How successful leaders think

In search of lessons to apply in our own careers, we often try to emulate what effective leaders do. Roger Martin says this focus is misplaced, because moves that work in one context may make little sense in another. A more productive, though more difficult, approach is to look at how such leaders think. After extensive interviews with more than 50 of them, the author discovered that most are integrative thinkers -that is, they can hold in their heads two opposing ideas at once and then come up with a new idea that contains elements of each but is superior to both. Martin argues that this process of consideration and synthesis (rather than superior strategy or faultless execution) is the hallmark of exceptional businesses and the people who run them. To support his point, he examines how integrative thinkers approach the four stages of decision making to craft superior solutions. First, when determining which features of a problem are salient, they go beyond those that are obviously relevant. Second, they consider multidirectional and nonlinear relationships, not just linear ones. Third, they see the whole problem and how the parts fit together. Fourth, they creatively resolve the tensions between opposing ideas and generate new alternatives. According to the author, integrative thinking is an ability everyone can hone. He points to several examples of business leaders who have done so, such as Bob Young, cofounder and former CEO of Red Hat, the dominant distributor of Linux opensource software. Young recognized from the beginning that he didn't have to choose between the two prevailing software business models. Inspired by both, he forged an innovative third way, creating a service offering for corporate customers that placed Red Hat on a path to tremendous success.     

Context Dependence and Aggregation in Disaggregate Choice Analysis

There is an emerging consensus among disciplines dealing with human decision making that the context in which a decision is made is an important determinant of outcomes. This consensus has been slow in the making because much of what is known about context effects has evolved from a desire to demonstrate the untenability of certain common assumptions upon which tractable models of behavior have generally been built. This paper seeks tobring disparate disciplinary perspectives to bear on the relation between context and choice, to formulate (1) recommendations for improvements to the state-of-the-practice of Random Utility Models (RUMs) of choice behavior, and (2) a future research agenda to guide the further incorporation of context into these models of choice behavior.     

Marketing and company performance: An examination of medium sized manufacturing firms in Britain

In recent years several studies have pointed to the importance of marketing to company performance and considerable emphasis has been placed, in Britain, on improving the marketing performance of small and mediumsized enterprises. Based on a mail survey of 231 medium sized manufacturing firms in the U.K., and in-depth inteviews with the Chief Marketing Executive of a sub-sample of 20 firms, the study confirms that the most successful companies are those which are marketing orientated. Nevertheless, several traditional tenets of marketing are questioned by the findings and it would seem that the traditional marketing model, as developed for large companies, is neither entirely necessary nor applicable for the smaller firm.     

Are really new product development projects harder to shut down?

Just as a good houseguest knows when it's time to say good-bye, effective managers must recognize when it's time to terminate a new product development (NPD) project. As a product progresses toward commercialization, a manager's reluctance to terminate a failing project becomes increasingly expensive. Despite this growing expense, however, many managers are reluctant to shut down failing NPD projects. Jeffrey Schmidt and Roger Calantone hypothesize that this reluctance may be even more pronounced for innovative new products than for incremental NPD efforts. They suggest that perhaps the excitement that really new products engender within a company makes managers more reluctant to shut down the NPD project, even in the face of clear-cut evidence that the project is not a winner. To test these assumptions, they conducted a decision-making experiment in which managers were asked to make go/no-go decisions at each stage in a hypothetical NPD project. One project involved an innovative new product; the other project involved an incremental development—that is, a line extension that offered only marginal size and cost reductions compared to current models. At the outset of the experiment, participants were given market share and profit objectives for assessing the new product's performance. At each stage in the hypothetical NPD project, the participants then received updated performance data. The performance data provided to participants was identical for the two hypothetical projects, and fell increasingly farther below the performance objectives as the project progressed. The results of the experiment support the hypothesized relationship between product innovativeness and managers' reluctance to terminate a failing NPD project. Given identical, poor, performance forecasts, the managers who participated in this experiment were more optimistic about the likelihood of success, were more committed to the project, and were more likely to opt for continuing the project when it involved the more innovative product. In fact, the participants were more likely to allow the highly innovative NPD project to proceed all the way through commercialization, notwithstanding the progressively ominous performance feedback.     

