grep -nA1  '\#\@\#' ~/mba/bizcit.txt | sed '/--/ d'| sed '/#@#/ d' > bizcit.idx
				     #@#
			   Distilled MBA Readings
 Indexed by line number. Line numbers  approx as shifted by inserting index.
				     #@#
191-   Managing Orgs Nadler Tushman 1982 Little Brown 0-316-596833
306-   Schermerhorn Management Wiley 2002 ISBN 0-471-43470-8
762-   Thry Hum Motvn  AH Maslow (1943) Psychol_Rvu, 50, 370-396
842-   Janis Mann Decisionmaking 1977 Free Press 0-02-916190-8
1015-   Janis 11/71 GroupThink PsyToday: powerful social pressures are brought ot
1049-   Reason and EMotion, Nohria & Gurtler, HBS 9-404-104 2004 Micahel Jensen [JACF
1064-   Character and Situation. Nohria & Gurtler, HBS 9-404-091 2004 Both
1085-   Knowldege Management, HBS 9-398-031 [Arthur Andersen 1996] All knowledge
1089-   Behavioral Pricing, HBS 9-599-114, Gourville, 1999 Actively Manage Price
1096-   Hierarchy of Objective, Granger, HBR 5/64 64307 objectives - . . . need not
1109-   Problems of matrix organizations, Davis & Lawrence, HBR 5/78 78303 A formless
1116-   Corp Cult Deal & Kennedy AW 1982 0-201-10277-3
1224-   Drucker HBR 3/71 Japanese management
1243-   Mintzberg Manager's Job: Folklore & fact HBR 7/75
1264-   Wv Hap Take-Charge Manager Nohria & Berkley HBR 1/94
1293-   Skilled incompetence Argyris HBR 9/86
1309-   Teaching Smart People How to Learn, Argyris, HBR 5/91
1338-   Argyris Empowerment HBR 5/98
1347-   Vroom Can Leaders Learn to Lead Org Dyn 4#1 1976
1363-   Drucker Practice of Management Harper & Row 1954
1496-   Influence Cialdini Quill Morrow 1998
1547-   Get Anyone Do Anything Lieberman 2000 wtmartins.com 0312270178
1669-   Reading People, Jo-Ellan Dimitrius, Ballantine, 1999 0345425871
1765-   Tom Peters Symbols Patterns Settings Org Dyn 3-22 1978 
1808-   Preemployment honesty testing edJones Quorum1991 ISBN 0-89930-620-9
1820-   Beyond Reason, Fisher & Shapiro, Harvard Negotn Proj, Penguin, 2005
1876-   Kheel, Keys to Conflict Resolution,4w8w, 2001
1924-   Negotiation Advice HBS 9-905-059 2006 Rob Walker [Inc 8/03 p75] - took a
1944-   Critical Moments in Negotiation HBS 9-902-163 2001 Establish initial
1952-   How to Manage Your Negotiating Team.  Brett, Jeanne M. 1
1983-   GETTING PAST YES. Ertel dertel@vantagepartners.com Harvard Business Review;
2020-   Pondy Org Conflict Adm Sci Q 12#2 9/67 [excellent lit rvu]
2073-   Assael Constr Role Interorg Confl Adm Sci Q 14#4 12/69
2082-   Managing Conflict at Org Interfaces, Brown, 1983 AW 0-201-00884-x
2388-    Walton Interpers Peacmkg 1969 AW 0-201-08435-x
2480-   Gabarro & Kotter Managing your boss HBR 1/80
2506-    Wm Evan Superior-Subordinate Conflict in Research Orgs Adm Sci Q 10#1 6/65 
2518-   Confl Mgt in PLC Thambain Sloan Mgt Rvu 16#3 1975
2574-   Managmt Rights: Made in Japan M K Chandler Columbia J Wrld Biz Winter 1966
2595-   Walton & Dutton Interdep Conflict Adm Sci Q 14#1 3/69 
2620-   Thompson Hierarchy Speclzn & Org Conflict Adm Sci Q 5#4 3/61 
2630-   Argyris Personality and Organizations Harper 1957 LC 57-11116
2717-   Argyris Mgt&Org Dvp 1971 MGH 07-002219-4
2745-   Argyris Personality & Org Thry Revis Adm Sci Q 18#2 1973
2773-   HBR 12/01 79#11 Kotter What Leaders really do
2793-   Crucibles of Leadership. Bennis, Warren Thomas, Robert Harvard Business
2828-   Leadership Yukl 1981 PH 0-13-527176-2
3012-   Ten Fatal Flaws That Derail Leaders.  Zenger, Jack 1 Folkman, Joseph 2
3025-   Salancik Pfeffer Power Strategic-contingency Org DYn 1977 (5) 3-21
3052-   Salancik Commitment is too easy Org Dyn 1977 (6) 62-80
3087-   Salancik Pfeffer Soc Info Job Att Task Dsn Adm Sci Q 23#2 1978 
3114-   John Kotter Power, dependence HBR 7/77 
3176-   Finding Your Innovation Sweet Spot.  Goldenberg, Jacob 1 Mazursky, David 2
3197-   Playing Around with Brainstorming. Schrage, Harvard Business Review; Mar2001,
3223-   Networked Incubators.  Hansen, Morten T.^1 Chesbrough, Henry W.^1 Nohria,
3234-   Getting Unusual Suspects to Solve R&D Puzzles.  Lakhani, Karim R. 1
3248-   Mtg Challenge of Disruptive Change Christiansen & Overdorf HBR 3/00 
3273-   Value Innovation.  Kim, W. Chan 1 Mauborgne, Renée 2,3 Harvard Business
3287-   Managing Strategic change J B Quinn Sloan Mgt Rvu Summer 80 21#4
3318-   Mgg Innov: Controlled chaos J B Quinn HBR 5/86
3348-   Werther Berman Vasconcellos Fut Tec Mgt Org Dyn 22(3) 1994
3387-   Drucker 12 Fables Research Mgt HBR 1/63
3410-   Rdgs Mgt Innovn Tushman & Moore 1982 Pitman 0-273-01786-1
3574-   Tech Innov Entrpsp & Strategy J B Quinn Sloan Mgt Rvu Spring 79 20#3
3588-   Maidique Entrprs Champions & Tech Innovns Sloan Mgt Rvu Winter 80 21#2 
3630-   Utterbach Innovn in Indu & Diffusn Tech Sci 183#4125 15feb74 
3654-   Brozen Invention Innovn & Imitation AER 41#2 5.51 
3691-   Charles W. Prather Keeping Innovation Alive After the Consultants Leave
3711-   D.  Bruce Merrifield Growth Strategies for the "New" Economy Research
3744-   Robert W.  Rycroft and Don E.  Kash Steering Complex Innovation Research
3766-   Gregory Alexander HOW TO (ALMOST) SCHEDULE INNOVATION Research Technology
3795-
3810-   Mel Perel CORPORATE COURAGE: BREAKING THE BARRIER TO INNOVATION Research
3837-   Robert Waites REINVENTING CORPORATE RESEARCH Research Technology
3861-   Reorienting R&D for a horizontal future Charles Downey, Daniel Greenberg,
3871-   ANTICIPATING DISRUPTIVE INNOVATION Jay Paap, Ralph Katz.  Research
3934-   Accelerate Radical Innovation-Now!  John P Dismukes.  Research Technology
3947-   DEVELOPING AN EFFECTIVE STRATEGY FOR MANAGING INTELLECTUAL ASSETS John
3963-
3990-   BUILDING COLLABORATIVE INNOVATION CAPABILITY Morgan Swink.  Research
4012-   COLLOQUIUM:  Innovation  and   Intellectual  Property  Protection  in  the
4068-   A Patent Doctrine without Bounds: The "Extended" Written Description
4116-   Antitrust and  Sharing Information about  Product Quality Summer,  2006 73
4165-   VALUING RISKY PROJECTS WITH REAL OPTIONS Scott Mathews.  Research
4180-   Empir Pr Contingency Vars Biz Stg Hambrick Ac Mgt J 28#4 12/85
4188-   J B Quinn HBR 11/69 Tech Xfr Multinat Cos
4206-   Jagdish N Sheth Model of Industrial Buyer Behavior J Mktg v37 1973 p51
4239-   How Rainmaker Jeffrey  Fox  2000 Hyperion  
4286-
4394-   Mk Stevens Your Mktg Sucks Crown3River 2005 (msco.com)
4429-   Purple Cow SethGoldin.com Portfolio/Penguin 2002
4468-   Competitive Marketing O'Shaughnessy 1984 Allen Unwin 0-04-658243-6
4586-   Loyalty, Reicheld, HBS, 1996  [1989 hbr?]
4604-   CRM Done Right.  Rigby, darrell.rigby@bain.com Ledingham,
4637-   The Achilles' Heel of Supply Chain Management.  Raman, Ananth 1
4678-   Alsop, 18 Immutble laws of Corporate Reputation WSJ/fp2004
4725-   Strategy in Action Yavitz&Newman 1982 FP 0-02-934670-3
4869-   Greenwald Competition Demystified Penguin Portfolio 2005
4884-   Porter, Competv Strategy 1980 FP  0-02-925360-8
5057-   Hardball Stalk 2004 HBS/BCG 1591391679
5177-   HARDBALL INNOVATION George Stalk Jr.  Research Technology Management.
5191-   Alfred duPont Chandler Strategy&Structure 1962 MIT 0-262-530009-0
5316-   Strategy Implementn Galbraith&Nathanson 1978 West  0-8290-0214-7
5438-   Legal COntext Hostile Takeovers HBS 9-904-005 2004 disclose its
5445-   Strategic Alliances HBS 9-298-047 Gompers 2001 Williamson argued that, as
5456-   Leadership and the Psychology of Turnarounds.  Kanter, Rosabeth Moss 1
5482-   Mergers That Stick.  Kanter, Rosabeth Moss 1 rkanter@hbs.edu Harvard
5502-   Integration Managers: Special Leaders for Special Times.  Ashkenas, Ronald
5530-   Your Best M&A Strategy. Rovit, Lemire Harvard Business Review; Mar2003,
5549-  Desperately seeking synergy Goold, Campbell, Source: Harvard Business
5592-   Getting Offshoring Right. Aron raviaron@wharton.upenn.edu Singh
5633-   The PASSIVE-AGGRESSIVE Organization. Neilson neilson_gary@bah.com
5669-   BREAK FREE FROM THE PRODUCT LIFE CYCLE. Moon ymoon@hbs.edu Harvard Business
5708-   Hw Biz Stg Use Guerilla Warfare Tactics Ian MacMillan JBizStg Fall 1980 
5739-   Corp Ideology & Stg Delgn Ian MacMillan JBizStg Wtr 83 3 
5755-   Hickson Hinings Lee Schneck & Pennings Strat Contingencies Theory
5770-   Org Design Galbraith 1977 AW 0-201-02558-2
5832-   Limits of the Learning Curve Abernathy & Wayne HBR 9/74
5854-   Rothschild How Ensure Continued Growth Strat Planning J Biz Stg 1#1 1980
5867-   Competitive Marketing O'Shaughnessy 1984 Allen Unwin 0-04-658243-6
5984-   Ray Ad & Commnxn Management 1982 PH 0-13-015230-7
6054-   Customer Oriented Apr Id Product Mkts Day Shocker J Mktg 43#4 1979
6066-   Abell Strategic Windows J Mktg 42#3 1978
6078-   Hambrick&MacMillan Prod Pflo & Man's Best Friend Cal Mgt Rvu 25#1 Fall 1982 
6097-   HBR 3/93 71#2 93204 Hamel & Prahalad Strategy as Stretch and Leverage
6109-   Product Portfolio Planning HBS 9-581-107 Yip 8/82 p8 [BCG Growth:Share]
6120-   Market share - key to profitability [PIMS], HBS 1/75 75103 Buzzell Gale &
6131-   Successful share-building strategies, HBR 1/81 81101 Buzzell & Wiersema [PIMS]
6139-   Limits of the learning curve HBR74501 9/74 Aberarnathy & Wayne Product:
6163-   Impact of strategic planning on profit performance HBR74210 3/75
6172-   Industrial buyer behavior HBS 9-582-117 4/89 stage in the procurement
6178-   Arthur Rock [Fairchild, Apple] HBR 11/87 Strategy vs Tactics from a
6196-   Top Ten Lies of Entrepreneurs HBR 1/01 Guy Kawasaki Garage.com
6219-   George Jenkins [Patricof] HBR 11/89 p117 we are trying to invest in
6228-   How venture capital works Zider 11/98 hbr
6246-   Bootstrap Finance Amar Bhide HBR 11/92 
6291-   Kaplan & Stromberg J_Finance LIX 5 10/04
6300-   What do Venture Capitalists do? Gorman & Sahlman, HBS 9-288-015 1987
6324-   Financial Contracting: "DEALS" HBS 9-288-014 6/89 p43 deals that have
6341-   Amis & Stevenson, Winning Angels, FT/PH/Pearson 2001 ISBN 0-273-64916-7
6513-   Ehernfeld on Doriot HBR 5/90 
6520-   Done Deals [VC] Gupta HBS 2000
6583-    Venture Capitalists usually take convertible preferred stock for their
6588-  Alternative Financing HBS 9-384-187 1984 convertible debt or preferred
6591-   Venture Capital Method HBS 9-288-006 6/89 Sahlman Forecasting future
6602-   Valuation of Venture Capital Hellmann Stanford E95 3/01 A valuation method is
6609-   Venture Industry HBS 9-285-096 11/85 American Research and Development
6626-   Attracting Shareholders Bhide HBS 9-389-139 Since irreversible investments
6634-   Private Equity Fundraising HBS 9-201-042 2007 Lerner Hardymon & Leamon
6649-   IPO Process HBS 9-200-018 2001 The legal, accounting and investment banking
6653-   Angel Financing HBS 9-298-083 2001 Gompers Myers and Majluf (1984) and
6671-   Private Equity Securities HBS 9-200-027 Lerner & Hardymon 2001 The driver
6681-   Private Equity Partnership Agreements HBS 9-294-084 Lerner & Gompers 2001
6693-   Elevator Pitch HBS 9-802-222 Applegate 2001 Our business [list name] will
6709-   Valuation in Private Equity HBS 9-297-050 Lerner 2002 one should attempt to
6714-   Pre-Start Analysis HBS 9-386-075 Van Style 1985 Considerations.. nature of
6720-   Distributions of Venture HBS 9-295-095 Lerber 1995 Venture capitalists
6734-   Valuing Equity Cash Flows HBS 9-295-085 Luerman 1994 impossible to apply
6743-   Start-up Strategies HBS 9-394-067 Bhide 1993 entrepreneur does only enough
6753-   Deal Structure HBS 9-384-186 8/88 Understanding the business.. amount of
6762-   Entrepreneurship HBS 9-384-131 8/88 strategic orientation, the commitment
6769-   New Venture Planning Karl Vesper J Biz Stg 
6780-   Diana I. Angelis Capturing the Option Value of R&D Research Technology
6789-   Prahalad & Hamel Core Competence 5/90 HBR
6801-   Strategies for Declining Industries J Biz Stg 1980 1#1 p27 Harrigan
6812-   Funding Growth in an Age of Austerity, Hamel & Getz HBR 7/04 Strategos.com
6845-   Economic decline Hayes & Abernathy HBR 7/80
6861-   MacMillan & George Corp Vent J Biz Stg 
6868-   Corp Venturing Zenas BLock JBizStg 3#2 fall 1982 Review of the five
6882-   Commercializing Technology HBS 9-694-102 9/94 Since innovative products and
6893-   Nichols/Lewent/Sci Mgt Merck HBR 1/94
6916-   R N Anthony We dont have the accounting concepts we need HBR 1/87
6935-   Burton Malkiel Random Walk Dn Wall St 4ed ISBN 0-393-95460-9
6990-   The Moral Hazard Economy.  Bernstein, Peter L. 1 Harvard Business Review;
7015-   Knee Accidental Investment Banker Random 2006
7098-   Geisst Deals of the Century WIley 2004
7138-   Lewis Panic Norton 2009
7192-   Hedging Political Risk in China.  Bremmer, Ian 1 Zakaria, Fareed 2 Harvard
7227-   Management Lessons from the Bust; Joseph Weber; Business Week Aug. 27,
7239-   Symposium:   The  Going-private   Phenomenon:   Venture  Capital   Limited
7296-   Symposium:  The  Going-private  Phenomenon:  Does  Private  Equity  Create
7403-   Predicting  Corporate  Governance Risk:  Evidence  from  the Directors'  &
7463-   Pernicious  Art   of  Securities  Regulation.   Anglo-American  Securities
7540-   Implications of the Private Securities Litigation Reform Act of 1995 for
				     #@#
   Managing Orgs Nadler Tushman 1982 Little Brown 0-316-596833
   p68 [Ian MacMillan] Table 2. Strategic Options: Offensive Strategies
[Rothschild 1979; Hofer & Schendel 1978] Market segmentation: Whereby the
competitor identidies and focuses on specific segments of the market; Product
innovation: Whereby the competitor introduces new products as the major
thrust of competitive direction; Service competition: Whereby the competitor
enhances service as a major competitive weapon; Distribution competition:
Whereby the securing of major distribution channels and superior delivery is
sought; Promotion competition: Whereby the major emphasis is on promoting of
product; Process innovation: Reduction of costs of manufacturing,
distribution, inventory; Price competition: Whereby pricing is used as the
major competitive weapon; Market diversification: New Markets are sought,
either geographically or market segments which were not previously served;
Related & unrelated product diversification: New Products are sought for
exositing markets; Credit competition: Typres of payment, and assistance in
funding of purchases by the customer, are used as a means of securing sales;
Supply control competition: Securing control if critical supplies or
controlling costs of supplies; Forward integration: Moving into activities
down the chain; Back integration: Moving into activities up the chain;
Conglomerate diversification: New products are brough to new managers
   p69 Table 3 Strategic Options: Defensive Strategies [Hofer & Schendel
1978] Scope reduction: Divestiture of assets and reduction of costs to a
level where small select segments can be served from an appropriately small
asset and cost base; Merger: With some other competitor to pool market share
and thus achieve economies of scale; Sale: Ro a copany outside the industry
wanting access to the market; Liquidation: Liquidating of the business
altogether
   p99 [pp11-40 Lawler Motivation 1973 Wadsworth] Needs can be thought of as
groups of outcomes that people seek.. two-level hierarchy. At the lowest
level are existence and security needs; at the other level are social,
esteenm, autonomy, and self-actualization needs..  higher-level needs will
appear only when the lower-level ones are satisfied.. All needs except
self-actualization are satiable, and as needs become satisfied they decrease
in importance.. motivated by mor than one need at a given point.. until
either it is satisfied or satisfaction of the lower-level need is threatened
   p125 [Straw from Straw & Salancik New Dir Org Beh 55-95 Wiley] However, as
noted by Wortman and Brehm (1976), it is possible to integrate learned
helplessness and reactance.. If a person expects to be able to control or
influence outcomes.. uncontrollable events should arouse psychological
reactance and the individual should be motivated to re-exert control. But if
the individual comes to learn through extended helplessness training that he
cannot control his environment, he will stop trying. When a person has no
expectation of control.. reactance will not precede helplessness and the
individual is predicted to quickly become a passive receive rof future
outcomes
   p238 [W Warner Burke after Zaleznik HBR 1977 55(3) 67-78]
Table 1. Differences Between Managers and Leaders
Dimension for comparison Managers                   Leaders
Attitudes towards goals  Impersonal, reactive,      Personal, active
                         passive
Conceptions of work      An enabling process of     Projecting ideas into images
                         coordinating and balancing that excite people
                         Limiting options           Developing options
Relations with others    Prefer to work with people Prefer solitary activities
                         Relate according to roles  Relate intuitively and
                                                    emphatically
Senses of self           Belong to their            Feel separate from thei
                         environment                environment
                         Depend on memberships,     Depend on personal
                         roles, etc, for identity   mastery of events for 
                                                    identity
   p273 [article from K W Thomas, Org_Beh, Kerr, 1979, Grid, fig in turn
from Kilmann & Thomas "Interpersonal conflict-handling behaviors as
reflections of Jungian personality dimensions", Psychological_Reports,
1975, 37, 971-80 Fig 1]
             Competing            Collaborating 
                    \             /  < - Integrative dimension
Assertiveness         Compromising
                    /             \  < - Distributive Dimension
             Avoiding              Accomodating
                      Cooperativeness

    p313 Figure 7 Organizational Design Tree Heuristic 
[R Duncan Org_Dyn Winter 1979]
                    Static -> Low uncertainty -> Less information needed 
      Simple                                       .'. Functional Organization
Nature of           Dynamic -> High uncertainty -> High information needed
goals and                 .'. Mixed functional organization (lateral relations)
environemnt         Static -> Low uncertainty -> Low information needed
            Yes                                 .'. Decentralized organization
     Complex (can   Dynamic -> High uncertainty -> High information needed
     we segment the    .'. Mixed decentralized organization (lateral relations)
     environemnt)   Static -> Low uncertainty -> Low information needed
            No                                    .'. Functional organization
                    Dynamic -> High uncertainty -> High information needed
                                      .'. Mixed functional (lateral relations)
   p418 Exhibit 2 The Five Phases of Growth [Larry Greiner HBR 7/72]
Large    Phase 1      Phase 2       Phase 3       Phase 4       Phase 5
                                                                Crisis of ?
Size                                                            Growth through
of                                         Crisis of RED TAPE    COLLABORATION
Organization                                     Growth through  
                                Crisis of CONTROL   COORDINATION
                                   Growth through
                   Crisis of AUTONOMY  DELEGATION
                         Growth through 
Small Crisis of LEADERSHIP     DIRECTION 
  Growth through CREATIVITY
     Young                       Age of organization           Mature
    p422 [Greiner] Exhibit 3 Organization Practices During Evolution
in the Five Pgases of Growth
Category   Phase 1     Phase 2       Phase 3       Phase 4       Phase 5
Management Make & Sell Efficiency of Expansions of Consolidation Problem solving
focus                  operations    market        of organization & innovation
Organization Informal  Centralized & Decentralized Line-staff &  Matrix of teams
Structure              functional    & geographical product groups
Top    Individualistic                
management &           Directive     Delegative     Watchdog     Participative
style  enterpreneurial
Control     Market     Standards &   Reports &      Plans & invest- Mutual goal
system        results   cost centers profit centers  ment centers      setting
Management  Ownership  Salary &      Individual     Profit sharing   Team
reward                   merit        bonus         & stock options    bonus
emphasis                 increases
				 #@#
   Schermerhorn Management Wiley 2002 ISBN 0-471-43470-8
   p93 1991 Frederick W Taylor published The Principles of Scientific
Management.. 1. Develop for every job a "science" that includes rules of
motion, starndardizer work implements, and proper working
conditions. 2. Carefully select workers with the right abilities for the
job. 3. Carefully train workers to do the job and give them the proper
incentives to cooperate with the job "science". 4. Support workers by
carefully planning their work and by smoothing the way as they go about their
jobs.. Frank and Lillian Gilbreth pioneered motion studies
   p94 Practical lessons from scientific management: Make results-based
compensation a performance incentive; Carefully design jobs wit efficient
work methods; Carefully select workers with the abilities to do these jobs;
Train workers.. 1916, after a career in French industry, Henri
Fayol.. 1. Foresight - to complete a plan of action for the
future. 2. Organization - to provide and mobilize resources to implement the
plan. 3. Command - to lead, select, and evaluate workers to get the best work
toward the plan. 4. Coordination - to fit diverse efforts together, and
ensure information is shared and problems solved. 5. Control - to make sure
things happen according to plan and to take necessary corrective action [C3I]
   p96 Max Weber.. bureaucracy.. Clear division of labor: jobs are well
defined, and workers become highly skilled at performing them. Clear
hierarchy of authority: Authority and responsibility are well defined for
each position, and each position reports to a higher-level one. Formal rules
and procedures: Written guidlines direct behavior and decisions in jobs,
written files are kept for historical record. Impersonality: Rules and
procedures are impartially and uniformely applied with no one receiving
preferential treatment. Careers are based on merit: Workers are selected and
promoted on ability and performance, and managers are career employees of the
organization.. "highest degree of efficiency.. calculability of results"
   p99 "Hawthorne effect is the tendency of persons singled out for special
attention to perform as expected" [Mayo, human relations movement, compare to
guniea pig or placebo effect as it is called elsewhere].. Fig 4.3 Maslow's
hierarchy of human needs: Self-actualization needs - Highest level: need for
self-fulfillment; to grow and use abilities to fullest and most creative
extent; Esteem needs - Need for esteem in eyes of others; need for
respect,prestige, recognition and self-esteem, personal sense of competence,
mastery; Social needs - Need for love, affection, sense of belongingness
inone's relationships with other people; Safety needs - Need for security,
protection, and stability in the events of day-to-day life; Physiological
needs - Most basic of all human needs; need for biological maintenance; food,
water and physical well-being
   p101 [Theory X] lack ambition, are irresponsible, are resistant to change,
and prefer to be led rather than to lead. McGregor considers such thinking
inappropriate. He argues for the value of Theory Y assumptions in which the
manager believes people are willing to work, are capable of self-control, are
willing to accept responsibility,a re imaginative and creative, and are
capable of self-direction.. either set of assumptions can create
self-fulfilling prophecies.. In his book, Personality and Oranization,
Argyris contrasts the management practices found in traditional and
hierarchical organizations with the needs and capabilities of mature adults
   p104 Contingency thinking tries to match management practices with
situational demands
   p106 Ouchi used the term "Theory Z" to describe a managemnt framework that
incorporates into North American practices a variety of insights found in
Japanese modesl.. [Peters & Waterman] Eigth attributes of performance
excellence: Bias toward action - making decisions and making sure that things
get done. Closeness to customers - knowing their needs and valuing customer
satisfaction. Autonomy and entrepreneurship - supporting innovation, change,
and risk taking. Productivity through people - valuing human resources as
keys to quality and performance. Hands-on and value-driven - having a clear
sense of organizational purpose. Sticking to the knitting - focusing
resources and attention on what the organization does best. Simple form and
lean staff - minimizing management levels and staff personnel. Simultaneous
loose-tight properties - allowing flexibility while staying in control
   p107 21st-century manager must be a: Global strategist - understands
interconnections among nations, cultures and economies; plans and acts with
due consideration of them. Master of technology - comfortable with
information technology; understands technological trends and their
implications; able to use technology tobest advantage. Effective politician -
understands growing complexity of government regulations and the legal
environment; able to relate them with the interests of the organization/
Inspiring leader - attracts highly motivated workers and inspires them with a
high-performance culture where individuals and teams can do their best work
   p108 Peter Drucker considers knowledge the principle resource of a
competitive society. Drucker, you should recall, also cautions that knowledge
constantly makes itself obsolete. In a society where knowledge workers are
increasingly important, new managers must be well-educated.. Success in
turbulent times comes only through continuous improvement. The new economy
requires everyone to be unrelenting in efforts to develop, refine, and
maintain job-relevant skills and competencies. It requires leaders with
strong people skills, ones attuned to the nature of an information/service
society, ones who understand the international dimensions, and ones who
establish commitments to work-life balance
   p109 The historic Hawthorne studies suggested that work behavior is
influenced by social and psychological forces and that work performance may
be improved by better "human relations".. Chris Argyris pointed out that
people in the workplace are adults and may react negatively when constrained
by strict managment practices and rigid organizational structures
   p173 plan is a statement of action steps to be taken in order to
accomplish the objectives.. Define your objectives.. Determine where you
are.. Develop premises regarding future conditions.. Analyze and choose among
action alternatives.. Implement the plan and evaluate results
   p176 Tips on how to manage your time: Do say "No" to requests that divert
you from work you should be doing. Don't get bogged down in details that
should be left to others. Do establish a system for screening telephone calls
and e-mail.  Don't let "drop-in" visitors use too much of your time.  Do
prioritize work tasks in order of importance and urgency.  Don't become
"calendar bound" by losing control of your schedule. Do work tasks in
priority order
   p185 historical comparison uses past performance as a benchmark for
evaluating current performance. A relative comparison uses the performance
achievements of other persons, work units, or organizations as the evaluation
standard. An engineering comparison uses engineered standards set
scientifically through such methods as time and motion studies
   p187 [sidebars] A feedforward [preliminary, input, prevent, spec] control
ensures that directions and resources are right before the work begins.. A
concurrent [steering] control focuses on what happens during the work
process.. A feedback [output, inspection] control takes place after an action
is completed
   p190 np7.2 "Hot stove rules" of employee discipline A reprimand should be
immediate; a hot stove burns the first time you touch it A reprimand should
be directed toward someone's actions, not the individual's personality; a hot
stove doesn't hold grudges, doesn't try to humiliate people , and doesn't
accept excuses A reprimand should be consistently applied; a hot stove burns
anyone who touhes it and does so every time A reprimand should be
informative; a hot stove lets a person know what to do to avoid getting
burned in the future - "Don't touch" A reprimand should occur in a supportive
setting; a hot stove onveys warmth but with an inflexible rule - "Don't
touch" A reprimand should support realistic rules; the don't-touch-a-hot
stove rule isn't a power play, a whim, or an emotion of the moment; it is a
necessary rule of reason
   p193 General Electric, for example, a Six Sigma program drives the quest
for competitve advantage. This means that statistically the firm's quality
performance will tolerate no more than 3.4 defects per million - a perfection
rate of 99.9997 percent [1-3.4/1E-6] Three types of objectives may be
sepcified in an MBA contract. Improvement.. development.. maintenance..
   p194 [MBO: SMART Specific, Measurable, Achievable, Realistic Timely]]
Specific.. Time-defined.. Challenging.. Measurable
   p205 Drucker associates this process with a set of five strategic
questions: (1) What is our business mission? (2) Who are our customers? (3)
What do our customers consider value? (4) WHat have been our results? (5)
What is our plan?
   p206 np 8.1 Five strategic management tasks..  Identify organizational
mission and objectives..  Assess current performance vis-a-vis mission and
objectives..  Create strategic plans to accomplish purpose and objectives..
Implement the strategic plans..  Evaluate results; change strategic plans
and/or implementation processes as necessary
   p207 According to Peter Drucker, the operating objectives of a business
might include the following: Profitability.. Market share.. Human
talent.. Financial health.. Cost efficiency.. Product
quality.. Innovation.. Social responsibility
   p208 SWOT analysis of the organizational Strengths [efficiency, skill,
share, financing, reputation] and Weaknesses [Outdated, obsolete, weak
management] as well as the external analysis of environmental Opportunities
[markets, economy, weak rivals, growth of existing market,emerging
technologies] and Threats [new rivals, shortages, taste trends, regul, subst]
   p209 Porter. five forces
model.. competitors.. entrants.. Suppliers.. Customers.. Substitutes
   pp211-2 [sidebars] A growth strategy involves expansion of the
organization's current operations. Growth through concentration is ihin the
same business area. Growth through diversification is by acquisition of or
investment in new and different areas. Growth through integration is by
acquiring suppliers or distributors. A retrenchment strategy involves
reducing the scale of current operations. Restructuring chanegs the scale
and/or mix of operations to gain efficiency and improve
performance. Downsizing decreases the size of operations in the intent to
become more streamlined. Divestiture sells off parts of the organization to
focus on attention and resources on core business areas. In a strategic
alliance organizations join together in partnership t puursue an area of
mutual interest
   pp214 major opportunities for competitive advantage are to be found in the
following areas.. Cost and quality.. Knowledge and speed.. Barriers to
entry.. Financial resources..
   p215 Porter.. four genenric business strategies.. Differentiation.. Cost
leadership. Focused diferentiation.. Focused cost leadership
   p218 BCG matrix approach   [?shar]
                       "Question Marks" - poor  "Stars" dominant competitive
                        competitive position     position in a growing industry
                         in a growing industry
                 High   Recommended strategy= growth      growth; add resources
                         or retrenchment; apply resource and build the business
                         to accomplish positive         further based on market
                         turnaround or pull back          projections
                         if outlook is poor
Market Growth Rate for  "Dogs"                        "Cash Cows" - dominant 
SBU Products Services    poor competitive position     position in a low-growth
                         in low-growth industry        
                Low     Recommended strategy =      stability or modest growth;
                         retrenchment; divest, sell    maintain benefits of 
                         eliminate resource drain      strong cash flow while
                                                       keeping resource 
                                                       investments minimum
   p260 advantages of a functional structure.. Economies of scale with
efficient use of resources. Task assignments consistnent with expertise and
training. High-quality technical problem solving. In-depth training and skill
development withnin functions. Clear career paths withing
functions.. disadvantages.. difficulties in pinpointing
responsibilities.. chimneys.. advantages of divisional structures.. More
flexibility in responding to environmental changes. Improved coordination
across functional departments.
   p261 Clear points of responsibility for product or service
delivery. Expertise focused on specific customers, products, and
regions. Greater ease in changingsize by adding or deleting
divisions.. disadvantages..reduce economies of scale and increase costs
through the duplication of resourses.. rivalries as divisions compete for
resources and attention
   p263 matrix structures.. Better interfunctional cooperation and problem
solving.  Increased flexibility in adding, removing, and/or changing
operations to meet changing demands. Better customer service, since there is
always a program, product or project manager informed and available to answer
questions. Better performance accountability through the program, product ot
project managers. Improved decsion making as problem solving takes place at
the team level, where the best information is available. Improved strategic
management, sinmce top managers are freed from unnecessary problem solving to
focus time on strategic value.. disadvantages.. power
struggles.. frustrating.. confusion.. "groupitis"
   p264 np10.2 Guidelines for mobilizing horizontal structures. Focus the
organization around processes, not functions. Put people in charge of core
processes. Decrease hierarchy and increase the use of teams. Empower people
to make decisions critical to performance. Utilize information
technology. Emphasize multiskilling and multiple competencies. Teach people
how to work in partnership with others. Build a culture of openness,
collaboratiuon, performance commitment
   p271 Organizations are being "streamlined" by cutting unnecessary levels
of management; flatter and more horizontal structures are viewed as a
competiitve advantage.. Organizations are using more cross-functional teams,
task forces, and horizontal structures, and they are becoming more customer
conscious; as they do so, employees often find themselves working for more
than one "boss"
   p272 Many organizations are shifting to wider spans of control as levcels
of management are eliminated and empowerment gains prominance; individuals
managers are taking responsibility for larger numbers [Fayol 7 now 15] of
subordinates who operate with less direct supervision
   p273 np10.3 Ground ruls for effective delegation: Carefully choose the
person to whom you delegate. Define the responsibility; make the assignment
clear. Agree on perfromance objectives and standards. Agree on a performance
timetable. Give authority; allow the other person to act independently. Show
trust in the other person. Provide performance support. Give performance
feedback. Recognize and reinforce progress. Help when things go wrong. Dont
forget your accountability for performance results
   p273 Managers in progressive organizations are delegating more; they are
finding more ways to empower people at all levels to make more decisions
affecting themselves and their work
   p287 np11.1 Organizational design checklist: Does the design fit well with
the major problems and opportunities of the external environment?  Does the
design support the implementation of strrategies and the accomplishment of
key operating objectives? Does the design support core technologies and allow
them to be used to best advantage? Can the design handle changes in
organizational size and different stages in the organizational life cycle?
Does the design support and empower workers and allow their talents to be
used to best advanatge?
   p285 fig 11.2 
Bureaucratic                                 Adaptive
Organizations                                Organizations                 
mechanistic designs                          organic designs
Centralized   <------ Authority    ------->  Decentralized
Many      <------ Rules and procedures --->  Few
Narrow  <------  Spans of control  ------>   Wide
Specialized       <---   Tasks   ----->      Shared
Few <-----   Teams and task forces  ----->   Many [7 v 15]
Formal and impersonal <--- Coordination ---> Informal and personal
   p288 [sidebar] Small-batch production manufactures a variety of
products crafted to fit customer specifications
   p289 [sidebar] continuous-process production raw materials are
continuously transformed by an automated system. The technological imperative
states that technology is a major influence on organizational
structure. Intensive technology focuses the efforts and talents of many
people to serve clients. Mediating technology links together people in a
beneficial exchange of values. In long-linked technology a client moves from
point to point during service delivery. In the organizational life cycle an
organization passes through different stages from birth to [youth, midlife, ]
maturity
   p293 np11.2 How to improve systems integration: Rules and procedures:
Clearly specify required activities. Hierarchical referral: refer problems
upward to a common superior. Planning: set targets that keep everyone headed
in the same direction. Direct contact: Have subunit managers coordinate
directly. Liaison roles: Assign formal coordinators to link subunits
together. Task forces: Form temporary task forces to coordinate activites nd
solve problems on a timetable. Teams: Form permanent teams with the authority
to coordinate and solve problems over time. Matrix organization: Create a
matrix structure to improve coordination n speciic programs.
   p292 Hammer goes further to highlight the following key words in this
definition and their implications: (1) group - tasks are viewed as part of a
group rather than in isolation; (2) together - everyone must share a common
goal; (3) result - the focus is on what is accomplished, not on activites;
(4) customer - processes serve customers and their perspectives are the ones
that really ocount
   p294 Process value analysis.. 1. Identify the core processes. 2. Map the
core processes in respect to workflows. 3. Evaluate all tasks for the core
processes. 4. Search for ways to eliminate unnecessary tasks and
work. 5. Search for ways to eliminate delays, errors, and
misunderstandings. 6. Search for efficiencies in how work is shared and
transferred among people and departments
   p338 np13.1 [Kouzes Posner Success 4/88] Five principles of visionary
leadership - Challenge the process: Be a pioneer; encourage innovation and
support people who have ideas. - Show enthusiasm: inspire others through
personal enthusiasm to share a common vision. - Help others to act: Be a tem
player and support the efforts and talents of others. - Set the example:
Provide a consistent role model of how others can and should act. - Celebrate
achievements: Bring emotion into the workplace and rally "hearts" as well as
"minds"
   p339 [sidebars] Coercive power is the capacity to punish or withhold
positive outcomes.. Legitimate power is the capacity to influence other
people by virtue of formal authority.. Expert power is the capacity to
influence others because of specialized knowledge. Referent power is the
capacity to influence other people because of their desire to identify
personally with you [and be like you]
   p342 np13.2 How to empower others - Get others involved in selecting their
work assignments and the methods for accomplishing tasks. - Create an
environment of cooperation, information sharing, discussion, and shared
ownership of goals. - Encourage others to take initiative, make decisions,
and use their knowledge. - When problems arise, find out what others think
and let them help design the solutions. - Stay out of the way; give others
the freedom to put their ideas and solutions into practice. Maintain high
morale and confidence by recognizing successes and encouraging high
performance.
   p343 Edwin Locke further identify [sic] these personal traits as being
common among successful leaders. - Drive: successful leaders have high
energy, display initiative, and are tenacious. - Self-confidence: Successful
leaders trust themselves and have confidence in their abilities. -
Creativity: Successful leaders hae the intelligence to integrate and
interpret information. - Business Knowledge: Successful leaders know their
industry and its technical foundations. - Motivation: Successful leaders
adapt to fit the needs of followers and demands of situations. - Flexibility:
Successful leaders adapt to fit the needs of followers and demands of
situations. - Honesty and integrity: Successful leaders are trustworthy; they
are honest, predictable, and dependable.
   p344 fig 13.3 Managerial styles in Blake & Mouton..
        Low                Concern for Production               High
High    Country Club                                    Team Manager
        Manager                                  Focuses on building
        Focuses on people's needs,             commitments to shared
        building relationships                               purpose
Concern                      Middle-of-Road
for                             Manager
People                   Focuses on balancing
                         work output and morale
        Impoverished                              Authority-Obedience
Low     Manager                                               Manager 
        Focuses on minimum                      Focuses on efficiency
        effort to get work done               of tasks and operations
    p345 Matching leadership style and situation.. Fiedler's contingency..
Leader-     Good   Good   Good   Good   Poor   Poor   Poor   Poor 
 member 
 relation
Task        High   High   Low    Low    High   High   Low     Low 
 structure
Position    Strong Weak   Strong Weak   Strong Weak   Strong  Weak   
 power
Situational Very high <---------------------------------> Very low
 control
Preferred   Task oriented        Relationship         Task oriented
 leadershp styles                     oriented
   p347 fig 13.5 ..Hersey-Blanchard situational leadership..
          Low    <---     Task Behavior - Guidance Required    --->    High
High          Participating - share ideas       Selling - Explain decisions               
Relationship  Followers able &                  Followers unable &
behavior      unwilling, insecure               willing, confident
Support       Deleagating - Turn over decisions Telling - give instructions
required      Followers able &                  Followers unable &
Low           willing, confident                unwillinf, insecure
   
