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April 2003
ARCHIVE
SUMMARY
What Makes Employees Trust Their Leaders?
Women in Business: Seven Key Questions
Exporting Makes Firms Stronger
External Information Flows and R&D Cooperation
Coca-Cola and Nestlé: A Story of Love and Hate
The Art of Firing

Companies - and indeed the economy as a whole - rely o­n trust. We trust that the other party - buyer, seller or partner - will keep his or her side of the agreement. Even before we have signed anything, we expect the other party to act in good faith and do what he or she has promised.

Is it the same with leaders and employees? IESE Professor Pablo Cardona has investigated the way trust is generated between managers and their subordinates and has come to the conclusion that it is the leaders who have the more active part to play in this equation.
Besides the issue of trust, in this edition of IESE Insight we also look at various aspects of people leadership that influence companies' performance and way of doing business: the presence of women in management and policies for business restructuring.

Also in this issue of IESE Insight: sustainable business, how family firms can prepare for the handover from o­ne generation to the next, and the role of multinationals in knowledge transfer.
 Leadership, Strategy and Change 
What Makes Employees Trust Their Leaders?
Aitziber Elola, Pablo Cardona
Trust is a critical element in the relationship between a manager and his or her subordinates. This compelling paper explores whether or not certain managerial behaviors encourage employees to trust their leader. It also tackles reciprocity: if an employee trusts in a manager, does the employee perceive the leader's trust in return?
 Organizations and People 
Women in Business: Seven Key Questions
Mª Nuria Chinchilla
Companies in the 21st century face an important challenge: the growing number of women joining the work force. To remain competitive in the coming millenium, companies would be wise to draw o­n women's strengths, including experiential knowledge, emotional intelligence and a feminine, humanistic view of life. Here are seven key questions that address women's evolving role in business.
 Finance 
Exporting Makes Firms Stronger
José Manuel Campa, J. Myles Shaver
Evidence to date suggests that exporting is an outcome. Professors José Manuel Campa of IESE and J. Myles Shaver of the University of Minnesota argue that it is more than this. They show that exporters have more stable cash flows, and hence more stable capital investments, than non-exporters. They also prove that the information disseminated upon becoming an exporter - suggesting that the firm has more stable expected future cash flows and possesses some source of competitive advantage - reduces a firm's liquidity constraints.
 Innovation and Entrepreneurship 
External Information Flows and R&D Cooperation
Bruno Cassiman, Reinhilde Veugelers
An important source of sustainable competitive advantage is successful innovation, which depends o­n the development and integration of new knowledge. Part of this knowledge reaches the firm from external sources. Are the external information flows and the decision to cooperate in R&D interrelated? In their article "R&D Cooperation and Spillovers: Some Empirical Evidence from Belgium" (American Economic Review), Professor Bruno Cassiman of IESE and Professor Reinhilde Veugelers of Katholieke Universiteit Leuven answer to this question.
 Leadership, Strategy and Change 
Coca-Cola and Nestlé: A Story of Love and Hate
África Ariño
In March 1991, Coca-Cola and Nestlé created Coca-Cola Nestlé Refreshments Company (CCNR), a joint venture expected to be among the most successful of its generation. Three and a half years later, however, the collaboration between Coca-Cola and Nestlé came to an end and the joint venture was dissolved. In 2001 the two food and beverage giants announced the re-launch of CCNR. What led to the joint venture's termination the first time around? How come Coca-Cola and Nestlé decided to work together again? And would the new collaboration be a success? IESE Professor Africa Ariño guides you to find answers to these questions.
 Organizations and People 
The Art of Firing
CREADE, IRCO, Sagardoy Abogados
When the winds are good, companies forget the shortages, restructurings and layoffs experienced during economic crises. A group of researchers and professors from the International Research Center o­n Organizations of IESE and representatives of Sagardoy Abogados and CREADE thought that it was opportune not to forget the learnings of the recent gusts of unfavourable winds. Their White Book o­n "Best Practices in the Processes of Headcount Restructuring" is a comprehensive analysis of the phenomenon in Spain. It also contains some advice for the mastering of - as the authors call it - "the art of firing".
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