Fall 2014
Volume 56, Issue # 1

Access the full Table of Contents below.
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Special Report: Strategy in Changing Markets

The Opportunity Paradox

How can managers best meet the challenge of capturing new growth opportunities?

How Strategic Is Your Board?

Strategic thinking by corporate boards is more important than ever for business survival.

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From the Editor: Strategy in the Midst of Change

How do you develop strategy in a business environment characterized by rapid change and considerable uncertainty about the future? That’s a question that many executives in fast-changing industries face. The Fall 2014 issue of MIT Sloan Management Review features a special report on strategy in changing markets, with articles on creating new strategic narratives, capturing new opportunities and finding the right strategic role for a board.

Features

Why Managers Still Matter

Managerial authority is essential when decisions are time-sensitive, knowledge is concentrated and decisions need to be coordinated.

Bringing Fun and Creativity to Work

Team-based contests that draw on creativity and collaboration skills can build motivation in employees.

Intelligence

The Upside to Large Competitors

New research suggests that a smaller company can benefit by making consumers aware that it competes against bigger corporations.

A New Perspective on Enterprise Resource Management

What if companies used information systems more broadly — not just to measure profits but also to account for the needs of people and the environment?

Getting Value From Your Data Scientists

To create real business value, top management must learn how to manage data scientists effectively.

Do-It-Yourself Leadership Training in China

In China, demand for skilled business managers exceeds supply. Can leadership self-development programs address that gap?

The 2014 Richard Beckhard Memorial Prize

This year’s winning article on planned change and organizational development is “Making Mergers Work,” by Hamid Bouchikhi and John R. Kimberly. The authors examine why mergers and acquisitions so often fail to achieve the results and synergies they promise. “Our work in this field has convinced us that there is no ‘one best way’ but rather four distinct paths that can be followed to achieve identity integration: assimilation, federation, confederation and metamorphosis,” they write.

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Getting Value From Your Data Scientists

  • Research Highlight
  • Read Time: 10 min 

Data scientists differ from other types of analysts in significant respects. To create real business value, top management must learn how to manage these “numbers people” effectively. To help executives avoid repeating some of the mistakes that have undermined the success of previous generations of analytical talent, the authors offer up seven recommendations for providing useful leadership and direction.

Why Managers Still Matter

  • Research Feature
  • Read Time: 20 min 

The role of managers needs to be redefined in today’s knowledge-based economy. Managerial authority remains essential in situations where decisions are time-sensitive, knowledge is concentrated and several decisions need to be coordinated. As well, an important task for today’s managers is to define the organizational goals and principles that they want employees to pursue. “From our perspective, the view that executive authority is increasingly passé is wrong,” write the authors.

Creating More Accurate Acquisition Valuations

  • Research Feature
  • Read Time: 18 min 

Deal markets can be “hot” or “cold,” and the state of the economy can bias executives’ evaluation of potential acquisitions. For instance, relying on discounted cash flow scenarios can bolster managers’ sense of confidence and create unrealistically low perceptions of uncertainty. Executives can mitigate valuation biases by having a checklist — the list tempers natural inclinations to focus on the value of growth options in “hot” markets and risk of investment in “cold” markets.

From the Editor: Strategy in the Midst of Change

  • Opinion & Analysis
  • Read Time: 2 min 

How do you develop strategy in a business environment characterized by rapid change and considerable uncertainty about the future? That’s a question that many executives in fast-changing industries face. The Fall 2014 issue of MIT Sloan Management Review features a special report on strategy in changing markets, with articles on creating new strategic narratives, capturing new opportunities and finding the right strategic role for a board.

How to Win in an Omnichannel World

  • Research Feature
  • Read Time: 24 min 

Retail customers now readily use both online and offline retail channels. To thrive in this new environment, retailers need to reexamine their strategies for delivering information and products. Companies that are successful at navigating the omnichannel environment take a customer perspective and view the activities of the company through two core functions: information and fulfillment. They also consider hybrid online-offline approaches, including inventory-only showrooms and “buy online, pick up in store” options.