   p350 fig 13.7 ..Vroom-Jago [Org_Dyn 3/73] leader-participation..
<-- Authority decision  Consultative decision  Group decision -->
Leader         Who has information/expertise?          Followers
No             Acceptance critical for implementation  Yes
High           Time pressure for decision making?      Low
   p366 fig 14.2 
Job Dissatisfaction      Herzberg's          Job Satisfaction
         |               Two-Factor                |
         V               Principles                V
Influenced by        Improving the motivator   Influenced by 
Hygiene Factors      factors increases        Motivator Factors
                     job satisfaction
Working conditions   Improving the hygiene    Achievement
Co-work relations    factors decreases        Recognition
Policies and rules   job disatisfaction       Responsibility
Supervisor Quality                            Work Itself
Base wage, salary                             Advancement, Personal Growth
   p367 [sidebar, McClelland 1940s] Need for Achievement (nAch) is the desire
to do something better, to solve problems, or to master complex tasks. Need
for power (nPower) is the desire to control, influence, or be responsible for
other people. Need for Affiliation (nAff) is the desire to establish and
maintain good relations with people
  p368fig14.3 Maslow              Alderfer       Herzberg      McClelland
Higher-order  Self-actualization  Growth         Satisfier     Achievement
Needs         Esteem                               factors     Power
Lower-Order   Social              Relatedness                  Affiliation
Needs         Safety              Existence      Hygiene
              Physiological                        factors
   p371 Vroom suggests that the motivation to work depends on.. Expectancy -
a person's belief that working hard will result in a desired level of task
performance being achieved (this is sometimes called effort-performance
expectancy ). Instrumentality - a person's belief that successful performance
will be followed by rewards and other potential outcomes (this is sometimes
called performance-outcome expectancy). Valence - the value a person assigns
to the possible rewards and other work-related outcomes.. related to one
another in multiplicative fashion
   p375 np14.2 Postitive Reinforcement: [Locke Goal Setting Theory] Clearly
identify desired work behaviors. Maintain a diverse inventory of
rewards. Inform everyone what must be done to get rewards. Recognize
individual differences when allocating rewards. Follow the laws of immediate
and contingent reinforcement. Punishment: Tell the person what is being done
wrong. Tell the person what is being done right. Make sure the punishment
matches the behavior. Administer the punishment in private. Follow the laws
of immediate and contingent reinforcement.
   p381 Maslow's hierarchy of human needs suggests a progression from
lower-order physiologial, saftey, and social needs to higher-order ego and
self-actualization needs. Alderfer's ERG theory identifies existence,
relatedness, and growth needs. Herzberg's two-factor theory points out the
importance of both job content and job context factors in satisfying human
needs. McClelland's acquired needs theory identifies the needs for
achievement, affiliation, and power, all of which may influence what a person
desires from work
  p382 Adams's equity theory recognizes that social comparisons take place
when rewards are distributed in the workplace. People who feel inequitably
treated are motivated to act in ways that reduce the sense of inequity;
perceived negative inequity may result in someone working less hard in the
future. Vroom's expectancy theory states that Motivation = Expectancy x
Instrumentality x Valence. Expectancy theory encourages managers to make sure
that any rewards offered for motivational purposes are both achievable and
individually valued. Locke's goal-setting theory emphasizes the motivational
power of goals; people tend to be highly motivated when the task goals are
specific rather than ambiguous, difficult but achievable, and set through
participatory means.. Reinforcement theory [B F Skinner] recognizes that
human behavior is influenced by its environmental consequences. The law of
effect states that behavior followed by a pleasant consequence is likely to
be repeated; behavior followed by an unpleasant consequence is unlikley to be
repeated. Reinforcement strategies include positive reinforcement, negative
reinforcement, punishment, and extinction. Positive reinforcement works best
when applied according to the laws of contingent and immediate reinforcement
   p426 STAGES OF TEAM DEVELOPMENT.. 1. FOrming - a stage of initial
orientation and interpersonal testing. 2. Storming - a stage of conflict over
tasks and working as a team. 3. Norming - a stage of consolidation around
task and operating agendas. 4. Performing - a stage of teamwork and focused
task performance. 5. Adjourning - a stage of task completion and
disengagement. [Heinen & Jacobson Ac Mgt Rvu v1 1976 pp98-111; Tuckman Psy
Bltn v63 1965 pp384-99; Tuckman & Jensen Group&Org Stud v2 1977 pp419-27]
   p447 fig17.2 The process of interpersonal ccommunication
                           Noise
            Semantic problems       Absence of feedback
            Improper channels       Physical distractions
Sender      Status effects [filter] Cultural differences    Receiver
Encodes        ----v----Message-------v----Channel--------> Decodes
Intended meaning <----v--Feedback--------v-Channel--------- Perceived meaning
                             [filter]
   p452 np17.2 Ten steps to good listening. 1. Stop talking. 2. Put the other
person at ease. 3. Show that you want to listen. 4. Remove any potential
distrctions. 5. Empathize with the other person. 6. Don't respond too
quickly; be patient. 7. DOn't get mad; hold your temper. 8. Go easy on
argument and criticism. 9. Ask questions. 10. Stop talking
   p453 fig17.2 Richness of communication channel
Low Richness  Postings,  Memos, E-mail,   Telephone, Face-to-face High Richness
Impersonal <--                                                  ---> Personal
One-way, Fast e-bulletins letters voice-mail e-meetings meetings  Two-way, Slow
   p462 fig17.5 Alternative conflict management styles
     High ^Accomodating or smoothing          Collaboration or Problem Solving
Degree of |Playing down the conflict and    Searching for a solution that meets
          |seeking harmony among parties      each other's needs
Coopera-  |                          Compromise
-iveness  |         Bargaining for gains and losses to each party
          |Avoidance                       Competition or Authoritative Command
          |Denying the existence of conflict Forcing a solution to impose one's
          |and hiding one's true feelings    will on the other party
      Low .--------------------------------------------------------------->High
				 #@#
   Thry Hum Motvn  AH Maslow (1943) Psychol_Rvu, 50, 370-396
   p372 Thus it seems impossible as well as useless to make any list of
fundamental physiological needs for they can come to almost any number one
might wish, depending on the degree of specificity of description. We can not
identify all physiological needs as homeostatic. That sexual desire,
sleepiness, sheer activity and maternal behavior in animals, are homeostatic,
has not yet been demonstrated. Furthermore, this list would not include the
various sensory pleasures (tastes, smells, tickling, stroking) which are
probably physiological and which may become the goals of motivated behavior.
   p373 It should be pointed out again that any of the physiological needs
and the consummatory behavior involved with them serve as channels for all
sorts of other needs as well. That is to say, the person who thinks he is
hungry may actually be seeking more for comfort, or dependence, than for
vitamins or proteins. Conversely, it is possible to satisfy the hunger need
in part by other activities such as drinking water or smoking cigarettes. In
other words, relatively isolable as these physiological needs are, they are
not completely so
   p374 culture itself is an adaptive tool, one of whose main functions
is to make the physiological emergencies come less and less often
   p375 gratification becomes as important a concept as deprivation in
motivation theory, for it releases the organism from the domination of a
relatively more physiological need, permitting thereby the emergence of other
more social goals..
   p376 If the physiological needs are relatively well gratified, there then
emerges a new set of needs, which we may categorize roughly as the safety
needs.
   p377 Another indication of the child's need for safety is his preference
for some kind of undisrupted routine or rhythm. He seems to want a
predictable, orderly world.. The central role of the parents and the normal
family setup are indisputable. Quarreling, physical assault, separation,
divorce or death within the family may be particularly terrifying
   p380 expression in a search for a protector, or a stronger person on whom
he may depend, or perhaps, a Fuehrer..  If both the physiological and the
safety needs are fairly well gratified, then there will emerge the love and
affection and belongingness needs
   p381 All people in our society (with a few pathological exceptions) have a
need or desire for a stable, firmly based, (usually) high evaluation of
themselves, for self-respect, or self-esteem, and for the esteem of
others. By firmly based self-esteem, we mean that which is soundly based upon
real capacity, achievement and respect from others. These needs may be
classified into two subsidiary sets. These are, first, the desire for
strength, for achievement, for adequacy, for confidence in the face of the
world, and for independence and freedom
   p383 clear emergence of these needs rests upon prior satisfaction of
the physiological, safety, love and esteem needs
   p384 psychologically important if it contributes directly to satisfaction
of basic needs. The less directly it so contributes, or the weaker this
contribution is, the less important this act must be conceived to be from the
point of view of dynamic psychology
   p385 This question is especially difficult because we know so little about
the facts. Curiosity, exploration, desire for the facts, desire to know may
certainly be observed easily enough. The fact that they often are pursued
even at great cost to the individual's safety is an earnest of the partial
character of our previous discussion. In addition, the writer must admit
that, though he has sufficient clinical evidence to postulate the desire to
know as a very strong drive in intelligent people, no data are available for
unintelligent people. It may then be largely a function of relatively high
intelligence..  hope of stimulating discussion and research, we shall
postulate a basic desire to know
   p386 'psychopathic personality' is another example of permanent loss
of the love needs
   p388 'strong' people who can easily weather disagreement or opposition,
who can swim against the stream of public opinion and who can stand up for
the truth at great personal cost. It is just the ones who have loved and been
well loved, and who have had many deep friendships who can hold out against
hatred, rejection or persecution..  may have given the impression that these
five sets of needs are somehow in a step-wise, all-or-none relationships to
each other. We have spoken in such terms as the following: "If one need is
satisfied, then another emerges." This statement might give the false
impression that a need must be satisfied 100 per cent before the next need
emerges.. satisfied perhaps 85 per cent in his physiological needs, 70 per
cent in his safety needs, 50 per cent in his love needs, 40 per cent in his
self-esteem needs, and 10 per cent in his self-actualization needs..  needs
are neither necessarily conscious nor unconscious..  Within the sphere of
motivational determinants any behavior tends to be determined by several or
all of the basic needs simultaneously rather than by only one of them. The
latter would be more an exception than the former..  A conflict or a
frustration is not necessarily pathogenic. It becomes so only when it
threatens or thwarts the basic needs..
				 #@#
   Janis Mann Decisionmaking 1977 Free Press 0-02-916190-8
   p22 number of critically relevant categories usually far exceeds 7+/- 2,
the limits of man's capacity for processing information in immediate meory
(see Miller, 1956 [63,81-97]).. ends up with an unsatisfactory suboptimizing
   p50 decisional conflict.. 1 The degree of stress genrated by any
decisional conflict is a direct function of the goal settings that the
decision maker expects to remain unsatisfied: the more goals expected to be
unfulfilled and the more important the needs to which those goals correspond,
the greater the stress.. 2. When a person encounters new threats or
opportunities that motivate him to consider a new course of action, the
degree of decisional stress is a function of the degree to which he is
committed to adhere to his present course of action.. The greater the
commitment to a prior decision, the greater the anticipated utilitarian
losses, social disapproval and self-dispaproval from failing to continue the
present course of action and hence the greater the degree of stress. 3. When
decisional conflict is ssevere because each alternative poses a threat of
serious risks, loss of hope about finding a better solution that the least
objectionable one will lead to defensive avoidance of threat cues.. 4. In a
severe decisional conflict, when threat cues are alient and the decision
maker anticipates having insufficient time to find an adequate means of
escaping seriou slosses, his level of stress remains extremely high and the
likelihood increases that his dominant pattern of response will be
hypervigilance
   p51 A moderate degree of stress in response to a challenging threat
induces a vigiliant effort to scrutinize the alternative courses of action
carefully and to work out a good solution, provided the decision maker
expects to find a stafisfactory way to resolve the decison dilemma
   p78 Table 2 Manifestations of conflict and related symptoms of stress
for each of the five basic patterns of decision making
Pattern of    Subjective Beliefs (Indicators of           Degree of Vacillation
Coping With  mediating psychological conditions           of Preference for 
Challenge      specified in figure 3-2     Level of Stress Alternative..
1. Unconflicted No serious risk from current Low: Persistently  No Vacillation
   adherence     course  of action                   calm
2. Unconflicted Serious risk from curr..     Low..              No Vacillation
    change      No serious risk from new
                course of action
3. Defensive     Serious risk from current   Variable..      Little or no..
    avoidance    Serious risk from new..                     ..except..
                 No better solution can be found             threat are salient
4. Hypervigilance  Serious risk..            High.. anxiety  Very high..
                   ..Insufficient time to search..
5 Vigilance        ..Sufficient time         Moderate..      Moderate..
   p130-1 eight symptoms of groupthink are: 1. an illusion of
invulnerability, shared by most or all of the members, which creates
excessive optimism and encourages extreme risks; 2. collective effort ot
rationalize in order to discount warnings which might lead the members to
reconsider their assumptions before they recommit themselves to their past
policy decisions; 3. an unquestioned belief in the group's inherent morality,
inclining the mebers to ignore the ethical or moral consequences of their
decisions; 4. stereotyped views of rivals and enemies as too evil to warrant
genuine attempts to negotiate, or as too weak or tupid to counter whatever
risky attempts are made to defeat their purposes; 5 direct pressure on any
member who expresses strong arguments aainst any of the groups stereotypes,
illusions, or commitments, making claer that such dissent is contrary to what
is expected of all loyal members; 6. self-censorship of deviations from the
apparent group consensus, reflecting each member's inclination to minimize
the importance of his doubts and counterarguments; 7. a shared illusion of
unanimity, partly resulting from their self-censorship and augmented by the
false assumption that silence implies consent; 8. the emergence of
self-appointed "mindguards" - members who protect the group from adverse
information that might shatter their shared complacency about the
effectiveness and morality of their decisions
   p196-7 Figure 8 Combined Model Of Coping Patterns And Stages Of Decision
Making
START
CHALLENGING 
NEGATIVE
FEEDBACK OR 
OPPORTUNITY
   v
STAGE 1
APPRAISING THE
CHALLENGE
   V     
Q1.1    -->    NO -->  UNCONFLICTED ADHERENCE-> END: STAGE 3 OF
ARE THE                                         PRIOR DECISION
RISKS SERIOUS
IF I DON'T ->   MAYBE OR YES
CHANGE?               v
                   STAGE 2
                SURVEYING
                ALTERNATIVES
,----------->   SEARCH FOR
|     |         ANOTHER
|DISCARD OF     ALTERNATIVE
|UNACCEPTABLE 
|ALTERNATIVE     Q2.1 IS THIS
|                ALTERNATIVE  
|                AN ACCEPTABLE
|                MEANS?
|                  YES
|                Q2.2 ARE THE
|                RISKS SERIOUS
|                IF I CHANGE TO  ->   NO->UNCONFLICTED
|                THIS ALTERNATIVE?         CHANGE ->      ATTENUATED
|                MAYBE OR YES                             STAGE 3 & 4:
|                Q2.3 IS IT                               SUPERFICIAL       END: WEAK
|                REALISTIC TO                             WEIGHING OF ->    STAGE 5 HIGH
|                HOPE TO FIND  ->    NO ->DEFENSIVE ->    ALTERNATIVES      VULNERABILITY TO 
|                A BETTER                 AVOIDANCE       AND LITTLE        UNANTICIPATED
|                ALTERNATIVE                              DELIBERATION      CHALLENGES
|                MAYBE OR YES                             ABOUT
|                Q2.4 IS THERE                            COMMITMENT
|                SUFFICIENT TIME ->  NO ->HYPERVIGILANCE-'
|                TO SEARCH FOR
|                AND EVALUATE A
|                BETTER ONE?
|                     MAYBE OR YES   ->   VIGILANCE
|                Q2.5 HAVE I   <-----------'
|                SUFFICIENTLY
|- NO <--        SURVEYED THE
|                ALTERNATIVES?     
|                     YES
<- Q3.4              STAGE 3
 MIGHT A             WEIGHING OF ALTERNATIVES
 MODIFIED  -> YES  
 ALTERNATIVE      '-> FURTHER SEARCH FOR
 BE BETTER?           EVALUATION OF
                      CONSEQUENCES
                       Q3.1 WHICH
                       ALTERNATIVE IS
          Q3.3 CAN I   BEST?
          RELAX THE     YES
          REQUIREMENTS     Q3.2 COULD THE
                  '<-NO    BEST ALTERNATIVE
                           MEET THE
                           ESSENTIAL
                           REQUIREMENTS? ->   YES  STAGE 4 
                                 ^                 DELIBERATING 
                                 |                 ABOUT COMMITMENT?
                                 NO <------------- Q4.1 SHAL I ADOPT
                                                   THE BEST ALTERNATIVES
                                                   AND ALLOW OTHERS TO
                                                   KNOW?
                                                   YES
                                                   END: STRONG STAGE 5
                                                   ADHERING DESPITE
                                                   NEGATIVE FEEDBACK
                                                   LOW VULNERABILITY
                                                   TO CHALLENGES 
                                                   ANTICIPATING IN
                                                   STAGES 1-4 
   p247 cognitive dissonance theorists.. degree of choice he perceives
himself as having had prior to and at the time of commitment.. necessary
condition for dissonance reduction is the decison maker's realization that he
has made a choice freely.. able to forsee the consequences of his actions at
the time he makes his decision.. preceives that he made a voluntary choice
among the viable alternatives, and is responsible for the decison.. Freedom
of choice.. major determinant of the consistency between a decison maker's
attitudes andf actions.. forced by fear of censure to comply to group norms
and standards
   p344 Cognitive confrontions that sensitize a person to the inconsistencies
between his beliefs and his actions and make him uncomfortable about them
have long been recognized as a means for challenging misconceptions, as
exemplified by.. Socratic method of merely asking a person to verbalize his
beliefs should be especially effective in inducing changes in the direction
of internal consistency.. verbalize both of the isolated cognitions within
the same conversation.. relationship between prejudiced attitudes and certain
mechanisms of ego defense.. scapegoating, projection.. presents a case
history of a.. similar in age and background
   p345 asked to state his position on a controversial issue.. arouse feeling
of self-disatisfaction by emphasizing the inconsistencies. self-centered
values, and implicit hypocisy.. "awareness-of rationalizations".. induced to
acknowledge his tendency to make use of certain rationalizations for
continuing potentially dangerous activity..given information refuting each
rationalization, he will be less likely to use those rationalizations
   p407 The Balance Sheet grid [+ - columns]
1. Tangible gains + and losses - for SELF
2. Tangible gains + and losses - for OTHERS
3. Self-approval + or self-disapproval -
4. Social approval + or disapproval -
				     #@#
   Janis 11/71 GroupThink PsyToday: powerful social pressures are brought ot
bear by the members of a cohesive group whenever a dissident begins to voice
his objections to a group consensus.. shared illusions.. Nor are they
inclined to raise ethical issues that carry the implication that this fine
group of ours, with its humanitarianism and its high-minded principles, might
be capable of adopting a course of action that is inhumane and
immoral.. Groupthink involves nondeliberate suppression of critical toughts
as a result of internalization of the group's nroms.. The more amiability and
espirit de corps there is among the members of a policy-making ingroup, the
greater the danger that independent critical thinking will be
replaced.. share an illusion of invulnerability.. ignore warnings; they also
collectively construct rationalizations in order to discount warnings, and
other forms of negative feedback.. believe inquestioningly in the inherent
morlity of their ingroup; this belief inclines the members to ignore the
ethical or moral consequences of their decisions.. Victims of groupthink hold
stereotypes views of the leaders of enemy groups.. apply direct pressure to
any individual who momentarily expresses doubts about any of the group's
shared illusions.. keep silent about their misgivings and even minimize to
themselves the importance of their doubts.. share an illusion of unanimity..
appoint themselves as mindguards to protct the leader and fellow members from
adverse information that might break the complacency.. recommendations..
assign the role of critical evaluator to each.. When the key members of a
hierarchy assign a policy-planning mission to any group withing their
organization, they should adopt an impartial stance instead of stating
preferences and expectations.. routinely should set up several outside
policy-planning and evaluation groups to work on the same policy question..
require aeach member to discuss the group's deliberations with
associates.. report back their reactions to the group.. outside
experts.. staggered basis.. devil's advocate.. survey of all warning sugnals
from the rivals and should write alternative scenarios on the rival's
intentions.. divide into two or more subgroups to meet separately.. then come
back together to hammer out differences.. "second-chance" meeting at which
every member expresses as vividly as he can all his residual doubts
				     #@#
   Reason and EMotion, Nohria & Gurtler, HBS 9-404-104 2004 Micahel Jensen [JACF
1994], for instance, argues that human beings are properly understood as
REMMs: Resourceful, Evaluative, and Maximizing model.. behavioral
economics.. Framing Effects.. how the alternative[sic] are presented..  Human
beings tend to quickly latch on to readily available information or any
available anchor to characterize their options.. human beings attach much
greater value to immediate gains, as opposed to longer-term gains.. Thus
despite our best efforts to be unbiased, we should be vigilant to how our
in-group and self-serving biases may creep.. wary of actions and situations
that generate emotions that may lead people to act impulsively or lose
sef-control (eg, greed, hubris, anger, revenge, fear). Instead they should
promote emotions that encourage deliberation adn self-control (eg, feelings
of responsibility, accountability, and care)[Russell & Barrett JPSP 1999 76#5
p808]
				     #@#
   Character and Situation. Nohria & Gurtler, HBS 9-404-091 2004 Both
COnfucius and Aristotle held that the extent to whch character traits are
internalized tends to obviate the need for conscious decision processes in
many cases.. Three factors were found to influence the results of the Milgram
experiments in a significant way: the "strength" or status of the individual
giving the orders (subjects were less likely to obey the orders of someone
who did not appear official), the immediacy (in space or time) of the
experimenterand their target (subjects were lesss liley to obey orders if hey
had direct contact with the victim), and the relative number of people
exerting force in the situation (they were less lilely to obey of they were
in a group taking orders from an individual). TIme and task pressures have
also been found to lead to unreflective obedience to authority.. People do
not work as hard in groups as they work alone.. Kitty Genovese.. Similar
example of inaction or bystander behavior have been observed in numerous
other real life and experimental conditions.. People also tend to adjust
their beliefs to confirm to those of their peers or associates.. emotions are
quite literally contagious.. Research has shown that negative emorions are
more intense than positive ones. Most lilely this is as a result if a
biologically innate survival mechanism - which enable humans to pick up on
anxiety and other moods that might signal conflict or danger
				     #@#
   Knowldege Management, HBS 9-398-031 [Arthur Andersen 1996] All knowledge
managers.. should: Know their community.. Design the context.. Oversee the
content.. Support the infrastructure.. ENhance the sharing process
				     #@#
   Behavioral Pricing, HBS 9-599-114, Gourville, 1999 Actively Manage Price
Expectations.. Establish credible reference prices.. Manage product price
trents.. Encourage favorable comparisons.. Avoid unfavorable comparison
through product differentiation.. Actively Manage Perceptions of Cost of Good
Sold.. Focus attention of fully-loaded cost of good sold.. Bundle products to
obscure cost of goods sold.. Focus attention of customer value
				     #@#
   Hierarchy of Objective, Granger, HBR 5/64 64307 objectives - . . . need not
begin with the braod grand design of the enterprise, but all objectives in
the hierarchy should be consistent with it; . . . should make the people in
the enterprise reach a bit; . . . should be realistic in terms of (a) the
internal resources of the enterprise, and (b) the externam opportunities,
threats, and constraints; . . . should take into account the creative
conception of a range of alternatives and the relative effectiveness of each;
. . . should be known to each person so that he understands the goals of his
own work and how they relate to the broader objectives of the total
enterpise; . . . should be periodically reconsidered and redefined, not only
to take accout of changing conditions, but for the salutary effect of
rethinking the aims of organizational activities
				     #@#
   Problems of matrix organizations, Davis & Lawrence, HBR 5/78 78303 A formless
state of confusion where people do not recognize a "boss" to whome they feel
responsible.. Managers jockey for power in many organization, but a matrix
design almost encourages them to do so.. As executives develop greater
confidence witht he matrix form, they bring the dotted line relationship out
of the closet, and grant it legitimacy
				 #@#
   Corp Cult Deal & Kennedy AW 1982 0-201-10277-3
   p39-41 Heroes.. Making Success Attainable and Human.. Providing Role
Models.. Symbolizing the Company to the Outside World.. Preserving What Makes
the Company Special.. Setting the Standard of Performance..  Motivating
Employees
   p48 Some of the most successful companies in America believe so strongly
in heroes that they regularly and subtly make them.. Watson was a visionary
hero for IBM; his salesperson of the month was a situational hero..charge out
of the foxhole before everyone else are not heroes, they're csaualties [cf
Turks in Korea]
  p50-2 Hundred Percent Club.. IBM deliberately sets their sales quotas so
roughly 80 percent of the force makes the club.. motorcycle inside the
research center.. roaring down the [IBM] corridors.. extremely good..
lightening rod for releasing people's tension.. scientists like hime because
he was a lunatic.. Outlwas are eccentric but highly competent.. violators of
cultural norms.. keep the company evolving..  In a weak culture, however,
mavericks can't identify with the culture's vague or contradictory values and
so they turn against those value and become whistle blowers..  second type of
"made" hero is the compass-hero.. role models for change
   p66 "This is awful, do it again.".. "This is worse that the first version;
can't you do better?".. third rewrite.. "It may not be good enough and I'm
sorry for wasting your time. But this is the best I can possibly do on this
subject. I'm sorry it took so long." In response came Kissinger's note: "I'll
read it now" [Winston Lord]
   p69 most managers today would be very reluctant to admit that their
cherished procedures are no more nor less than rituals
   p76 By dictating which individuals spend how much time on what process,
senior management knows that it is continuing to control the company. It will
influence what middle management talks about, what it thinks about, and the
homewoek it will be doing. These rituals become powerful levers that top
management can pull to maintain its control
   p87-93 informal system of checks and balances to gather and disseminate
information.. STORYTELLERS.. PRIESTS.. worriers..  guardians of the culture's
values.. WHISPERERS.. powers behind the throne.. GOSSIPS.. troubadors.. 
SECRETERIAL.. observant.. SPIES..  liked and have access to many
   p95 Dutch Admirals's Paradigm.. two junior officers.. made a pact.. go out
of their way to tell people what a great guy the other guy was..  revealed
this pact.. day they were both made admirals..  youngest ever
   p101-2 cultivating a network.. each person with whom you come in contact
with deference you would reserve for the CEO..Ask people to explain the
meaning of what you have seen. Ask them about histoy.. Ask each contact for
the names of others to talk to.. storytellers, cultivate a special
relationship with them
   p103 network to work for the bulk of their communications with the
poeple in the organization
   p107 tough-guy macho culture.. take high risks and get quick feedback
   p108 work hard/play hard culture. Fun and action.. few risks, all with
quick feedback.. bet-your-company culture.. big-stakes.. high-risk,
slow-feedback.. process culture.. little or no feedback.. hard to measure
what they do; instead they concentrate on how it's done..  bureaucracy
   p108-111 Tough-Guy.. Police.. surgeons.. consulting.. venture..
entertainment.. speed, not endurance.. best the most senior.. tolerate
all-or-nothing.. rituals.. wax poetic.. "problem-solving" or
"strategizing".. slow the work routine.. sense of safety.. rituals become
superstitions
   p113-6 Work Hard..sales.. real estate.. stays in the field and gets
closely involved with the customer's problems.. super salespeople..
energetic games.. singing the IBM song.. Language.. Volume can displace
quality.. lack of thoughtfulness or attention.. short-term
   p116-9 Bet.. drilling rig.. Aircraft.. smelting.. investment..
architectural..risk the future of the entire company.. character and
confidence tha can carry them through the waiting.. Immaturity is not
tolerated.. never know whether they are right or wrong
   p119-123 Process.. government.. regulated.. no idea how effective they are
until someone blames.. "cover your ass".. trivial event becomes the subject
for a memo.. prove they didn't make the mistake, should someone mention it
five years from now.. protect the system's integrity more than their
own.. orderly, punctual, attend to detail, and survive on their
memories.. carry out the procedures as they ar written down without asking
whether they make sense in the real world.. real world ceases to
exist.. assistant does most of the work and is loved by all.. lack of
identifiable succes.. tightly structured hierarcies come very close to a
class system.. No one can say they really like an efficient administrator
   p123-5 Tough.. "in fashion".. Workers.. avoid extremes.. Bettors aand
process.. conserative.. coincide with their rank..  tough..  receptionist
harly pays any attention.. wait..  worker/player.. meet you at the door, slap
you on the back.. bettor and process.. elaborate sign-in.. Tough guys score
points off one another; worker/players drink together; bettors mentor each
other; process people discuss memos
   p135-9 Signs of a Culture in Trouble.. no clear values.. cannot
agree.. heores of the culture are destructive.. contradictory.. stop paying
attention to what is going on in the real world.. Short-term focus.. Morale
Problems.. Fragmentation/Inconsistency.. Emotional
outbursts.. exclusive.. subculture values preempt shared company values
   p146-150 Macho managers back the stars.. rushed off independently to solve
the problem.. manager's job, then, is to force a consensus..  WOrker/player
managers take advantage of the frenetic place..  task-force.. Deadlines, of
course, would be tight, since energy is the engine.. Bettors.. every issue is
considered from every possible angle.. Process. good chance that the problem
won't be noticed..allow the process to manage itself.. Tough-guy cultures
have a difficult time marshalling their forces.. Work/play.. potential for
superficiality.. Bettor cultures have a hard time moving very
quickly.. Process cultures can be stymied by any major change
   p153 Encourage each subculture to enrich its own culturals life.. Try to
focus subcultures and cabals on understanding the problems of the
other.. Point out how the overall culture is richer because of the strength
of the subculture
   p175-6 Change.. Position a hero in charge of the process.. Recognize a
real threat from outside.. Make transition rituals the pivotal elements of
change.. Provide transistion training in new values and behavior
patterns.. Bring in outside shamans.. Build tangible symbols of the new
directions.. Insist on the importance of security in transition.. jobs
   p184 people are more effective when they are in control.. Peer-group
pressjure is widely believed to be the single strongest motivating
factor.. Strong cultures are more easily built in smaller units..  computer
and communication links that bond individual units into corporations will be
far cheaper than the layers of middle management.. Atomization
				 #@#
   Drucker HBR 3/71 Japanese management
   p111 The Japanese, we are told, debate a proposed decision throughout the
organization until there is agreement on it. And only then do they make the
decision
   p112 The Japanese, by contrast, need to spend absolutely no time on
"selling" a decision. Everybody has been presold
   p116 Our training is promotion-focused; the Japanese training is
performance-focused
   p118 Still, it is not really true, as Japanese [and Steppes Mongolian]
official doctrine asserts, that "men are freely moved from job to job within
a plant"
   p119 It is still almost unheard of for a young man to take a job in
another company except with the express permission of his previous employer
   p120 In other words, godfathers are people who know, having been passed
over at age 45 for the top management spots, that they are not going to "make
it" in their organizations. Therefore, they are not likely to build factions
of their own or to play internal politics. At the same time, they are the
most highly respected members of the upper-middle management group
				 #@#
   Mintzberg Manager's Job: Folklore & fact HBR 7/75
   p49 plans, organizes, coordinates and controls.. these four words, which
have domionated management vocabulary since the French industrialist Henri
Fayol first introduced them in 1916, tell us little about what managers
actually do
   p50 unrelenting pace, that their activities are characterized by brevity,
variety, and discontinuity, and that they are strongly oriented to action and
dislike reflective activity
   p51 performing a number of regular duties, including ritual and ceremony,
negotiations, and processing of soft information that links the organization
with its environment
   p52 giant MIS systems are not working.. Managers strongly favor the verbal
media - namely, telephone calls and meetings.. manager's extensive use of
verbal media helps explain why he is reluctant to delegate
   p53 The manager's programs - to schedule time, process information,
make decisions, and so on - remain locked deep inside their brains
   p55 [Exhibit I] the Manager's roles: Formal authority and status ->
Interpersonal roles (Figurehead, Leader, Liaison) -> Informational roles
(Monitor, Disseminator, Spokesman) -> Decisional roles (Entrepreneur,
Disturbance handler, Resource allocator, Negotiator)
				 #@#
   Wv Hap Take-Charge Manager Nohria & Berkley HBR 1/94
   p129 The widespread adoption of trendy management techniques during the
1980s allowed managers to rely on ready-made answers instead of searching for
creative solutions
   p131 TQM programs are derided for their incremental nature, while
reengineering is championed as the key to achieving "breakthrough"
performance. THe half-life of such ideas is becoming so short that we find
managers shifting abruptly from one idea tot he next. Employees wise up tot
he syndrome very quickly. Experience teaches them not to get terribly
enthused about any new idea.. Every managerial situation, we believe, demands
a pragmatic attitude. For purposes of discussion, we can divide this approach
into four general components: sensitivity to context, willingness to make do,
focus on outcomes, and openness to uncertainty
   p132 public setting also forced reticent managers to faceup to pressures for
change. Welch insisted that managers give on-the-spot responses to employee
proposals. Nothing was considered sacred.. Willingness to Make Do.. We call
this aprect of pragmatism bricolage, a word French anthropologist Claude
Levi-Strauss used to describe the thought processes of primitive societies
   p133 reason inductively.. play with possibilities and use available
resources to find workable solutions. THey tinket with systems and variables,
constantly on the lookout for improved configurations.. When a bricoleur is
making do, solutions are never fixed or final
   p134 Focus on Outcomes
   p135 People become caught up in the novelty [instead of outcomes]
   p136 Openness to uncertainty.. To quote economist Kenneth Arrow, in many
situations, "we must simply act, fully knowing our ignorance of possible
consequences".. Pragmatists understand that iti is unrealistic to try to
avoid uncertainty
				 #@#
   Skilled incompetence Argyris HBR 9/86
   p74 By adeptly avoiding conflict with coworkers, some executives eventually
wreak organizational havoc.. practiced routine behavior (skill) to produce
what they do not intend (incompetence)
   p77-8 1. In one paragraph describe a key organizational problem as you see
it. 2. In attacking the problem, assume you could talk to whomever you
wish. Descirbe, in a paragraph or so, the strategy you would use in this
