 |
At the start of 2008, the only thing we know for certain is that we don't yet know how the world economy behaved in 2007. The International Monetary Fund is rearranging its accounts in order to apply new statistical criteria that will allow it to assess the contribution each country made to global growth, and other studies won't be completed for some time. Worryingly, with neither economists nor governments able to agree on economic forecasts for 2008, and corporate optimism waning, what can executives do in this atmosphere of uncertainty? Should they put off all strategic decisions until the situation gets clarified? Against this backdrop, now might not be the best time to rush a decision, but that doesn't mean you should give up having a list of strategic resolutions for the coming year. Surely there are some crucial aspects of your company that you could improve, even in the absence of all the information. A recent poll showed that the top resolution for 2008 is to appreciate loved ones and spend more time with family and friends this year, so that seems as good a place as any to start. Wouldn't you like to make some personal changes that reconcile work and home responsibilities without disadvantaging prospects for you or your company? Next, look around at your management team: are there some objective criteria you could set for better governance - especially relevant if you belong to a family business? What about relationships with your outside partners and suppliers: Instead of clinging to fixed contracts based on margin, could you negotiate some flexible deals that allow you to renegotiate prices over time, which would benefit every link of the chain? Better yet, why not set up a portfolio of alliances that create economies of scale or help you innovate? Finally, in the wider realm of ethics, isn't it time we match our words with deeds in the area of social responsibility? Pursuing these sorts of goals has less to do with current economic circumstances, more our determination to constantly improve the way things are done. At IESE Insight, we have our own list of new year's resolutions for continual improvement, which we will share with you as the year progresses. The fact that you are reading this edition means that our first resolution - to equip you with the relevant knowledge you need to improve yourself, the people you work with, and the world in which you operate - has not, like most other new year's resolutions, already been broken. The IESE Insight team wishes you a year full of happiness and abundant knowledge.
|
|
|
Economics |
|
|
|
Economics Made Easy |
|
| Alfredo Pastor |
|
How can it be that in a ranking of the world's top economies, India is listed ahead of Germany and Great Britain? And that Spain, which has for years aspired to become a G8 member, sits 15th on the list, behind Indonesia and South Korea? What affects do inflation, unemployment, interest rates and globalization have on our daily lives? These and other questions are answered in the book The Humble Science: Economics for Citizens (La ciencia humilde: Economía para ciudadanos) by IESE professor Alfredo Pastor. Using everyday examples and straightforward language, this publication explains the basic principles of economics, a "humble science" that should not be feared, says the author, as it simply entails using common sense and helps us understand the world around us. 
|
|
|
Finance |
|
|
|
Latinos: Opportunities for U.S. Banks |
|
| Francesc Prior, Javier Santomá |
|
| Latin American immigrants represent the fastest-growing segment of the U.S. population, in both number and economic weight. In 2006, this group contributed more than $450 billion to the U.S. economy and sent more than $45 billion to their countries of origin. However, most of these are illegal aliens, which means they are excluded from the mainstream banking system. Between 33 percent and 44 percent of all Latinos are without checking or savings accounts, and must resort to other services that are more expensive and inefficient than traditional banking. The study "Best Practices in Banking for Latin American Immigrants in the United States" ("Mejores prácticas en bancarización de inmigrantes latinoamericanos en Estados Unidos") makes a thorough analysis of the problem, identifying cases that successfully meet Latin American immigrants' need for banking in the United States.
|
|
|
Service and Operations Management |
|
|
|
Renegotiate and Reduce Inefficiencies in Your Supply Chain |
|
| Víctor Martínez de Albéniz, David Simchi-Levi |
|
| Ever seen books with their covers torn off? This is one of the telltale signs that buyers and suppliers, seeking to optimize their supply chain, have struck a buy-back agreement. While buyers and suppliers need to negotiate such types of deals, finding a mutually advantageous arrangement is no easy feat, especially when it comes to a field as complex as supply-chain economics. Considering all the means available for buyers and suppliers to improve efficiency in their supply chain, professors Victor Martínez de Albéniz and David Simchi-Levi consider a counter-intuitive mechanism to help buyers and sellers negotiate wisely - wholesale price renegotiation - which they believe can best reduce inefficiency and increase profits for everyone involved.
|
|
|
Business Ethics |
|
|
|
Actions Speak Louder Than Words (Though Words Count, Too) |
|
| Pascual Berrone, Jordi Surroca, Josep A. Tribó |
|
| While most would admit, after the court rulings on Enron and the like, that unethical business behavior is bad for society, the jury is still out on whether ethical disclosure practices are good for companies. Some would contend that ethical initiatives do little to boost the bottom line and, therefore, are not in the shareholders' best interests. Professors Pascual Berrone, Jordi Surroca and Josep Tribó argue otherwise. In their article, "Corporate Ethical Identity as a Determinant of Firm Performance," they discover that ethics and business are not unrelated worlds, but rather, one enhances the other.
