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Things around the globe are shaking up. What was Japanese yesterday (Nissan) is today Swedish (Volvo). And what was known last month as a British-Dutch conglomerate (Corus) a few days ago became the second largest steel company in India (Tata). In Spain, the long-standing electricity monopoly (Endesa) was absorbed just a few months ago by a German energy giant (E.On). All these mergers and acquisitions make reading the business section of the newspaper a frenetic trip from one point of the globe to the other... though -fortunately - without the jet lag. How do employees assimilate these processes of globalization? Are people capable of easily adapting to companies with remote cultural origins? IESE Professor of Managing People in Organizations Yih-teen Lee has studied how national culture affects the "fit" and motivation of a company's employees. His research, recently awarded by the Academy of Management, reveals that distinct cultures perceive authority in different ways, which conditions how employees integrate, and their degree of satisfaction and work motivation. To improve employees' attitude, the author recommends that multinational firms should "design structures that are congruent with the local values systems." In addition to national diversity, there are other cultural aspects that condition the motivation of directors and employees. For instance, when people do not understand or share corporate values, they tend to be guided by their personal or professional objectives. This leads to inefficiency, which ends up dampening a company's results. Two of our investigations this month propose solutions to this problem: one through "Management by Missions," and another by strengthening the values that help a family business last. Though the two visions are distinct, they share a common thread: Despite origin or nationality, companies are formed by people who either make certain values a reality - or not.
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Organizations and People |
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How National Culture Influences Fit |
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| Yih-Teen Lee, John Antonakis |
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In the business world, there's a lot of talk about "fit." "He failed to 'fit' into the corporate culture," they might say, or "Yes, he 'fits' in well." Despite so much conservation, little is known about how national culture affects this buzzword. For example, will a Taiwanese employee 'fit' better into a certain work environment than, say, a German? In the award-winning paper "Satisfaction With Organizational Structuring: Does Fit Depend on Where One's From?" IESE Professor Yih-Teen Lee and Prof. John Antonakis explain why "power distance" makes it imperative that multinational firms take a close look at local values. 
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Leadership, Strategy and Change |
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Get Results With "Management by Missions" |
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| Pablo Cardona, Carlos Rey |
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| Many companies have, at one time or another, contemplated their purpose and presented a mission or a set of corporate values. Sometimes, this is merely a cosmetic exercise. The true challenge is to define a coherent mission and to make it reach every nook and cranny of the company, so that each and every employee lives it in practice, day in and day out. This has been achieved, to varying degrees, by companies like Sony España, Abertis, Random House Mondadori and T-Systems, which have applied the philosophy known as "Management by Missions." In the paper "Management by Missions: Initial Success Stories," IESE Professor Pablo Cardona and the managing partner of Efficiency Coaching, Carlos Rey, explain that this methodology not only delivers benefits in terms of efficiency and human resources management, it also helps eliminate certain problems deriving from an alignment focused primarily on strategic objectives.
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Economics |
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Milton Friedman: The Economist Who Changed the World |
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| Antonio Argandoña |
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| The passing away of Milton Friedman (1912-2006) in December focused attention on the creator of neoliberal philosophies, who was one of the 20th century's most brilliant and influential economists. The head of IESE's economics department, Professor Antonio Argandoña, reviews the contributions of this controversial master of economic science in the areas of economic policy and liberal thought. The work of Friedman, who viewed economics as a tool for changing the world, won over and inspired many experts and government leaders. Argandoña analyzes the Nobel laureate's ideas, including his methodological foundations, his perspectives on stabilization policies, his particular approach to monetary policy, and his emphasis on defending freedom as opposed to the interventionist role of the government.
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Marketing |
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A New Golden Age of Radio? |
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| Lluís G. Renart, Nicolás Muñoz |
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| Radio is on the threshold of what just may be the greatest revolution the medium has experienced since the advent of frequency modulation (FM) in the 60s: digital radio. This new standard, which is the equivalent to what the CD was for vinyl, does not just bring higher quality: It will mean a huge opportunity for revamping radio's business model. The change is already becoming noticeable in the United States. Yet, in Europe -especially in Spain- digital radio still has major strides to make. IESE professor Lluís G. Renart and Media Planning Group's corporate development director Niko Muñoz analyze the challenges and opportunities facing digital radio.