Measuring intangible value in business-to-business buyer-seller relationships: An intellectual capital perspective

The value that resides in a firm's relationships has both tangible and intangible aspects and both need to be developed and managed carefully. Marketing managers need to be able to understand these dimensions of value to manage them and to argue for their share of the firm's resources to effectively develop the value of the firm's relationships. This paper describes a study that adds to current knowledge of relationship value by testing a hypothesized model of the intangible part of the value that is manifested in buyer-seller relationships and by developing a set of scales to measure the hypothesized dimensions. The focus of the research, which synthesizes a conceptual framework from the intellectual capital literature, is on business-to-business situations and on the value of the relationship to the seller, rather than to the buyer. The analysis of data from a survey of relevant managers, using structural equation modeling techniques, gives support to the model and scales.     

STRUCTURAL IMPLICATIONS OF THE COMPANY–CUSTOMER INTERFACE

The main approach current in organization theory adopts a ‘structural contingency’ model in attempting to explain and predict company structures. However, this model, as currently described in the literature, is so broadly defined that it tells us little about how market conditions and the ways in which companies deal with their customers might affect internal company structures. The present paper considers the issues involved and presents some results from a study focused on these relationships.     

Capital and growth with oligarchic property rights

To analyze effects of imperfect property rights on economic growth, we consider economies where some fraction of capital can be owned only by local oligarchs, whose status is subject to political risk. Political risk decreases local capital and wages. Risk-averse oligarchs acquire safe foreign assets for insurance, thus increasing wages in other countries that protect outside investors. We show that for empirically reasonable parameter values, reforms to decrease political risk or to protect more outsiders' investments can decrease local oligarchs' welfare by increasing wages, making such reforms prone to political resistance from the ruling elite. We suggest measures of property rights imperfections derived from empirically observable data, and we test the quantitative predictions of our model using those measures and other parameter values routinely assumed in growth theory.     

What Accounts for the Rising Share of Women in the Top 1 percent?

The share of women in the top 1 percent of the UK’s income distribution has been growing over the last two decades (as in several other countries). Our first contribution is to account for this trend using regressions of the probability of being in the top 1 percent, fitted separately for men and women, in order to contrast between the sexes the role of changes in characteristics and changes in returns to characteristics. We show that the rise of women in the top 1 percent is primarily accounted for by their greater increases in the number of years spent in full-time education. Although most top income analysis uses tax return data, we derive our findings taking advantage of the much more extensive information about personal characteristics that is available in survey data. Our use of survey data requires justification given survey under-coverage of top incomes. Providing this justification is our second contribution.     

Clinical trials with multiple endpoints can establish a correlation,but not (yet) causality,between dietary supplementation with omega-3 fatty acids and keratoconjunctivitis sicca

Aim: We review clinical evidence of therapeutic efficacy and effectiveness of omega-3 fatty acids (omega-3s) in keratoconjunctivitis sicca, colloquially known as dry eye disease. In doing so, we identify relevant literature to address the following questions: (1) What definitive guidance can clinical evidence offer eye physicians and their patients? (2) What aspects of omega-3 supplementation lack definitive evidence, and how might economic assessments help?

Methods: A targeted and systematic search strategy based on PRISMA (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) was designed in this study for refereed clinical trials of omega-3s in dry eye treatment. Four key databases were accessed. Records were filtered through a three-step process using predetermined inclusion criteria. Data was extracted for experimental design, sample population characteristics, content of test and control groups, symptoms and associated opthalmologic conditions, diagnostic measures, patient health outcomes, adverse events, and model time horizon.

Results: A total of 219 records were initially identified, of which 21 prospective clinical trials, with a total of 2,973 participants, were admitted for review. Clinical evidence indicates that daily oral supplementation with omega-3s statistically correlates with dry eye treatment in the general symptomatic population as well as induced sub-populations. Reported adverse events are minimal. These trials nonetheless exhibit considerable heterogeneity in clinical endpoints, particularly as a result of the multi-factorial character of dry eye as well as continuous advances in scientific knowledge and technology. Their findings and recommendations appear to be of limited external validity. And causal inferences are needed, but difficult to establish. These have encouraged and sustained wide variations in ophthalmologic practice and normative decision-making.

Conclusions: Comparability of omega-3 therapeutic efficacy and effectiveness remains a major challenge in dry eye disease management. Notwithstanding its multi-factorial character, addressing prevailing methodological and empirical issues in clinical trials will help reduce knowledge gaps and normative choices among eye physicians and patients alike. In this regard, pharmacoeconomics offers a useful and robust toolset through which analysis of cost-minimization, cost-effectiveness, and cost-utility as well as meta-analysis can be comparatively pursued. Blending measures of costs and outcomes puts in perspective the heterogeneity of clinical endpoints in keratoconjunctivitis sicca.