meeting. 3. Next, split your page into two columns. On the right-hand side,
write how you would begin the meeting: what you would actually say. Then
write what you would believe the other(s) would say. Then write you response
to their response. Continue writing this scenario for two or so double-spaced
typewritten pages. 4. In the left-hand column write any of your ideas or
feelings that you would not communicate for whatever reason.. In analyzing
their left-hand columns, the executives found that each side blamed the other
for difficulties, and they used the same reasons
				 #@#
   Teaching Smart People How to Learn, Argyris, HBR 5/91
   p101 react defensively. They projected the blam for any problems away
from themselves and onto what they said were unclear goals, insensitive and
unfair leaders, and stupid clients
   p103 One of the paradoxes of human behavior, however, is that the master
program people actually use is rarely the one they think they use.. remain in
unilateral control.. maximize "winning" and minimize "losing".. supress
negative feelings.. be as "rational" as possible.. Defensie reasoning
encourages individuals to keep private the premises, inferences, and
conclusions that shape their behavior and to avoid testing them in a truly
independent and objective fashion.. short-circuits learning
   p104 People who rarely experience failure, however, end up not knowing
how to deal with it effectively
   p105 professionals seemed to hold management to a different level of
performanc that they held themselves
   p106 [defensive reasoning:] 1. When criticising the company state your
criticism in ways that you believe are valid - but also in ways that prevent
others from deciding for themselves whether your claim to validity is
correct. 2. When asked to illustrate your criticisms, don't include any data
that others could use to decide for themselves whether the illustrations are
valid. 3. State your conclusions in ways that isguise their logical
implications. If others point out these implications to you, deny
them.. Until senior managers become aware of how they reason defensively and
the counterproductive consequences that result, there will be little real
progess. Any change activity is likely to be just a fad
   p108 And in turn, everyone would have understood that act of questioning
not as a sign of mistrust or an invasion of privacy but as a valuable
opportunity for learning
				 #@#
   Argyris Empowerment HBR 5/98
   p101 executives do not always seem to want what they say they need
   p104 Empowerment too often enters the realm of political correctness,
which means that no one can say what he or she is thinking.. if you challenge
the change agent, you become an enemy of change
   p105 Calculate factors such as morale, satisfaction, and even commitment
into your human relations policies, but do not make them the ultimate
criteria. They are penultimate. The ultimate goal is performance.
				 #@#
   Vroom Can Leaders Learn to Lead Org Dyn 4#1 1976
   p17 I share with Fiedler (and probably disagree with Argyris) a conviction
that a contingency model is required
   p20 neither universally autocratic nor universally participative but
utilizes either approach in response to the demands of a situation as he
perceives them. Above all, he is a flexible leader who has thought through
his values and who has a repertoire of skills necessary to execute
effectively each of the decision processes
   p26 I am persuaded by Argyris's evidence that many people are unaware of
discrepancies between their espoused theories and their actions. Small groups
are helpful in pointing out these discrepancies
   p28 In short, like Argyris and unlike Fiedler, I believe that managers can
learn to become more effective leaders. But like Fiedler (and unlike
Argyris), I believe that such effetciveness requires matching of one's
leadership style to the demands of the situation
				 #@#
   Drucker Practice of Management Harper & Row 1954
   p63 There are eight reas in which objectives of performancs and results
have to be set: Market standing; innovation; productivity; physical and
financial resources; profitability; manager performance and development;
worker performance and attitude; public responsibility
   p105 Unique-product production has high costs for the individual product
but great flexibility in the plant. Mass production "new style" has the
ability to supply wants cheaply and within a wide and flexible range of
products. But it requires much higher capital investment than unique-product
production and a much higher level of continuous activity; it involves
inventory risks; it needs a distributive organization that can sell
continuously rather than one that goes after a specialized, individual
order. Process production requires the highest capital investment - in
absolute dollars - and the most nearly continuous operation.. Under the
unique-product system the time-span of decisions is short. Under mass
production it becomes longer
   p107 I have learned to be extremely skeptical of any prediction of
imminent revolution or of sweeping changes in technology or business
organization
   p127 The objectives of every manager should spell out his contribution to
the attainment of company goals in all areas of the businees.. This is
necessary both to give full scope to the craftsmanship of each function and
specialty, and to prevent empire-building and clannish jealousies of the
various functions and specialties. It is necessary also to avoid overemphasis
on any one key area
   p129 To "give him a sense of participation" (to use a pet phrase of the
"human relations" jargon) is not enough. Being a manager demands the
assumption of a genuine responsibility.. must be a "meeting of minds" within
the entire management of each unit
   p131 To be able to control his own performance a manager needs to know
more that what his goals are. He must be able to measure his performance and
results against the goal
   p135 At least once every five years every form should be put on trial for
its life
   p136 establish team work and harminize the goalsof the individual with the
common weal. The only priniple that can do this is management by objectives
and self-control. It makes the common weal the aim of every manager. It
substitutes control from outside the stricter,more exacting and more
efficient control from the inside. It motivates the manager to action not
becausesomeone tells him to do something or talks him into doing it, but
because the objective needs of his taks demand it. He acts not because
somebody wants him to - he acts in other words, as a free man
   p150 Appraisals must be based on performance. Appraisal is judgement; and
judgement walways requires a definite standard.. Not only are few of us
reliable judges of a man; nothing, also, may change as much as potential. THe
world is full of men whose youthful promise of excellence has turned into
middle-aged mediocrity
   p187 No amount of activity will develop tomorrow's managers in a
functionally centralized organization; all that is likely to produce are
tomorrow's specialists. Conversely, genuine federal decentralization will
develop, train, and test a fair number of managers for tomorrow without any
additional manager-development activity as such
   p199 A decision should always be made at the lowest possible level and
close to the scene of action as possible. Moreover, a decision should always
be made at a level insuring that all activities and objectives affected are
fully considered
   p205 It must whenever possible integrate activites on the principle of
federal decentralization, which organizes activites into autonomous product
business each with its own market and product and with its own profit and
loss responsibility. Where this is not possible it must use functional
decentralization, which sets up integrated units with maximum responsibility
for a major and distinct stage in the business process
   p208 Yet the functional specialist may become so narrow in his vision, his
skills and his loyalties as to be totally unfit for general management
   p213 There is, however, one requirement that must be satisfied if federal
decentralization is to result. The managerial unti must contribute a profit
to the company rather than merely contribute to the profit of the
company. Its profit or loss should directly become company profit or loss. In
fact, the company's total profit must be the sum total of the profits - not
arrived at by manipulating accounting figures, but determined by the
objective and final judgement of the market place
   p243 The root of the trouble is the concept of staff-and-line. The root of
the trouble is the belief that there is such a thing as staff functions. 
There are only management functions, either running a business, managing a
business-producing function or manageing a supply function. Above all,
service work does not belong in top managment. It does not belong in the
central office. For service work does not affect the business as a whole - it
only deals with techniques and tools. Since service work is s help to
operating managers, it should be organized as the tool of operating managers
   p249 Growth always requires new and different competence in top
managment. It requires that top managment realize that its own function is no
longer to know what goes on in the plant or in the regional sales offices. It
is important indeed for top management to learn that the problem of size
cannot be met by trying to keep in communication with managers and employees
as far down as possible - that is neither required nor even desirable
   p266 Finally, man is distinguished from all other resources in that his
"development" is not something that is done to him; it is not another or
better way of using existing properties. It is growth; and growth is always
from within
   p272 To assume that people do not want to work would make the job of
managing worker and work totally hopeless. THe task facing management
therefore is to reach the worker's motivation and to enlist his
participation, to moblize the worker's desire to work. What basic concepts,
what tools, and what experience do we have for this task?
   p288 Technological changes will force new thinking, new experimentation,
new methods. And there are signs that the process has already begun. The
relationship between a man and the kind of work he does, which traditional
Human-Relations thinking pushed aside as almost irrelevant, is now being
studied by men close tot he Human-Relations school. [cites Walker & Guest]
The problem of the human resource, rather than on the assumption of man as a
badly designed machine tool, is being given serious attention by men of
standing in Scientific Management [cites Juran!]
   p306 The worker should be enabled to control, measure and guide his own
performance. He should know how he is doing without being told. THe rules for
procedures and information that apply to managers apply to workers as well
   p328 If it be argued that, in the guise of making it manageable and
meaningful, I propose to abolish the "supervisor's job," I would answer that
this is indeed my intention. What the enterprise needs to obtain peak
performance from the worker is a manager instead of a supervisor
   p345 Setting objectives, organizing, motivating and communicating,
measuring and developing people are formal, classifying categories. Only a
manager's experience can bring them to life
   pp372-3 We can summarize by saying that the new demads require that the
manager of tomorrow acquit himself of seven new tasks: 1. He must manage by
objectives. 2. He must take more risks and for a longer period ahead. And
risk-taking decisions will have to be made at lower levels in the
organization. The manager must therefore be able to calculate each
risk.. 3. He must be able to make strategic decisions. 4. He must be bale to
build an integrated team each member of which is capable of managing and of
measuring his own performance and results in relation to the common
objectives.. 5. He will have to be able to communicate information fast and
clearly. He will have to be able to motivate people. He must, in other owrds,
be able to obtain the responsible participation o fother managers, of the
professional specialists and of all other owrkers. 6. Traditionally a manager
has been expected to know one or more functions. THis will no longer be
enough. The manager of tomorrow must be able to see the business as a whole
and to integrate his function with it. 7. Traditionally a manager has been
expected to know a few products or one industry. This, too, will nolonger be
enough. The manager of tomorrow will have to be able to relate his product
and industry to the total environment, to find what is significant in it and
to take it into acocunt in his decisions and actions.. integrate world-wide
trends into his decisions
				 #@#
   Influence Cialdini Quill Morrow 1998
   p12 estimate the second object to be heavier than if we lifted it without
first trying the light one. The contrast principle is well established in the
field of psychophysics and applies to all sorts of perceptions besides
weight.. Even though both hands are in the same bucket, the hand that has
been in the cold water feels as if it is now in hot
   p13 sell the costly item first
   p18 Richard Leakey escribes the essence of what makes us humn to the
reciprocity system: "We are human becase our ancestors learned to share their
food and their skills in an honored network of obligation"..  widely shared
and strongly heldfeeling of future obligation.. result was the lowering of
the natural inhibitions against transactions that must be begun by one
person's providing personal resources to another
   p19 rule for reciprocation is so deeply implanted in us by the process of
socialization.. against all countervailing forces, obligation triumphed
   p65 They undersupply the stores with the toys they've gotten the parents
to promise.. forced to substitute other toys.. [but later] adults go trudging
off to the store to live up dutifully to their words
   p67 you to make a commitment.. your automatic and ill-considered
consistency wit that earlier commitment
   p118 Sales and motivation consultant Cavett Robert captures the principle
nicely in his advice to sales trainees: "Since 95 percent of the people are
imitators and only 5 percent initiators, people are persuaded more by the
actions of others by any proff we can offer".. principle of social proof
   p132 [Kitty] Genovese incient.. no one had helped precisely because there
were so many observers.. someone else will help or has helped, no one
does..pluralistic ignorance effect
   p133 In times of such uncertainty, the natural tendency is to look around
at the actions of others for clues. We can learn from the way the other
witnesses are reacting, whether the event is or is not an emergency.. 
pluralistic ignorance "in which each person decides that since nobody is
concerned, nothing is wrong"
   p204 factors leading to liking - physical attractiveness, familiarity,
association.. vigilance should be directed not otward the things tha may
produce undue liking for a compliance practitioner [eg salesman], but toward
the fact that undue liking has been produced. The time to act protectively is
when we feel ourselves liking the practitioner more than we should under the
circumstances By concentrating out attention on the effect rather than the
causes, we can avoid the laborious, nearly impossible task of trying to
detect and deflect
   p205 The stronger the force, the more conspicuous it becomes and,
consequently, the more subject to our alerted defenses.. unwarranted liking
should be enough to get us to react
   p213 deep-seated sense of duty to authority with us all. According to
Milgram, the real culprit in the [electrocute the other subject] experiments
was his subject's inability to defy the wishes of the boss of the study
[Milgram j Abn Soc Psy 67 (1963) 371-78]
   p232 assure us of their sincerity: They will seem to argue to a degree
against their own interests. Correctly done, this can be a subtly effective
device for proving their honesty
				 #@#
   Get Anyone Do Anything Lieberman 2000 wtmartins.com 0312270178
   p27 People want what they can't have and they want more of what they have
to work for.. Introduce an element of uncertainty to instantly reignite the
passion.. Make her feel good and she will feel good about you
   p37-381 If She's A True Friend.. Tell her about something significant that
is going on in your life and see if she calls to follow up and find out what
happened.. Tell a secret about a mutual friend and see if it gets back to
him.. lots of people who are willing to "cheer us up" when things aren't
doing well. But it's more difficult to find someone who will congratulate us
when things are going well.. Does she tell you things for your benfit even
though she knows that it might make you upset with her.. If she "must know"
then she's just interested in gossip and not in you. A good friend will
respect your wishes and give you space.. Is she willingto give up something
if it means making you happy.. Is the word compromise in her vocabulary
   p42 powerful manipulators are: guilt, intimidation, appeal to ego, fear,
curiosity, our desire to be liked, and love
   p45 If he is sincere in his stance that he will leave if he doesn't get
his way, then he will appear almost reluctant and not overly confident in his
stance because he's not pleased that it has come down to this.. It's the
insecure who has to tell you how confident he is because that's the only way
that we're going to find out
   p49 Ask a question that does not accuse the person of anything but
rather alludes to it
   p52 Just get her to commit to liking the idea, person, or object.
Then simply ask her how she thinks that it can be improved
   p60 narrow a person's options to avoid extensive deliberation..  Give a
deadline for taking action.. Engage the law of consistency by first having
and individual commit to a smaller request.. reducing whatyou want to do in
simple, easy-to-follow steps
   p64 when we feel our freedom is being restricted or limited we tend to
move further toward what is being limited.. Ninety percent of the decisions
we make are based on emotion.. Offer a specific game plan with a clear-cut
course of action.. how your idea will prevent negative or unpleasant
consequences.. remind him how he is in some way the one who first gave you
the idea. Let him know too that this new way of thinking is really consistent
with who he is
   p78 align yourself with a greater and more important value to which
this person holds
   p79-80 her agreeing to take the chance. Again, if at this point she
absolutely refuses, then you know that there is no way that she is likely to
comply..  reluctant to change her mind without any new information because
she will think of herself as inconsistent.. Adopt a two-sides argument to
increase your cerdibility, being sure to present the evidence to support your
position first
   p87-8 not preoccupied with something else.. reciprocity by doing something
for him.. personal responsibility.. no one else to turn to..  (a)
specifically what you want, (b) how he will in some way feel good about doing
you the favor, and (c) the relative ease with which he can accomplish the
task. If your situation is due to your incompetence, you will generate
apathy, not sympathy. Focus on any elements of your predicament that were not
your own doing. Reshape his self-concept to include the idea that helping you
is something consistent with who he is. Knowing others "did the right thing"
invokes an unconscious desire to do the same. Have him witness or simply tell
him about those who have helped in similar situations. Studies conclude that
if she feels theatened by your success you will not get her
cooperation.. keep asking. Many times people just say no because it's easy
and they're used to it
   p92 remain one of the crowd. Humility is one of the most powerful
character traits for effective leadership.. vision must be clear, simple, and
organized.. Overly passionate leaders are believable but few people want to
follow them. Never yell or publicly chastise..  charisma by making others
feel important
   p95 overview before going into the details. This puts the new information
into an understandable context. Use the law of expectation. Simply stating
that you expect this information will be understood quickly and easily
greatly increases comprehension and retention
   pp98-9 consistent in the opposition to majority.. avoid appearing rigid
and dogmatic.. Divide and conquer.. additional information..  social proof by
finding other people, outside your group, who share your view
   p100 When your mind has nothing to focus on it divides against itself and
creates a breeding ground for worries and anxieties. Yet once you get a
clearly defined outside goal that you are passionate about these divisions
cease
   p110 Never do anything out of fear. If you need to win then you
will lose. You must only focus on the game, not the outcome
   p117 Human beings have an inherent curiosity, and by not making your
message clear, it forces the person you/re trying to reach to clarify what
it's about [and call back]
   p125 apology should be sincere and specific. Let the person who that you
are prepared to face and accept any consequences for your actions.. restore
her sense of power
   p132 Present the situation when possible (or aspects of it) as temporary,
isolated, and insignificant. Use the law of contrast and comparison by
illustrating how it could have been worse than it actually turned out
   p136 When you turn down the favor (that's being asked of you) ask for a
favor from that person right after you say no to his request. By asking a
favor of him that he can't come through on, you've in effect canceled your
debt as soon as he declines your request
   p140 Tell a third party that you genuinely like, admire, and/or respect
this person.. showing an interest in her you will get her to like you faster
than if you spent all day trying to get her interested in you. Talk about
those things that you share and have in common..  likes you based on how you
make her feel about herself
   p142 Let her know that there is a real person behind the rumors..  rumors
spread is that they are interesting and that they sound believable.. simply
spread a more outrageous rumor that overshadows that one, but incorporates it
as well [ad absurdum]
   p148 So let him say everything he wants to say without interruption and
then agree.. If you don't iterrupt, then they will eventually run out of
things to say. If you interrupt you are going to give him more ammunition and
risk a heated argument instead of a monologue..  listening, agreeing, and
stroking his ego
   p153 most likely to feel jealous in areas that are specifically
relevant to his self-worth
   p160 best time to criticize is when you are removed from the
event.. because you care.. Always criticize in private. Preface your
criticism with a compliment. Criticize the act not the person. Share some of
the responsibility if you can. Offer the solution. Let him know that he is
not alone
   p162 highly stressed situation, self-focusing on emotions led to increased
emotional awareness and a strong desire to seek social support (Strentz and
Auerbach, 1988).. By making the person think about his emotions, you
unconsciously force him to seek support from you, to open up, and to share
   p170 The minute you try to defend yourself, you've lost. Don't
automatically accept the person's premise or you may be starting at a
disadvantage. Instead gain leverage and ask him to explain why he thinks the
way he does. Don't be goaded into responding to a vague statement. You can't
win. Change the question, reduce it to specififc, then answer
   p176 "Never argue with anyone who is crazier than you." Do whatever you
can to make him think you're nuts. Scream, yell, talk to imaginary people,
[bark, glossalalia] whatever
				 #@#
   Reading People, Jo-Ellan Dimitrius, Ballantine, 1999 0345425871
   p17 best weapon against fear is knowledge
   p63 Any trait that shows tension, nervousness, or secretiveness
indicates possible dishonesty
   p65 Stillness, a fixed or set gaze, and the chin on the hand are
all signs of pensiveness or attentiveness
   p66 people who are bored usually distract themselves with physical
activity
   p67 Anger usually manifests itself in one of three was: aggression,
defensiveness, or withdrawal
   p73 nervous will need an outlet for his nervous energy
   p85 comparing the public persona with the person's home, you can learn how
contented they are, whether they feel insecure or confident, what they spend
most of their time doing, and in general what matters most to them
   p99 sizing up someone's friends and associates will give you a
pretty reliable indication of his or her character
   p102 how everything is maintained and positioned; and always ask
how much choice the peson had
   p115 Generally speaking, I hav found that people who have a loud, dominant
voice bu use it courteously and appropriately are confident.  Those who abuse
others with their loud voice, like a bully with a big stick, are often
insecure
   p130 To encourage candid conversation, resist the urge to correct,
criticize, or gloat
   p136 come around their desk and sit next to them. If you want to have an
unconstrained conversation with someone, get rid of any obstacles between the
two of you
   pp150-1 good listening are: Don't interrupt. Be empathetic; don't condemn,
argue, or patronize. Maintain a comfortable physical distance. Be involved,
but not too intense. Don't let your body language impact the free flow of
information. Self-disclose, but not too much, too soon. Don't tkae what
someone says out of context.  "Listen" with all your sences.. don't leave the
setting to chance..  speed with which they are comfortable.. questions to
keep the conversation moving and information flowing your way. Questions
which call for information about the three most predictive traits -
socioeconomic background, satisfaction with life, and compassion..
Open-ended questions are an invitiation to chat.. Leading questions
focus.. on track, but may produce less spontaneous or complete
answers.. Argumentative questions are usually your last resort, but may be
necessary to ferret out the truth when you have to be confrontational
   p155 Most of us are quick to deny any hint of wrongdoing and happy to
explain ourselves if we have nothing to hide. That's why, in nearly every
courtroom, judges instruct juries that they may draw a negative inference if
one party has a chance to explain an important issue but doesn't
   p157 People who want to avoid lying outright often try to spread the truth
sround in a long answer so that, in order to discover it, you have to pick
out a piece here, a piece there.. When someone doesn't want to commit
himself, he will often answer a question with a question. He's waiting for
more information from you, so he can tailor his answer accordingly
   pp180-1 silence usually means your concerns are well-founded..
interrutions. The motive may be to control the conversation, get attention,
or just excitement or enthusiasm.. Unsolicited boasting reflects not just the
obvious arrogance, but an insincere streak as well.. Humility is great. But
in the extreme it reflects deep insecurity.. Whatever warrants obvious
repetition by someone is very important to her. Don't ignore
it.. gossip. Consider it the tool of the unhappy, insecure, mean-spirited,
and manipulative.. Unsolicited self-disclosure, especially in large doses,
signals an attempt to connect, impress, persuade, brag, test, or
deceive.. With few exceptions, sarcasm is a way to get a laugh or make a
point indirectly - usually at someone else's expense
   p186 how someone acts towards "everyday people" can give you a pretty good
idea how he or she will act toward you when the bloom is off the rose
   p206 life's highly charged situations that reveal a person's strength of
character.. unkept promises. Sometimes the motive is evil, sometimes it's
not; but whatever the motive, don't expect to be able to rely on
them.. Sometimes what someone doesn't do is as important as what they
do.. Preachers always have an agenda - persuasion, control, attention. But
don't assume they practice what they preach.. fanfare..  sure sign of
insecurity.. any extreme in spending habits usually arise from deep seated
insecurities
   p223 more frequently one lies, the less it bothers him and more difficult
it is to spot the lies from voice and mannerismas..  Sometimes we unwittingly
fool ourselves.. not a lie, but a blind spot
   p283 A would-be king holds himself above the masses. A true prince
walks among them
   p284 politician sits quietly, back straight, eyes forward, hands still in
his lap, a slight smile on hs ace, as he waits for the debate to begin
   p286 Confusion. Vizualize the windup toy, scurrying in one direction until
it hits the wall, rebounding and heading off in another direction. The
movement is random, not orderly..  Defensivenese. Picture a cat cornered by a
dog. It's backed against a wall, hair standing on end. It's looking for a
chance to run away, but ready to attack if necessary
   p288 Embarassment. Think o fa young boy strutting into the cafeteria. He
trips and falls in front of everyone. His face turns red. He brushes himself
off, awkwardly trying not to show his embarrassment, and lsinks off to a
table in the corner
   p289 Fear Visualize a deer, frozen in ithe middle of the road, eyes
wide, body stiff
   p290 Resentment. Picture a high school girl who wasn't picked to be a
cheerleader, watching as the squad practices. Her arms are folded, her eyes
are slightly closed, her body stiff.. Secretiveness.. THink of a poker
player, expressionless, peering over his cards, which he is holing tight and
close to his face
   p293 surprise: quick body movememnt and a temporary loss of control
over the smaller muscles
				 #@#
   Tom Peters Symbols Patterns Settings Org Dyn 3-22 1978 
   p6 fig 1 RULES FOR MANAGING CHANGE: 1. Spend Time: Spending time exerts,
in itself, a "claim" on the decision-making system. 2. Persist: Having more
patience than other people often results in adoption of a chosen course of
action. 3. Exchange status for substance: One of the most effective ways to
gather support for programs is to reward allies with visible tokens of
recognition. 4. Facilitate opposition participation: Often those outside the
formal decision enters overestimate the feasibility of change; encouraged to
participate, they will often become more realistic. 5. Overload the system:
Bureaucracies chew up most projects, but on the other hand, some sneak
through; merely launching more projects is likely to result in more
successes. 6. Provide garbage cans: Organizations endlessly argue issues; to
induce desired outcomes, put "throw-away" issues at the top of agendas (to
absorb debate) saving substantive issues for later. 7. Manage unobstrusively:
Certain actions can influence the organization pervasively but almost
imperceptibly; moreover, the resulting changes will persist with little
further attention.  8. Interpret history: By articulating a particular
version of events, the leader can alter people's perception of what has been
happening; whoever writes the minutes influences the outcome
   p9 fig 3 MUNDANE TASKS: a. Symbols: Calendars, Reports, Agenda, Physical
Settings, Public Statements, Staff organization. b. Patterns: Positive
reinforcement, Frequency and consistency of behavior, Implementation/solution
bias, Experimenting mode. c.  Settings: Role of modeling, Location, Agenda
control, Presentation format, Questioning approaches, Deadline management,
Use of minutes
   p16 Most important of these is singleness of focus. That is, the
single-element focuser should not be confused with multiple-team project
management. Its effectiveness rests on achieving a limited, temporary focus
on one or at most two, major new items. Note, also, that the structural
manifestations then to be about half staff, half line. On one hand, the
focusing element often has the look of a traditional staff unit, but its
manager, as the unmistakable agent of the top team's highest priority, visiby
intrudes on operating managers' territory.
   p19 lessons extracted by business leaders, the crucial role in central
beliefs emerges.. stress the quest to give operational force and meaning to a
dominant, though imprecise idea
   p20 Just as it cannot be imposed by fiat, it cannot be changed at
will. Typically, a major shift in the dominant belief can be brought about
only when an important change is perceived to be at hand. The process of
gaining commitment requires so much emotional commitment and institutional
energy that it can be repeated only infrequently. It has a reasonably
predictable life cycle.. It suggests movement
				 #@#
   Preemployment honesty testing edJones Quorum1991 ISBN 0-89930-620-9
   p65 Basic psychometric Properties of a Preemployment honesty test:
Reliability, validity, and fairness. Dennis S Joy.. Employees who steal tend
to view themselves as average people in a basically dishonest world. THese
individuals project their own dishonesty and thus see theft as
prevalent. This allows them to rationalize that everyopne steals, so they
feel they are acting according to accepted norms. The typical dishonest
employee is also more tolerant of theft in others and holds less punitive
attitudes about theft. Dishonest employees are more tmpted to steal, ruminate
about more theft-related activities, exhibit more interthief loyalty, and
more readily accept commom rationalizations for their theft
				 #@#
   Beyond Reason, Fisher & Shapiro, Harvard Negotn Proj, Penguin, 2005
   p204 core concerns are: 1. Appreciation. Feeling unappreciated puts people
down. We can appreciate others by understanding their point of view; finding
merit in what tey think, feel, or do; and communicating our understanding
through words or action. We can appreciate ourselves, too.
2. Affiliation. Rather than having each negotiator feel alone and
disconnected, we can try to build structural connections as colleagues and
personal connections as confidantes. 3. Autonomy. Recognize that everyone
wants freedom to affect or make a great many decisions. We can expand our
autonomy and avoid impinging upon theirs. 4. Status. No one likes to feel
demeaned. Rather than compete with others over who has the higer social
status, we can acknowledge everyon's areas of [articular status, including
our own. 5. ROle. An unfulfilling role leaves us feeling trivialized and
unengaged. Yet we are free to choose roles that help us and others work
together. And we can expand the activites within any role to make them
fulfilling.
   p208 The Seven Elements: The Anatomy of a Negotiation
Element           Some Diagnostic Questions   Some Prescriptive Advice
Relationship      How does each negotiator    Build rapport and a good
                  think and feel about        working relationship with
                  the other?                  fellow negotiators. Work
                                              together, side by side.
Communication     Is communication poor,      Build easy two-way
                  deceptive, one way? Are     communication. Inquire
                  negotiators telling one     listen, be worthy of trust.
                  another what to do?         Avoid fuzzy promises.
Interests         Are negotiators making      Respect the interests of
                  demands and stating         others. Understan and
                  positions while concealing  disclose your own inter-
                  their true interests that   ests. (You need no  dis-
                  underlie them?              close how highly you
                                              value what you want.)
Options           Does the negotiation look   With no commitment,
                  like a zero-sum game        jointly brainstorm pos-
                  where each side's choice    sible ways of meeting
                  is between winning or       legitimate interests of
                  losing?                     both.
Legitimacy        Does no one seem to         Look for and request
                  care about being fair? Are  external standards of
                  they simply haggling by     fairness that will be per-
                  saying what they are        suasive to both.
                  willing or unwilling to do?
BATNA             Is each side theatening     Consider your walk-away
(Best Alternative the other without know-     alternative as well as
 to Negotiated    ing what they will do if    theirs. Recognize that
 Agreement)       no agreement is reached?    any agreement must be 
                                              better for both than
                                              walking away without an
                                              agreement.
Commitments       Have negotiators de-        Draft fair and realistic
                  manded unrealistic com-     commitments that each
                  mitments from the other     side could make.
                  side? Have they failed to
                  draft commitments they
                  would be willing to make?
				     #@#
   Kheel, Keys to Conflict Resolution,4w8w, 2001
   p48 TEN COMMANDMENTS FOR NEGOTIATORS. I. Seek agreement on a clear
definition of the issues in dispute at the earliest possible time. II.. try
to see yourself as your opponent sees you. III. Try also to see your opponent
as he sees himself. IV. Fals statements of material facts can be
illegal. They are also unwise, especially in consintuing
relationships. V. Puffing-and-bluffing.. if they do not include fals eor
misleading statements of material facts. VI. Credibility is
key... VII. Silence and body laguage can be as significant.. VII. In
negotiation, timing is critical.. IX. Keep cool.. X. Be ready for
decision-making at the crunch. It is time to put up or shut up
   p82 TEN COMMENDMENTS FOR MEDIATORS: I. Emphasize at the outset the
importance of clearly defining the issues in dispute and gathering and
assessing the relevant facts. II. Take control of the "housekeeping" aspects
of the dispute such as wehr eand when the meetings should be held, how long
they should last and whether and when public statements should be made to the
media. III. Remember, your goal is to get the disputants to agree with each
other; it is not to get them to agree with your views on the merits of their
respective claims. IV. Avoid any statements or actions that will prejudice
the bargaining position of either side. V. Make no formal recommendations for
settlement unless both sides specifically ask you to do so and, if requested,
bear in mind that your ability to continue mediating may be prejudiced if one
side accepts your recommendations and the other side rejects them. VI. You
may offer suggestions for discussion purposes, separately or to both parties,
but not as a recommended solution. VII. Convey accurately any messaqges or
proposals you are asked to relay to the other side. VIII. Respect any
confidences you are given by either side. IX. Never go around the individuals
designated.. X. Bear in mind at all times that you are the friend of
contesting adversaries. Give them no reason to share you as an enemy
   p96 TEN COMMENDMENTS FOR ARBITRATORS: I Decide the dispute strictly in
accordance with the mandate the parties have given you; do not substitute
your judgement of fairness for the criteria you are called upon to
apply. SImply splitting the difference is a cop-out. II. If the dispute
involves the rights of the parties under a contract, guide yourself by the
contract's terms, which usually limit you to an interpretation and
application of the cobtract. You have no authority to add to, subtract from
or modify its terms. III. If interest claims are involved, guide yourself by
the criteria in the stipulation of the parties submitting the dispute to
arbitration. IV. COnduct yourself as a judge would.. V. Avoid speaking to one
party in the absence of the other.. VI. Try to mediate if the opportunity
arises. But neither say, nor do, anything in mediation that might prejudice
your ability to make a decision on the merits. VII. Confine your decision and
opinion to the case before you. Omit any incidental or supplementary
remarks.. VII. Do not allow anyone unconnected with the arbitration to be
present at the hearing without the consent of both sides. IX. Do not release
your decision to the public without the consent of both sides. X. agree in
advance how you will be paid
