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Winter 2016
Volume 57, Issue # 2

Access the full Table of Contents below.
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Special Report: The Age of Super-Transparency

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Leading in the Age of Super-Transparency

How can companies adapt themselves to the demands of super-transparency?

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Using Social Media in Business Disputes

"Lawsourcing" campaigns are helping smaller organizations advance legal and public relations goals.

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What’s Your Strategy for Supply Chain Disclosure?

Today’s supply chains are required to be lean, agile, sustainable, and — increasingly — transparent.

Letter from the Editor

How Transparency Changes Business

December 14, 2015 | Martha E. Mangelsdorf

The Winter 2016 issue of MIT Sloan Management Review explores how increased transparency — and, in particular, the ready flow of information in a digital world — is changing the environment in which corporations operate. Transparency also is changing the distribution of power between large organizations and those who challenge them. Executives need to anticipate the possibility that any issues related to their company could someday be public knowledge.

Also Featured in This Issue

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Mastering Strategy

How can executives develop their skills as strategists? One way is to learn from the masters.

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How CEOs Can Leverage Twitter

By tweeting, CEOs have an opportunity to initiate and influence online conversations.

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When Customers Become Fans

Smartphone maker Xiaomi cultivates user pride through user-centered and open innovation.

Intelligence

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Getting Workplace Safety Right

Companies aiming to be competitive in the long term do not see safety and productivity as trade-offs.

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How Transparency Changes Business

  • Opinion & Analysis
  • Read Time: 2 min 

The Winter 2016 issue of MIT Sloan Management Review explores how increased transparency — and, in particular, the ready flow of information in a digital world — is changing the environment in which corporations operate. Transparency also is changing the distribution of power between large organizations and those who challenge them. Executives need to anticipate the possibility that any issues related to their company could someday be public knowledge.

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Fighting the “Headquarters Knows Best” Syndrome

  • Research Feature
  • Read Time: 22 min 

Belief that headquarters knows best can be damaging to the long-term success of a company operating in global markets. One company’s solution: a decision to operate out of dual headquarters, in the Netherlands and China. “No longer a prisoner of its home base, the top team was viewed as mobile, agile, and geographically dispersed,” write Cyril Bouquet et al. “The company was able to make more effective resource-allocation decisions informed by diverse thinking and divergent points of view.”

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Lessons From Hollywood: A New Approach To Funding R&D

  • Research Feature
  • Read Time: 33 min 

Could science-based industries benefit from a financing model similar to one used to make Hollywood movies? “We propose that a form of governance centered on the project rather than the company may be a more efficient way to organize innovation in science-based industries,” write the authors. Their proposal addresses the fact that traditional venture capital “wasn’t designed to deal with the costs, risks, and slow payout of science-based industries.”

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How CEOs Can Leverage Twitter

  • Research Feature
  • Read Time: 15 min 

Rather than waiting for impressions about a company to be driven by others in social media, CEOs of large companies can help shape the conversation by becoming active on Twitter. Journalists often check a CEO’s Twitter account before covering the CEO or the company, and certain types of business-related CEO tweets — including tweets about new management initiatives; strategy and performance; and new products and services — have even correlated with positive movement of company stock prices.

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Leading in the Age of Super-Transparency

  • Research Feature
  • Read Time: 22 min 

Thanks to social media and an increasing flood of data, the capacity to generate causes and controversies almost instantly has become the new norm in today’s “super-transparent society.” Individuals and organizations produce a voluminous, mostly involuntary, “digital exhaust,” which reveals much more about them than they think it does. Most business leaders have not yet come to grips with the new reality — and what it means for their organizations.

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What’s Your Strategy for Supply Chain Disclosure?

  • Research Feature
  • Read Time: 22 min 

How much information should a company disclose about its supply chain? In addition to having to be lean, agile, and sustainable, today’s supply chains are increasingly the focus of growing attention from a variety of external stakeholders. These stakeholders often want information beyond what the company is legally obliged to disclose. But many companies have limited visibility of their supply chain information and have not fully considered their disclosure strategy.

