MIT Sloan Management Review

People aren't stupid – they just often act that way. Noted behavioral economist Dan Ariely explains what that should mean for strategists.

Companies with better environmental risk management have a lower cost of capital.

Increased complexity of a company's systems -- products, processes, technologies, organizational structures, legal contracts and so on -- can create dangerous vulnerabilities. Three complementary strategies can help mitigate the risk.

Under the right circumstances, industry initiatives involving “coopetition”

More and more companies are now able to change their prices in real time to capture the full possible value of goods and services. Here’s how to do dynamic pricing right.

An executive's "financial signature" is the key to how he or she evaluates risk and reward to build company value.

Contrary to a common assumption, companies can use a variety of techniques to reduce costs, not just in the design phase, but throughout the product life cycle. The authors suggest that companies competing aggressively on costs could learn from Olympus Optical. In a field study, they observed how the company’s consumer-products division applies cost-management techniques in an integrated way, with the outputs of some techniques acting as inputs to others and leading to continuous cost reductions.

Most companies today are using precious little of the computing power available to them through the machines and software they already own. PCs, servers and mainframes all sit idle much of time, while the people who operate them are away from the office or the plant. And as a recent IBM Corp. study points out, [...]

Kellogg‘s profit margins and the stature of its brands both declined throughout the 1990s. A wake-up call came in 1999 when the venerable company lost market leadership. The author describes how it embarked upon an ambitious and, for the food industry, novel strategy, emphasizing profit and value over volume and employing compensation and organization strategies to help cascade the change through the company and re-establish its innovativeness, profitability and reputation.

Executives who carefully cultivate financial market and business cycle literacy are likely to manage their companies better than those who do not.