|
|
|
Corporate Governance |
|
|
|
Top 10 Tips for Good Governance |
|
| Josep Tàpies, Alfonso Chiner Furquet |
|
| As Confucius said, "Govern a family as you would cook a small fish - very gently." Wise words when it comes to the issue of governance in a family business. In their technical notes, "Governance of the Family Business (Gobierno de la familia empresaria)," IESE Prof. Josep Tàpies, Chair of Family-Owned Business, and fellow researcher Alfonso Chiner assert that if people accept the principle that companies in general require management controls for the purpose of coordinating and harmonizing employees toward accomplishing some goal, then family businesses should not be any different. Therein lies the problem: family businesses are different and must be treated on their own terms. Taking account of the delicate nature of family businesses, the authors suggest 10 tips for good governance to ensure that blood and business get mixed, not shed.
|
|
|
Innovation and Entrepreneurship |
|
|
|
The Company That Companies Keep |
|
| Pinar Ozcan |
|
| You're only as good as the company you keep - it's an adage that applies from the playground to the classroom to the executive suite. Indeed, for businesses, the partners, affiliates and associates that are connected through a network are vital to companies' ability to succeed. For entrepreneurial companies in particular, being the "lone wolf" - far from heroic - can be a nearly fatal position, isolating a company from its competition and making it almost invisible to investors and potential partners. To increase the chance for success, companies would do well to build strong "alliance portfolios" - that is, strong networks that add value to a company and facilitate its growth. In "What Networks Do to Companies and What Companies Do to Networks: Evolution of Alliance Portfolios in Networked Markets," IESE Professor Pinar Ozcan discusses the benefits of alliance portfolios and discusses how those portfolios change over time.
|
|
|
Knowledge and Information |
|
|
|
Analyzing the Morning Commute |
|
| Carlos F. Daganzo, Alejandro Lago |
|
| In major metropolitan areas, the morning commute is often the most stressful part of the day. Managing congestion challenges urban planners, as they examine how drivers compete for road space with an eye on their watch. The paper "Spillovers, Merging Traffic and the Morning Commute" by Alejandro Lago and Carlos F. Daganzo studies a congested road network in which lines of cars getting onto the freeway spill back over long distances and penalize drivers from different access points. Contrary to common practice, should the ramps closest to the bottleneck be given priority? The paper answers this and other questions with the aim of reducing the congestion caused by urban sprawl.
|
|
|
E-Business |
|
|
|
Where Is Technology Outsourcing Leading Us? |
|
| Sandra Sieber, Josep Valor, Valentín Porta |
|
| Outsourcing business processes has its advantages, but it also brings risk. In order to deal with these risks, companies must know what options are offered to them by outsourcing, a term gaining in popularity among executives. In the paper "Outsourcing ICT Services and Business Process Outsourcing (BPO)" ("La externalización de los servicios de TIC y el Business Process Outsourcing)," IESE information systems professors Sandra Sieber and Josep Valor, along with specialized consultant Valentín Porta, identify the different types of outsourcing available to companies, and offer analysis as to what the future holds for this 15-year-old practice.
|
|
|
Organizations and People |
|
|
|
Career and Family: Choose Your Path |
|
| Nuria Chinchilla, Consuelo León, Elizabeth Torres, Miguel Ángel Canela |
|
| When it comes to making decisions, women and younger executives value the balance between personal/family life and professional life, whereas older men prioritize professional promotion and the opinions of their other half. This is one of the conclusions reached in a study done by Nuria Chinchilla, IESE professor of Managing People in Organizations, along with associate researcher Consuelo León, research assistant Elisabeth Torres and mathematics professor Miguel Ángel Canela from the University of Barcelona, which was based on the data collected in a survey of 967 male and female executives.
|
|
|
Business Ethics |
|
|
|
Without Ethics, Can We Even Talk About Education? |
|
| Manuel Guillén, Juan Fontrodona, Alfredo Rodríguez Sedano |
|
| When the idea of creating a pan-European educational framework took root, ethics were considered one of the pillars. Yet, as the framework, called the European Qualifications Framework (EQF), has evolved, ethics have somehow gradually disappeared from the document and its grids. In the article, "The Great Forgotten Issue: Vindicating Ethics in the European Qualifications Framework," Manuel Guillén, IESE professor of business ethics Joan Fontrodona and Alfredo Rodríguez-Sedano argue that if ethics are not emphasized in the framework, Europe may eventually find itself with an amoral education system. Without ethics, can we even talk about education?
|
|
ARCHIVE