				     #@#
   Negotiation Advice HBS 9-905-059 2006 Rob Walker [Inc 8/03 p75] - took a
fresh look at aome classic texts..  "self-respect," "high self-esteem," "self
worth," and "utter clarity.".. Successful negotiating requires a host of
traits - poise, curiosity, creativity, and stamina.. Getting to Yes [Fisher Ury
Patton 1991].. generating mutual gains: Focus on interests, not positions. Invent
options for mutual gain. Insist on objective criteria.. Negotiating with
Difficult People [1991], WIlliam Ury.. importance of deep listening ang
giving other people an opportunity to save face.. detachment of a
disinterested observer seted way up in the balcony.. Douglas Stone, Bruce
Patton, and Sheila Heen, authors of Difficult Conversation [1999].. Have your
feeling (or they will have you). Don't assume they mean it: disentagle intent
from impact. Begin with the third story (the account a dispassionate observer
would offer).. Bazerman and Neal [Negot Rationally 1992] also state that
sound decision making in negotiation can be promoted by asking yourself
questions such as: Are you pursuing a negotiated course of action only to
justify an earlier decision? Is there another frame that would put a
different perspective on the negotiation? Are you being affected by readily
available information and ignoring other valid, but less, accessible data?
Have you fully thought out the decisions of your opponent?
				     #@#
   Critical Moments in Negotiation HBS 9-902-163 2001 Establish initial
conditions carefully.. Continually test your assumptions.. strategic turns if
your role or position are challenges.. develop rescue and recovery routines
for moments of high conflict.. caucuses and time-outs to interrupt
destructive beahvior and to gain perspective.. develop a shared
language.. tolerance for ambiguity.. critical moments as a transistional
device to reframe the process
				     #@#
   How to Manage Your Negotiating Team.  Brett, Jeanne M. 1
jmbrett@kellogg.northwestern.edu Friedman, Ray 2 ray.friedman@vanderbilt.edu
Behfar, Kristin 3 kbehfar@uci.edu Harvard Business Review; Sep2009, Vol. 87
Issue 9, p105-109, Even though team members are all technically on the same
side, they often have different priorities and imagine different ideal
outcomes: Business development just wants to close the deal. Finance is most
concerned about costs. The legal department is focused on patents and
intellectual property. Teams that ignore or fail to resolve their differences
over negotiation targets, trade-off s, concessions, and tactics will not come
to the table with a coherent negotiation strategy. They risk ending up with
an agreement that's good for one part of the company but bad for another. On
the basis of our research, we recommend four techniques for managing
conflicts of interest within the team.  Plot out the conflicts..  Work with
constituents.. one leader sent his team members back to their own departments
with the worst-case outcome for the company and individual units. This
sobering hypothetical softened up hardliners and allowed members to align
their interests..  Mediate conflicts of interest..  Persuade with data..
Gaffes made at the bargaining table are usually the result of genuine
differences in participants' negotiation styles, a lack of preparation, or
frustration. Although rarely intentional, breakdowns in discipline sabotage a
team's strategy in ways that are almost impossible to recover from. Such
breakdowns reveal fissures that the other party eagerly exploits..  Simulate
the negotiation..  Rehearsals like that enable individuals to determine when
they should contribute -- and when they should keep silent. They help people
anticipate their own and others' likeliest emotional responses, predict where
team discipline might break down, and clarify who has authority to make
concessions and decisions..  Assign roles to capitalize on team members'
strengths and interests..  Large teams using text messaging or chat
technology often had a gatekeeper decide when the lead negotiator needed to
be alerted about new ideas bubbling up during the course of the talks
				     #@#
   GETTING PAST YES. Ertel dertel@vantagepartners.com Harvard Business Review;
Nov2004, Vol. 82 Issue 11, p60-68 The real challenge lies not in hammering
out little victories on the way to signing on the dotted line but in
designing a deal that works in practice.. People who view the contract as the
conclusion and see themselves as solely responsible for getting there behave
very differently from those who see the agreement as just the beginning and
believe their role is to ensure that the parties involved actually realize
the value they are trying to create. These two camps have conflicting
opinions about the use of surprise and the sharing of information. They also
differ in how much attention they pay to whether the parties' commitments are
realistic, whether their stakeholders are sufficiently aligned, and whether
those who must implement the deal can establish a suitable working
relationship with one another.. Unfortunately, many organizations structure
their negotiation teams and manage the flow of information in ways that
actually hurt a deal's chances of being implemented well.. The deal maker
mentality also fosters the take-no-prisoners attitude common in procurement
organizations.. The deal structure that both customer and provider teams are
left to implement is the one that was easiest to compare with other bids, not
the one that would have created the most value. Worse yet, when the
negotiators on each side exit the process, the people responsible for making
the deal work are virtual strangers and lack a nuanced understanding of why
issues were handled the way they were. Furthermore, neither side has earned
the trust of its partner during negotiations.. Making the leap to an
implementation mind-set requires five shifts.. WHAT CAPABILITIES ARE
NECESSARY TO ACCOMPLISH OUR OBJECTIVES?.. Encourage the other party to do its
homework and consult with its internal stakeholders before and throughout the
negotiation process.. If their interests are not aligned, and they cannot
deliver fully, that's not just their problem--it's your problem,
too.. Turning a blind eye to likely alignment problems on the other side of
the table is one of the leading reasons alliances break down.. Complex deals
require the participation of many people during implementation, so once the
agreement is in place, it's essential that the team that created it get
everyone up to speed on the terms of the deal, on the mind-set under which it
was negotiated, and on the trade-offs that were made in crafting the final
contract.. You must worry about the costs and challenges of execution rather
than just getting the other side to say yes
				 #@#
   Pondy Org Conflict Adm Sci Q 12#2 9/67 [excellent lit rvu]
   p297 Bargaining model. This is designed to deal with conflict among
interest groups in competition for scarce resources. This model is
particularly appropriate for the analysis of labor-managment relations,
budgeting processes, and staff-line conflicts. 2. Bureaucratic model. This is
applicable to the analysis od superior-subordinate conflicts or, in general,
conflicts along the vertical dimensions of a hierarchy
   p300 Latent conflict.. (1) competition for scarce resources, (2) drives
for autonomy, and (3) divergence of subunit goals.. Conflict is said to occur
when the focal person receives incompatible role demands or expectations
   p301 Perceived conflict.. misunderstanding of each others' true position
   p301 Felt conflict.. personalization.. Anxieties may also result from
identity crises or from extra-organizational pressures.. to dissipate
accumulated hostilities, total institutions require certain safety-valve
institutions such as athletic activites or norms that legitimize solitude and
withdrawal, such as the noncommunication norms prevalent in religious orders
   p303 Manifest conflict.. revolutions.. aggressive and defensive
coalitions.. apathy or rigid adherence
   p304 consciously but not necessarily deliberately blocks another member's
goal achievement.. interface between perceived conflict and manifest conflict
and the interface between felt conflict and manifest conflict are the
pressure points where most conflict resolution programs are applied
   p305 if the conflict is merely suppresses but not resolved, the latent
conditions or conflict may be aggravated and explode
   p307 some optimum level of conflict and associated personal stress and
tension are necessary forprogress and productivity
   p308 if it pursues policies and actions that guarantee stability, it may
inhibit its adaptive abilities. It is argued here that a given conflict
episode or relationship may have beneficial or deleterious effects on
productivity, stability, and adaptibility
   p309 To say that (perceived) conflict represents a state of disequilibrium
and generates pressures for conflict resolution, is to say three things: (1)
that perceived conflict is a cost of participation; (2) that the conflict
distrurbs the inducements-contributions balance; and (3) that organization
members react to perceptions of conflcit by attempting to resolve the
conflict
   p315 [bureaucratic] autocrats seldom are or seldom remain
benevolent... (1) organizations are so large that the leaders cannot identify
personally with the rank and file; (2) responsibilities are delegated to
organiztional subunits, and subunit goals, values, etc. become differentiated
from those of the hierarchy; and (3) procedures are formalized, and the
organization leaders tend to treat rank and file members as mere
instrumentlities or executors of the procedures
   p316 The "man-in-the-middle" must align himself with the interest of
either his superior or his subordinate, and in so doing he laienates the
other
   p318 [System model] If in turn, two subunits having differentiated
goalsare functionally interdependent, then conditions exist for
conflict. Important types of interdependence matter are: (1) common usage of
some service or facility, (2) sequences of work or information flow
prescribed by task or hierarchy, and (3) rules of unanimity or consensus
about joint activity
				 #@#
   Assael Constr Role Interorg Confl Adm Sci Q 14#4 12/69
   p574 This high level of interdependence has lead to persistent economic
conflicts between manufacturers and dealers
   p574 requirements for constructive conflict: 1. A critical review of past
actions. 2.More frequent and effective communications between disputants, and
the establishment of outlets to express grievances. 3. A more equitable
distribution of system resources. 4. Standardizations of modes of conflict
resolutuion. 5. Creation of a balance of power within th esystem
				 #@#
   Managing Conflict at Org Interfaces, Brown, 1983 AW 0-201-00884-x
   p15 The more numerous and diverse the levels and specialized divisions
within an organization, the more opportunities for conflict at their
interfaces.. more interdependence between the parties, the higher the cost of
poorly managed conflict at their interface
   pp29-30 Table 2.1 Characteristics of underorganized and 
overorganized interfaces
ATTRIBUTE   UNDERORGANIZED INTERFACE         OVERORGANIZED INTERFACE
Boundary permeability
Inputs      Open to disruptive inputs of     Closed to necessary inputs of
             information, resources,people    information, resources,people
Outputs     Open to "leaks" of critical      Closed to export of problem
             energy, information, people      energy, information, people
Interface organization
Leadership  No clear authority;              Centralized, unquestioned
             competing authorities            authority
Goals       No clear goals; multiple         Goals clear but conservative
             conflicting goals                and not subject to challenge
Formal      Fragmented, conflicted, isolated Well-defined and clearly
 structure   or undefined roles               enforced roles
            Poorly defined ineffectual rules Rules and procedures defined
             and procedures                   and inforced in detail
Informal    Values and theories not          Values and theories coherent,
 culture     articulated of conflicting       shared, and conservative
            Feeling that chaos is imminent   Feelings that interface will
             and fight/flight is appropriate  continue and conformity is
                                              required
Technology  Not routine; artistic; poorly    Routine; assembly-line; well-
             understood work procedures       understood work procedures
Relevant    Culture differences are critical; Task differences are critical;
 differences environment dominates             interface goals dominate
Critical problems
Resources   Interface is resource-poor, and   Interface is innovation-poor,
             and needs more to survive         and needs more to survive
Energy      Energy is diffused, leaked poorly Energy is directed but
             channeled                         restricted and constrained
Conflict    Differences produce withdrawal or Differences produce suppression
             escalation and threaten           or harmonizing that prevents
             interface continuation      exploration or constructive conflict
   p34 Under conditions of high threat, people act competitively no matter
what their personal characteristics.. Walton and McKersie (1965) argue that
bargaining tactics (in situations dominated by conflicting interests) involve
selective misrepresentation, withholding information, commitment to positions
that reduce flexible discussion, and threats..  problem-solving tactics
(where common interests prevail) require exchanges of accurate information,
flexible search for alternative solutions that meet the needs of both
parties, and willingness to influence and be influenced on the basis of
trust..  representatives are seldom skilled at both
   p36-7 Table 2.2 Diagnostic questions; interface elements
Interface
 How is the interface defined?  
  What goals are shared and what interdependencies are important (tasks, 
   social identifications, common authorities, physical space)?  
  What is included in the interface (people, resources)?  
  How clearly defined (by what criteria) are interface boundaries? 
 How is the interface organized? 
   How open or closed are interface boundaries? by what mechanisms? 
   How tight or loose is interface regulation of activity? by what mechanisms? 
  What kind of interface organization is created by the combination 
   of boundary permeability and internal regulation? 
  Is it appropriate to interface activity? overorganized? underorganized? 
Parties
 What interests do the parties bring to the interface? 
   What is the mix of conflicting and common interests? 
  What interests are perceived and what not perceived? 
  How large are the stakes at issue? 
  Are the parties equally interested? 
 What internal characteristics of the parties are relevant?  
  To what extent are parties mobilized or unmobilized for conflict? 
  Do parties have iunrealistic stereotypes of themselves or others? 
Representatives
 How are representative roles defined? 
  What responsibilities and expectations are important? 
  What resources, discretion, and autonomy are available? 
 How do personal representative characteristics affect events?
  What are their relevant personal traits and characteristics?
  What are their relevant skills and tactical competencies?
Context 
 How does the next level of social unit affect interface events?  
  If both parties belong to the same unit, how do hierarchies, reward
   systems, and other unit features affect relations?  
  If parties belong to different larger units, how do these memberships
   affect interface events? 
 What part do third parties play at the interface? 
  What stances do they take vis-a-vis th eparties? 
  Do they intervene directly or indirectly?
 How does the larger context affect interface events? 
   p45 Table 2.3 Diagnostic questions: interface dynamics
Dynamics of representtaive behavior
 How do representtaive perceptions, communications, and actions interact?
  bargaining: negative perceptions, guarded communications, coercive tactics?
  problem-solving: positive perceptions, open communications, 
                                                         cooperative tactics?
 Is the pattern of interaction stable or changing?
 Are the outcomes of interaction positive or negative?
  productive conflict (bargaining or problem-solving)?
  too much conflict (escalation)?
   too little conflict (withdrawal or supression)?
Dynamic sof interface development
 How do outcomes of representatives' interaction, contextual forces, and
   party characterstics interact over time to alter or maintain the interface?
  direct impacts on interfaces?
  mutual interface over time?
 Is the interface stable or changing over time?
 Is the organization of the interface appropriate?
  underorganization that encourages too much or too little conflict?
  overorganization that encourages too little conflict?
  appropriate organization that encourages productive conflict?
   p48 Too much conflict.. perceive themselves as innocent victims and their
opponents as malignant villains.. antagonism, hostility, and extreme distrust
   p49 Too little conflict.. withdrawal can produce low attendance, low
commitment to decisions, infrequent participation, and decisions based on
little or low-quality information [cit Janis Groupthink 1972]
   pp52-3 Table 3.1 Assessing levels of conflict: choosing to intervene
CONFLICT   PERCEPTIONS       COMMUNICATIONS      ACTIONS       OUTCOMES
LEVEL       Common interests Extreme restriction Exaggerate    Discussion on
Too much    unrecognized  Serious distortion  differences   information,
Escalation  Extreme distrust of information   Coercive influence low commitment
            Hostility                         Violence and      Harm to parties
                                               sabotage        Future relations
                                                               deteriorate
Productive  Conflicting    Exchage guarded  Preserve      Decisions distribute
 Bargaining   interests    Selective offer  differences   fixed resources
              dominate    and acceptance of Rigid commitments  Accepted process
       Common interests known   informaton  Threats and        Future relations
       Opponent recognized                  promises         in bargaining mode
             Distrust
 Problem- Common interests Open exchanges Explore differences Decisions provide
 solving  dominate        Accurate information Flexible       mutual benefits
    Conflictin interests known         generation of alternatives   Creative
    Friendliness and trust                 Consensus decisions    alternatives
                                                            Future relations in
                                                            problem-solvng mode
Too little   Conflicting    Controversial  Deny differences   Decisions based
 Suppression interests    information suppressed Supress  on little information,
            unrecognized  Agreement emphassized  disagreement analysis, or
       Differences denied                                    challenge to myths
                                                            Future relations as 
                                                    parties without differences
 Withdrawal Conflicting  Controversy avoided Avoid differences No decisions, or
        interest recognized Low exchange of  Reduce investment  decisions by
           but avoided   information         Decide by default       default
       Fear of other party                                  Low commitment and 
           and conflict                                          participation
                                                     Future relations in doubt
   p54 conflict management intervention.. redirect immediate
behavior.. reallocate relevant resources.. reframe perspectives..  realign
structural forces.. new issues or alternatives.. altering flows of
information.. new tactical options.. large issues may be "fractionated" to
reduce conflict
   p59-60 Table 3.2 Interventions for redirecting behavior
INTERVENTION FOR TOO MUCH CONFLICT              FOR TOO LITTLE CONFLICT
Control      Fractionate issues to reduce size: Consolidate issues to enlarge:
issues        smaller parties                    larger parties
              smaller problems                   larger problems
              principles not involved            involve principles
              no procedural precedent            set procedural precedents
              no substantive precedent           set substantive precedents
Refocus      Create alternatives that unfreeze  Clarify hard choices and
alternatives  deadlocks and revise commitments  trade-offs in noncontroversial
                                                 alternatives
Alter        Increase believable communications Raise suppressed or
communications Build mechanisms that ensure      avoided issues
                trustworthy                        Encourage investigation and
                information exchange          discussion of potential problems
               Guard against within-party     Focus attention on lost or 
                distortions of information     ignored information
               Discuss excalation impacts on  Discuss withdrawal and supression
                information flows               impacts on communications
Change        Initial presentations that       Initial presentations that  
tactics        permit cooperation; concessions  encourage examining differences;
               evidence of peaceful intent          clear positions and demands
              Conflict-reducing initiatives:   Conflict-promoting initiatives:
               minimize risks                   minimize risks
               clear intentions                 identify issues
               unilateral peaceful step         explore differences
               expected reciprocation           require interaction
              Self-defense tactics against     Self-defense tactics for
                escalation:                      withdrawal/suppression:
               deterence for high               identify withdrawal/
                threat situations                suppression maneuvers
               nonpunitive response to          confront maneuvers to
                encourage cooperation            undercut their impact
   pp60-1 Resource allocation interventions expand or contract the available
personnel, information, or other resources relevant to conflict or its
management at the interface.. Altering resources interdependence.. Glabraith
(1973) suggests that resource reallocation is often used by default to manage
conflict.. slack resources
  p67 Table 3.4 Interventions for reframing perspectives
INTERVENTION FOR TOO MUCH CONFLICT              FOR TOO LITTLE CONFLICT
Reformulate  Clarify and encourage work         Clarify and encourage work
party interests for superordinate goals          for diversity of interests
Revise       Reduce unrealistic stereotypes     Reduce unrealistic stereotypes
unrealistic   of opponent's villauny             of opponent's similarity or
stereotypes                                      dangerousness
             Reduce unrealistic stereotypes of  Reduce unrealistic stereotypes
              own innocence or victimization     of own similarity or inability
                                                 to confront
Reconceptualize Construct theories that include  Construct theories that 
the               include both perspectives       differentiate perspectives
situation    Clarify forces operating to         Clarify forces operating to  
              promote conflict                    reduce conflict
Recognize    Understand escalatory interaction   Inderstand withdrawal/
conflict      of perceptions, communications,     suppression interaction of
dynamics      and tactics                         communications and tactics
   p73-4 Table 3.5 Interventions for realigning underlying forces
INTERVENTION FOR TOO MUCH CONFLICT              FOR TOO LITTLE CONFLICT
                                       SUPPRESSION                 WITHDRAWAL
Redefine     Create new interface to   Deemphasize to      Clarify boundaries
unit          manage conflict           reduce supression  to prevent avoidance
boundaries   Include new parties (eg   Include assertive   Include trouble
              co-opt outsiders)        representatives  makers (eg consultants)
             Define parties to         Define parties to   Define parties to
               cope with conflict (eg  reduce "fusion" and reduce distance
                 matrix organization)  overlap              and clarify 
         or to reduce interdependence                       interdependence
Alter    Open party boundaries to new  Close party boundaries Open party
boundary  information and personnel     to establish           boundaries to
permeability  rotation                  difference             stimulate 
                                                     information and personnel
         Close interface to            Open interface to    Close interface to
          escalatory inputs,            stimulating inputs,  disruptive inputs
          provocative outputs           ventilating outputs  outputs that drain
                                                             critical resources
Revise   Define rules and procedures  Loosen overly detailed Tighten rules and 
formal    legitimate to both parties   rules and procedures   procedures that
rules and                              that suppress debate   permit withdrawal
procedures
Renegotiate Negotiate shared standards Loosen shared standards Negotiate shared
shared norms of appropriate behavior    that restrict debate    standards and
and values   and dirty tricks                                   values that 
                                                                support debate
Refocus     Clarify incentives for    Clarify incentives for Clarify incentives 
incentives   reduced conflict           more debate           for more debate
            Emphasize costs of        Clarify costs of       Clarify costs of
             continued conflict     continued suppression  continued withdrawal
   p85 Lawrence and Lorsch (1967) found that departments in some business
organizations differed in time orientation, interpersoanl culture, and
formality of structure in addition to their diverse task objectives
   p89 larger organization depends on interfaces among interdependent
departments for accomplishing its goals, so problematic conflict at those
interfaces may draw rapid response.. limits extremes of immediate
interaction.. Walton, Dutton, and Fitch (1966) found self-maintaining
patterns of interface organization
   pp126 Lower parties fear upper parties as wholly malevolent and
overpowering, and upper parties often stereotype lower parties as weak and
subhuman, Both parties bring to authority relations strong feelings derived
from their experiences as parents and children (Bion, 1959). Communications
between unequal parties are particularly vulnerable to distortion and
restriction. The lower party's fear reduces its communication to upper
parties, particularly of information that might provoke retaliation; the
upper party's ignorance o flower party concerns blinds them to areas of
controversy.  When lower parties voice long-suppressed antagonisms, upper
parties are often surprised into responding with injured innocence or outrage
   p211-2 Too much conflict at culture interfaces is associated with culture
shock, personal prejudice, and cultural polarization that may produced deep
antagonism and intense fightig. Too little conflict between cultures, on the
other hand, is associated with enforced cultural homogeneity and
institutional discrimination in some cases and cultural isolation and
withdrawal in others.. interventions may emphasize altering the patterns of
representatives' interaction by changing their perceptions, communications,
or actions Or they may focus on reshaping interface definition and
organization by altering the interplay of parties, the context, and the
interface itself..  issues at conflict interfaces can have symbolic value
well beyond their obvious importance and representatives of one culture may
be very much unprepared for the depth of feeling the issue sets off in the
other.. often peripheral to organizational.. dispersion increases the
likelihood of unplanned negotiations between self-appointed representatives
of relatively unorganized cultural parties at informally defined cultural
interfaces
   pp308-9 Table 9.2 Intervention characteristics
INTERVENTION TARGET DYNAMICS RESOURCES REQUIRED AVANTAGES/DISADVANTAGES
Redirect     Representative  Skills             With good timing can interrupt
behavior     interaction     Imagination         can interupt sycles of 
 issues       (quick impact)   (low cost)        problematic interaction
 alternatives                                   Effective when interface and 
 communications                                  contect moderate conflict
 tactitcs                                        problems (eg at departmental
                                                 interfaces
                                                Vulnerable to continuing cycles
                                                 and structural pressues
Reframe perspectives
 interests    Representative   Information      Can alter highly charged
 stereotypes   interaction     Interpretations   perspectives (eg at level,
 situations    (quick impact)  Persuasion skills Complements other
 dynamics     Interface          (low cost)        interventions
               development                      Vulnerable to continuing cycles 
                (slower impact)                   and  structural pressures
Reallocate resources
 interdependence Representative  Resource       Can match resources to central
 conflict         interaction      control       issues (eg task, power,
  management      (quick impact)   (moderate     culture issues)
   resources     Interface           cost)      Creates press for long-term
                  development                    solutions
                  (slower impact)              Relatively visible and expensive
Realign structural forces
 boundaries      Interface     Formal,informal Complements changes in 
 permeability      development  influence        interaction dynamics by 
 rules, procedures   (slower     (moderate to     altering long-term pressures
 norms, values       impact)      high cost)      (eg at level, culture
 incentives                                        interfaces)
                                                Creates press for long-term
                                                 solutions
                                                Expensive and disruptive to
                                                 other parts of system
				 #@#
    Walton Interpers Peacmkg 1969 AW 0-201-08435-x
   p73 Substantive issues involve disagreements over policies and practices,
competitive bids for the same resources, and differing conceptions of role
relationships. Emotional issues involve negative feelings between the parties
(eg, anger, distrust, scorn, resentment, fear, rejection).. "philosophical
differences," which of course are usually manifested in conflicts over the
substance of policies and practices
   p74 Some substantive issues centered on a type of "role invasion"..
Perhaps opposite to role invasion is "task deprivation," whereby one party is
not getting the services which he requires in order to perform
effectively.. Another very frequently encountered source of interpersonal
conflict in organizations is a "competitive incentive structure".. Turning to
emotional issues, one type is "personal need deprivation," wherein the
situation is currently failing to satisfy some salient personal needs.. In
the case of "incompatible personal needs," two persons make contradictory
demands on their situation or on their relationship, demands which are based
directly on their repsective interpersonal needs
   p75 Even where it is not clear what personal needs are being blocked,
"differences and similarities in personal styles" may be threatening to the
persons involved
   p76 obstacles to interaction.. Task requirements.. Group norms..  Personal
role concepts.. Public images.. Perception of the other's
vulnerability.. Perception of one's own vulnerability.. Fear that a
conciliatory overture won't be reciprocated
   p83 conflict-resolution behaviors.. agreeing to meet.. listened to each
other.. regret for having "piled on".. acknowledgement..  authentic
expression of regret.. nondefensive acknowledgement of the fact
   p84 Diagnosing the conflicts requires determination of which issues are
basic and which are merely symptomatic, representing a proliferation of the
basic issues.. party may inject a second or substitute issue into the
conflict because it provides a more legitimate umbrella for the
conflict. Sunstantive issues are often injected into a basically emotional
conflict for this reason
   p85 basic issue sometimes risks so much embarrassment for one or both
persons that they can save face by acting as if their differences centered on
some other issue. Second, if this is so, it i smore "expressive" and
therefore more gratifying for a person to engage another around a surface
issue which is, nevertheless, similar to (rather than different from) the
underlying issue. Third, by identifying a surface issue which resembles the
basic issue, one is better able to exchange ideas (one's own perceptions of
other's views) which are also relelvant to the basic issue.. Substantive
issues may develop subconsciously from emotional conflicts, as merely another
way one person can differentiate himself from a person toward whome he feels
antagonistic
   p86 sometimes a new substantive issue is injected tactically into the
conflict by a party who wishes to gain the offensive or counter an opponent's
offensive.. Additional issues result from attempts to cope with the
consequences of primary conflict
   p90 control strategies.. eventual results may be less desirable that an
early expression of the conflict.. may tend to go underground.. result in
accumulation// more complex strategy.. cooling off period.. temporarily
protecting the larger system from disruption.. second operational objective
does not try to prevent all conflict interchanges, but attempts to set limits
on the tactics and weapons
   p91 prevent a conflict from escalating.. achieve some de-escalation
   p94 following ingredients in an interpersonal setting are postulated as
strategic to productive confrontation: 1. mutual positive motivation,
2. balance in the situational power of the two principals, 3. synchronization
of their confrontation efforts, 4. appropriate pacing of the differntiation
and integration phases of a dialogue, 5.  conditions favoring openness in
dialogue, 6. reliable communicative signs, 7. optimum tension in the situation
   p129 tactical interventions.. refereeing the interaction process,
suggesting agenda, clarifying participants' messages, eliciting and offering
interpersonal feedback, diagnosing the conflict issues, prescribing
discussion methods, diagnosing difficulties in the dialogue process, and
counseling
   p146-7 If there is no sufficient immediate desire on both sides to ensure
a give-and-take, the third party can move to avoid or delay the direct
confrontation.. third party works to achieve more symmetry in the
motivational forces.. third party can attempt to achieve as much balance as
possibe; for example, by offsetting an organizational power advantage of one,
by involving more allies for the other. THe third party can regulate the
interaction process in a way that favors a person with lesser verbal or
fighting skills. Thus, again we propose that the third party attempt to
achieve symmetry.. third party can ensure that one principal's initiative to
confront is synchronized with the other's readiness for the dialogue, in
order to avoid abortive confrontations.. related funtion is to ensure either
that the differentiation phase of the dialogue is worked out fully before
moving on to the integrative phase, or at least, that a sufficient amount of
differentiation has occured to provide a basis for the amount of integration
contemplated for the time being.. extent to which various factors contribute
to openness in a confrontation; in particular these factors are
organizational norms pertaining to expression of differences, emotional
reassurance available to participants, and the skills at hand for
facilitating dialogue..  translating or restating the messages until the
sender and receiver agree on the meaning; by procedural devices which require
one to demonstrate that he understands what the other has said; and by
contributing to the development of a common language with respect to
substantive issues, emotional issues, and the dialogue process
itself.. optimum level of tension.. sense of urgency.. rleaxig..  rigidity of
individual thought processes
				 #@#
   Gabarro & Kotter Managing your boss HBR 1/80
   p94 requires the following: That you have a good understanding of the
other person and yourself, especially regarding strengths, weakenesses, work
styles, and needs. That you use this information to develop and manage a
healthy relationship - one which is compatible with both persons' work styles
and assets, is characterized bymutual expectations, and meets the most
critical needs of the other person
   p96 vice president made three basic errors. He took information supplied
to him at face value, he made assumptions in areas where he had no
information, and - most damaging- he never actively tried to clarify what his
boss' objectives were
   p97 Although a superior-subordinate relationship is one of mutual
dependence, it is also one in which the subordinate is typically more
ependent on the boss.. frustration, sometimes anger, when his actions or
opinions are contstrained by his boss;s decisions.. Both counterdependence
and overdependence lead managers to hold unrealistic views of what a baoss is
   p99 Managing the relationship with your boss: Make sure you understand
your boss and his context, including: His goals and objectives; The pressures
on him; His strengths, weaknesses, blind spots; His preferred work
style. Asses yourself and your needs, including: Your own strengths and
weaknesses; Your personal style; YOur predisposition toward dependence on
authority figures. Develop and maintain a relationship that: FIts both your
needs and styles. Is characterized by mutual expectations. Keeps your boss
informed. Is based on dependability and honesty. Selectively uses your boss's
time and resources.
				 #@#
    Wm Evan Superior-Subordinate Conflict in Research Orgs Adm Sci Q 10#1 6/65 
   p54 generally on an ad hoc basis. Management is neither self conscious
about the judicial function it is performing nor is it inclined to formalize
and establish it as an impersonal control mechanism
   p59 supervisors report more conflicts: they are more likely to have
administrative conflicts because of the nature of their jobs. In the absence
of a due process mechanism, superior-subordinate conflicts are either
unilaterally settled or else remain unresolved.. higher proportion of
personnel in the government laboratory report bilaterla or multilateral
conflci resolutions, whereas a higher proportion of personnel in the
industrial laboratory report unresolved conflicts
				 #@#
   Confl Mgt in PLC Thambain Sloan Mgt Rvu 16#3 1975
   p33 various conflict resolution modes. Blake and Mouton [Mgrl Grid Gulf
1964], for example, have delinieated five modes for handling conflicts:
Withdrawal. Retreating or withdrawing from an actual or potential
disagreement. Smoothing. Deemphasizing or avoiding areas of difference and
emphasizing areas of agreement. Compromising. Bargaining and searching for
solutions which bring some degree of satisfaction to the parties in a
dispute. Characterized by a "give-and-take" attitude. Forcing. Exerting one's
viewpoint at the potential expense of another. Often characterized by
competitiveness and a win/lose situation. Confrontation. Facing the conflict
directly which involves a problem-solving approach whereby affected parties
work through their disagreements.
   p46-7 TABLE 1 Major Conflict Sources by Product Life-Cycle Stage

