Deep smarts

When a person sizes up a complex situation and rapidly comes to a decision that proves to be not just good but brilliant, you think, "That was smart." After you watch him do this a few times, you realize you're in the presence of something special. It's not raw brainpower, though that helps. It's not emotional intelligence, either, though that, too, is often involved. It's deep smarts. Deep smarts are not philosophical--they're not"wisdom" in that sense, but they're as close to wisdom as business gets. You see them in the manager who understands when and how to move into a new international market, in the executive who knows just what kind of talk to give when her organization is in crisis, in the technician who can track a product failure back to an interaction between independently produced elements. These are people whose knowledge would be hard to purchase on the open market. Their insight is based on know-how more than on know-what; it comprises a system view as well as expertise in individual areas. Because deep smarts are experienced based and often context specific, they can't be produced overnight or readily imported into an organization. It takes years for an individual to develop them--and no time at all for an organization to lose them when a valued veteran walks out the door. They can be taught, however, with the right techniques. Drawing on their forthcoming book Deep Smarts, Dorothy Leonard and Walter Swap say the best way to transfer such expertise to novices--and, on a larger scale, to make individual knowledge institutional--isn't through PowerPoint slides, a Web site of best practices, online training, project reports, or lectures. Rather, the sage needs to teach the neophyte individually how to draw wisdom from experience. Companies have to be willing to dedicate time and effort to such extensive training, but the investment more than pays for itself.     

The simple analytics of information and experimentation in dynamic agency

Summary. The dynamics of a stochastic, two–period principal–agent relationship is studied. The agent's type remains the same over time. Contracts are short term. The principal designs the second contract, taking the information available about the agent after the first period into account. Compared to deterministic environments significant changes emerge: First, fully separating contracts are optimal. Second, the principal has two opposing incentives when designing contracts: the principal ‘experiments,’ making signals more informative; yet dampens signals, thereby reducing up–front payments. As a result, ‘good’ agents' targets are ratcheted over time. Received: November 28, 2000; revised version: December 1, 2000     

The interaction of equity and efficiency factors in optimal pricing rules

Operational rules for setting optimal prices for the products of nationalized or regulated industries when both the distribution of income and efficiency are taken into account have been developed. In this paper we look closely at the interaction between equity and efficiency in these rules, in particular at the fact that the terms relating to each will generally be interconnected. When this relationship is taken into account quite simple operational parametric formulations for the optimal pricing rules can be derived and discussed.     

The nature and determinants of customer expectations of service

A conceptual model articulating the nature and determinants of customer expectations of service is proposed and discussed. The model specifies three different types of service expectations: desired service, adequate service, and predicted service. Seventeen propositions about service expectations and their antecedents are provided. Discussion centers on the research implications of the model and its propositions. Her research interests include services marketing and consumer perceptions of price and quality. Her articles have appeared in theJournal of Consumer Research, Journal of Marketing, Journal of Marketing Research, Journal of Consumer Affairs, Journal of Retailing, andManagement Accounting. She is co-author (with Len Berry and Parsu Parasurman) ofDelivering Quality Service: Balancing Customer Perceptions and Expectations (The Free Press, 1990). Leonard L. Berry holds the J. C. Penney Chair of Retailing Studies, is Professor of Marketing, and is director of the Center for Retailing Studies at Texas A&M University. He is a former national president of the American Marketing Association. His research interests are services marketing, service quality, and retailing strategy. He is the author of numerous journal articles and books, includingMarketing Services: Competing Through Quality (The Free Press, 1991), which he wrote with A. Parasuraman. His research interests include services marketing, sales management, and marketing strategy. He has written numerous articles in journals such as theJournal of Marketing, Journal of Marketing Research, Journal of Business Research, Sloan Management Review, andBusiness Horizons. He is the author ofMarketing Research (Addison-Wesley, 1991) and coauthor (with Leonard L. Berry and Valarie A. Zeithaml) ofDelivering Quality Service: Balancing Customer Perceptions and Expectations (The Free Press, 1990).     

A study of conflict between shopping center managers and retailers within regional shopping centers

This article reports on a study of conflict between center managers and retail tenants in regional shopping centers in Ohio. Also, issues important to the successful operation of a regional center are identified. The results show that conflict does exist, and the differences in conflict perceived by center managers and tenants are significant. Specific areas of disagreements are pinpointed. The results show that the extent of conflict that exists is a function of the size of the shopping center and the proportion of the total square footage of gross leasable area occupied by major tenants.     

Firm Value,Information Problems and the Internal Capital Market

We examine how information problems between the firm and the investor affect the value of an internal capital market. While the extant literature finds that, on average, the diversified firm's access to an internal capital market is positively related to firm value, this paper finds that the results hold only for firms which face low levels of information problems. Firms facing the high levels of information problems realize no value from internal capital market access, consistent with the Jensen Free Cash Flow hypothesis. When information problems are large, agency costs dominate any savings that result from using an internal capital market to avoid selling under-priced securities in the external capital markets.     

Can corporate codes of ethics influence behavior?

There is increasing public interest in understanding the nature of corporate ethics due to the knowledge that unethical decisions and activities frequently undermine the performance and abilities of many organizations. Of the current literature found on the topic of ways organizations can influence ethical behavior, a majority is found on the issue of corporate codes of ethics.Most discussions on codes of ethics evaluate the contents of the codes and offer opinions on their wording, content, and/or value. Unfortunately, very little research has been devoted towards discovering whether they are effective in promoting ethical decision-making behavior. Thus, due to the lack of empirical research on this particular topic, this paper attempts to further address this issue.Data was obtained through the use of a fifteen-item questionnaire, in which seven of the items were scenarios on the topic of ethical behavior, and the remaining eight questions were concerned with demographic information. The survey was administered to 150 business students at a large university.The results indicated that corporate codes of ethics are not influential in determining a person's ethical decision-making behavior.