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Economics |
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Working Women Still Work More at Home |
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| Almudena Sevilla, Cristina Fernández |
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| Just because more and more women work outside the home, do they do less household chores? Absolutely not. Women's higher earnings have not liberated them from housework. In the paper "Social Norms and Household Time Allocation," researchers Cristina Fernandez of IESE Business School and Almudena Sevilla-Sanz of the University of Oxford observe that wives who earn more than their husbands still do more than 50 percent of the housework and childcare. And when a woman's relative earnings increase, her share of housework only decreases up to the point where she earns the same as her husband. Childcare, too, does not vary with spouses' relative earnings. At the root of this phenomenon are social norms.
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Organizations and People |
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Five Secrets Behind Successful Family Businesses |
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| Miguel Ángel Gallo, Daniela Montemerlo, Josep Tàpies, Kristin Cappuyns, Salvatore Tomaselli, Sabine Klein |
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| As everyone knows, you can choose your friends - but not your family. And in every family, members have different personalities and goals that do not always mesh. In a family business, clashes mean more than just an unpleasant evening around the dinner table - they could endanger the business's survival. Nonetheless, many family businesses thrive from one generation to the next. What are their secrets? In "From the Founder to Multigenerational Family Business: The Family's Crucial Role as an Owner for Longevity," authors Miguel A. Gallo, Sabine Klein, Daniela Montemerlo, Josep Tàpies, Salvatore Tomaselli, and Kristin Cappuyns explore the psychological dynamics of the people behind a family business, and suggest ways that families can ensure the survival of their business for the long term.
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Marketing |
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The Press in 2007: Are Newspapers on the Brink? |
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| Deloitte, IESE Business School |
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| Experts say that the upsurge of online media and the overpowering force of audiovisual content are making the daily paper increasingly less attractive to readers because the paper is unable to match the immediacy of the Internet, radio or television. Nevertheless, catastrophe does not appear to be imminent. The "White Paper on the Daily Press 2007," which includes accounting results filed by Spanish editors with the Spanish Registry of Companies, shows that Spanish daily newspapers are in good health. Analyzed by the consulting firm Deloitte and experts from IESE, the white paper forecasts that if daily papers can overcome the challenges of the future, they have a long life ahead of them. Case in point: In 2005, they enjoyed a revenue increase of over 4 percent.
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Economics |
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Mergers and Competition: Searching for Balance |
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| Xavier Vives , Lars Calmfors, Giancarlo Corsetti, Seppo Honkapohja, John Kay, Gilles Saint-Paul, Hans-Werner Sinn, Jan-Egbert Sturm |
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| Mittal Steel for Arcelor, E-on for Endesa, France Telecom for Amena... One just needs to look at current events in the business world over the past several months to see that mergers abound in the EU. What is behind the merger wave, and are large mergers a threat to free competition in Europe? The study "Mergers and Antitrust Policies in Europe," which includes the participation of IESE economics professor Xavier Vives and various other European experts, shows that these transactions do in fact endanger competition. The study also reveals that there is a lack of coordination of the policies that allow for ideal corporate restructuring. The authors recommend setting up an independent administrative court or an independent European Competition Agency, along the lines of the Federal Trade Commission (FTC) in the U.S.
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Finance |
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Which Spanish Companies Created Value in 2006? |
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| Pablo Fernández |
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| Banco Santander finished out 2006 as the company creating the most value for its shareholders. Rounding out the top six were: Endesa, Telefónica, Arcelor, BBVA and Iberdrola. Meanwhile, the profits leader was a somewhat smaller company: Inmocaral. In general, 59 companies were more profitable than the IBEX 35, while 12 ended the year with losses. So report Professor Pablo Fernández (IESE) and research assistant José María Carabias (IESE) in the paper "Rentabilidad y creación de valor de las empresas españolas en 2006" ("Profitability and the Creation of Value by Spanish Companies in 2006").
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