PROJECT       MAJOR CONFLICT SOURCE AND RECOMMENDATION 
LIFE-CYCLE    FOR MINIMIZING DYSFUNCTIONAL CONSEUENCES
PHASE         CONFLICT SOURCE         RECOMMENDATIONS

PROJECT       PRIORITIES - Clearly define plans. Joint decision making and/or
FORMATION                  consultation with affected parties
                         - Stress imprtance of project to goals
                           of the organization
              PROCEDURES - Develop detailed administrative perating procedures to
                           be followed in conduct of project. Secure approval from 
                           key administrators. Develop statement of understanding 
                           or charter
              SCHEDULES  - Develop schedule commitments in advance of total 
                           project commencements
                         - Forecast other departmental priorities and possible
                           impact on project
BUILD-UP      PRIORITIES - Provide effective feedback to support areas on forecasted
PHASE                      project plans and needs via status review sessions
              SCHEDULES  - Carefully schedule work breakdown packages (project
                           subunits) in cooperation with functional groups
              PROCEDURES - Contingency planning on key administrative issues
MAIN          SCHEDULE   - Continually monitor work in progress. Communicate
PROGRAM                    results to affecte darties.
              TECHNICAL  - Early resolution of technical problems
                         - Communication of schedule and budget restraints to
                           technical personnel
                         - Emphasize adequate, early technical testing
                         - Facilitate early agreement on final designs
               MANPOWER  - Forecast and commuicate manpower requirements early
                         - Establish manpower requirements and priorities with
                           functional and staff groups
PHASEOUT       SCHEDUES  - Close monitoring of schedules throughout product life cycle
                         - Consider reallocation of available manpower to critical
                           project areas prone to schedule slippages
                         - Attain prompt resolution of technical issues which may 
                           impact schedules
             PERSONALITY - Develop plans for reallocation of manpower upon 
                 AND       project completion
              MANPOWER   - Mantain harmonious working relationships with project
                           team and support groups. Try to loosen 
                           up "high-stress" environmnet
				 #@#
   Managmt Rights: Made in Japan M K Chandler Columbia J Wrld Biz Winter 1966
   p132 Jpanaese firms have had less of a "do-it-yourself" tradition than
those in America. Subcontracting is more fully accepted as a way of life, but
it is a planned and managed self-contracting
   p133 These managerial actions easily could have served to further "divide
and conquer" an already badly split work force composed of a core group of
permanent employees whose status was protected by a sundry and changing
collection of temporary and contractors' workers. The permanent workers and
their unions were well known for their indifference to the fate of these
lower-status elements, but now the permanent or core group was threatened and
was being used in much the same way as temporary workers, that is, to provide
greater flexibility for the firm
   p139 In the US an endless series of pronouncements have specified the
conditions under which manangement does or does not have the right to
contract-out. From the standpoint of organizational flexibility, this is
certiany the wrong place to introduce regulation, to say nothing of the
confuson stemming from the myriad of confliting opinions. For both Japanese
managements and unions, management rights as an abstract principle does not
have the psychological value ound in the United States. The Japanese approach
is pragmatic and geared to achievement through organization
				 #@#
   Walton & Dutton Interdep Conflict Adm Sci Q 14#1 3/69 
   p73 Mutual taks dependence is the key variable in the relevance of the
interunit conflict.. Overload conditions may intensify th eproblem of scarce
resources and lead to bargaining
   p76 Role dissatisfaction and ambiguity are related to mor ebasic
organizational variables, including growth rate, organizational level, and
hierarcical differences. Organizational growth appears to have offsetting
consequences
   p81 Table 3 Consequences of interunit coflict
Attributes of confluctful      Illustrative consequences
lateral relationships 
Competition in general         Motivates or debilitates
                               Provides checks and balances
oncealment and distortions     Lowers quality of decisions
Channeled interunit contacts   Enhances stability in the system
Rigidity, formality in         Enhances stability in the system
decision procedures            Lowers ability to change
Appeals to superiors           Provides more contact for superios
for decisions                  May increase of decrease 
                               uality of decisions
Decreased rate of              Hinders coordination and 
interunit interaction          implementation of tasks
Low trust, suspicion,          Psychological strain and turnover of
hostility            personnel or decrease in individual performance
				 #@#
   Thompson Hierarchy Speclzn & Org Conflict Adm Sci Q 5#4 3/61 
   p485 Abstract.. Specifically, intraorganizational conflict, to the extent
that it is organizationally determined, is a function of (1) disagreement
over necessity of authoritatively created interdependence, (2) growing
disparity between rights ad abilities, (3) scalar status violations involve
din technologically created interdependencies, and (4) differentiation of
values and reality perceptions brought about by the controls over
interpersonal communication exercised by the hierarchical system, the ststus
system, and the technical system (specialization)
				 #@#
   Argyris Personality and Organizations Harper 1957 LC 57-11116
   p39 conflict harms a person's personality when the personality uses
incorrect ways of dealing witht he conflict. Conflict when dealt with
correctly, is an experience of growth for the personality
   p41 One of the common results of regression is aggression..  Guilt is,
therefore, aggression from ourselves to ourselves..  Sometimes the conflict
is not resolved but the person continues to live by making another choice
which is "second best"..  list of the reasons and then pick.. on a conscious
level..  when the personality is healthy and the conflict is not strong
   p42 denial is that the employees do not allow what has been said to
penetrate into their consciousness.. Repression is thus forcing down into the
unconscious that part of a threat which we do not like.. suppression we push
things into the unconscious and generally know.. inhibition the person
purposely and knowingly refrains
   p43 converting his difficulty into a physical problem..  resolves his fear
of not being able to to do something by working so hard that he accomplishes
his goal and usually goes way beyond.. Rationalization occurs when we an
alibi is created for otherwise untenable behavior.. Identification refers to
the desire to be like someone else
   p44 projection is a mechanism whereby we "see" in other people a quality
which would embarass us greatly if we were to admit it as our own.. constant
rejection and acceptance and never coming to a conslusion is called
vacillation.. People attempt to resolve some conflict situations by hating
and liking the same person who is the focus of the threat.. Every slip of the
toungue has some meaning
   p78 may adapt by: (1) Regressing, ie, becoming less mature and less
efficient (2) Giving up and leaving the situation (3) Becoming agressive,
hostile, and attacking what is frustrating him. Developing a tendency to
blame others (4) Remaining frustrated by doing nothing.. Failure may cause
the employee to: (1) Lose interest in his work (2) Lose self-conflidence (3)
Give up quickly (4) Lower work standards (5) Fear new tasks (6) Expect more
failure (7) Develop a tendency to blame others
   p120 Turning to the impact of the organization upon the individual, we may
begin to wonder what kind of an individual would feel adapted and adjusted on
the job. In a preliminary analysis by Argyris of interviews of 10 assembly
line workers who were judged to be adapted and adjusted, it was found that
they tended top have the following personal characteristics: a. THey value
money as most important. Seniority is second most important.  b. They all
perceive themselves as having poor education.  c. THey are unable to perform
several different things at the same time. "I can use a screwdriver, but I
can't talk at the same time."  d. They aspire to doing the minimum quantity
of work. They do not tend to aspire for quality work. They do not feel badly
about doing work that is of poor quality.  e. They tend to desire to be
isolated and alone. They express no desire for group cohesiveness or
"we-feeling". They are not loyal to their company and would leave to go to
another if they could be guaranteed a few cents more and their present
seniority g. THey feel satisfied with the foreman because they hardly see him
and he hardly contacts them.  h. THey tend to be satisfied with the working
conditions i. They are hardly ever late or absent from work.  j. They tend to
dislike changes and are very rigid in their attitudes.  They place a great
deal of emphasis on predictability and surety in life. Change tends to
threaten them
   p133 [Whyte Money & Motivn p37 Harper 1955; Meltzer, Am J Orthopsy 26#2
4/56 pp 394-400] Piece work has a chance to succeed: 1. When outcome is
reasonably possible, but not completely certain. Piecework will tend to fail:
2.  If quota earnings seem clearly unattainable... the worker abandons the
goal. 3. If quota is completely predictable and certain, the work becomes
monotonous and meaningless. 4. If ahievement depends upon factors outside
worker's control. Conclusions of researchers on psychological success:
1. Barrier tot he goal must be strong enough to require effort but not so
strong as to prevent achievement. 2. Same as above. 3. The barrier is so weak
that no sense of success is achieved by overcoming it. 4. Barrier must be
overcome and goal achieved through individual's own effort. Help or hindrance
from outside leads to failure
   p233 lack of congruency between the needs of healthy individuals and the
demands of formal organizations.. resultants of this disturbance are
frustration, failure, short time perspective, and conflict
   p234 disturbance in the organization will tend to increase.. as the
individual agents increase in degree of maturity.. dependence, subordination
and passivity increase.. down the chain of command.. directive leadership..
controls..  specialized.. exactness.. The nature of the formal principles of
organization cause the subordinate, at any given level, to experience
competition, rivalry, inter-subordinate hostility, and to develop a focus on
parts rather than the whole
   p235 The employee adaptive behavior maintains self-integration and impedes
integration with the formal organization.. THe adaptive behvior of the
employee has a cumulative effect, feedbacks into the organization, and
reinforces itself
   p236 Certain management reactions tend to increase the antagonisms
underlying the adaptive behavior
   p237 Other management actions can decrease the degree of incongruency
between the individual and formal organization.. Job or role enlargement and
employee-centered leadership will not tend to work to the extent that the
adaptive behavior.. has become embedded in the organizational culture and the
self-concept of the individuals.. minimized by the use of reality-centered
leadership
				 #@#
   Argyris Mgt&Org Dvp 1971 MGH 07-002219-4
   p133 Behavior tending to be more frequent: Owning up to ideas, Conforming
to ideas, Concern for ideas, Openness to ideas, Not helping others to express
ideas and feelings, Inconsistent behavior; Behavior tending to be less
frequent: Owning up to feelings, Individuality of ideas, Helping others to
express ideas, Consistent behavior; Rarely observed behavior: Experimenting
with ideas or feelings, Concern for feelings, Trust of ideas or feelings,
Helping others to express feleings.. Under stress, groups seemed to magnify
their pattern rather than change
   p169 personal causation and responsibility. If that is low, then
externally induced change (eg, changes in the organizational structure) will
tend to be effective.. Where effective change does depend upon individual's
personal responsibility, changes in interpersonal relationships are necessary
before structural changes can be introduced
   p170 The further one goes down the hierarchy, the higher the probability
that the potent variables will be found in the technology, administrative
controls, and organizational structure. The higher one goes up the hierarchy,
the greater the probability that the potent variables will be found in
interpersonal and group relations (perhaps administrative controls if one
thinks of financial controls)
   p195 willingness and internal commitment may not be sufficient.. An
executive group requires continual help, especially in three critical
areas. They are (1) giving and receiving valid information; (2) creating
effective group behavior and norms; and (3) designing new kinds of
organizational structures, managerial controls, and reward systems that
reinforce the new behavior so that the managerial behavior, the
organizational structure, etc., become congruent with the OD philosophy
            			 #@#
   Argyris Personality & Org Thry Revis Adm Sci Q 18#2 1973
   p141 Organnizations come into being when goals to be achieved are too
complex for any one individual
   p151 Hackman and Lawler defined six dimensions of jobs. They are variety,
autonomy, task identity, feedback, dealing with others, and friendship
opportunities ([J App Psy mgrf55]1971;256) They identified the first four as
core dimensions. THese core dimensions are the higher order need items
reconceptualized in terms of job characteristics.. higher jobs are on core
dimensions, the more employees tend to report feeling internal pressures to
take personal responsibility and do high-quality work.. higher intrinsic
motivation.. control over one's own work, feeling of worthwhile
accomplishment, personal growth, and self-esteem
   p155 those with jobs in the higher occupational classes selected more
active recreational pursuits while those in the lower occupational classes
selected more passive recreational pursuits (Parker, 1971[Praeger]; 60)
   p159 Personality and organization theory predicts that the younger people
(more oriented toward self-actualization) will find increasingly intolerable
those organizatins that do not encourage people to aspire toward relative
independence, psychological success, and the expression of their feelings and
their abilities. THis prediction is congruent with Maslow's, where he states
that as a society progresses tot he point that survival and security needs
are fulfilled, then the desire will be to express more of the higher order
needs (Maslow, 1970).. Over time such individuals resolve their
self-actualizing tendencies by any one or a combination of approaches:
suppressing them, denying them, or distorting them
   p162 degree of deprivation on the job signiicantly influences the
kind of fulfillment employees seek outside their job
				 #@#
   HBR 12/01 79#11 Kotter What Leaders really do
   p104 Management is about coping with complexity.. Leadership by contrast
is about coping with change
   p105 Planning works best not as a substitute for direction setting but as
a complement to it. A competent planning process serves as a useful reality
check on direction-setting activites
   p107 Leadership is different. Achieving grand visions always requires an
occassional burst of energy. Motivation and inspiration energize people, not
by pushing htem in the right direction as control mechanisms do but by
satisfying basic human needs for achievement, a sense of belonging,
recognition, self-esteen, a feeling of control over one's life, and the
ability to live up to one's ideals. Such feelings touch us deeply and elicit
a powerful response
   p109 Depsite the increasing importance of leadership to business success,
the on-the-job experiences of most people actually seem to undermine the
development of attributes needed for leadership
   p111 Corporations that do a better-than-average job of developing leaders
put an emphasis on creating challenging opportunities for relatively young
employees
				     #@#
   Crucibles of Leadership. Bennis, Warren Thomas, Robert Harvard Business
Review; Sep2002, Vol. 80 Issue 9, p39-45, one of the most reliable indicators
and predictors of true leadership is an individual's ability to find meaning
in negative events and to learn from even the most trying circumstances. Put
another way, the skills required to conquer adversity and emerge stronger and
more committed than ever are the same ones that make for extraordinary
leaders.. A crucible is, by definition, a transformative experience through
which an individual comes to a new or an altered sense of identity.. did not
allow his spirit to be broken..  certain that absolutely nothing in his
professional life could break him.. Dickerson set the highest standards for
Jones, especially in the area of communication skills- a facility we've found
essential to leadership.. His mentor also expected the teenage Jones to speak
correctly at all times and would hiss discreetly in his direction if he
stumbled. Great expectations are evidence of great respect, and as Jones
learned all the complex, often subtle lessons of how to succeed, he was
motivated in no small measure by his desire not to disappoint the man he
still calls "Mr. Dickerson.".. We believe that great leaders possess four
essential skills, and, we were surprised to learn, these happen to be the
same skills that allow a person to find meaning in what could be a
debilitating experience. First is the ability to engage others in shared
meaning.. Second is a distinctive and compelling voice.. Third is a sense of
integrity (including a strong set of values).. But by far the most critical
skill of the four is what we call "adaptive capacity." This is, in essence,
applied creativity-an almost magical ability to transcend adversity, with all
its attendant stresses, and to emerge stronger than before. It's composed of
two primary qualities: the ability to grasp context, and
hardiness.. Hardiness is just what it sounds like the perseverance and
toughness that enable people to emerge from devastating circumstances without
losing hope.. It is the combination of hardiness and ability to grasp context
that, above all, allows a person to not only survive an ordeal, but to learn
from it, and to emerge stronger, more engaged, and more committed than
ever. These attributes allow leaders to grow from their crucibles, instead of
being destroyed by them-to find opportunity where others might find only
despair. This is the stuff of true leadership.
				 #@#
   Leadership Yukl 1981 PH 0-13-527176-2
   p11 Table 2-1 Typology of Different Forms of Influence
Form of Influence     Agent Requirements        Target Person Requirements
1. Legitimate Request Legitimate Justification  Relevant Values
2. Intrumental        Control over Rewards;     Relevant Needs, Openness
   Compliance         Credibility of Promise    to Manipulation
3. Coercion           Control over Punishments; Fear,Openness to Intimidation
                      Credibility of Threat
4. Rational           Insight; Technical        Relevant Values and Needs
   Persuasion         Expertise; Persuasive Ability
5. Rational Faith     Technical Expertise;      Low Expertise, Relevant Need;
                      Credibility               Trust of Agent
6. Inspirational      Insight into Values and   Relevant Values and Beliefs
   Appeal             Beliefs; Persuasive Ability
7. Indoctrination     Control of Social Situation; Alienation, Relevant Needs
                      Relevant Skills
8. Information        Credibility as Information Use of Information for
   Distortion         Source                     Impression Formation and
                                                 Decision Making
9. Situational        Control of Relevant Aspects Willingness to 
   Engineering        of Situation                Accept Situation
10. Personal          Attractiveness, Charisma    Admiration of Agent
    Identification
11. Decision          Willingness to Allow        Desire to Participate,
    Identification    Participation; Relevant     Goals Consistent with
                      Skills                      Agent Goals
   p45 Table 3-2 Major Sources of Leader Influence over 
       Subordinates and Likely Outcomes
Source of Leader              Type of Outcome
Influence     Commitment              Compliance        Resistance
REFERENT      LIKELY**                POSSIBLE          POSSIBLE
POWER         If request is believed  If request is     If request is for
              to be important to      perceived to be   something that will
              leader                  unimportant to    bring harm to
                                      leader            leader
EXPERT        LIKELY**                POSSIBLE          POSSIBLE
POWER         If request is persuasive If request is    If leader is arrogant
              and subordinates share   persuasive but   and insulting, or
              leader's task goals      subordinates are subordinates oppose
                                       apathetic about  task goals
                                       task goals
LEGITIMATE    POSSIBLE                LIKELY**          POSSIBLE        
POWER         If request if polite    If request or     If arrogant demands
              and very appropriate    order is seen as  are made or request
                                      legitimate        does not appear proper
REWARD        POSSIBLE                LIKELY**          POSSIBLE        
POWER         If used in a subtle,    If used in a      If used in a
              very personal way       mechanical,       manipulative, arrogant
                                      impersonal way    way
COERCIVE      VERY UNLIKELY           POSSIBLE          LIKELY***
POWER                              If used in a helpful,If used in a hostile
                                   nonpunitive way      or manipulative way
   pp73-4 Table 4-2 Most Effective Trait Predictors of Managerial Advancement..
Trait Description                                                 Correlation
1. ORAL COMMINATION SKILL: How good this person would be in           .33**
   presenting an oral report to a small conference group 
   on a well-known subject
2. HUMAN RELATIONS SKILL: How effectively this person can lead a      .32**
   group to accomplish a task without arousing hostility
3. NEED FOR ADVANCEMENT: How much this person wants to be promoted    .31**
   significantly earlier than his or her peers
4. RESISTANCE TO STRESS: How well this person's work performance will .31**
   stand up in the face of personal stress
5. TOLERANCE OF UNCERTAINTY: How well this person's work performance  .30**
   will stand up under uncertian or unstructured conditions
6. ORGANIZING AND PLANNING: How effectively this person can organize  .28**
   his or her work and plan ahead
7. ENERGY: How continuously this person can sustain a high level      .28**
   of work activity
8. CREATIVITY: How likely this preson is to solve a management        .25**
   problem in a novel way
9. RANGE OF INTERESTS: The extent to which the person is interested in.23*
   a variety of fields of activity,such as science,sports,music,and art
10.INNER WORK STANDARDS: The extent to which the person wants to do a .21*
   good job, even if lesser performance is acceptable to his or 
   her boss and others
11.BEHAVIORAL FLEXIBILITY: How readily this person,when motivated,can .21*
   modify his behavior to reach a goal
12.NEED FOR SECURITY: The extent to which this person desires a      -.20*
   secure job
13.ABILITY TO DELAY GRATIFICATION: The extent to which this person   -.19*
   is able to work over long periods without great rewards to 
   attain later rewards
14.DECISION MAKING: The person's readiness to make decisions, and     .18*
   the quality of his or her decisions
15.PRIVACY OF WORK: The extent to which this person finds             .18*
   satisfactions from work more important than satisfactions
   from other areas of life
16.GOAL FLEXIBILITY: The ability of the person to change his life    -.18*
   goals in accordance with reality opportunities
SOURCE: Adapted from: D W Bray, R J Campbell and D L Grant, Formative
Years in a Business: A Long Term AT&T Study of ManagerialLives, New
York: John WIley & Sons, Inc. 1974   *p<.05   **p<.01
   p107 Table 5.3 Definition of Leadership Scales [Stodgill 1974 p143]
CONSIDERATION: rgeards the comfort, well-being, status, and contributions of
his followers.  INITIATION OF STRUCTURE: clearly defines own role, and lets
followers know what is expected.  REPRESENTATION: speaks and acts as the
representative of the group.  DEMAND RECONCILIATION: reconciles conflicting
organizational demands and reduces disorder to the system.  TOLERANCE OF
UNCERTAINTY: is able to tolerate uncertainty and postponement without anxiety
or upset.  PERSUASIVENESS: uses persuasion and argument effectively; exhibits
strong convictions.  TOLERANCE OF FREEDOM: allows followers scope for
initiative, decision, and action.  ROLE RETENTION: actively exercises
leadership role rather than surrendering leadership to others.  PREDICITIVE
ACCURACY: exhibits foresight and ability to predict outcomes accurately.
PRODUCTION EMPHASIS: applies pressure for productive output.  INTEGRATION:
maintains a closely knit organization; resolves intermember conflicts.
INFLUENCE WITH SUPERIORS: maintains cordial relations with superiors; has
influence with them; is striving for higher status
   pp192-8 GUIDELINES FOR DETERMINING THE RELEVANCE OF SPECIFIC BEHAVIORS..
Performance Emphasis.. When subordinate errors and quality deficiencies are
costly..  direct competition with other units.. unit is highly
interdependent.. failure to meet deadlines..  would seriously
disrupt.. leader is under extreme pressure from higher management..
subordinates are not highly motivated.. / ..  Consideration.. work is
boring.. subordinates lack self-confidence..  depend on the leader for
support and encouragement.. strong affiliation needs.. acceptance by the
leader.. leader is in close proximity to subordinates.. interact frequently
with them..  subordinates have substantial counterpower.. / ..  Inspiration..
Commitment (eg enthusiastic effort, self-sacrifice, initiative) is
essential.. work is difficult and frustrating..  dangerous.. ideals and
values that are relevant.. competition with other units.. / ..
Praise-Recognition.. leader is able to obtain reliable information about
subordinate performance.. subrodinates are not able to get much
feedback.. from the work itself or from clients.. subordinates lack
self-confidence.. / ..  Structuring Reward Contingencies.. leader has
substantial authority.. subordinates value the rewards.. performance outcomes
are primarily determined by subordinate effort and skill..  possible to
measure subordinate performance accurately.. work is repetitive, boring, and
tedious.. / ..  Decision Perticipation..  subordinates possess relevant
knowledge.. share the leader's concern..  adequate time.. group of
subordinates is small and working in close proximity.. unlikely to accept an
autocratic.. / ..  Autonomy-Delegation.. competent
professionals.. performance can be measured.. without close supervision..
errors.. not extremely costly.. leader is overloaded.. subordinates have
strong needs for achievement.. / ..  Role Clarification.. subordinates lack
experience.. work is complex and unstructured.. organization has elaborate
rules.. many short tasks.. frequently give new assignments to
subordinates.. changes in the nature of the work or the organization of
activities require a redefinition of subordinate work roles.. /..  Goal
Setting.. objective performance indicators are available for use in setting
specific goals.. performance outcomes are highly dependent on
subordinates.. moderate amount of achievement motivation to be aroused by
challenging goals and deadlines.. / ..  Training-Coaching.. complex and
highly technical.. experience..  technology is changing.. skill
deficiencies.. frequently.. train ne subordinates.. high turnover.. new
responsibilities and advance to higher positions.. / ..  Information
Dissemination.. changing policies.. strongly affected by developments in
other parts of the organization.. deals diretly with outside
organizations.. leader has exclusive access to important information.. crisis
or emergency.. / ..  Problem Solving.. hostile environment.. competitiors and
external opponents.. inadequate equipment, inappropriate procedures, delays..
disruptions.. equipment breakdowns, supply shortages.. / ..
Planning.. activities must be sequenced.. several types of tasks..
contingency plans.. sharp variations in the demand.. / ..
Coordinating.. interdependent tasks.. synchronization of actions..
sequentially.. turns using the same equipment.. need for uniform
practices.. number of interdependent subordinates.. large.. / ..  Work
Facilitation.. large variety and amount of supplies.. support
services.. information, approvals, cooperation.. /..  Representation..
competing with other units for scarce resources..  highly dependent on
other.. lobbying and public relations efforts are necessary to obtai support
and resources for the unit from superiors and/or outside sources.. negotiate
agreements and contracts directly with outside organizations.. / ..  Internal
Facilitation.. close proximity.. highly interdependent..  unit is
large.. highly mobile.. cooperation and teamwork are essential.. / ..
Conflict Management.. subordinates are in copetition with each
other.. interdependent jobs.. differnt values.. / ..
Criticism-Discipline.. dangerous substances..  compliance with rules..
subordinates are likely to ignore rules
   p244 Table 9-1 Major Types of Leadership Behavior in Decision Groups
Task-Oriented Behavior         Specific Objective
1. Initiating-Structuring      Guide and Sequence Discussion
2. Stimulating Communication   Increase Information Exchange
3. Clarifying Communication    Increase Comprehension
4. Summarizing                 Check Understanding and Monitor Progress
5. Consensus Testing           Check on Agreement
Group-Maintenance Behavior     Specific Objective
1. Gatekeeping                 Increase and Equalize Participation
2. Harmonizing                 Reduce Tension and Hostility
3. Supporting                  Prevent Withdrawal
4. Standard Setting            Regulate Behavior
5. Process Analyzing           Discover and Resolve Process Problems
				     #@#
   Ten Fatal Flaws That Derail Leaders.  Zenger, Jack 1 Folkman, Joseph 2
Harvard Business Review; Jun2009, Vol. 87 Issue 6, p18-18, 2/3p The worst
leaders: Lack energy and enthusiasm They see new initiatives as a burden,
rarely volunteer, and fear being overwhelmed.. They live by the mantra
"Underpromise and overdeliver.".. They believe their only job is to
execute.. Have poor judgment.. They avoid peers, act independently, and view
other leaders as competitors.. They set standards of behavior or expectations
of performance and then violate them. They're perceived as lacking
integrity.. They reject suggestions from subordinates and peers..  Don't
learn from mistakes.. They make sins of both commission (they're abrasive and
bullying) and omission (they're aloof, unavailable, and reluctant to
praise). Fail to develop others
				 #@#
   Salancik Pfeffer Power Strategic-contingency Org DYn 1977 (5) 3-21
   p3 "political" power, far from being a dirty business, is, in its most
naked form, one of the few mechanisms available for aligning an organization
with its own reality. However, institutionalized forms of power - what we
prefer to call the cleaner forms of power: authority, legitimization,
centralized control, regulations, and the mor emodern "management information
systems" - tend to buffer the organization from reality, and obscure the
demands of its environment. Most great states and institutions declined, not
because they played politics, but because they failed to accomodate to the
political realities they faced. Political processes, rather than being
mechanisms for unfair and unjust allocations and appointments, tend toward
the realistic resolution of conflicts among interests. And power, while it
eludes definition, is easy enough to recognize by its consequences - the
ability of those who posses power to bring about the outcomes they desire
   p7 Power is shared in organizations out of necessity more than out of
concern for principles of organizational development or particiaptory
democracy. Power is shared because no one person controls al the desired
activites.. power derives from the activities desired in an organization
   p8 The amount of power an individual has at any one time depends, not only
on the activities he or she controls, but also on the existence of other
persons or means by which the activities can be achieved and on those who
determine what ends are desired and, hence, on what activities are desired
and ciritical for the organizations
   p17 "job" to be done has a way of expanding itself until it becomes less
and less clear what the job is.. power tends to take on institutionalized
forms that enable it to endure beyond its usefulness
				 #@#
   Salancik Commitment is too easy Org Dyn 1977 (6) 62-80
   p62 Commitment is a state of being in which an individual becomes bound by
his actions and through these actions to beliefs that sustain the activities
and his own involvement. COmmitment is ubiquitous, so common that we are
often unaware of its constraining effects and its subtle control over our
behavior. Commitment is what makes us like what we do and continue doing it,
even when the payoffs are not obvious
   p63 sustain us in the cafe of difficulties.. outcomes are uncertain
   p64 Three characteristics bind an individual to his acts and hence commit
him. They are the visibility, the irrevocability, and the volitionality of
the behavior
   p69 Without volition, a behavior is not necessarily committing, for the
person can always assert that he really did not cause the behavior himself
   p71 One significance of myths lies in justifying actions that
otherwise might appear senseless and meaningless
   p74 Participation undercuts opposition and objections. When this is true,
goals are more likely to be accomplished. Involving persons or groups in the
design of a project or policy ensures their support. Their hand leaves its
imprint not only on the design but on them
   p77 only places them in the position of having to justify a position that
is being attacked.. allow a person to become committed to his objections in
the first place.. Instead, the manager should let the person keep track of
the problems with the new program on his own and should not ask for a
report.. coomunicate only expectations that he thinks the program is workable
   p78 constanty reminded of the money they are paid.. do not evaluate
the job on the intrinsic features
   p79 public statement regarding your position is being made, and while it
is clear at the time that it comes from someone else, if you sit idly by, it
will be taken by all - including yourself - as your opinion.. distancing and
segregating personal responsibilitis plays an important role in reducing
other persons' commitments when they are no longer desirable.. loosening a
person's commitment to a position is t provide him with substantial external
justifications for his position
   p80 commitment is a strikingly powerful and subtle form of coopting
				 #@#
   Salancik Pfeffer Soc Info Job Att Task Dsn Adm Sci Q 23#2 1978 
   p228 Perception is a retrospective process: though the experienc eis
immediate, it derives from recall and reconstruction. An object exposed to
the individual is coded and briefly stored in short-term memory, where it
will deteriorate unless renewed by active coding processes or transferred
into long-term memory
   p232 Instead of proposing that individuals have an inherent need to make
sense of their activities, one could argue that the tendency for them to do
so derives from the demands and constraints of their social environment for
meaningful and justifiable behavior
   p237 A given culture may add external rewards and pressures to tasks to
compensate for the culturally devalued properties of such tasks. Such
practices may lead to a generalized negative association between paying for
the task and its inherent enjoyment
   p245 person who takes a job because it is the only one available will
be less satisfied than one who picks it from several offers
   p249 (1) workers, when committed to a situation or responsible for it, can
find satisfaction and meaning in it; and (2) the critical varaible in
positive job attitudes is the construction of the environment and the
appropriate attitudinal responses. Again satisfaction is partly outside the
control of the individual, but the capability to restructure and adapt to
situations cognitively is more explicitly recognized.. Even the setting of
the questioning may affect the responses. Asking about work when one is
enjoying hte fruits if that work, such as sailing a boat, may elicit a
different response than if the attitude is sought while the individual is
hard at work at the task that led to the wherewithal to purchase the boat
				 #@#
   John Kotter Power, dependence HBR 7/77 
   p126 manager can be dependent in varying degrees on superiors,
subordinates of peers, outside suppliers, customers, competitors, unions,
regulating agencies
   p128 Successful managers cope with their dependence on others by being
sensitive to it, by eliminating or avoiding unnecessary dependence, and by
establishing power over those others. Good managers then use that power to
help them plan, organize, staff, budget, evaluate, and so on. In other words,
it is primarily because of the dependence inherent in managerial jobs that
the dynamics of poer necessarily form an important part of a manager's
process

