pattern of economic organization became very appealing during this period. One of the major shifts in this model is concerning “the flexibility of firms and the ability to reconfigure the nature and organization of core activities and skills to respond to rapid and radical changes in markets and technologies”. The labor force in this model is different also; instead of semiskilled workers, these firms need technical workers whose knowledge and contributions are crucial to the firms’ success, “but whose knowledge and skills are vulnerable to environmental changes”. The author makes five points regarding the likely effects of the financial crisis and recession on the influence of the U.S. capitalism model on forms of economic organization elsewhere in the world. First, there is little doubt that the expanded role of the financial services sector in the U.S. and U.K. will decline. The deregulation of the past has enabled lenders to avoid responsibility for their decisions and to exit quickly from commitments. Secondly, “the expansion of such transaction-based banking business models and rapid exits from financial commitments seem likely to reinforce more general doubts about the viability of ultraliberal market economies in which ownership rights can be traded very easily with few constraints on short-term economic opportunism”. Third, there is growing interest in different business systems, which highlights the variety of effective forms of economic organization to be found in the U.S. and other capitalistic societies. Fourth, despite the reaction against ultraliberal market contracting, the Silicon Valley model will probably remain popular to some because it offers hope economic growth. Lastly, more government control and regulations, due to the current financial crisis is likely to follow. This article is very informative in the subject of how a capitalistic economy works and where its future is likely heading. This subject is important for managers to understand because it affects their firms and their competitor’s as well. It is also an important political subject because if a manager is interested in which way the U.S. economy is going to be regulated and steered, he or she must know the point of view of the candidates for public office they are voting for.
Friday, April 23, 2010
Poor Pricing Power Poses Problems for the U.S.
Bogoslaw, D. (2010). Poor pricing power poses problems for the U.S. Retrieved April 21, 2010 from: http://www.businessweek.com/investor/content/apr2010/pi20100420_625166.htm
This article is published on the BusinessWeek.com Web site and discusses some of the problems that U.S. businesses could encounter, including deflation concerns, especially if the economy falters again. Normally when the Fed pumps a lot of liquidly into the economy and keeps interest rates low, economist worry more about inflation. However, right now, many are concerned about the opposite problem, deflation. This could occur if companies start lowering prices to lure customers into buying again, but if deflation sets in, it will likely lead to companies needing to cut costs and employees as a result, further driving consumers away. Deflation feeds upon itself because when consumers believe that prices will be going down in the future, that put off today’s purchases so they can save on the same purchase later. When businesses are forced to lower prices, they have to cut costs elsewhere and the vicious cycle continues and can devastate an already weak economy. Additionally, as stated by the author, deflation is most dangerous because it boost the value of the dollar, increasing the cost of repaying debt. He says right now we are in a period of disinflation, which is a decline in the rate of inflation and increases the possibility of actual deflation occurring. While there is some optimism for growth in the economy, the author states that because of the continuing unemployment situation, which many believe will not improve greatly for some time to come; there is plenty of skepticism about the economy as well. This is an important subject for manager to understand because deflation and inflation can throw the economy into chaos and it is important for managers to monitor the economy so can be aware of what is going on and how it can affect them.
This article is published on the BusinessWeek.com Web site and discusses some of the problems that U.S. businesses could encounter, including deflation concerns, especially if the economy falters again. Normally when the Fed pumps a lot of liquidly into the economy and keeps interest rates low, economist worry more about inflation. However, right now, many are concerned about the opposite problem, deflation. This could occur if companies start lowering prices to lure customers into buying again, but if deflation sets in, it will likely lead to companies needing to cut costs and employees as a result, further driving consumers away. Deflation feeds upon itself because when consumers believe that prices will be going down in the future, that put off today’s purchases so they can save on the same purchase later. When businesses are forced to lower prices, they have to cut costs elsewhere and the vicious cycle continues and can devastate an already weak economy. Additionally, as stated by the author, deflation is most dangerous because it boost the value of the dollar, increasing the cost of repaying debt. He says right now we are in a period of disinflation, which is a decline in the rate of inflation and increases the possibility of actual deflation occurring. While there is some optimism for growth in the economy, the author states that because of the continuing unemployment situation, which many believe will not improve greatly for some time to come; there is plenty of skepticism about the economy as well. This is an important subject for manager to understand because deflation and inflation can throw the economy into chaos and it is important for managers to monitor the economy so can be aware of what is going on and how it can affect them.
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