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Long Range Planning

37/5 October 2004

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Charles Baden-Fuller Editorial

Leadership
Few topics create so much debate as that of leadership. The influence of leaders on their organisations is clearly important; they seem able to create a climate that leads to rapid wealth creation or destruction. But the influence of leaders in large complex organisations seems disproportionate given the numerous checks and balances and the many professional staff working to make the organisation run smoothly. The successes and failures at Dell, Microsoft, Shell and Enron seem as dependent on their corporate leader’s actions as those of the much smaller enterprise that has fewer support systems. What is happening here? What do these leaders of large companies actually do? Do the corporate histories, often written by leaders about themselves, paint a proper picture?
James Kelly’s article on leadership in large complex organisations provides insights about what this particular kind of CEOs do and how they do it. James has been a leader himself, and has made a life’s work examining the workings of the upper-echelon of corporations that are successful and of those that fail. He knows the language, the concerns, the hot-buttons, the pressures and how leaders achieve their influence. He reveals a beguilingly simple agenda of success that includes: culling standards of performance, values and organisational design that engage and motivate people, and a clear growth path. James argues that these are the key select tasks and that they have to be done with energy, commitment and “deadly intent”. This is not easy, and he documents failures as well as successes.
Paula Jarzabkowski examines another dimension of leadership: the diversity of the top management team. It is well known that diversity has the potential to improve organisational performance in both large and small organisations. She explains the dimensions of team diversity, why it is much more than ethnic and gender based and why it has to be linked to collective action. She then goes on to examine how this diversity should be built up and managed to achieve its fullest effect; avoiding dysfunctional teams and yielding the development of a learning culture.
There are few case studies of failure, yet it is from leadership failures that we can learn the most. Elizabeth Briody, Tamer Cavusgil and Stewart Miller tell the story of failed leadership within GM. Three successful internal units: Saturn, International Operations, and the Small Car Group came together to create the Delta Car Program, a less than successful internal corporate venture. Perhaps because of the strength of the individual partners, each team seemed unwilling to mould its culture and to provide the necessary effort to make the new venture succeed. Whilst the authors politely ascribe the failure to many factors, to most readers it will be clear that we have a case of the failure of leadership. In this case, the company’s management was not able to rise to the challenge.
Business Continuity Management is traditionally seen as a stop-gap response to leadership crisis caused by accidents. These events could include the death of the CEO, a terrorist attack, or some hi-tech crime. Brahim Herbane, Dominic Elliott, Ethné Swartz argue that management practices devoted to recovering from interruptions are developing procedures and techniques that need to be considered more widely. Business Continuity Management has found ways to operate speedily with great resilience, fulfil demanding regulatory situations, and thereby cement and augment competitive advantages. These are all features that need to be learned by existing managers and be included in the repertoire of leaders.

Intellectual Property Management
Our last piece examines how Intellectual Property Rights can be best managed by firms wishing to sell or source products in countries such as China. Deli Yang, Mahmut Sonmez and Derek Bosworth offer ten strategies to counter piracy. These range from sophisticated supply and market monitoring to legal and commercial challenges, and to working with competitors, governments and public opinion. They warn that piracy as an issue is not going to go away.

 

James Kelly Corporate Leadership: Reflections of a CEO and CEO Advisor jkelly@macpartnership.com

For nearly four decades, James Kelly has been a CEO, and advised CEO’s as co-founder of the Mac group, Chairman of Gemini Consulting and in private consulting practice. From this experience, he reminds us that growth and success are not ‘random events of corporate evolution’, but depend on the ‘visible hand of leadership that drives, shapes and evolves businesses in good times and bad.’ His lively article draws largely on personal acquaintance to review the careers of five men - Pitman of Lloyds TSB, Welch of General Electric, Bischoff of Schroders’, Watson of Omnicom and Leahy of Tesco - who ‘view high performance as a life or death issue’ and who ‘manage with deadly intent’, as well of two anonymous failures. He identifies unambiguous culling standards of performance; values and organisation design that engage and motivate people; and positive strategic growth paths (plus some good luck) the core ingredients most likely to increase the chances of success for the leaders of large corporate groups, and suggests modifications to the messages of three leading business academics.