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A New Vision for Personal Transportation

  • Research Highlight
  • Read Time: 11 min 

Smart data and mass customization have the potential to radically change the way trips are planned. Already, the Boston-based startup Bridj is piloting a dynamic bus system that optimizes routing in response to demand, while Düsseldorf Airport is piloting a robotic parking system in which users just drop off their cars, which are then parked automatically. In the future, intermodal routing could provide customers with a seamless experience and reshape the transportation infrastructure.

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When Customers Become Fans

  • Research Feature
  • Read Time: 3 min 

Beijing-based smartphone maker Xiaomi Inc. has actively involved enthusiastic customers — known as “Mi Fans” — in both software and hardware development processes. Tech-savvy users test interfaces and products as volunteers, doing much of their communication on the Internet. Customer involvement in the product development life cycle has not only helped Xiaomi reduce R&D costs but also enabled the company to cultivate a sense of participation and pride among lead users.

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Using Social Media in Business Disputes

  • Research Feature
  • Read Time: 7 min 

An emergent defensive strategy is being used by both upstart players facing established competitors and by newcomers (such as Tesla, Airbnb, and Uber) facing government regulators. Called “lawsourcing,” the strategy advances legal and public relations goals through social media campaigns, online petitions, and boycotts to draw attention to disputes. These tactics are often framed in moral and ethical terms, and they are being initiated by even very small players.

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Getting Workplace Safety Right

  • Research Highlight
  • Read Time: 10 min 

Companies aiming to be competitive in the long term do not see safety and productivity as trade-offs. Research drawn from multiple studies conducted with the support of companies, unions, and regulators in the United States and Canada finds no evidence that protecting the workforce harms competitiveness. “Once companies understand that safety is not the enemy of efficiency,” the authors write, “they can begin to build organizational safety capabilities.”

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What Email Reveals About Your Organization

  • Research Highlight
  • Read Time: 11 min 

By studying data from email archives and other sources, managers can gain surprising insights about how groups should be organized and about which communications patterns are most successful. Anonymized analysis of internal information communication found that creative people, for instance, work more productively on projects with strong leaders than on collaborations without a clear leader. In addition, in many situations, groups of leaders taking turns worked better at sparking creativity.

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The Long-Tail Strategy for IT Outsourcing

  • Research Feature
  • Read Time: 24 min 

No longer just a cost-saving measure, IT outsourcing has emerged as an important strategic tool for acquiring cutting-edge ideas. Many companies are expanding their portfolios of IT suppliers to include smaller, highly innovative companies. But this expansion increases the complexity of managing supplier portfolios. To take full advantage of the innovations that diverse suppliers provide, organizations need to reimagine their strategies to be dynamic, diversified, and still disciplined.

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How Workplace Fairness Affects Employee Commitment

  • Research Highlight
  • Read Time: 8 min 

Managers have an opportunity to interrupt a sometimes vicious cycle between trust and commitment. The relationship between workers’ trust in decision-making authorities and their commitment toward the organization is a self-perpetuating one, and organizations can achieve a higher level of workforce engagement by proactively building and maintaining trust-based relationships. The key, research finds, appears to be the continuous anticipation and management of the so-called “expectation-experience gap.”

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Has Your Office Become a Lonely Place?

  • Opinion & Analysis
  • Read Time: 3 min 

With increasing amounts of work getting done outside the traditional corporate office — for example, through employees working at home — those left in the office may face a lonelier, and even less productive, office environment. In fact, working remotely may be contagious, because if many people on a team aren’t in the office much, coming into the office has less benefit for the remaining employees. “Once a certain number of individuals are working offsite, everyone is isolated,” write researchers.

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Mastering Strategy

  • Interview
  • Read Time: 15 min 

How can executives develop their skills as strategists? One way is to learn from the masters. The book Strategy Rules: Five Timeless Lessons From Bill Gates, Andy Grove, and Steve Jobs (HarperCollins, 2015) explores insights drawn from the careers of these former CEOs of Microsoft, Intel, and Apple. In a Q&A, the book’s authors, David B. Yoffie of Harvard Business School and Michael A. Cusumano of MIT Sloan, explain how strategic thinking is a capability that leaders — even the superstars — develop over time.