   p133 Methods of influence

Face-to-face methods        What they can influence    Advantages         Drawbacks

Excercise obligation-based  Behavior within zone       Quick. Requires    If the request is outside the
power                       that the other perceives   no outlay of       acceptable zone, it will fail;
                            as legitimate in light     tangible resources if it is too far outside, others 
                            of the obligation                             might see it as illegitimate

Excercise power based on    Attitudes and behavior     Quick. Requires    If the request is outside the
perceived expertise         within the zone of         no outlay of       acceptable zone, it will fail;
                            perceived expertise        tangible resources if it is too far outside, others 
                                                                          might see it as illegitimate
Excercise power based on    Attitudes and behavior     Quick, Requires no Restricted to influence attempts
identification with a       that are not in conflict   expenditure of     that are not in conflict with the
manager                     with the ideals that underlie limited         ideals that underlie the
                            the identification         resources          identification

Excercise power based on    Wide range of behavior     Quick. Can often   Repeated influence attempts
perceived dependence        that can be monitored      succeed when other encourage the other to gain 
                                                       methods fails      power over the influencer

Coercively exercise power   Wide range of behavior     Quick. Can often   Invites retaliation.
based on perceived depenedence that can be easily      succeed when other Very risky.
                            monitored                  methods fail.

Use persuasion            Very wide range of attitudes Can produce internalized  Can be very
                            and behavior               motivation that does not  time-consuming.
                                                       require monitoring.       Requires other
                                                       Requires no power or      people to listen
                                                       outlay of scarce material resources

Combine these methods     Depends on the exact         Can be more potent and    More costly than using
                          combination       less risky than using a single method   a single method

Indirect methods          What they can influence      Advantages                Drawbacks

Manipulate the other's    Wide range of behavior       Can succeed when face-to-face  Can be time-consuming.
environment by using any  and attitudes                methods fail            Is complex to implement.
or all of the face-to-face                                                     Is very risky, especially if 
methods                                                                        used frequntly

Change the forces that     Wide range of behavior and  has continuous influence,  Oftenr equires a 
continuously act on the individual;   attitudes on a   not just a one-shot effect. considerable power outlay
Formal organizational arrangements.  continual basis   Can have a very powerful impact.  to achieve
Informal social arrangements
Technology
Resources available
Statement of organizational goals
				     #@#
   Finding Your Innovation Sweet Spot.  Goldenberg, Jacob 1 Mazursky, David 2
Horowitz, Roni 3,4 Levav, Amnon 5 Harvard Business Review; Mar2003, Vol. 81
Issue 3, p120-129, MARKETERS WILL TELL YOU that the best sources of new
product ideas are customers, both current and potential. Increasingly,
though, we're seeing that customers lack the imagination to envision
innovative products that address their emerging, or even existing, needs or
desires..  systematic inventive thinking. It represents a complete overhaul
of traditional brainstorming, replacing the creative free-for-all with a
highly disciplined "inside the box" approach to idea generation. And, unlike
most new product development methods, it starts with an existing product and
its characteristics rather than with customers and their unmet needs. The
method's main thrust: Don't just listen to the voice of your customers;
listen to the voice of your product..  You begin by listing the essential
elements of a product, both its physical components and its
attributes.. manipulate these elements to come up with something
new.. emerges initially seems more bizarre..  At the core of our process are
the five innovation patterns..  Subtraction.. Multiplication..  Division..
Task Unification..  Attribute Dependency Change..  Function Follows Form..
The patterns of innovation work the same way: They upset developers'
assumptions about the fixedness of products..
				     #@#
   Playing Around with Brainstorming. Schrage, Harvard Business Review; Mar2001,
Vol. 79 Issue 3, p149-154, The Art of Innovation: Kelley.. The ability to
generate "effective surprise.".. "Aha ... of course!".. far less about the
art of innovation than about a culture of innovation. Practically every page
and paragraph reflects the cultural values that make IDEO a uniquely
innovative organization. How IDEO brainstorms, how it rapidly prototypes both
ideas and products, how it sets up and runs design teams-- all are the
antithesis of a cookie-cutter, replicable process. What's more, the people
IDEO (carefully) hires either enjoy the firm's crazy
"We-need-ten-ideas-a-minute-and-don't -forget-the-deadline-for-the
-design-is-Wednesday" atmosphere or else they don't last. IDEO succeeds
precisely because it's not typical.. The sad fact confronting Kelley is that
most organizations--including some of IDEO's clients-- seem more comfortable
going through the methodological motions than making the cultural commitment
that ongoing innovation demands.. In reality, most organizations don't
practice brainstorming with the frequency, intensity, or sincerity that IDEO
believes is required for innovation.. As long as they share the underlying
faith, people are encouraged to question any and all assumptions about what
innovation means. In IDEO's culture, you aren't innovative unless you are
challenging the client's, the team's, and your own preexisting notions.. This
dichotomy calls to mind the terrific line of Ethernet inventor and 3Com
founder Bob Metcalfe: "Invention is a flower; innovation is a weed."
Invention is about the challenge of bringing something new to life;
innovation is the challenge of spreading something new so that it becomes a
marketplace presence
				     #@#
   Networked Incubators.  Hansen, Morten T.^1 Chesbrough, Henry W.^1 Nohria,
Nitin^2 Sull, Donald N.^1 Harvard Business Review; Sep/Oct2000, Vol. 78 Issue
5, p74-84, When properly designed, networked incubators combine the best of
two worlds- the scale and scope of large, established corporations and the
entrepreneurial spirit of small venture-capital firms - all while providing
unique networking benefits.. incubators offer preferred rates and terms from
top-tier service providers.. Many start-up managers report spending upwards
of half their time in the first six to nine months setting up the basic
infrastructure to run their businesses.. preferential access to a network of
companies
				     #@#
   Getting Unusual Suspects to Solve R&D Puzzles.  Lakhani, Karim R. 1
klakhani@hbs.edu Jeppesen, Lars Bo 2 lbj.ivs@cbs.dk Harvard Business Review;
May2007, Vol. 85 Issue 5, p30-32, For even the toughest of R&D problems,
there are often people out there with innovative solutions already on their
shelves or in their back pockets. The trick for corporate executives is
finding and gaining access to those individuals. Our research with a company
that broadcasts technological problems into the ether -- and gets back solid
results -- has given us a profile of the kind of people most likely to solve
R&D puzzles.. Open-source software communities have shown that broadcasting
technical conundrums to a broad network of individuals can yield effective
solutions. Open-source problem solving has now migrated beyond software to
industries as diverse as custom integrated circuits, biotechnology,
pharmaceuticals, content production, and music.
				     #@#
   Mtg Challenge of Disruptive Change Christiansen & Overdorf HBR 3/00 
   p72 Sustaining technologies are innovations that make a product or service
perform better in ways that customers in the mainstream market already
value.. Disruptive innovations create an entirely new market through the
introduction of a new kind of product or service, one that's actually worse,
initially, as judged by the performance metrics that mainstream customers
value..  Sustaining innovations are always developed and introduced by
established industry leaders.. But those same companies never introduce - or
cope well with - disruptive innovations
   p73 managers must create a new organizational space.. three possible
ways.. new organizational structures.. spin out an independent
organization.. acquire a different organization whose processes and values
closely match the requirements of the new task
   p76 first determine whether they have hte resources required to
succeed.. Does the organization have the processes and values it needs to
succeed in this new situation?.. very capabilities tah make their
organizations effective also define their disabilities.. Are the processes
by which work habitually gets done in the organization appropriate for
this new problem? And will the values of the organization cause this
initiative to get high priority or to languish?.. The reason that
innovation often seems to be so difficult for established companies is tha
thay employ highly capapble people and then set them to work within
organizational structures whose processes and values weren't designed for
the task at hand
				     #@#
   Value Innovation.  Kim, W. Chan 1 Mauborgne, Renée 2,3 Harvard Business
Review; Jul/Aug2004, Vol. 82 Issue 7/8, p172-180, Section: BEST OF HBR 1997
First, they must identify and articulate the company's prevailing strategic
logic. Then they must challenge it. They must stop and think about the
industry's assumptions, the company's strategic focus, and the approaches- to
customers, assets and capabilities, and product and service offerings- that
are taken as given. Having reframed the company's strategic logic around
value innovation, senior executives must ask the four questions that
translate that thinking into a new value curve: Which of the factors that our
industry takes for granted should be eliminated? Which factors should be
reduced well below the industry's standard? Which should be raised well above
the industry's standard? Which factors should be created that the industry
has never offered?
				     #@#
   Managing Strategic change J B Quinn Sloan Mgt Rvu Summer 80 21#4
   p4 Early signals may come from anywhere and may be difficult to
distinguish from the background "noise" of ordinary
communications.. Effective change managers actively develop informal networks
to get objective information
   p8 Barring a major crisis, a frontal attack on an old strategy could be
regarded as an attack on those who espoused it - perhaps properly - and
brought the enterprise to its present leve of success
   p9 Logic dictates, therefore, that managers purposely design flexibility
into their organizations and have resources ready to deploy incrementally as
events demand.. Very often the specific strategy adopted depends on the
timing or sequence of such random events [cf Yavitz strategic opportunism]
   p13 Radical crusades become the new conventional wisdom, and over time
totally new issues emerged. Participants or observers were often not aware of
exactly when a particular decision had been made or when a subsequent
consensus was created to superses or modify it; the proces sof strategic
change was dynamic.. In the large enterprises observed, strategy formulation
was a continuously evolving analytical-political consesnus process with
neither a finite beginning nor a definite end
   p14 Top executives deliberately manage the incremental process within each
subsystem to create the basis for consesnus. They also manage the coalitions
that lie at the heart of most controlled strategy developments. They
recognize that they are at the confluence of innumerable pressures - from
stockolders, environmentalists, governmnet bodies, cutomers, supliers,
distributors, producing units, marketing groups, technologists, unions,
special issue activists, individual employees, ambitious executives, and so
on - and that knowledgeable people of goodwill can easily disagree on proper
actions. In response to changing pressures and coalitions among these groups,
the top management team constantly forms and reforms itsown coalitions on
various decisions
				 #@#
   Mgg Innov: Controlled chaos J B Quinn HBR 5/86
   p73 sheer number of attempts - most by small-scale entrepreneurs - means
that some ventures will survive. The 90% to 99% that fail are distributed
widely throughout society and receive little notice. On the other hand the
big comapny that wishes to move a concept from invention tot the marketplace
must absorb all potential failure costs itself

[Milton Friedman disagrees]

   p74 new companies do not face the psychologicla pain ans the economic
costs of laying off employees, shutting down plants and even communities, and
displacing supplier relationships built with years of mutual commitment and
effort.. COmpany founders tend to be pioneers in their technologies and
fanatics when it comes to solving problems. THay are often described as
"possessed" or "obsessed,".. THeir fanticism may cause inventor-entrepreneurs
to underestimate the obstacles and length of time to success.. Innovators
tend to work in homes, basements, warehouses, or low-rent facilities
   p76 Only highly committed entrepreneurs can tolerate (and even enjoy) this
chaos
   p77 Continuous innovation occurs largely because top executives appreciate
innovation and manage their company's value system and atmosphere to support
it
   p78 Innovative companies tie their visions to the practical realities of
the marketplace.. most innovative large companies in my sample try to keep
the total organization flat and project teams small
   p79 Many companies structure shoot-outs among competing approaches only
after they reach the prototype stages.. Every highly innovative enterprise in
my research sample emulated smalle sompany proactices by using groups that
functioned in a skunkworks style
				 #@#
   Werther Berman Vasconcellos Fut Tec Mgt Org Dyn 22(3) 1994
   p23 "fourth generation" of technology management is characterized by a
seamlss stewardship that stretches from the idea stage through to the
delivery of higher value added outcomes for customers. It requires the
orchestration of technologies, customers, competitors, and the organization's
internal social structures. Specifically, a sustainable competitve advantage
comes from technologies that are proprietary, customers are "locked in," and
competitors that are "locked out" through high barriers to entry and social
structures that support effective strategic execution
   p25 Although resistance can be expected when technology is developed
externally (encountering the "not-invented-here" syndrome) or is a radical
departure from present technologies (engendering defensive reactions from the
guardians of present technologies), these technologies may hold the greatest
opportunity to realign the competitive structure of the industry.
   p26 chief technology officer or senior scientist as an internal technology
champion. These champions serve as boundary spanners to continuously educate
all levels of the organization about technology's strategice contribution. By
interfacing with other executives, R&D labs, project teams, and technology
managers, they facilitate an internal flow of information throughout the
organization and serve senior manegemtn as internal technology
consultants.. Internal resistance and informational barriers are most
commonly found at departmental boundaries
   p27 Relative organizational resistance to technology acquisition..
 Source\Type       Incremental     Radical
   Internal        Low             High
   External        High            Very High
   p28 Value chain grid..   
 Applications\Uses       Offensive        Defensive
    Customers            Value Added      Lock-in
    Competitor           Preempt          Block
   p30 Leading firms will continuously refine their abilities to acquire and
deploy relevant technologies that have already become an integral part of
corporate strategies.. Internally, emphasis will fall on the ability of
technology champions to create within their organizations a higher level of
receptivity that continuously embraces new technologies, regardless of their
source or type, uses, or applications.. Shifting to a process orietnation
that requires executives and chief technology officers to evaluate
communication flows, interdepartmental cooperation, and teamwork is not easy
				     #@#
   Drucker 12 Fables Research Mgt HBR 1/63
   p104 But paralyzing projectitis sets in predictablly unless the number of
projects is very much smaller than the number of researchers - one to five,
perhaps, or even one to ten. Otherwise, research people are much too busy
holding meetings about what they should go to work on ever tp do any real
work, much too busy writing metaphysical memoranda on the true inwardness of
research ever to do research itself
   p105 lazy and ineffectual PhD is perhaps a greater drain on the
organization than is a lazy man without such intellectual
references.. knowledge, especially of the basic kind, does not come out of
industrial research unless it is focused on economic performance
   p106 first goal of effective research management should be to convert the
maximum of research dollars into actula research time.. Of course, by
climbing on th ebandwagon one avoid thse disagreeable arguments which might
be caused by proposing something new, original, and therefore questionable
   p107 research group is not encouraged t do "preventive" research, to find
new and better products to take the place of the present successful product
line.. If a company does not want to "rock the boat," wouldn't i be better
off having no research? At least then it would not have to pay for
reseaerch.. one cannot "market research" a truly new product.. requires
insight into economic, social, and technological developments, potentials,
and changes, not just the present and the past
				     #@#
   Rdgs Mgt Innovn Tushman & Moore 1982 Pitman 0-273-01786-1
   p125 [Howard & Moore] influence the speed of diffusion.  Characteristics
positively related to adoption are: 1. Rekative advantage - The degree to
which it is superior to competitive products.  2. Compaatibility - How
consistent the innovation is with the values and experiences of potential
adopters. 3. Divisibility - The degree to which it can be tried on a limited
basis. 4.  Communicability - The relative ease of observing and describing
the benefits to others
   p279 [Maidique & Patch HBS Case Corp Stg & Tech Policy]
Typical Functional Requirements of Alternative Technological Strategies
          R & D     Manufacturing Marketing   Finance  Organization Timing
First-    Requires  Emphasis on   Emphasis on Requires Emphasis on Early-entry
to-Market state of  pilot and     stimulating access to flexibility inaurgurates
          the art  medium-scale   primary     risk      over         the product
          R & D    manufacturing  demand      capital   efficiency;  life cycle
                                                        encourage 
                                                        risk taking
Second-   Requires  Requires      Must         Requires Combine     Entry Early 
to-Market flexible, agility in    differentiate   rapid elements of in growth 
        responsive  setting up    the product; commitment flexibility   stage
      and advanced  manufacturing stimulate    of medium  and efficiency
    R&D capability  medium scale  secondary    to large 
                                  demand    quantities of
                                              capital
Late-to- Requires   Requires      Must         Requires   Emphasis on   Entry 
Market or skill in  efficiency and minimize    access to  efficiency     during
Cost      process   automation     selling and capital in  hierarchical  late
Minimization development  for      distribution large      control;     growth
           and cost     large-scale  costs       amounts   procedures  or early
      effective product production                    rigidly enforced maturity
Market-  Requires   Requires       Must identify Requires  Flexibility Entry
Segmentation ability  flexibility  and reach     access to and control during
      in applications, on short-   favorable     capital in   required   growth
    custom engineering, medium     segments      medium or  in serving   stage
       and advanced      runs                 large amounts different
    product design                                          customers' 
                                                           requirements
   p350 [Tushman Sloan Mgt Rvu Winter 1979 v20] Field studies indicate that
engineers and applied scientists spend between 50 and 75 percent of their
time communicating ;Rosenbloom & Wolek Tek Info Indu R&D HBS 1967; Sales Mgrl
Beh MGH 1964]
   pp359-61 [Tushman SMR79] managing communication networks.. 1. Analyze
information processing requirememnts of each project based on the uncertainty
posed by the task characterisitics and the task environments.. 2.  Based on
the information processong requirements processing requirememnts of each
project, determine appropriate intra-project communication
patters.. 3. Analyze information processing requirements between the project
and other areas of the firm.. Based on information processing requirements
between the project and other areas of the firm, choose appropriate linking
mechanism.. Analyze the need for information from areas outside the
firm.. 6. Based on the project's external information requirements, choose
appropriate linking mechanisms.. 7. If information processing requirements
facing the project change over time, then the project's communcations network
must be adopted to these changes
   p428 [Tauber J Mktg 1977] Summary of Measurement of Sales Elements
by Each Technique

Sales     Concept and    Historical Data    Laboratory       Sales Wave
Elements  Product Tests  Regression Models  Test Markets     Experiment
Trial     Purchase       Past               Observed         Purchase
          intention      behavior           current behavior intention

First     Repurchase     Repurchase      Repurchase intention  Observed
Repeat    intention      intention      or observed current    current
                                                 behavior     behavior
Adoption  Not            Decay function   Decay function       Observed
          measurable     model- applied   model or observed   current
                         to first repeat  current behavior    behavior
Frequency Not            Past behavior-   Past behavior-      Observed
of Purchase measurable   data of other    data of other       current          
                         products in category  products in category  bahavior

   p458 [Sales & Schmenner HBR 1/78 How Org Mfg?] Differences betwen
product-focused and process-focused manufacturing organization

                   Product focus              Process focus
Profit or cost     Product groups             Central organization
responsibility: where located

Size of corporate staff  Relatively small      Relatively large
Major functions of   (a) Review capital        (a) Coordinating with marketing
corporate staff      appropriation requests    (b) Facilities decisions
                     (b) Communicate corporate (c) Personnel policies  
                      changes and requests     (d) Purchasing
                  (c) Act as clearinghouse for (e) Logistics-inventory manag..
                        personnel information  (f) Coordination of
                        management recruiting        production schedules       
                        purchasing             (g) Make versus buy, 
                        used equipment          vertical integration decision
               management development programs  (h) recruit future plant managers
        (d) Evaluate and reward plant managers  (i) Review plant perfomace,
   (e) Selelct plant managers and manage career       cost center basis
    paths - possibly across product group lines
Major         (a) Coordination with marketing (a) use materials and facilities 
responsibilities                                    efficiently
of plant       (b) Facilities decisions       (b) Recruit production, clerical,
organizations     (subject to marketing)          and lower management workers
            (c) Purchasing and logistics       (c) Training and development
             (d) Production scheduling              of future department
                 and inventory control              and plant managers
              (e) Make versus buy             (d) Respond to special requests 
             (f) Recruit management       from marketing within limited ranges

   p475 [Skinner, Mfg Corp Stg 1978 WIley] Technology Economics and
Manufacturing Management

Preliminary Technology
Understand  Equipment
Physical     and   ----------------------------> Economics
Operations  process                               |
            |  What it costs                      |
            |   Original cost and life            | Total costs (vs price) 
            |   Working capital                   |  (vs life)
            |   Cost mix                          | Cost breakdown
            |   Support costs                     V Costs vs volume
            |  What it does                       |  (break-even)
            V   Output/time (cycle and capacity)  | Economics of scale
            |   Quality/specs of product          | Costs of product changes
            |  What it requires                   | Paybacks - cash flow/
            |   Manning - skills, set up          |   equipemtn costs
            |    numbers, operate                 |
            |   Set up - changeovers down time    |
            |   Material specs                    |
            |   Maintenance-building, utilities   |
            V  Certainty/uncertainty              V
          Constraints---------------------------> Manufacturing
            For example,                         Management problems
            Product/meterial flexibility         What must be good at
            Volume limitations                   "The Name of the Game"
            Spare - manning, maintenance,           For example,
             utilities required                 Changes in volume
            Uncertainties                       Changes in Product (old)/(new)
            Quality/specs limitation            Cost (key) to control
                                             Supervisory/work force management
                                             Production planning and 
                                                    controled use of inventory
                                             Maintenance
                                          Choice equipment /proces technologies
                                       Plant size/balance (internal) (external)
                                             Purchasing - make/buy
                                  Materials handling, transportation, location

   p481 [LorschORg_Dyn Autumn 1977 Org Design] Contrasting Organization Designs
DESIGN DIMENSION        R&D LAB             MANUFACTURING PLANT
Structure  
 Spans of control       Wide                Narrow
 Number of levels       Many                Few
  in hierarchy
 Job definitions        General and broad   Specific and detailed
Measurement      General and less frequent  Specific and frequent
                   (for example, quarterly)  (for example,daily or even hourly)

Planning           General and as related   Specific, with detailed
                     to goals                 methods
Rewards    Money, professional recognition, Money,
                  scientific careers          management careers
Selection         Qualified technically     Leadership ability
            Interest in industrial research Process knowledge
                                            Cost analysis
                                            Scheduling and so on
Training        Professional conferences    Human skills
                                            Quantitative skills
                                            Technology
				     #@#
   Tech Innov Entrpsp & Strategy J B Quinn Sloan Mgt Rvu Spring 79 20#3
   p20 system allows talented fanatics a way to pursue their ideals.. 
inventor/ entrepreneur is not bound to formal plans or PERT charts of progress
   p21 overhead costs is minimal.. FOr every success there are hundreds of
failures.. Because the only solution that survives is the one that will sell,
the individual inventor/ entrepreneur keeps his eyes glued to the market need
   p24 1. A Strong incentive existed for successful [large scale]
development.. 2. A Clearly Defined Need was specified in economic/technical
performance terms for the whole system.. 3. Multiple Competing
Approaches.. 4. User Guidance.. 5. High Expertise.. 6. Time Horizons in
successful innovative enterprises were longer than those common in their fields
   p25 7. Commited Champions.. 8. Top Level Risk-Taking
Support.. 9. Morale-Discovery Mode
				     #@#
   Maidique Entrprs Champions & Tech Innovns Sloan Mgt Rvu Winter 80 21#2 
   p63 Table 2 Key Roles and FUnctions According to Different Investigator
Function    Bower      Schwartz  SAPPHO    Kusiatin   Roberts      This Article
            (1972)     (1973)    (1974)    (1976)    (1968,1972,
                                                     1977,1978)
Business    Context    Context   Chief        -         -          Business
Structure &                      Executive                         Definition,
Definition                                                         Technological
                                                                   Entrepreneur
Sponsorship Impetus    Impetus   Business   Manager   Sponsor,     Executive
                                 Innovator, Champion, Product      Champion,
                                 Product    Technical Champion,    Product 
                                 Champion   Champion  Project      Champion,
                                                      Manager,     Technological
                                                      Entrepreneur Entrepreneur
Technical   Definition Technical Technical  Technical Creative     Technical
Definition            Definition,Innovator  Champion  Scientist    Definiton,
                       Factoring                                   Technologist
Technical       -        -          -       Technical Gatekeeper      -
Information                                 Champion
Market          -         -         -          -      Market          -
Information                                           Gatekeeper
   p64 Table 3 Definitions of Key Roles.  Technological Entrepereneur: The
organizer of a technological venture who excercises control of the venture
(Typically by owning a substantial portion of the equity) and assumes the
risks of the business. Usually he is the chief executive officer.  Product
Objective: A member of the organization who creates, defines, or adopts an
idea for a new technological innovation and who is willing to risk his or her
position and prestige to make possible the innovation's successful
implmementation.  Executive Champion: An executive in a technological firm
who has direct or indirect influence over the resource allocation process and
who uses this power to channel resources to a new technological innovation,
thereby absorbing most, but usually not all, the risk of the project.
Technical Definition: The basic performance requirements and associated
specifications that characterize a proposal for a new technological
innovation.  Sponsorship: The actions by which executives channel resources
to innovative projects that they have chosen to support.  Business
Definitions: A description of the business within which a firm chooses to
compete and of the overall administrative practices that the firm will follow
in that business.  [Hyperbolic Product innovation curve crosses negative
parabolic process innovation curve at dominant design emergence]
				     #@#
   Utterbach Innovn in Indu & Diffusn Tech Sci 183#4125 15feb74 
   p621 From 60 to 80 percent of important innovations in a large number of
fields have been in response to market demands.. most of the ideas
successfully developed and implemented by any firm came from outside of the
firm.. cost of originating and developing a successful innovation is a minor
part (probably 15 to 30 percent) of the total cost of bringing it into use
   p622 stronger market orientation on the part of smaller
firsm.. substantial lag, 8 to 15 years, between the time technical
information is generated and the time it is used in an innovation
   p623 government-held patents [before Baye-Dole?] and technical reports are
seldom used in a commercially or socially important application other than
the specific one from which the patent or information arose..  roughly half
of all information that stimulated innovations came from communications
initiated by someone other than the innovator.. during problem-solving, fully
86 percent of the important information used was the result of communication
initiated by the innovator.. oral sources were important both during
idea-generation (45 percent of all information) and during problem-solving
(32 percent of all information)
   p625 One possibility is to use the strategy for growth or competition
evident in a firm or an industry, such as sales maximization (automotive),
cost minimization (transportation, communications), performance maximization
(aircraft, chemicals), or control of materials resources (mining, petroleum)
as a basis for drawing distinctions
				     #@#
   Brozen Invention Innovn & Imitation AER 41#2 5.51 
   p239 Schumpeter has pointed out that innovation (change in technological
possibilites) may occur without innovation (change in th eproductive methods
of technical leaders) and innovation may occur without invention
   p240 "Advanced" Techniques Uneconomic for Some Resource and Market
Patterns. [Appropriate Technology] What happens to be an advanced technology
may not be used by some enterprises because of differences in relative
scarcities of resources available to different marets. In that case,
different technologies are appropriate to different enterprises. No one
technique can be designated as best for all different resource patterns and
all scales of production.
   pp240-1 SEC studies have shown that the cost of raising capital is in
excess of 20 per cent of the proceeds of security issues of small firms in
contrast to less than 5 per cent in large firms. The cost of capital inhibits
the use of "advanced" techniques by small concerns
   p243 Social structure may inhibit the imitation of desirable
innovations. In a class-divided society, with income distributed on the basis
of caste or power rather than on the basis of productivity, ther eis little
incentive to invent, innovate, or imitate better technicways [sic].. Lagging
technology is sometimes the result of managerial and entrepreneurial
decadence
   p244 Yet they may fail to do so for lack of proper standards as to what
constitutes best practice
   p257 In attacking the problem of furthering economic development,
particularly in underdeveloped areas, a decision must be made as to whether
effort should be lavished upon the dimunition of the gap between
technological possibilites and the level to which it is economic to develop
them, upon the dimunition of the gap between the level of the technological
leaders and that of the technological possibilites, or upon the dimunition of
the gap between the average technology of the area and that of the
leaders. Here, the considerations previously described must rule. A
determination must be made of whether a gap of more than an economic amount
exists between leadership and the possibilites and between the average
technology and that of the leaders. The efficacy of an additional unit of
effort in diminishing one or the other gap must be measured and the effort
then put where it can accomplish most
				     #@#
   Charles W. Prather Keeping Innovation Alive After the Consultants Leave
Research Technology Management 43 no5 S/O 2000 A better way to sustain
innovation is to make it as much a part of the organization's value system
as, say, honesty and integrity. This, in turn, requires making values "real"
by taking action in the "support legs" of awards, taboos and repetitive
reinforcement.  The first arena is Education, and it is focused on the
individual.. The second arena is Application, and it is focused on the team.
Teams are formed to solve problems or to take advantage of opportunities, and
a shared problem-solving process common to all team members is needed. The
third arena is Environment, and it is focused on the organization..  values
expressed in the behavior of the leadership. I believe strongly that the
Environment arena has the greatest impact.. Ekvall's work has been further
refined and validated by Scott Isaksen and others who have clarified nine
dimensions of the climate for innovation.. 1. Challenge.. 2. Risk-taking.. 3.
Trust and openness.. 4. Idea time.. 5. Idea support.. 6. Valuing diversity in
thinking style.. 7. Freedom..  8.  Playfulness and humor..  9.  Absence of
interpersonal conflicts..  10.  Debates [Isaksen, Scott G., Dorval, Brian K.
and Treffinger, Donald J. Creative Approaches to Problem-Solving.  Dubuque,
Iowa: Kendall-Hunt Publishing Company, 1994, thinksmart.com]
				     #@#
   D.  Bruce Merrifield Growth Strategies for the "New" Economy Research
Technology Management 43 no6 9-11 N/D 2000 The entrepreneurial process
responsible for averting what otherwise would have been another serious
Depression, was jump-started by the Economic Recovery Tax Act of 1981, which
reduced taxes by $500 billion over the next four years, but even more
importantly, also reduced the capital gains tax from 70 percent in early 1980
to 20 percent.  This stimulated the creation of $35 billion of venture
capital, "almost overnight," and began an explosion of new business
formations, from about 200,000 to 800,000 per year.. There are three special
conditions for significant commercial success and sustained growth of new
Initial Public Offerings (IPOs). 1. The new product, process or service must
have both a significant sales and profit potential with substantial growth
projected, as well as a "first-mover" advantage. 2. The new operation should
be strongly protected by patents or copyrights in order to stall market entry
of "fast followers." 3. Once launched as an IPO, an already-prepared strategy
needs to be in place for rapid acquisition of both pre-commercial startups
and public low-price/earnings-ratio companies whose capabilities may be
complementary to the new IPO operations. Given these conditions, the market
tends to provide a high market capitalization and a high P/E ratio for the
new business. This, in turn, permits rapid and continuous growth through
acquisition, which can far exceed that which otherwise might be possible
through internal resources alone.  Also, the valuation of low-P/E
ratio-companies acquired immediately rises to that of the acquiring company,
a strong incentive for acquired personnel to cooperate. Bruce Merrifield is
chairman and CEO of Pridco Management, Inc. Washington, D.C., and professor
emeritus of the Wharton School of Business, University of Pennsylvania.  As
Assistant Secretary of Commerce for Technology and Under Secretary for
Economic Affairs during the Reagan Administration, he spearheaded changes in
the antitrust, technology transfer and patent laws, and put through the
Malcolm Baldrige Quality Award and the National Technology Medal. He received
his Ph.D. in physical organic chemistry from the University of Chicago.
dr.bmerrifield@erols.com
				     #@#
   Robert W.  Rycroft and Don E.  Kash Steering Complex Innovation Research
Technology Management 43 no3 18-23 My/Je 2000 THE NORMAL PATTERN Within this
pattern, managers need to: * Enhance core capabilities by improving
performance. * Acquire complementary assets to exploit established core
capabilities.  * Engage in local learning.  * Pay close attention to
well-defined markets..  Speed is the key to success when incremental
innovations are the dominant pattern. A premium is placed on the ability to
operate with "minimum information" and that means at least two things: solve
problems, but don't try to understand them, and recognize that excess
information is an enemy.  The network must be focused on building upon
existing knowledge and skills and not be diverted by knowledge or skills that
are not immediately useful.. THE TRANSITION PATTERN Here managers need to: *
Expand (and eliminate) core capabilities.* Acquire complementary assets to
explore new areas of core capability.  * Engage in regional learning. *
Balance market and non-market linkages in the selection environment.. Because
the transition will cause some existing core capabilities to decline in
value, some "unlearning" must take place..  THE TRANSFORMATION PATTERN
Managers need to: * Create new core capabilities.  * Invest in highly
diversified complementary assets.  * Engage in cosmopolitan learning..  *
Develop strong non-market relationships..  Uncertainty is pervasive and
unavoidable
				     #@#
   Gregory Alexander HOW TO (ALMOST) SCHEDULE INNOVATION Research Technology
Management 45 no1 31-40 Ja/F 2002 * What is the repeatability of an
individual experiment? * Based on the data, is there more than one possible
cause for any given observation (i.e., is it one cause or a combination of
causes)?  * Do inexplicable observations imply there may be "lurking"
variables? That is, are there experimental variables whose values I did not
consider that could have drifted from one experiment to the next and caused
large differences in observed results?..  What statistical design of
experiments, or SDE, offers in many cases is a methodical approach to give
the maximum information, together with a measure of the uncertainty of the
results, while conducting the least number of experiments.  It also
contributes to the likelihood that the data obtained will indeed test the
hypotheses..  Prioritize the variables to be studied by making, articulating,
and documenting some simplifying assumptions.. WORK-BREAKDOWN STRUCTURE (WBS)
At this point, most of the work in getting to a WBS is complete.  All that
remains is to determine if the elements (pieces of work) are defined in
enough detail for determining schedule and budget.  The literature offers
various criteria for making this decision. Answering yes to a set of six
questions for each activity is a good way to ensure that the project can be
scheduled (8).  We call these the WBS criteria: * Is each activity bounded
(has a clear beginning and end)? * Does each activity have a clear work
product?  * Is each activity independent (can proceed to completion, once
begun, without need for additional input)?  * Is the duration easily
estimated? * Can the status of the activity be easily measured (you can tell
at any time if it is 25%, 50%, 75%, 100% complete)? * Is the duration
acceptable for preventing scope creep (a good rule of thumb is <2 weeks)?


