 |
Quality or price: Nowadays it seems this is an obligatory dilemma for any product or service strategy. Yet the two concepts need not be packaged separately. In fact, the pioneers of the Total Quality philosophy, such as W. Edwards Deming and Joseph M. Juran, always understood quality in terms of optimizing business processes and learning from mistakes, in order to improve customer satisfaction, while reducing costs along the way. As with so many other management ideas, the concept of quality has at times been mishandled. In extreme cases, the means (the protocols that ensure excellent production or service) became the end (where it was more important to document what was being done at each step than the actual action being taken). Situations like these not only do away with the benefits that gave rise to those processes, but also lead to desperation - if not roars of laughter - for more than one reasonable employee. Nonetheless, quality is not dead. In a context of fierce competition and no margin for lowering prices, quality - defined as "total involvement of the entire company and all of its organization-related aspects" - could once again be the solution to quite a few problems. These are the findings of some of the researchers who have contributed to this edition of IESE Insight. José Ramón Pin, Antonio Ortega Parra and Pilar García-Lombardía propose the use of "quality agreements" between HR departments and other business units in order to ensure that the company's strategic goals are achieved on the basis of specific requests. Another study reviewed this month, by an international group of experts that includes IESE Prof. Philip G. Moscoso, analyzes quality in supply-chain relationships. Finally, two studies show that progress can also be made in the quality of leadership: the key is to become a transcendental leader. The first study suggests doing so through management by missions, and the second through collaboration in NGO management development programs. In this edition we have hand-picked a selection of papers on public and private investment, personal decision making and managing technology teams. Although none of these speaks directly to the issue of quality, all are designed to contribute to the excellence of the company by way of new knowledge. We hope you enjoy a quality read.
|
|
|
Finance |
|
|
|
Why Private Equity Is Here to Stay |
|
| Heino Meerkatt, John Rose, Michael Brigl, Heinrich von Liechtenstein, Mª Julia Prats, Alejandro Herrera |
|
Despite turmoil in global credit markets, private equity is alive and well, with ample funds for investment. So says a new study from The Boston Consulting Group and IESE Business School, noting that rather than creating value through leverage, the sector's focus seems to be shifting to operational improvement and growth. The shift away from credit dependency means that the current crunch will affect the sector less than predicted. Although private equity does not, on average, outperform the public capital markets on a risk-adjusted basis, the best private-equity firms do consistently "beat the fade," says the study. In short, the funds avoid reverting to average returns and are likely to outperform the market over time. 
|
|
|
Organizations and People |
|
|
|
Using QAs to Align HR Objectives with Rest of Company |
|
| José Ramón Pin, Antonio Ortega Parra, Pilar García-Lombardía |
|
| Quality agreements (QAs), a formal commitment between a party providing a service and the one receiving it, are well established when the provider is an external supplier, as is frequently the case with IT services. However, there is less evidence of customer-supplier relationships being implemented internally between departments in the same company. To study how this could work, IESE joined forces with the former HR director of BBVA to study QAs in relation to human resources, a realm of growing relevance and interest. By analyzing the practices of GlaxoSmithKline, Randstad, Repsol as well as BBVA, they suggest "One Way to Strategically Adjust HR" ("Una propuesta para el ajuste estratégico de RR.HH.") when using QAs - the title of their paper.
|
|
|
E-Business |
|
|
|
Setting Up a Firewall Against Burnout |
|
| Suzanne D. Pawlowski, Evgeny A. Káganer, John J. Cater III |
|
| IT manager Joe is already working 60-hour weeks when his boss orders him to implement that whiz-bang technology everyone's talking about, not so much because his company needs it, but because the competition has it. Suddenly, those 60-hour weeks seem like a vacation. Worse than feeling angry or anxious, Joe feels nothing at all. Joe is a classic case headed for burnout. In the paper "Focusing the Research Agenda on Burnout in IT: Social Representations of Burnout in the Profession," Suzanne D. Pawlowski, IESE's Evgeny A. Káganer and John J. Cater III capture and analyze the perspectives on burnout among IT professionals - a little understood area of growing concern.