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How Strategic Is Your Board?

  • Research Feature
  • Read Time: 18 min 

Strategic thinking at the top of a company is more important than ever for business survival. But boards of directors have no clear model to follow when it comes to developing the strategic role for the companies they oversee. Should they supervise, cocreate or support strategy? A structured assessment of a board’s strategic responsibilities can bring clarity to its role in creating strategy, and boards should be prepared to change their role in strategy if the industry context changes.

The Opportunity Paradox

  • Research Feature
  • Read Time: 21 min 

How can companies capture new opportunities most effectively? When evaluating new business opportunities, there’s a paradoxical tension between strategic focus and flexibility. Managers tend to be opportunists or strategists, and while most managers focus their attention on opportunity execution, opportunity selection appears to matter as much. Sustained business success seems to depend not just on capturing one opportunity but also on stringing multiple opportunities together.

Beyond Forecasting: Creating New Strategic Narratives

  • Research Feature
  • Read Time: 16 min 

In rapidly changing industries, it can be hard for established companies to build momentum for new strategic directions. But by rethinking the past and present and reimagining the future, managers can construct strategic narratives that enable innovation. A new study helps to understand how managers actually make strategy in conditions of considerable uncertainty, and do it in a way that is coherent, plausible and acceptable to most key stakeholders in the organization.

Finding the Right Corporate Legal Strategy

  • Research Feature
  • Read Time: 23 min 

How can companies use the law to gain strategic advantages? Some companies move beyond viewing the law just in terms of compliance and use their legal environment to secure a competitive advantage. Companies can adopt one of five types of legal strategies: avoidance, compliance, prevention, value or transformation. The right strategy for a company will depend on factors such as its business model, managers’ attitudes toward the law and the legal department’s ability to collaborate with managers.

Bringing Fun and Creativity to Work

  • Opinion & Analysis
  • Read Time: 4 min 

How do you inspire employees to become more motivated and perform better? By challenging them to test their creativity and collaboration skills through a team-based contest. “The contest provided a safe environment for participants to unleash their imaginations and form an emotional connection,” write the authors. “That, in turn, triggered an increased level of psychological ownership and positive feelings.“

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The Upside to Large Competitors

  • Research Highlight
  • Read Time: 7 min 

New research suggests that a smaller company can benefit by making consumers aware that it competes against bigger corporations. In six lab and field studies, the authors explored the effects of having a large, dominant competitor and found advantages in highlighting a competitor’s size and proximity. “Small brands see consumer support go up when they are faced with a competitive threat from large brands,” write the authors. “This support translates into higher purchase intention, more purchases and more favorable online reviews.”

The 2014 Richard Beckhard Memorial Prize

  • Opinion & Analysis
  • Read Time: 2 min 

This year’s winning article on planned change and organizational development is “Making Mergers Work,” by Hamid Bouchikhi and John R. Kimberly. The authors examine why mergers and acquisitions so often fail to achieve the results and synergies they promise. “Our work in this field has convinced us that there is no ‘one best way’ but rather four distinct paths that can be followed to achieve identity integration: assimilation, federation, confederation and metamorphosis,” they write.

What It Takes to Reshore Manufacturing Successfully

  • Research Feature
  • Read Time: 24 min 

The process of bringing assembly work back to U.S. factories from abroad is more challenging than the economics would predict. In the United States, many key resources, including the manufacturing workforce, have atrophied. Author Willy C. Shih (Harvard Business School) recommends that to reduce turnover, companies that embrace reshoring — bringing assembly work back from abroad — encourage workers to complete training and certification.

Do-It-Yourself Leadership Training in China

  • Research Highlight
  • Read Time: 9 min 

In recent years, China’s economy has grown so rapidly — and changed so much — that demand for skilled business managers exceeds supply. A gap between Chinese companies’ unwillingness to invest in training and young managers’ hunger for an opportunity to learn may create an opening for companies with a strong tradition of employee education. Can leadership self-development programs help address that gap?