				     #@#


   Michael D. Santoro and Stephen C. Betts MAKING INDUSTRY--UNIVERSITY
PARTNERSHIPS WORK Research Technology Management 45 no3 42-6 My/Je 2002
Moreover, while the Bayh-Dole Act has stimulated industry-university research
by promoting additional investments from the private sector, many legal
constraints exist.. Unfortunately, by insisting on full disclosure,
universities signal the industrial community that academe is overly
self-centered, rigid and unresponsive to industry's needs.. Even a
university's insistence on non-exclusivity can work in the firm's favor, for
instance, when a new technology requires a technology infrastructure based on
a socially accepted dominant design.. With respect to revenue sharing of
patents, firms often receive in the range of 1-3 percent of sales, although
this depends upon the technology and the industry
				     #@#
   Mel Perel CORPORATE COURAGE: BREAKING THE BARRIER TO INNOVATION Research
Technology Management 45 no3 9-17 My/Je 2002 three basic requirements for
success: * Creating and sustaining a supportive corporate culture.  *
Generating a flow of ideas.  * Relying on creative champions to spark and
lead breakthrough efforts..  Executive champions do not recognize corporate
culture as an obstacle to innovation and are best placed to break innovation
barriers.. clearly articulated goals (qualitative or quantitative) in the
often fuzzy arena of breakthrough innovation will empower people to address
and persevere with unusual opportunities..Ensure that potential breakthrough
initiatives are funded (modestly at the outset) and are assigned a dedicated
team (small at the outset). Then allow the team time and freedom to get on
with the job.. apply standards fairly and consistently to select only the
best ideas so that employees don't assume that rejection of ideas implies a
negative innovation climate. This requires CEOs to invest considerable time
and patience..  Trust and patience are key underpinnings of a supportive
corporate culture..  Consider some form of vested "equity" rights to enable
breakthrough innovation team members to benefit financially if developments
are transferred to a different group for commercialization or are licensed
out..  Learn from failures rather than punish or stigmatize them..  Focus
communication about breakthrough activities on those technologies or
capabilities that end-users recognize as the basis of value.. Keep initial
new venture investments relatively small by seeking external sources to
co-fund higher-risk breakthrough developments.. There is little correlation
between stage-gate project selection and commercial success--that is, there
is no assurance that a product that passes all the gates will be commercially
successful [Whiteley Bean Russo RTM July-Aug.  1998, pp. 15-16.]
				     #@#
   Robert Waites REINVENTING CORPORATE RESEARCH Research Technology
Management 45 no4 15-22 Jl/Ag 2002 Bob Zider points out that, "Contrary to
popular perception, venture capital plays only a minor role in funding basic
innovation" [HBR 1199 pp. 131-139] This is because most venture fund managers
are looking for businesses that can become successful in a few years. Thus,
basic innovation remains the domain of government labs, universities and labs
in medium and large companies. ADAPTING VC PRACTICES TO CORPORATE R&D.. In
his article on "How to bring the valley inside," Gary Hamel describes the
reluctance of existing companies to pursue ideas that will "kill an existing
business" [Hamel HBR 9/99 pp. 71-84].. we challenge the researchers to
develop effective elevator pitches for their research proposals, and
challenge them to condense the value of their proposed research into a short
presentation. This exercise helps them understand the essence of their
ideas. Although much has been written about "phase-gate" management processes
for product development, in most large enterprises the objective of "phase
exit reviews" is for communication and refinement of objectives rather than
making crisp "go/no-go" decisions. Venture capitalists allocate capital to
start-ups in phases and insist on concrete milestones.. ask the corporate
researchers to identify comparables for their work and to compare the
technology and business models.. focus on growing a particular business or
market segment. Often there are attractive emerging businesses that leverage
existing corporate competencies.. Many of the contractors and consultants who
work for start-ups will also work for existing enterprises.,
				     #@#
   Reorienting R&D for a horizontal future Charles Downey, Daniel Greenberg,
Vivek Kapur.  Research Technology Management.  Washington:Sep/Oct 2003.
Vol. 46, Iss. 5, p. 22-28 These are complex questions, but tools and
techniques that can help businesses manage innovation are evolving
quickly. Integrated product innovation..  * More-and more valuable-ideas
generated by improved market planning.  * Better investment decisions because
of disciplined portfolio management.  * Faster time-to-market through more
effective pipeline management.  * Greater flexibility offered by platform
management.
				     #@#
   ANTICIPATING DISRUPTIVE INNOVATION Jay Paap, Ralph Katz.  Research
Technology Management.  Washington:Sep/Oct 2004.  Vol. 47, Iss. 5, p. 13-22
(10 pp.)  This pathological trend, described by many as the (tyranny of
success-in which winners often become losers and firms lose their innovative
edge-has been a worldwide dilemma..  The leadership, vision, strategic focus,
valued competencies, structures, policies, rewards, and corporate culture
that were all so critical in building the company's growth and competitive
advantage during one period can become its Achilles heel as technological and
market conditions change over time..  Not only must business organizations be
concerned with the financial success and market penetration of their current
mix of products and services, but they must also focus on their long-term
capabilities to develop or commercialize what will emerge as the most
customer- valued technical advancements into future offerings in a quick,
timely and responsive manner..  Interestingly, most studies of innovation
show that incumbent leaders were very aware of the new technologies that
eventually disrupted their business successes [Utterback, J. Mastering the
Dynamics of Innovation. Cambridge: Harvard Business School Press, 1994] In
fact, the incumbents not only invested in the development of these
technologies, they were often the creators or the technical pioneers of
them. The watch industry provides one of the most vivid examples..  Edward
Roberts, who presented an expanded flow chart complete with feedback loops in
his often- cited retrospective article on the nature of Technology Management
(9).  [Roberts, E. B. "Managing Invention and Innovation: What We've
Learned."  Research-Technology Management, Jan-Feb 1988, pp. 11-29.]..
Technology does not directly lead to a return; all it does is create change..
* An investment in technology creates a change (lower-right S-curve).  * That
change has an impact on the internal or external customer (upper-left S-
curve).  * The change has to take the performance to a minimum level before
the customer (internal or external, current or prospective) responds-this is
the leverage minimum.  * At some point the customer no longer values
improvements, and further investments to create change provide no return-this
is the leverage limit.  * The driver in a particular market segment is the
performance characteristic whose leverage is the greatest and thus represents
the major consideration potential customers use when selecting a process,
product or service. (In most products and services there are multiple
drivers, each of which must be addressed in concert)..  The Nature of
Technology Substitution..  * The old technology matures relative to the
dominant driver..  * The previous driver matures, a new driver emerges and
the old technology is unable to meet unmet needs of the new dominant driver..
* The environment changes creating a new dominant driver..  The lesson: Focus
on understanding the leverage of needs and drivers, not on hunting for a
technology that will change everything..  If technology planning is to
anticipate "disruptive technologies," it must not start with technology but
with needs, and assess how current and future customers' needs will evolve
into different generations of drivers. This is done by considering the
driver's leverage, not just its importance..  Of greater interest is when the
new driver cannot be well served by the existing technology. In such cases
there is pressure for a new technology that will satisfy the new drivers..
Understand the dynamics of innovation and substitution..  Do not ignore your
customers (current or potential). However, do not focus solely on what your
current customers ask for. More important, focus on what they need.. Do not
abandon an old technology just because it appears mature..  Moving to newer
technologies that can deliver performance at the leverage limit of the old
drivers (even though below your technology's performance level) may be
necessary to meet the leverage minimum of a new driver.  * Implement
processes that help anticipate and manage change.  * Collect intelligence on
changing needs, technologies, customers, and competitors.  * Use planning
frameworks that consider the leverage of a need-not just its importance, and
that take into account technology maturity and substitution.  * Ensure that
project approval frameworks promote the disciplined early-stage exploration
of the viability of potential new technologies.  * Adopt development
mechanisms that promote the dualism
				     #@#
   Accelerate Radical Innovation-Now!  John P Dismukes.  Research Technology
Management.  Washington:Sep/Oct 2004.  Vol. 47, Iss. 5, p. 2-3 (3 pp.)  The
conferees concluded that radical innovation and its importance need to be
defined before it can be accelerated. While acknowledging that radical versus
incremental innovation is a relative term, varying by industry,
organizational culture and stage in societal development, the group
nevertheless identified a self-consistent set of key factors that encourage
and promote non-incremental change, and particularly major (discontinuous,
disruptive) changes. These factors include technological performance,
application, products, processes, markets, users, organizational behavior,
speed, and societal acceptance. They will result in drastic transforming
capabilities for new technology systems that lead to profitable enterprises.
				     #@#
   DEVELOPING AN EFFECTIVE STRATEGY FOR MANAGING INTELLECTUAL ASSETS John
Tao, Joseph Daniele, Edward Hummel, David Goldheim, Gene Slowinski.  Research
Technology Management.  Washington:Jan/Feb 2005.  Vol. 48, Iss. 1, p. 50-58
(9 pp.)  Alignment Creates Value..  * Competencies of the business unit.  *
Needs of the market.  * Required infrastructure.  * Financial and human
capital.  * Required technologies.  * Competitive environment.  * Execution
risks..  1. Which internal patents support your current business? Which ones
are key?  2. Which external patents could block you, now or in future?
3. Which internal patents can block your competitors, now or in future?
4. Which intellectual assets (internal and external) provide you with the
freedom to practice?  5. Can you identify the IA that drive or protect market
share in key areas of your business today and in the future?  6. What IP or
know-how can you acquire externally?  7. What is the total value contributed
by your IA in your protected products and services, licensing revenues, tax
savings, and in equity of your joint ventures and other ventures?
				     #@#

   ALLOCATING PATENT RIGHTS IN COLLABORATIVE RESEARCH AGREEMENTS Gene
Slowinski, Matthew W Sagal.  Research Technology Management.
Washington:Jan/Feb 2006.  Vol. 49, Iss. 1, p. 51-59 (9 pp.)  Linking Patent
Rights to Marketplace Intents Experienced alliance managers understand the
connection between patent rights and "marketplace alignment."..  Severe
problems can arise in alliances when boundaries are not clearly defined..
There are at least six reasons an alliance can be terminated: 1. The
objectives of the alliance are successfully achieved and the partners want to
proceed in the marketplace independently.  2. One of the partners changes its
strategic direction or decides that other projects have a higher priority.
3. One of the firms identifies a more attractive partner, and wants to
terminate the current alliance and create a new collaboration with a new
partner.  4. One or both firms decide that the implementation results are
less successful than expected and future prospects are not encouraging.
5. One partner has not performed adequately or has breached the terms of the
contract.  6. One partner is acquired or merged with another firm..  While
this is a complex subject, we hope to have persuaded readers of three things:
1. A clear understanding of both firms' marketplace intents should guide
patent allocation negotiations with an initial focus on rights to use.
2. Combining the Intellectual Property Needs Matrix with careful thinking
about alliance boundaries and the "joint versus sole" question facilitates
clear understanding and communication of both firms' RTU needs.  3. Early and
ongoing involvement of legal counsel in the planning and negotiation process
enables optimum selection of the legal structure that maximizes the value of
the collaboration.
				     #@#
   BUILDING COLLABORATIVE INNOVATION CAPABILITY Morgan Swink.  Research
Technology Management.  Washington:Mar/Apr 2006.  Vol.  49, Iss. 2, p. 37-47
(11 pp.)  * 3-D product information-with graphics-based mark-up ability.  *
Product platform, bill-of-materials and configuration data.  * Product and
process specifications.  * Part classification/group technology for
searching.  * Preferred suppliers sortable by product capabilities.  *
Competitive product data.  * Market demand and customer preference data.  *
Means for rapid identification of experts, posting of needs for assistance.
* Workflow definitions to direct people's interactions with the data..  *
Accommodate change in configuration management data and related knowledge.  *
Facilitate reuse of standards and practices.  * Assure that all requirements
remain clear, concise and valid.  * Communicate changes, standards and
requirements promptly and precisely.  * Assure conformance in each case..
Process-oriented Key Performance Indicators: * Frequency of input to the PLM
database.  * Number of identifiable collaborative events: meetings, research
ventures.  * Number of identifiable collaborative relationships.  * Traffic
on electronic communication networks.  Outcome-oriented Key Performance
Indicators: * Number of new product ideas evaluated.  * Time to development
for new ideas.  * Time to market for new products or process improvements.  *
Time to break-even for new product introductions.  * Reduction in travel and
overhead costs.  * Revenue from new products.
				     #@#
   COLLOQUIUM:  Innovation  and   Intellectual  Property  Protection  in  the
Software  Industry:   An  Emerging  Role   for  Patents?   Winter,   2004  71
U. Chi. L. Rev. 241 Bradford L.  Smith + Susan O. Mann Given the growing need
for  interoperability,  governments  have  sometimes  concluded  that  it  is
necessary, under carefully defined  circumstances, to permit certain forms of
"reverse engineering"  of software programs..  Software  developers and their
customers typically  had a direct contractual relationship  with one another,
and because most  software programs were task-specific and  customized to the
customer's unique needs,  vendors had little incentive to  make their systems
interoperable with  those offered by  others..  Moreover, the  Register noted
that  software programs  might, in  certain circumstances,  not qualify  as a
"writing of an  author," and that programs in  executable-code form might not
qualify as  "copies" within  the meaning  of the 1909  Copyright Act  then in
effect.  n4 Given  these  hurdles, relatively  few  software developers  took
advantage of  copyright protection for  their [*244] programs..   Rather than
entrenching  the positions  of the  leading IT  firms of  the  day, copyright
protection provided the foundation for a new generation of software providers
that  greatly expanded  the  range and  diversity  of costeffective  software
options available to consumers..  In  the seminal case of Apple Computer, Inc
v  Franklin Computer  Corp, n23  for instance,  the Third  Circuit  held that
computer  programs, whether  in  source  or object  code  form, qualified  as
"literary works"  under the Copyright  Act and that a  competitor's wholesale
copying of software infringed on  the original developer's copyrights in such
programs..   U.S. courts  generally came  to endorse  the view  that,  to the
extent  necessary  to  promote interoperability,  unauthorized  decompilation
normally does not violate copyright..   On appeal as Lotus Development Corp v
Borland International, n47  the First Circuit held that  Lotus's menu command
hierarchy constituted  a "method  of operation" and,  as such,  was expressly
excluded from copyright  protection under $ S 102 of  the Copyright Act..  In
Diehr, the Supreme Court held  that, although a mathematical formula embodied
in a  software program might  not qualify for  patent protection on  its own,
application of the  formula to perform a useful  process--in Diehr, a process
for curing  synthetic rubber--did qualify for  patent protection..  existence
and significance of a "mathematical  algorithm" with a claim that defined the
applicant's invention, using the so-called Freeman-Walter-Abele test..  after
Alappat, patent applicants  needed only to define their claims  in terms of a
computer  program implemented in  a machine  in order  to bring  their claims
within the  scope of patentable  subject matter..  in contrast  to copyrights
and trade secrets, a prerequisite  for patent protection is that the inventor
must  disclose a  clear  and precise  description  of his  or her  invention,
thereby  promoting  the goals  of  technological  disclosure  and IT  product
transparency..   patents protect  the  actual invention,  not  just a  single
implementation of it. Thus,  patent protection enables software developers to
share key  technologies with partners, customers, and  others..  twenty years
or less  of protection from  the time the  patent application is  filed. This
period  of  exclusivity is  decades  shorter  than  the fifty-plus  years  of
protection  generally   afforded  by  national  copyright   regimes  and  the
theoretically  unlimited  term of  protection  available  under trade  secret
law. Thus,  patented innovations are likely  to enter the  public domain more
rapidly..  Efforts  to improve examiner  training and increase  patent office
funding  have  met  with  some  success.  Contrary  to  conventional  wisdom,
references to prior art in software patents appear to be equal or superior to
the  norm,  while  ongoing  efforts  to  further  harmonize  patent  law  and
procedures  hold promise  in the  effort  to bring  global patent  protection
within the financial reach of smaller firms.
				     #@#
   A Patent Doctrine without Bounds: The "Extended" Written Description
Requirement Spring, 2004 71 U. Chi. L. Rev. 617 Guang Ming Whitley Adequate
disclosure is the "quid pro quo" of the patent system: the public grants
exclusive rights to the patent holder for a limited time, and in exchange,
the patent holder divulges the operating principles of the invention to the
public.  Since adequacy of disclosure determines a patent's validity and
scope, the Supreme Court has cautioned against "fundamental alterations in
disclosure rules" that may "risk destroying the legitimate expectations of
inventors in their property" by invalidating pending or issued patents..
foiled attempts to add new matter to a patent through the amendment process
while retaining the benefit of an earlier filing date.  enablement
requirement ensures that "public knowledge is enriched by the patent
specification to a degree at least commensurate with the scope of the
claims.".. The enablement requirement, as articulated in In re Wands, once
served as the primary method for determining whether a patent claim was
adequately disclosed..  The enablement analysis must be sufficient to
distinguish overbroad claims from claims that are adequately disclosed by the
patent specification..  lack of clear boundaries and retroactive application,
which allow the decisionmaker to invalidate almost any patent claim for lack
of written description..  proposes that the test for written description be
combined with the original Wands enablement factors, using the goal of
adequate disclosure to cabin discretionary application of the written
description requirement. This solution limits judicial discretion, lends
clarity to the adequate disclosure requirements, and simultaneously
harmonizes existing case law and alleviates concerns about adequate
disclosure in emerging technologies..  PTO Written Description Factors: Wands
Enablement Factors: Evidence of support in the application, Actual reduction
to practice, Clear depiction in detailed drawings or chemical formulas,
Disclosure of relevant, distinguishing, and identifying characteristics,
Level of skill and knowledge in the art, Predictability of the art, Full
scope of the claim, Quantity of experimentation necessary, Amount of
direction or guidance presented, Presence or absence of working examples,
Nature of the invention, State of the prior art, Relative skill of those in
the art, Predictability or unpredictability of the art, Breadth of the
claim..  Combining the factors for the extended written description and
enablement requirements would assist courts in invalidating claims that may
satisfy the current enablement factors without fulfilling the requirement of
adequate disclosure. Such a change would not disturb the general structure of
patent law, but would merely collapse a recently created disclosure doctrine
into the established enablement requirement. Altering the extended written
description requirement in this manner would also preserve the expectations
of inventors.  The extended written description requirement is not well
established, well defined, or deeply rooted. Enablement is a powerful
disclosure doctrine that should not be relegated to secondary
importance. Collapsing the extended written description requirement into the
enablement requirement is a positive, feasible, and necessary step in the
development of patent law.
				     #@#
   Antitrust and  Sharing Information about  Product Quality Summer,  2006 73
U.  Chi. L.  Rev. 995  John Han  The Antitrust  Division alleged  that PCIC's
dissemination of  "competitively sensitive information"  violated § 1  of the
Sherman  Act;  n7 by  sharing  information  about  one feature  of  otherwise
independent  insurance products,  insurers reduce  the "potential  for losing
clients to firms  not using [limitation of liability]."..   Price fixing is a
per  se  violation of  §  1.  In  markets with  significant  quality-oriented
competition, standardizing  product quality can  also violate §  1..  Markets
for physical  products with dominant  designs by definition possess  (a) high
scale economies  and (b)  low market demand  for improvements. n62  With such
products,  standardization  is  typically  procompetitive..   Standardization
increased  price  competition by  making  previously differentiated  products
comparable  and  reducing  buyer  search  costs..   Markets  for  nonphysical
products without dominant  designs, such as markets for  contract terms, have
(a) limited  scale economies  in production, and  (b) high market  demand for
improvements.   In   such   markets,   standardization   can   sometimes   be
anticompetitive  and  independently violate  §  1..  Quality  standardization
invigorates  price competition by  making previously  differentiated products
fungible.  Buyers  find it  easier  to  compare  prices between  standardized
products, subjecting  sellers to heightened price competition.  Firms have an
incentive to  differentiate their  products in order  to mute  this increased
price competition..  Market dispersion  is inconsistent pricing between firms
in  the marketplace.  Knowing what  competitors charge  for  similar products
facilitates  pricing consistency  and reduces  price  dispersion.  Minimizing
price  dispersion has  a  procompetitive  effect that  should  be taken  into
account in  any rule of reason  analysis.  n98 Because uniform  prices can be
produced  either  by  collusion  or  efficient  markets,  evidence  of  price
uniformity  only  becomes  significant  when considered  in  connection  with
separate evidence  of an agreement to  fix prices.[62 Antitrust L  J 465, 479
(1994)]..  closer prices are to  value, the less sellers over- or underinvest
in  production,  and  the  less  buyers over-  or  underpurchase.,  Increased
information  sharing should lead  to price  reductions as  competition forces
cost  savings to  be  passed on  to  consumers. Information  sharing is  less
important for reducing price dispersion  in (a) markets selling products with
a naturally uniform  composition such as sugar, (b)  markets where prices are
regulated, n105 (c)  "stable industries" with low demand  variance and little
innovation (as  compared with turbulent markets,  which require "specialized,
risky   investments"),  n106   and  (d)   concentrated  markets..    When  an
underperforming rival uses benchmarking  to improve its competitive position,
its  peers   are  subject  to   enhanced  price  and   quality  competition..
information  sharing  may  facilitate  both competitive  and  anticompetitive
ends. In evaluating its legality  as a precursor act, courts are ill-equipped
to  make fine  distinctions  between the  anticompetitive and  procompetitive
case.   The cost is  greater for  erroneously enjoining  vital procompetitive
behavior than for  not considering information sharing as  evidence of cartel
action. Given all of this, courts hearing cases involving sharing information
about  product  quality  should  exclude  that  behavior  from  their  larger
antitrust inquiry.
				     #@#
   VALUING RISKY PROJECTS WITH REAL OPTIONS Scott Mathews.  Research
Technology Management.  Arlington:Sep/Oct 2009.  Vol.  52, Iss. 5, p. 32-41
(10 pp.)  To extend the NPV analysis beyond a single most-likely scenario, a
common practice is to assess several scenarios. Typically, two additional
scenarios are considered: an optimistic and a pessimistic one, which refl ect
different outcomes, more or less favorable, of the assumptions applied in the
most likely case.. Monte Carlo simulation offers the ability to incorporate
into the analysis hundreds of scenarios, including those that are plausible
albeit lower probability, but potentially consequential to the outcome of the
project such as the optimistic and pessimistic scenarios..  The Datar-Mathews
option pricing model has provided a better sense of value on some of Boeing's
largest projects.[ Mathews, Scott H., Datar, Vinay T. and Johnson,
Blake. 2007. A Practical Method for Valuing Real Options. Journal of Applied
Corporate Finance, Spring (19), No. 2, pp. 95-104.]
				 #@#
   Empir Pr Contingency Vars Biz Stg Hambrick Ac Mgt J 28#4 12/85
   p779 Examining the relative results of the Chow tests reveald that user
sector, consumer or industrial, and purchase infrequency were by far the most
significant of the variables tested..  Stage of product life cycle, instead
of being th emost significant - as both Hofer (1975) [Ac Mgt J 18 784-810]
and the present study hypothesized - ranked a distand but still very strong
third among the ten variables examined
				 #@#
   J B Quinn HBR 11/69 Tech Xfr Multinat Cos
   p 149 In fact, throughout many societies the pirmary force needed to
stimulate growthis not so much capital investment as technological advance
   p161 Widen markets.. easier for well-managed multinational companies to
introduce full-scale operations. invest in the communications,
transportation, and power networks that are essential to modern
industry.. Eliminate cartel and monopoly arrangements.. force both foreign
and domestic companies to compete and innovate.. Eliminate barriers to
industry-university relationships in scientific, technical, and management
spheres and encourage domestic technical-management programs which diffuse
tehcnology to domestic concerns.. Offer incentives for training in certain
disciplines.. Aggressively seek foreign technology and not attempt the
impossible task of creating all needed technologies internally.. Create local
"free trade" complexes [incubators?] where companies can bring raw materials
[research resources?] tax free to process for immediate re-export.. Allow
foreign companies to bid on high-technology prime contract provided they
subcontract and train domestic producers to supply major portions
				 #@#
   Jagdish N Sheth Model of Industrial Buyer Behavior J Mktg v37 1973 p51
(1b)         Specialized    Role         Life               (4)
Information  Education      Orientation Style              Situational 
Sources             `--------'-----------'                 Factors
                             |                                    |
Salesmen <-- (1c)     (1a)   V         (1e)                       |
         Active <-.   Background of    Satisfaction               |
           Search |   the Individuals  with Purchase <----------. |
Exhibitions &     |           V          |                      | |
Trade Shows      (1) Expectations of   <-'         Autonomous   | |
                  1. Purchasing Agents --.         Decisions--, | |
Direct Mail       2. Engineers           |              ^     V | V
                  3. Users           (2) Industrial---> |  Supplier or
Press Releases    4. Others          Buying Process     |  Brand Choice
                                         ^              V       ^
Journal                                  |            Joint     |
Advertising                              |          Decisions (3) Conflict
                                         |                      Resolution
Professional                     ,-------------,              1. Problem 
and Technical    (2a) Product-Specific  (2b)Company-Specific     Solving
Conferences       Factors                Factors              2. Persuasion
                    ^                    ^                    3. Bargaining
Trade News          |                    |                    4. Politicking
                    |                    |
Word of Mouth       |                    |
                    |                    |
Others ---->(1d)    |                    |
          Perceptual|                    |
          Distortion|                    |
   ,--------,----------,           ,-------------,-----------,
 Time     Perceived  Type of     Organization  Organization Degree of
 Pressure Risk       Purchase    Orientation     SIze       Centralization
				 #@#
   How Rainmaker Jeffrey  Fox  2000 Hyperion  
   p7 "Why should this customer do business with our company, with me?"
   pp16-7 precall planning checklist should include: 1. Written sales call
objective. 2. Needs analysis questions to ask. 3. Something to
show. 4. Anticipated customer concerns and objectiosn. 5. Points of
difference vis-a-vis competitors. 6. Meaningful benefits to customers.
7. Dollarization approach; investment return analysis. 8. Strategies to
handle objections and eliminate customer concerns. 9. Closing
strategies. 10. Expected surprises
   p29 "Do you have your appointment calendar handy?".. make
appointments to make rain
   p41 By agreeing to decide for herself, the customer eliminates the option
of not deciding. The customer is now engaged and can't ignore the facts
   p55 "Yes, that is a good company.  Would you like to know our points of
difference?".. not knock the competitor. To do so would be to impugn the
intelligence of the customer
   p63 Ninety-five percent of all salespeople will dilute themselves, by
calling on too many customers and not allocating enough sales calls to close
each sale
   p81 be on high receive.. Don't start talking until the customer has
completely stopped talking. Don't think about what you are going to say
next. Take notes
   p89 In addition to never being in a meeting, you are never sick.  You are
travelling. You have never "left for the day," You are out of the office or
meeting with customers. You are never "not in the office yet." You are at a
breakfast meeting with a client
   p97 "we would be happy to give you a demonstration. If the demo is
successful, is there naything else prohibiting you from going ahead?"
   p103 before eght o'clock any morning and after three on Friday
afternoons. Early-morning sales calls are good for two reasons: (1) there are
less, or limited, interruptions, and (2) the customer's agreement to the
unusual hour is a big buy signal
   p122 "why don't you give it a try?" is a killer sales question
   pp142-3 1. Send a handwritten note. 2. Clip and send an article of
interest. 3. Talk to a satisfied client and ask who else you might
help. 4. Send a tahnk-you gift to someone who referred you. 5. Give your
business card to someone with influence. 6. Send a letter to the editor of a
magazine your customers read. 7. Add fifteen people to your mailing
list. 8. Leave a compelling voice mail. 9. Make an appointment. 10. Call a
client you haven't talked to in years
   p145 The good salesperson: is organized, calls only on decision makers,
does detailed precall planning, always has a written sales call objective,
asks preplanned questions, listens, is emphatic with customers, encourages
and appreciates objections, always dollarizes the value of the product, asks
for customer commitments

			 #@#

  Kotler Keller Mktg Mgt 12ed New Delhi:PrenticeHall 2007

  p40 Fig 2.3 A Holistic.. [Kotler Jain Maesincee, Mktg Moves p29 HBS 2002]
                  Customer Focus    Core Competencies  Collaborative Networks
Value Exlporation Cognitive space   Competencey space     Resource space
Value Creation    Customer benefits Busiess domain        Business Partners
Value Delivery    [CRM]             Internal resource m.. business partner  m..

  p107 Questionnaire.. Ensure that questions are withour bias..
questions as simple as possible.. specific.. Avoid jargon or
shorthand.. Steer clear of sophisticated or uncommon words.. Avoid
ambiguous words.. Avoid questions with a negative in them.. Avoid
hypothetical questions.. imaginary.. Do not use words that could be
misheard.. Desensitize questions by using response bands.. Ensure that
fixed responses do not overlap.. Allow for "other"

   p149 best customers outspend others by ratios of 16 to 1 in retailing, 
13 to 1 in the restaurant business, 12 to one in the airline business, 
and 5 to 1 in the hotel and motel industry [AmEx Putten in Peppers & 
Rogers, One-to-One, NY:Currency Doubleday, 1993, p108]

  p156 Acquiring new customers can  cost  five  times  more  than  the  costs
involved  in  satisfying and retaining current customers. [Reicheld, Loyalty,
HBS 1996]

   p186 People are more likely to notice stimuli that relate to a
current need.. that they anticipate.. whose deviations are large in
relation to the normal

  p202 Decision Traps [Russo & Shoemaker, Doubleday 1990] 1. Plunging In.. 2.
Frame  Blindness  [Wrong  problem]..  3.   Lack   of   Frame   Control..   4.
Overconfidence  in  Your  Judgement.. 5. Shortsighted Shortcuts.. 6. Shooting
From the Hip.. 7. Group Failure.. 8. Fooling Yourself About Feedback.. 9. Not
Keeping Track.. 10. Failure to Audit Your Decision Process

   p202-3 Consumers tend to segregate gains.. integrate losses..
integrate smalle rlosses with larger gains.. segregate small gains
from large losses

   p234 The buying center is the decision-making unit of a buying
organization. It consists of initiators, users, influences, deciders,
approvers, buyers, and gatekeepers.. environmnetal, organizational,
interpersonal, and individual factors.. buyphases: (1) problem
recognition, (2) general need description, (3) product specification, (4)
supplier search, (5) proposal solicitation, (6) supplier selection, (7)
order-routine specification, and (8) performance review
   
   p259 Table 8.2 Major Segmentation Variables for Business Markets..
Demographic: 1. Industry.. 2. Company Size.. Location.. Operating Variables:
4. Technology.. 5. User or nonuser status.. 6. Customer capabilities..
Purchasing Approaches: 7. Purchasing-function organization.. centralized or
decentralized.. 8. Power structure.. 9. Nature of existing relationships..
10. General purchase policies..leasing.. bidding.. 11. Purchasing criteria..
quality? Service? Price? Situational Factors: 12. Urgency.. 13. Specific
application.. 14. Size of order.. Personal Characteristics: 15. Buyer-seller
similarity.. 16. Attitudes toward risk.. 17. Loyalty
 
    p294 Twenty-First Century Branding [Bedbury, New Brand World, Viking,
2002].. 1. Relying on brand awareness has become marketing fools gold -
Smart brands are more concrned with brand relevance and brand resonance.
2. You have to know it before you can grow it.. don't know who they are..
3. Always remember the Spandex rule of brand expansion - just because you
can doesn't mean you should. 4. Great brands establish enduring customer
relationships.. emotions and trust.. 5. Everything matters - Even your
restroom. 6. All brands need good parents - Unfortunately most brands
come from troubled homes. 7. Big is no excuse for being bad.. principles
before profits. 8. Relevnce, simplicity and humanity
    
    p301 [Keller, Strategic Brand Management, PH  2003]  High-quality  brands
stretch  farther..  prototypical  of  a  product category can be difficult to
extend outside the category. Concrete attribute associations tend to be  more
difficult  to  extend  than abstract.. positive in the original product class
but  become  negative  in  the  extension..  successful  extension  can  only
contribute to the parent brand image but also enable a brand to  be  extended
even  farther.. unsuccessful extension hurts the parent brand only when there
is a strong basis of fit.. does not prevent a firm  from  "backtracking"  and
introducing  more similar extension.. Vertical.. often require sub-branding..
emphasized information about the extension

   p332 Table 10.3 Summary of Product Life-Cycle..
            Introduction  Growth               Maturity     Decline
Characteristics 
Sales       Low Sales     Rapidly Rising Sales Peak Sales   Declining Sales
Costs       High..        Average..            Low..        Low..
Profits     Negative      Rising..             High..       Declining..
Customer    Innovators    Early adopters       Middle majority  Laggards
Competitors Few           Growing..            Stable..     Declining..
Marketing Objectives      Maximize             Maximize     Reduce expenditure
            Create product  market              profit while  and milk
            awareness and   share               defending     the brand
            trial                               market share
Strategies
Product     Offer a basic ..extensions,       Diversify..    Ohase out weak
               product     service, warranty
Price       ..cost-plus    ..to penetrate..   ..match or best.. Cut price
Distribution Build selective.. ..intensive..  ..more intensive.. ..phase out..
Advertising  ..awareness.. ..awareness..      Stress brand      Reduce..
             early adopters mass market..      diff..         retain.. loyals..
Sales promo.. ..heavy..     Reduce to take    Increase..        Reduce
              ..entice trial advantage         ..switching..
    
    p369 Making Smaller Better [Adam Morgan, Eating the Big Fish, Wiley 1999]
1. Break with you immediate past.. 2.  Build  a  "lighthouse  identity"..  3.
Assume   thought   leadership   of   the  category..  4.  Create  symbols  of
revaluation.. 5. Sacrifice.. 6. Overcommit.. 7. Use publicity and advertising
to enter the popular culture.. 8. Be idea-centered, not consumer-centered
			 #@#
   Mk Stevens Your Mktg Sucks Crown3River 2005 (msco.com)
   p19  1. Why your marketing sucks: Stop throwing thousand-dollar bills out
the window and camouflaging spenfing as marketing
   p42 1. Marketing is an integrated process **
   p43 2. You need to identify innovative initiatives that can command
the attention of the marketplace.. 3. Integrate all of the elements of
your marketing program.. 4. Do no engage in any marketing initiatives
that fail to produce a positive return on the money invested
   p46 5. Pick the low-hanging fruit [cross-selling].. established client
base.. 6. DOn't be linear.. assymetrical, swarming **
   p45 7. Be persistent, relentless, inventive, counterintuitive,
challenging, combative, strategic, and tactical**
   p49 2. Nothing happens until a sale is made: Any company making sales the
last step in the marketing process has its marketing program
ass-backwards. 
   p87 3. Start with a blank page: To hell with what your competitors are
doing... rethink everything and start from scratch
   p105 4. Make a spectacle of yourself - or your company: Stop playing it safe
with singles and doubles and start hitting home runs. 
   p112 Be imaginative / Accept risk / Assume challenges / Find a new way to win
   p121 5. There are no one-trick ponies: Who says synergy never works? The
practical benefits of integrated marketing
   p136 staying power to remain committed throughout the course of the campaign
   p138 willingness to create a tight alignment between the president's
office and the marketing campaign
   p143 6. Extreme Marketing in action: The last word on synergy and
developing an integrated plan for making sure every marketing dollar
you spend brings in more than $1 in return..  shoul dhelp leverage all
of your other marketing spending
   p169 7. Ready, aim, fire!  Why it beats ready, fire, aim every time.. how
to test, execute and monitor your marketing.. Measure twice, cut once
   p187 8. Pick the low hanging fruit: Why you don't have to spend a
fortune to boost sales and earning.. selling more to people who
already have a relationship with you
			 #@#
   Purple Cow SethGoldin.com Portfolio/Penguin 2002
   p10 The world has changed. There are far more choices, but there is **
less and less time to sort them out **
   p17 TV-INDUSTRIAL AGE - POST-TV AGES
Average products         - Remarkable products
Advertise to anyone      - Adevrtise to the early adopter
Fear of failure          - Fear of fear
Long cycles              - Short cycles
Small changes            - Big changes
   p41 Differentiate your customers. Find the group that's most
profitable. Find the group that's most likely to sneeze [spread viral
marketing]. Figur eout how to develop/advertise/reward either group.
Ignore the rest. Your ads (and your products!) shouldn't cater to the
masses. Your ads (and products) should cater to the customers you'd
choose if you choose your customers
   p60 What could you measure? What would that cost? How fast could you
get the results? If you can affort it, try it. "If you measure it, it
will improve."
   p73 Do you have the email addresses of the 20 percent of your customer
base that loves what you do? If not, start getting them. If you do,
what could you make for these customers that would appear
super-special? 
   p74 Could you make a collectible version of your product?
   p88 Do you have a slogan or positioning statement or remarkable boast
that's actually true? Is it consistent? Is it worth passing on? 
   p93 If someone in your organization is charged with creating a new
Purple Cow, leave them alone! Don't use internal reviews and usability
testing to figure out if the new product is as good as what you've got
now. Instead, pick the right maverick and get out of the way
   p94 1. Get permission from the people you impressed the first time.
Not permission to spam.. to alert them the next time you might have
another Cow / 2. Work with the sneezers in the audience to make it
easier for them to help.. Give them the tools (and the story) they'll
need to sell your idea to a wider audience. / 3. Once you've crossed
the line from remarkable to profitable business, let a different team
milk it.. thousand variations.. don't believe your own.. inevitable
downward slide to commodity
   p95. 4. Reinvest.. fail and fail again.. remarkable last time won't be
			 #@#
   Competitive Marketing O'Shaughnessy 1984 Allen Unwin 0-04-658243-6
   p74 Figure 4.5 [Buyer decision model]
                    Buyer's goals          Buyer's belief
Indecision<-Unstable      Stable                |
         Goals agreed->    V <------------------|
              standing<- Wants -> occurent
      Non-buying <--------|----------------------------------->   Buying
Latent want      Passive wants     Exclusionary reasons  Extrinsic   Intrinsic
Creation  Want   Change     |     Incapacity  | Promises preference  preference
of       remains in    Forebearance      Authority    Evaluate/        | Habit|
awareness latent beliefs,                              decide        Choose   |
of              priorities        Generated-functions  +  Use-functions  Picking
product's       or terms of Integrative    |    Adaptive Legalistic Technical
potential       purchase       |          Economic     |           performance
|                              +              |Imitative|||Reputation factors
towards            Conventions | Ego/Status/  |    Advice|Sample
Buying                    Bandwagon/ integrity|      Seek Comparison
action                    fashion             |guarantees shopping
                    ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
                                    Choice of [roduct/brand
                                     Intention to buy
                           Buying action        Buying action...belief
                      and choice frustrated

   p113 Figure 6.1 Competitive Strategies
                                                 Move        Mix adjustments
                                                 before 
                                                 competition Deterrent action
                                                 Move        Imitate
                    Market share protection      with      
                    (hold/defend)                competition Compensate
                                                 Move        Merger/acquisition
                                                 away from
Competitive                                      competition Collusion
strategies                                                   New areas
                                                 Move        New segments
                                                 before      Additional channels
                                                 competition Penetration pricing
                        Market share advancement Move        Capitalize
                                 (growth)        with
                                                 competition Leapfrog
                                                 Move        New offerings
                                                 away from   Reciprocal
                                                 competition  agreement

