Coming attraction

Francesca Cornelli, Richard D'Aveni, Andrew Kakabadse, Rosabeth Moss Kanter, Markus Reitzig, Fons Trompenaars and Kim Warren share their latest research.     

Supporting innovation and venture development in established companies

Accumulated research findings call into question the ability of established corporations to develop and manage new ventures successfully. This article argues that the problem comes in large part from failing to differentiate between the requirements of administrative management—geared to managing existing activities and holding things in place to ensure continuation of already-developed activities—and the requirements of entrepreneurial management—designed to create change by developing something new. The two kinds of management are in tension and may interfere with each other, but every established organization needs both in order to get both innovation and efficiency.Innovations and new ventures have four particular characteristics that account for their special management requirements: uncertainty, knowledge-intensivity, competition with alternative courses of action, and boundary-crossing. Thus entrepreneurial management to support creation of the new puts a stress on such features as visionary leadership, “patient money,” planning flexibility, team continuity/stability, and interfunctional cooperation. But the usual requirements of administrative management in established corporations contradict these principles. Thus some companies try to set their new ventures apart from the old to avoid conflicts in management requirements. However, this this only partially solves the problem.All companies need both to manage ongoing activities and to create new ones—with the proportions of each depending on the nature of the business. They need to strike a balance between administrative and entrepreneurial management. The problem of venture development in established corporations occurs when administrative management comes to dominate and innovation is not valued sufficiently. The command system of administrative management needs to be replaced by a mutual adjustment system.High innovation companies build mutual adjustment into their design. They allow flexibility to move into an entrepreneurial mode. They are characterized by broader jobs: structures built around small business units or functionally complete project teams; cultures stressing the ability of people to contribute more over time; and easy access to the key “power tools” of information, support, and resources.A more entrepreneurial corporation minimizes hard-and-fast rules and procedures governed by a rigidly defined command structure and emphasizes instead flexibility and broadly-skilled sets of employees in flexible units that can be grouped or regrouped as changing circumstances require.Large corporations must institute deliberate programs to encourage innovation and entrepreneurship, including removing the roadblocks of unnecessary administrative requirements; encouraging integration across departments and functions: changing budgeting and accounting procedures and providing internal venture capital and special project funds; discretionary time; and new business performance measures.     

The middle manager as innovator

If there's one thing that most U.S. executives agree on, it's the need for higher productivity in American workplaces. So far most efforts at raising performance have concentrated on factory and office employees-partly, one assumes, because their output is easily measured. However, the increases in productivity at the shop or office level will mean nothing in the long run, if, for instance, new products aren't designed, new structures aren't put in place to accommodate change, or new equipment isn't conceived to improve product quality. In other words, a company's productivity depends to a great degree on how innovative its middle managers are. In this article, the author describes a study she conducted of 165 middle managers in five companies to determine what managers contribute to innovation and what factors the most innovative companies have in common. She found that, among other things, innovative managers tend to be visionary, comfortable with change, and persistent. Innovation flourishes in companies where territories overlap and people have contact across functions; information flows freely; numbers of people have excesses in their budgets; many managers are in open-ended positions, and reward systems look to the future, not the past.     

Thriving locally in the global economy

More and more small and midsize companies are joining corporate giants in striving to exploit international growth markets. At the same time, civic leaders worry about their communities' economic future in light of the impact of global forces on the operation and survival of business. How can communities retain local vitality yet still link their business to the global economy? Harvard professor Rosabeth Moss Kanter addresses that question in this classic HBR article, orginally published in 1995. To avoid a clash between international economic interests and local political interests, globalizing business must learn how to be responsive to the communities in which they operate, Kanter says. And communities must determine how to create a civic culture that will attract and retain footloose companies. The author surveyed five U.S. regions with direct connections to the global economy--Boston, Cleveland, Miami, Seattle, and the Spartanburg-Greenville region of South Carolina--to determine their business and civic leader's strategies for improving their constituent's quality of life. She identified ways in which the global economy can work locally by capitalizing on the resources that distinguish one place from another. Kanter argues that regions can invest in capabilities that connect their local populations to the global economy in one of three ways: as thinkers, makers, or traders. She points to the Spartanburg-Greenville region as a good example of a world-class makers, with its exceptional blue-collar workforce that has attracted more than 200 companies from 18 countries. The history of the economic development of this region is a lesson for those seeking to understand how to achieve world-class status and bring local residents into the world economy.     

How different is Japanese corporate finance? An investigation of the information content of new security issues

This article studies the shareholder wealth effects associatedwith 875 new security issues in Japan from January 1, 1985,to May 31, 1991. The announcement of convertible debt issueshas a significant positive abnormal return of 1.05 percent.There is an abnormal return of 0.45 percent at the announcementof equity issues that is off-set by an abnormal return of 1.01percent on the issue day. Abnormal returns are negatively relatedto firm size, so that large Japanese firms have abnormal returnsless different from those of U.S. firms than small Japanesefirms. Our evidence is consistent with the view that Japanesemanagers decide to issue shares based on different considerationsthan American managers.     

Identifying significant characteristics of organic milk consumers: a CART analysis of an artefactual field experiment

The organic dairy category is one of the fastest growing categories of organic foods in the US. Organic milk consumers generally cite perceived health benefits and lower risk of food contamination, as well as perceived superior quality and environmental sustainability of organic farming methods, as the major motivations for preference of organic over conventional milk. While the attributes of organic milk that are valued by consumers are fairly well-known, more ambiguity exists regarding the demographic characteristics of the typical organic milk consumer. This research makes use of experimental data from 148 adult participants and use a Classification and Regression Tree (CART) analysis, a nonparametric modelling approach, to identify how Willingness-to-Pay (WTP) for organic milk varies with the demographic profile of experiment participants. The study finds that perceived taste of organic milk, concern for the risk of consuming conventional milk, being a primary shopper, and the quantity of milk consumed are the major factors that separate experiment participants into groups with high and low WTP for organic milk.     

创新：企业发展中的经典陷阱

创新虽然已经不是什么最新的时尚了,但是在公司的战略计划中,每隔几年就会出现在最要紧的位置上.公司的每一代管理者都同样怀着对新事物的热情,与此同时,在克服创新所带来的困境时,也都面临着同样的挑战.有关创新的豪言壮语发布之后,通常都是落入俗套的行动计划,最终必然毫无建树,而创新的团队就会随着公司的裁员计划悄悄消失.这种现象是普遍发生的.创新已经成为企业发展中最容易陷入的误区之一.总结起来,自上个世纪70年代起,全球范围内的创新活动已经经历了四个不同的历史时期.