 

Paula Jarzabkowski and Rosalind Searle Top Management Team Strategic Capacity: Harnessing Diversity and Collective Action p.a.jarzabkowski@aston.ac.uk

Academic research has pointed to an important link between diversity in the top management team (TMT) and corporate performance. However, the nature of this link remains elusive. This paper seeks to fill this gap by developing a conceptual framework to explain the relationships between TMT diversity and TMT collective action. It explains how in some cases diversity might actually be detrimental, but offers guidelines on how to solve the conflicts that might arise. The paper also offers six practical suggestions to develop processes that enable collective action and improve strategic capacity, and hence the company’s performance.

 

Elizabeth Briody, S. Tamer Cavusgil & Stewart R. Miller Turning Three Sides into a Delta at General Motors: Enhancing Partnership Integration in Corporate Ventures cavusgil@msu.edu

General Motors had enjoyed global operations that were based on exports, acquisitions, joint ventures and strategic alliances throughout the 20th century. Its global-programme strategy appeared assured. However, the carmaker came unstuck when it came to creating a large-scale collaborative effort involving its own internal units. The Delta Small Car Program, involving three fully internal GM units, was terminated after its goals failed to materialise. The carmaker’s long-standing cultural tradition of autonomy for its units was what made collaboration between them difficult. We examine this GM global programme, placing it in its historical context. Our primary database consists of the perceptions and experiences offered to us by a cross-section of programme participants. By examining partner integration at the working level, we identify insights and offer recommendations pertaining to venture structure and dynamics and their role in venture success.


Brahim Herbane, Dominic Elliott and Ethne M. Swartz Business Continuity Management: Time for a Strategic Role? bhcor@dmu.ac.uk

Business activity is inherently risky – but in today’s climate terrorist attacks, corporate financial scandals, hi-tech crime and changing weather patterns can all add to the threats firms face. Against this background, the authors argue that business continuity management configured to enhance speed of recovery and deliver resilience against interruption, to go beyond the basic regulatory obligations and to be fully embedded in firm management, can play a significant role in preserving competitive advantage, and advance the case for fully-configured BCM to be seen as strategic rather than purely functional.
The continuity provisions of six UK-based financial services firms are reviewed to illustrate both the Crisis Management and Disaster Recovery antecedents of BC Planning, and the journey towards the standard provision of ‘fully-fledged’ BCM in terms of human resources, business planning, communications/structure and attitudes/ownership. The reactions of Morgan Stanley to the events of 9/11 underline the point that recovery plans must be flexible and manageable in the face of unpredictable realities and human responses. The authors offer practical precepts for BCM implementation and a diagnostic outlining the key determinants of enhanced value preservation, reminding us that, as the business world becomes more uncertain, ‘when things go wrong, those better able to think, act and adapt to business interruptions will have demonstrated the value of superior business continuity management.’

 

Deli Yang, Mahmut Sonmez and Derek Bosworth Strategic Responses for Multinationals to Intellectual Property Abuses D.Yang@bradford.ac.uk

This article examines the prevalence of what the authors call ‘the inevitable curse of piracy’, common to multinational IP owners around the world. The authors looks at the experience Manchester United, Microsoft, DuPont, Budweiserand others operating in China - ‘the most populous market on earth’ - to elaborate ten corporate strategies to counter the activities of pirates, be they counterfeiting, licensing overruns or illegal trademark registration. Strategies are grouped into three strands – proactive approaches include sophisticated labelling, pricing policies and monitoring of production/distribution chains and markets; defensive weapons include embarrassing or acquiring pirates, while networking means involve co-operative action with other IP owners, agencies, government, legal authorities and public opinion. Whatever combination of strategies firms choose to employ, the authors recommend that they treat piracy as a challenge, be corporately proactive, and remain continuously alert to the dynamic nature of the ‘crime of the 21st century’.

This issue is currently in press. Scheduled date for publication is 7 October 2004. Shortly, it will also be available on www.sciencedirect.com

 
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