|
|
|
Service and Operations Management |
|
|
|
Supply-Chain Relationships Take Work |
|
| Hannes Günter, Craig Shepherd, Philip G. Moscoso, Cees De Snoo, Johann Riedel |
|
| Saying you want a high-quality relationship is like saying you want something to eat - in other words, what, specifically, do you mean? Defining a high-quality relationship is a challenge that supply-chain managers, in particular, must face. Good relationships can positively affect a supply chain's performance, but what a good relationship actually means is up for debate, and the definition varies across different academic disciplines. In "Unpacking Relationship Quality in Supply Chains: An Interdisciplinary Review," authors Hannes Günter, Craig Shepherd, Philip Moscoso, Cees De Snoo and Johann Riedel review the existing literature and suggest how a true definition of relationship quality may be reached - and what the ambiguity means for supply chains.
|
|
|
Leadership, Strategy and Change |
|
|
|
Leading a Process of Change Based on Mission |
|
| Pablo Cardona, Carlos Rey |
|
| Getting employees committed to a mission that is abundant in content, credibility and urgency takes a certain kind of "transcendental" leadership that is deeply rooted in principles and personal values. In their paper, IESE Prof. Pablo Cardona and DPM Consulting partner Carlos Rey show one method for achieving what they call "mission-based leadership." The authors have tested it out and they say it works.
|
|
|
Finance |
|
|
|
More Money Now or Later? Predicting Income Stream |
|
| Manel Baucells, Rakesh K. Sarin |
|
| Suppose you're looking for a job and receive multiple offers. To evaluate them, you consider current salary, future salary and other criteria, such as job location, territory and travel requirements, to name just a few. Yet, the future is hard to predict and might bring complications. What if your future salary depends on company performance? Often, income streams are uncertain and change over time. So, what's the best way to evaluate the alternatives? In their paper, Manel Baucells and Rakesh K. Sarin define and evaluate three main approaches for evaluating time streams of income and recommend the best one for calculating future economic well-being.
|
|
|
Corporate Governance |
|
|
|
How Ownership Concentration Influences R&D Investment |
|
| Josep A. Tribó, Pascual Berrone, Jordi Surroca |
|
| In the United States and Britain, firm ownership is typically dispersed among a large number of outside investors. Conversely, Asia and most of continental Europe have high levels of ownership concentration, representing an insider-dominated system. In this article, Josep A. Tribó, IESE's Pascual Berrone and Jordi Surroca explore the dynamics between ownership structure and R&D expenditure by observing firms from Spain, which bridges both types of governance systems. In doing so, they gain new insights into what drives investment preferences and, ultimately, the key influences on a firm's level of R&D spending.
|
|
|
Innovation and Entrepreneurship |
|
|
|
NGO Partnership Boosts Management Development |
|
| Anjaney Borwankar, S. Ramakrishna Velamuri |
|
| "It was the most rewarding experience of my life." "My confidence has grown." "The personal development I gained from the assignment was exceptional." These are just a few of the enthusiastic comments from U.K. managers of a large European financial services firm who took part in a 10-year partnership program with an NGO in India. Turning their attention to NGO-private sector partnerships, Anjaney Borwankar and Prof. S. Ramakrishna Velamuri find that NGOs, particularly in developing countries, offer unique conditions and contexts for the personal development of private-sector managers. Their self-awareness was evidently enhanced - but less clear is whether that personal boost translated into improved organizational effectiveness.
|
|
|
Knowledge and Information |
|
|
|
Stop Press! Healthy Prospects for Newspapers in Spain |
|
| Carat, Deloitte, IESE-CIEC |
|
| Higher income, greater post-tax profits, more advertising: Who says the press is in crisis? For the seventh year in a row, Carat, Deloitte and IESE have joined forces to publish the 2008 edition of the Daily Press White Book. In it, they show that the oft-predicted crisis in the sector has simply not materialized, at least not in Spain. The study, based on statistics from 2006 and projections for 2007, also notes good times for digital press and online advertising. The only bad news: decreasing readership among youth, and the fact that, although readership is increasing, distribution is falling.
|
|
|
Finance |
|
|
|
2008: A Good Year for the Stock Market? |
|
| Vicente J. Bermejo, Pablo Fernández |
|
| Stock markets around the world got off to a rocky start in 2008. IESE Prof. Pablo Fernández and research assistant Vicente J. Bermejo highlight this in their article "Spanish Companies in 2007 and the Period Between 1993-2007: Profitability and Value Creation" ("Las empresas españolas en 2007 y en el periodo 1993-2007: Rentabilidad y creación de valor"). In January, shareholders watched as the 125 companies traded on the Spanish stock market destroyed more value than in all of 2007. The number of companies doing so and those offering negative profits at the start of this year have also increased. Will this be a good year for the stock market?
|
|
ARCHIVE