   p151 Table 8.2 Typical Suggested Strategies Relating to Mix
Variables in the Product Life Cycle Stage
Stage in    Product          Pricing   Promotion            Distribution
life cycle  Iron out            High   Create awareness     Selective 
Introduction   product                  of products' potential  distribution
               deficiencies            Stimulate primary demand  
Growth       Focus on product          Selective advertising Extend to 
              quality                   of brand             coverage sought
             Variations of 
              product introduced
Maturity     Product adjustments     Image build and maintain  Seek close
              for further brand      Sales promotions       dealer relationships
              differentiation        Facilitate changes in product, etc
Decline      Simplify product line     Primary demand          Selected
             Seek new product uses      may again be            dealers 
   Changes to revitalize product Low     cultivated              cultivated

   p247 Figure 12.2 The Process of Industrial Purchasing
                        Company objectives
Efficiency                 Problems            material/component shortages
Saleability    }Opportunities  + Difficulties{ obsolete/old equipment
Asset protection               |               new projects
Flexibility                    |               poor current suppliers
                               |          Buying
                               |       particiapnts      image projected
                               |Specific       |Standing interpersonal relations
                               |responsibilites|wants   {integrity sought
                               |               |         innovation risk avoidance
                               |            Perceived    investment (personal) payoff
                            Present         supplier/
            straight rebuy  need            product need
                                       Decision      Disposition
                                       to make       to buy
                                       and not buy     |
+++++++++++++++++++++++++++++++++++++++++++++++++++++++|+++++++++++++++++++
Pick     Re-order  Purchase Purchase   Purchase  {technical     Purchase
supplier from      initiating advising deciding  {economic liaison | authorizing
from     current   Initiate   Advise            / adaptive    |monitoring|
approved suppliers inquiries   Determine needs { integrative  |    |     |
list               ............/    V           \ legalistic  |    |     |
                   |   Agreement Conflict                     |    |     |
                   |    |        Analytical Bargaining Jural Liaise Settle
                   |    |        mode       mode              |    |     |
                   |    V<------ Conflict resolved            |    |     |
                   |  Core      new offering                  |    |     |
                   |  offering  modified offering             |    |     |
                   |  specified same offering                 |    |     |
                   Search  directories    --Specify           |    |     |
                   for     catalogues       suppliers         |    |     |
             ......sources advertisements         |           |    |     |
             |    Inadequate  sales rep.          |           |    |     |
             |     Develop  Adequate              |           |    |     |
             |     sources   request              |           |    |     |
             |               details/quotations   |           |    |     |
             |               proposals /adaptive  |           |    |     |
             +- - - - - - - -+Evaluate{integrative|           |    |     |
             |               |         \legalistic|           |    |     |
             |               |          {technical|           |    |     |
             |               |          {economic |           |    |     |
             |     Agreement  Conflict            |           |    |     |
             |     |     Analytical Bargaining Jural     Liaise     Settle
             |     |          mode    mode      mode               |     |
             |     |          Conflict resolved   |                |     |
             |     +------------------------------+                |     |
             +-------------Supplier selected                       |     |
             |             Authorization sought- - - - - - -Approved Authorized
             + - - - Contracts signed/rder issued - - - - - - - - - - - -+
                                                             +-Supplier
                                                               performance
                                                               evaluation
                                [loop present need]..Unsatisfactory Satisfactory
                                                        performance performance 
				     #@#
   Loyalty, Reicheld, HBS, 1996  [1989 hbr?]
   p1 disloyalty at current rates stunts corporate performance by 25 to 50
percent
   p33 raising customer retention rates by five percentage points could
increase the value of an average customer by 25 to 100 percent
   p97 We discovered that employee loyalty affected new-customer volume as
well as retention. We asked how people came to choose a particular
garage. Predictabley, satisfied customers were the number-one source of
referrals. But we were unprepared for the second most common source:
referrals from garage employees themselves, who as insiders know how much
value their shops provide. If an operation gives the kind of value that makes
employees proud, they will naturally recommend it to friends and
relatives. The real surprise is that their opinion has more impact on
new-customer volume than advnertising and promotion put together
   p302 Customer, employee, and investor loyalty are so thoroughly
intertwined that to understand and manage one, you must understand and manage
all three
			     #@#
   CRM Done Right.  Rigby, darrell.rigby@bain.com Ledingham,
dianne.ledingham@bain.com Harvard Business Review; Nov2004, Vol. 82 Issue 11,
p118-129, The successful users have also exhibited a healthy skepticism,
discounting overblown claims that the ultimate payback from a CRM system is
the creation of a "real-time enterprise." Understanding that highly accurate
and timely data are not required everywhere in their businesses, they've
tailored their real-time CRM initiatives to those parts of their customer
relationships that truly do depend on "perfect" information. Once they've
succeeded with the smaller, more-targeted CRM project, they've used their
initial investments as springboards for solving additional problems..  It's
possible to use CRM systems to manage the entire customer relationship cycle
all at once-initial purchase, after-sales service, subsequent purchases,
recommendations to other customers..Such an approach ends up creating unused
technology capacity, causes unnecessary business disruptions, and ultimately
fails the payback test. When companies carefully examine their customer
relationship cycles, they usually find some deep-seated, pernicious problems
in a few areas that undermine overall performance.  It is these pain points
that should be the focus of the CRM effort..  Kimberly-Clark started by
building onto an existing software program for account management, called
Profit Calculator, which its sales department had developed to track
investments in individual promotion efforts..  Focusing on pain points can
not only be an effective way to build a successful CRM program but can also
get an unsuccessful CRM initiative back on track.. But perfect information
comes at a high cost. The systems required to collect and disseminate it are
expensive; so are the finely tuned processes needed to react quickly to
it.. data produced by a narrowly focused CRM system often reveal additional
opportunities for important business refinements. And those refinements,
taken together, can amount to a broad CRM application that extends across the
company.  The difference between this sort of wide-ranging CRM implementation
and the prerecession CRM applications is that each step in building the
system represents a carefully planned, well-defined advancement in strategic
thinking..
				     #@#
   The Achilles' Heel of Supply Chain Management.  Raman, Ananth 1
DeHoratius, Nicole Ton, Zeynep Harvard Business Review; May2001, Vol. 79
Issue 5, p25-28, Point-of-sale scanners and electronic inventory systems were
supposed to revolutionize supply chains by connecting manufacturing directly
to consumers. But there's a big problem: bad data..  Even when a store's
inventory information is technically correct, it may still suffer from bad
data because employees routinely put products in the wrong places. Another
well-regarded retail chain found that 16% of its in-stock SKUs were reported
as stockouts when customers asked for them at the help desk. In fact,
however, the items were available; they had just been misplaced in a storage
area or on the selling floor.. If a customer is buying peach, orange, and
strawberry yogurts at the same price, the clerk often swipes one of the
yogurts -- say, peach -- three times. As a result, the store's inventory
system says the peach yogurts are down by three and the others are
unchanged. Managers routinely exacerbate this problem by tracking checkout
clerks' speed but not their accuracy. Indeed, most stores adopted scanners
primarily to save on labor costs, not to gain better data.. When one retailer
audited every item on hand at a new store, it found that the inventory system
had the wrong quantities for 29% of the SKUs, with an average deviation from
actual supplies of 25%. The pickers in the company's distribution center had
simply been sloppy in assembling the store's mix of SKUs.. To minimize
paperwork and auditing expenses on goods transferred within the company, the
retailer had discouraged store managers from getting credit from distribution
centers for items shipped in error that cost less than a certain amount. As a
result, the managers weren't motivated to carefully check the accuracy of
deliveries from the distribution centers. Since they could receive credit for
manufacturers' errors, however, they checked those shipments meticulously.
Unfortunately, the one activity that can help stores improve their data
accuracy -- the periodic auditing of inventory -- is usually done for a very
different purpose. Most stores perform audits solely for financial reasons,
to measure the "shrink" of goods that have been lost or pilfered. That means
they measure inventory by dollar value, not by item. If the audit shows that
the total value of the inventory is approximately the same as what the system
says, managers are happy -- even if the actual mix of SKUs differs greatly.
Rewarding speedy checkouts, reducing paperwork, and checking inventory value
are laudable goals, but they all inadvertently undermine the accuracy of
supply chain data.. as long as inventory data aren't being collected for
anything important, store managers won't be under pressure to improve their
data quality, but until the quality improves, retailers and their suppliers
will hesitate to rely on the data.
				     #@#
   Alsop, 18 Immutble laws of Corporate Reputation WSJ/fp2004
   p10 Like it or not, eveyr individual, every company, every organization
develops a reputationthat is based on people's perceptions of it over
time. THough reputation takes years to form, it can be ruined in an instant
   p49 The stakeholder pyramid isn't a static structure. It's vital to
understand ehich audiences are most important to a company at any given
time. At the pace pf change today, a company needs to frequently reevaluate
which stakeholder group matters most at the moment
   p57 Values statements promote commitment, integrity, repsect, trust,
teamwork, and other noble virtues. Ethics codes tend to be less visonary and
more oriented toward compliance with laws and regulations.. Oc course, what
cosntitutes ethical behavior can still be subjective
   p120 self-awareness is the first step toward self-improvement. Unfortunately,
too many companies have managed to survive by living in denial
   p180 It had to learn to speak with a single voice. All communications and
marketing messages must be working together to reinfoce a corporate
brand. Stakeholders can't feel very good about a company they don't
understand
   p195 THe possibilities for reputation rub-off from business relationships
are endless. Whether a supplier, a merger or joint-venture partner, an
accountant, a licensee, or acelbrity endorser, business connections will most
definitely influence corporate repuatition.. A company can experience rub-off
reputation damage just by being part of a maligned industry
   p220 The first few days are the most critical in trying to limit reputation
damage in a crisis. Crises aren't like fine wines; they don't improve with
age. A communications void is highly dangerous during a time of
crisis. Silence gives critics time to gain the upper hand and reinforces the
public's suspicions that the company must be guilty. Without information from
the company, rumors and misinformation can proliferate fast. Corporate
lawyers may advise against a public apology early onn in a crisis, when the
facts aren't all in, but a company should at least own up to the problem and
express regret. A long-standing, positive relationship witht he media can pay
off handsomely in getting the corporate message out during a crisis. THe
channels of communication are already open, and the media are mor elikely to
trust what the company has to say`
   p236 Reputation improvement strategies misfire for many reasons, including
weak leadership, lack of a coherent vision, stingy spending on marketing and
new-product development, or simply blunders in execution. Whatever the cause,
the longer a reputation remains in rehab, the harder is is to save. As time
passes, the chances of ever regaining a robust reputation fade. The best hope
becomaes simply eliminating the negative feelings and settling for neutral
reputation - not an inspiring prospect
   p262 TO be effective, the apology should be made reasonably fast. Of course,
the tone must be sincere.. Make an honest act of corporate contrition, and
the public just may forgive you.. should have apologized right away instead
of taking a defensive
 				 #@#
   Strategy in Action Yavitz&Newman 1982 FP 0-02-934670-3
   p4 Strategy is not a response to short-term.. longer-term course that the
ship is steering, not with the waves.. insist that the qualitative strategic
plan be a separate document from the subsequently prepared financial
projections.. not a rationalization of what we did..  integration of all
these functional plans.. feasible in terms of resources that will be
mobilized, and it must identify ways by which at least some form of
superiority over competitors is to be achieved
   p22 1. Domain sought. What products or intangible services will the
business-unit sell to what groups of customers? 2. Differential advantage in
serving what domain. On what basis - such as access to raw materials, bette
rpersonnel, new technology, or low cost and prices - will the business-unit
seek an advantage over competitors in providing its products or services?
3. Strategic thrusts necessary and their appropriate timing. To move from
where the business-unit now is to where it wants to be - as laid out in (1)
and (2) - what moves will be made early and what can be deferred? 4. Target
results expected.  What financial and other criteria will the business-unit
use to measure its success, and what levels of achievement are expected?
   p23 redefinition of one's industry or niche within that industry
sometimes suggests an attractive domain
   p35 down-side risk, if present, that is substantially smaller than the
potential up-side gain.. Contingency plans are a device for limiting
losses.. fallback alternative
   p38 resources bases for prepared opportunism include unused borrowing
capacity, mining rights or other access to raw materials, and a metal-can
company's small venture in plastics to get a feel for that technology
   p39 Strategic management accepts uncertainty as inevitable, and then tries
to turn this ambiguity into an advantage through strategic planning
   p46 Often a unit when viewed separately has only medium appeal, but
when combined with other holdings it may add unusual stregth. Synergy
   p53 no inside champion for disposal, as typically is present for an
acquisition; some people will lose thier jobs, and senior executives are
reluctant to admit that they cannot make a success of anything they direct
   p57 develop along certain lines that the unit acting alone would
shun.. while "taking out insurance" the enterprise can "learn" what is
involved in developing specific stregths - a learning experience..  natural
for unit executives to feel that they should be permitted to use cash they
generate to strengthen their own position, instead of denying themselves for
the benefitof a small, upstart activity
   p61 central issues of corporate input strategy are: 1. Selecting a few
kinds of contributions the orporation will make to its business-units -
contributions of such quality and value that the business-units gain a
significant advantage over their competitors. 2. Finding ways to develop a
differential advantage in the production or delivery of such
services. 3. Integrating these strengths into portfolio selection and
corporate mission, and into the design of charters for business-units
   p65 Many diversified corporations, in fact, provide few strategic inputs
to their business-units. This is especially true of "conglomerates" -
assemblies of already established firms that have little relation to each
other and are merely clustered in a passive holding company. The pressure to
generate short-term profits and cash flow is often so great that the parent
corporation is not even a good source of capital
   p101 In any one technical area the need for major strategy shifts is
intermittent.. easier to organize and administer staff seeking alternatives
for recognized problems than to predict and diagnose those problems in the
first place.. Judgement about when to speak up is required - a watchdog,
growling all day will be ignored; going to sleep can be disastrous.. Staff,
like the line, can get trapped in tradition
   p108 strategic planning system must be treated only as a framework within
which the more irregular, less formal, and subtle aspects of strategy
formulation can be brought into focus
   p118 PBB lesson is that detailed programming tends to reduce
adaptation.. program calling for major internal change usually need
reinforcement from organizational and personnel shifts - and time to digest
   p122 Program Other Critical Short-Term Moves.. Projects with such long
lead times that they must be started now if they are to be completed when the
end result is needed.. necessary first step in the sequence..  Development of
a capapbility that will be used in a prepared opportunism strategy
   p126 Line managers not only help prepare progras, they also are assigned
specific tasks in th enew program.. pressure to cut expenses arises it is the
extra, special task that gets squeezed down.. special programs with
difficult-to-measure outputs are often loosely controlled.. Meeting strategy
targets typically is considered desirable but secondary to today's
business. Thus rewards give managers a clear message of where priorities
lie.. Strategic change is routine-disrupting, unique experience. It calls for
initiative and imagination to overcome natural protection of the status quo
   p134 Conversion to a new behavioral system takes time.. learning,
anxiety and confidence
   p150 think of the corporation serving as an outside director of each
division.. strategy is consistent with corporate guides for that division as
to domain, risk levels, target results.. Selecting capable executives.. tough
actions be taken when necessary, even though such actions may be personally
unpleasant for the division.. Rewarding key people for outstanding
performance, and if necessary removing ley people for poor
performance.. Making sure the internal control system will provide early
warning.. final approval to very large transactions.. sounding board; asking
discerning questions
   pp156-7 MATRIX ORGANIZATION AS A TEMPORARY COMPROMISE. Matrix organization
is a seductive idea. It can be helpful, but should be used with caution. Of
course, within some kinds of business-units a matrix setup is the normal -
often more optimum - organization design.  For a construction firm,
advertising agency, or engineering consultatn - for example - there is
repeated need for at least two strong viewpoints.. most functions can be
assigned to the operating divisions.  Usually, only one or two functions are
on the borderline, and we do not have to complicate the entire structure to
accomodate these exceptions.. can be treated like a shared service.. Matrix
organization at the corporate level may be justified as a transistion device,
but usually its use reflects fence-sitting - an attempt to have a new
organization without dismantling the old one. It is a sure way to double the
already staggering load of meetings senior executives must attend
   p173 outside is likely to be better prepared, sooner than an insider who
has to retool.. exctement and vigor.. sends signals
   p179 Measure progress toward strategic targets separately from results of
esablished operations.. encourage revisions of strategy and entrepreneurial
risk-taking
   p189 many potential investments never reach the final screening.  The
personnel needed to develop the idea may not be assigned by a dubious
supervisor, or a departmental manager may not care to sponsor the
project. Without both careful analysis and strong sponsorship the proposal is
unlikely to be presented to the top allocating body
   p200 regular expense budgets may be increased by a small amount to
recognize the extra workload. The result is that costs of working on old and
new strategies are scrambled in the current expense accounts.  The annual
budget allowances are similarly scrambled.. preference for dealing in
immediate problems is normal.. incentives typically pay off sooner on
short-term performance
   p204 Policies can be set that prevent use for sidetrack
activities.. Project approval can be withheld unless support for strategy is
clear.. Resource allocations can be derived directly from strategic
programs.. Separate allocations can be made for old and new business
   pp217-8 What steps are systematically taken to design company strategy?
.. Are provisions made to change behavior patterns?.. Does the company's
organization aid the strategy?.. Are qualified, committed people in strategic
posts, and does the reward system encourage them to give approved strategy
top priority?.. Are resources allocated to nourish strategy? Is the linkage
between strategy and local allotments clear?.. Do controls watch progress on
strategic programs and monitor key external variables?
   p242 Figure 14-1 Intangible Factors Bearing on Modification of Strategy:
A. Boldness of existing strategy. Its fit with existing company strengths and
executive attitudes. Its difference from previous strategy. Replace vs add-on
of activites. Perceived uncertainty and risk. B. Source of new alternatives
(modifications).  Externally imposed vs internally generated. Derived by
analysis vs proposed by missionary for idea. Participation in formulation by
those who carry out proposal. C. TImeliness of alternatives. Unique and
fleeting opportunity. Importance of a head start. Defensive move vs
offensive. Other committments of existing resources. D. Committment of
respected, charismatic, powerful leaders within company to present strattegy
and to alternatives. E. Conguence with aims of resource suppliers. Fit with
values of key employees and political factors within company. Acceptability
to outside reference groups (banks, neighbors, regulators, etc). Personal
opportunitiees for self-actualization, achievement, etc at key places in th e
organization. F. Fit with total company operations. Compatibility with
internal operating system. Compatibility with other external relationships
				     #@#
   Greenwald Competition Demystified Penguin Portfolio 2005
   p18                          YOU Manage Competitive Advantage
                              OTHERS You are an ant; EXIT GRACEFULLY
                           YES
                 YES   Single Dominant Firm NO Game STructure/Simulation
               Competitive Advantage           Prisoner's DIlemma Entry/Preemption
ALL Markets -      NO  Operational Effecitveness: Efficiency,Efficiency, Efficiency
   p340 segregate the early investments, which create assets, from the
subsequent income flows. The former constitute the asset value of the
project; the latter are the earnings power value [EARNS/WACC, franchise],
including growth. Any excess of EPV over asset value must be justified by
identifying sustainable competitive advantages. Optimisitic growth and margin
assumptions incorporated into a highly uncertain terminal value are not
dependable.
				 #@#
   Porter, Competv Strategy 1980 FP  0-02-925360-8
   p7 THREAT OF ENTRY.. Barriers to Entry.. Economies of Scale
   p9 Product Differentiation.. Captal Requirements
   p10 Switching Costs.. Access to Distribution
   p11 technology.. access to raw.. locations.. subsidies.. experience
   p17 Intensity of Rivalry.. Numerous.. Slow.. High Fixed
   p19 [lo] Switching Costs.. Capacity Augmented in Large increments.. 
   p20 High Exit Barriers
   p24 BARGAINING POWER OF BUYERS.. concentrated
   p25 undifferentiated.. threat backward integration.. full information
   p27 POWER OF SUPPLIERS.. concentrated.. [no] substitute..
   p28 differentiated.. forward integration
   pp40-41 Generic Strategy  Commonly Requires      Common Organizational
                          Skills and Resources   Requirements
        Overall Cost      Substained capital     Tight cost control
         Leadership        investment and access Frequent, detailed 
                           to capital              control reports
                          Process engineering    Structured organization
                           skills                  and responsibilities
                          Intense supervision    Incentives based on
                           or labor               meeting strict 
                          Low-cost distribution   quantitative targets
                           system
        Differentiation   Strong marketing       Strong coordination
                           abilities              among functions in
                          Product engineering     R&D, product development,
                          Creative flair          and marketing
                          Strong capability in   Subjective measurement and
                           basic research         incentives instead of
                          Corporate reputation    quantitative measures
                           for quality or 
                           technological leadership
        Focus             Combination of the above polices directed at the
                           particular strategic target
   p64 Areas of Competitor Strengths and Weaknesses
   Products
    Standing of products, from the user's point of view, in each market segment
    Breadth and depth of the product line
   Dealer/Distribution
    Channel coverage and quality
    Strength of channel relationships
    Ability to service the channels
   Marketing and Selling
    Skills in each aspect of the marketing mix
    Skills in market research and new product development
    Training and skills of the sales force
   Operations
    Manufacturing cost position - economies of scale, learning curve,
     newness of equipment, etc.
    Technological sophistication of facilities and equipment
    Flexibility of facilities and equipment
    Proprietary know-how and unique patent or cost advantages
    Skills in capacity addition, quality control, tooling, etc
    Location, including labor and transportation cost
    Labor force climate; unionization situation
    Access to and cost of raw materials
    Degree of vertical integration
   Research and Engineering
    Patents and copyrights
    In-house capability in the research and development process
      (product research, basic research, development, imitation, etc)
    R&D staff skills in terms of creativity,simplicity,quality,reliability,etc
    Access to outside sources of research and engineering (eg, suppliers,
     cutomers, contractors)
    Overall Costs
     Overall relative costs
     Shaed costs or activites with other business units
     Where the competitor is generating the scale or other factors that
      are key to its cost position
    Financial Strength
     Cash flow
     Short- and long-term borrowing capacity (relative debt/equity ratio)
     New equity capacity over the forseable future
     Financial management ability, including negotitation, raising capital,
      credit inventories, and accounts receivable
     Organization
      Unity of values and clarity of purpose in the organization
      Organization fatigue based on recent requirements placed on it
      Consistency of organizational arrangements with strategy
     General Management Ability
      Leadership qualities of CEOl abilit of CEO to motivate
      Ability to coordinate particualr functions or groups of functions
       (eg manufacturing with research coordination)
      Age, training, and functional orientation of management
      Depth of management
      FLexibility and adaptibility of manaegment
     Corporate Portfolio
      Ability of corporation to support planned changes in all business units
       in terms of financial and other resources
      Ability of corporation to supplement or reinforce business unit strengths
     Other
      Special treatment by or access to governent bodies
      Personnel turnover
   p96 THREATENING MOVES.. 1. How likely is retaliation? 2. How soon will
retaliation come? How effective will retaliation potentially be? How tough
will retaliation be, where toughness refers to the willingness of the
competitor to retaliate stronlgy even at its own expense? 5.  Can retaliation
be influenced?.. Lags in retaliation
   p102 COMMUNICATING COMMITMENT..assets resources, other mechanisms to cary
out the commitment quickly; a clear intention to carry out the commitments,
including a history of adherence to past commitments; iability to back down
or perceived moral resolve not to back down; ability to detect compliance to
the terms to which the commitment refers
   p114 switching.. costs of modifying products.. costs of testing..
retraining.. new ancillary equipment.. logistical
   p118 COSTS OF SERVICING BUYERS.. order size; selling direct versus through
distributors; required lead time; steadiness of order flow for purposes of
planning and logistics; shipping cost; selling cost; need for customization
or modification
   pp127-8 strategic dimensions.. specialization.. brand identification..
push versus pull.. channel selection.. quality.. technological
leadership.. vertical integration.. cost position.. ancillary
services.. price policy.. leverage.. parent company.. governement
   p142 gorwth of industry demand, overall potential for product
differntiation, structure of supplier industries, aspects of
technology.. height of mobility barriers protecting the firm's strategic
group.. bargaining power.. vulnerability.. to substitute..
rivalry.. competition within the strategic group.. scale of the firm relative
to to others in its group..  costs of entry.. ability of the firm to execute
   p272            Has strengths Relative        Lacks Strengths
                         to Competitors for      Relative to Competitors
                       Remaining Pockets         for Remaining Pockets
Favorable Industry         Leadership                Harvest or
Structure for Decline       or Niche                  Divest Quickly
Unfavorable Industry     Niche or                    Divest
Structure for Decline     Harvest                      Quickly
     Firm's Strategic Needs
     to Remain in the Business 
   p326 Elements of the Capacity Expansion Decision: Detemine the firm's
options for the size and type of capacity additions -> Assess probable future
demand and costs of inputs -> Assess probable future demand costs of inputs
-> Assess probable technological changes and probability of obsolescence ->
Predict capacity additions by each competitor based on the competitor's
expectations about the industry -> Add these to determine industry supply and
demand balance, and resulting industry prices and costs -> Determine expected
cash flows from capacity addition -> Test the aanalysis of consistency
   p328-35 Overbuilding.. Addinf capacity in large lumps.. Economies of Scale
or a Significant Learning Curve.. Long Lead Times in Adding
Capacity.. Increased Minimum Efficient Scale.. CHanges in Production
Technology.. Significant Exit Barriers.. Forcing by Suppliers..  Building
Credibility.. Integrated Competitors.. Capacity Share Affects Demand.. Age
and Type of Capacity Affects Demands.. Large Number of Firms.. Lack of
Credible Market Leader(s).. New entry.. FIrst Mover Advantage.. Inflation of
Future Expectation.. Divergent Assumptions or Perceptions.. Breakdown of
Market Signaling.. Structural Change..  Financial Community
Pressure.. Product Orientation of Management..  Asymetric Aversion to
Risk.. Perverse Tax Incentives.. Desire for Indigenous Industry.. Pressures
to Increase or Mainatin Employment..  diversification, which raises the
opportunity cost of capital and/or widens the horizons of management who may
have been production-oriented or prone to overbuild to protect their position
in their traditional industry..  finance background to replace management
with marketing or production backgrounds.. Pollytion control costs..
uncertainty.. previous periods of overcapcity..
   pp336-7 [PREEMPTIVE] Large Capacity Exansion Relative to Expected Market
Size.. Large Economies of Scale Relative to Total MArket Demand, or
Significant Experience Curve.. Credibility of the Preempting Firm.. ABility
to Signal Preemptive Motive Before Competitors Act..
   p338 Willingness of Competitors to back Down.. goals other than purely
economic.. major strategic thrust.. staying power, a longer time horizon, or
a greater wllingness to trade profits for market position.. very long view of
success
   p340 confront directly the two sources of entry barriers into an industry
- structural entry barriers and the expected reaction of incumbent
firms.. face the risks that existing firms will retaliate
   p342-3 WILL RETALIATION OCCUR?.. Slow Growth.. Commodity.. High FIxed
Costs.. High Industry Concentration.. Incumbents Who Attach High Strategic
Importance to Their Position in the Business.. Attitudes of Incumbent
Management
   p347 entrant can exploit conventional wisdom.. firm with no preconceived
notions can often see
   p349 ENTRY.. Reduce Product Costs..Buy in with Low Price.. Offer a
Superior.. New Niche.. Marketing Innovation.. Piggyback Distribution
				 #@#
   Hardball Stalk 2004 HBS/BCG 1591391679
   p8-10 Hardball players strive to continually widen the performance gap
between themselves and competitors.. empirically proven advantage..  strive
to convert competitive advantage into decisive advantage..  systematically
reinforcing.. avoid direct confrontation with competitors.. exploit their
employee's will to win.. believe..  "The number-one threat is us," Herb
Kelleher, the former CEO of Southwest Airlines [1993 Annual Report], told his
people at a big company meeting. "We must not let success breed complacency,
cockiness, greediness, laziness, indifference, preoccupation with
nonessentials; bureaucracy; hierarchy; quarrelsomeness; of obliviousness to
threats posed by the outside world".. draw a bright line in the caution
zone.. where the unacceptable area is
   pp13-16 Unleash massive and overwhelming force.. accurate, direct, and
swift. It must not be used until the company is ready to pull all its energy
behind it.. Exploit anomalies.. Threaten your competitor's profit
sanctuaries.. Take it and make it your own.. much more than appropriating a
good idea; you have to improve on it.. Entice your competitor into
retreat.. believe will be beneficial to them but actually will weaken
them.. Break compromises.. concession that an industry forces on its
customers
   p40 Most anomalies go unnoticed, however, or are ignored.  Organizations
try to contain or suppress them, precisely because thay are departues from
the norm and to ebrace them might disrupt standard operating procedures. When
senior managers learn of anomalies, they generally dismiss them as narrowly
based, or random, one-time events..  Exploiting an anomaly can be difficult -
taking a limited phenomenon to a much larger scale may require that buiness
processes and systems be adjusted in order to sustain and encourage the new
behavior and to achieve competitive advantgae in cost, quality, time, and
value
   p63-4 price strategically to sharply diminish a competitor's cash flow,
thereby reducing his ability to respond.. The more like a commodity the
product or service is, the easier it will be to use price to attract
customers away from a competitor.. higher the costs of switchingm however,
the harder it will be to lure customers away with price.. When the customer
base is concentrated, such as is the case with big box retailers, discounts
can be used to set low prices for high-volume customers.. But the complexity
also gives management greater freedom to make focused pricing moves on
specific products, accounts, or geographies. You must be sure that your
"costs to serve" and specific market and competitive conditions are
wll-documented in case you have to defen yourself against charge sof
predatory pricing..  You need to have sanctuaries of your own as well as
targets
   pp65 Behaviors to look for include: The company has only average financial
performance.. competitor is sluggish, unaware, or does not display
aggressive.. business units are managed as independent profit centers.. flow
of information is slow.. A weal central management team will do nothing to
help a business unit whose profit sanctuary is under attack, but they will
still expect the unit to continue delivering profit against target
   pp82-3 if truly understood and successfully transplanted, has the
potential to drmamatically improve the performance of your business..  Borrow
when it will facilitate the indirect attack.. Copy completely, commit
fully.. transplant the heart of its business model
   p97-8 main competitors have a broad range.. very large differences in the
sales volumes of the various products offered by the main
competitors.. harder for the company to allocate costs accurately to a
specific product or order.. When indirect costs exceed 50 percent of
value-added costs, the possibility of misallocation is very high.. The
indirect costs that are most difficult to allocate accurately are the
associated with creating and managing customer relationships.. sales to some
customers will appear to be more profitable than they actually
are.. compensation of certain employees, usually those in sales and
marketing, is tied to the contributions their efforts makre to gross
margin.. service costs may also be very high and often misallocated..  to
exploit a competitor's flawed understanding of the true costs of serving
different segments..  When an industry is booming, management practices get
sloppy.. In an industry with only two or three mni competitors, each company
is usually very aware of the other's actions, making it difficult to make an
unnoticed indirect attack. In an industry with many competitors (five or
more), it is very difficult for one competitor to taking princing actions
that will influence the behavior of all the others in the desired ways. If a
company attacks one rival, the other competitors may take actions to deflect
it
  pp99-100 Strengthen your grip on customers that purchase in high volumes at
prices that result in low margins. These are often the most important
customers to win and keep because their high volumes can be key to achieving
low costs.. Shed customers that purchase low volumes at low prices.. You want
to set your prices high enough that your competitors will win most of this
business, but not so high that they will make a substantial profit..  Retain
low-volume customers that pay high prices, but be ready to ditch them if
their willingness to pay erodes.. Retain high-volume customers that pay high
net prices.. Offer incentives to your important customers who purchase both
high- and low-volume products
   pp115-9 Shop the way your customer shops.. Know how your product or
service is really bought and used.. Try to make a change to your
product/service delivery mechanism.. would require a major change in the
organization, in job skills, and in activities, and would probably require a
significant shift in staffing.. Create new ways for your product/service and
its delivery system to create value for customers.. placed the emphasis on
the wants of the customer, rather than on the needs of the
manufacturer.. Test the limits of your imagination.. reservoir of suppressed
disatisfactions
   pp136-8 Acquire only if the opportunity fits with the strategy..  Don't be
tempted to step outside your prove process. If you're going to change the
acquisition criteria, you may need to change the acquisition process,
too.. Build an internal M&A capability. Many a CEO has lived to regret
succumbing to the unsolicited pitches of investment bankers.. building a team
that can generate M&A ideas, explore and analyse them, do their own due
dilligence, and negotiate the deals. Seek outside advice and
assistance.. counsel of an adviser who does not stand to directly gain from
the acquisition.. perspective on the acquisition that is free of traditional
industry assumptions and unbiased by internal politics.. Take a rigorous
approach to valuation.. how the pruchase will affect the value of your
company, as well as how much it is worth on th eopen market. For example,
will the acquisition rob resources from othe rof your initiatives? If you
forfeit the acquisition ro a competitor, how micht it strengthen that rival?
Or, can an acquisition be "lost" in a way that hurts your rival?.. Invest in
post merger integration (PMI) capability so you have the capacity to
successfully integrate acquisitions.. But integration can be the most
difficult part, and it's where many deals fall apart
   p143 danger of being stuck in the miidle if.. Your product sells at a
substantial premium based on its brand name withou t delivering on value,
features, or emotional engagement.. Your product is mediocre in quality,
design, or performance.. Your product has no story or context
   p154-4 Leaders who personally live in the heart of the matter have three
traits in common.. physically and personally connected to the
market.. courage to ask simple qeustions.. Saying "I don't know" can lead to
breakthroughs. Leaders lose thier edge and value when they assume too
much.. build a truth-telling network.. Employees, operating out of
self-interest, often shade the truth when they pass information upward
				     #@#
   HARDBALL INNOVATION George Stalk Jr.  Research Technology Management.
Washington:Jan/Feb 2006.  Vol. 49, Iss. 1, p. 20-28 (9 pp.)  Ten Patterns of
Disciplined Management.. Know your process.. Make support functions
time-invisible... Co-locate critical resources and organize around the tasks
at hand.. Maintain continuity.. Align beliefs, goals, measurements, behavior
for speed.. Bring discipline to planning.. Freeze specs and use improvement
phases.. Invest in capability platforms.. Let senior management
facilitate-not develop..Perhaps the most demanding change required of top
management is adjusting the compensation and promotion system so that people
can remain in their positions long enough to accumulate experience and to
exercise that experience.  Corporate-wide personnel policies often need
revision to provide multiple pay tiers within a grade to enable people to
stay in a position longer and still enjoy salary increases.
				 #@#
   Alfred duPont Chandler Strategy&Structure 1962 MIT 0-262-530009-0
   p21 THe operation of a railroad or canal called for more administration
than its construction.. with the completion of the great east-west trunk
lines in the 1850's administration became a full-time task in American
business
   p30 Before the [1889] New Jersey amendment, no general incorporation law
explicitly allowed a corporation to hold stock of other corporations. Some
states, in fact, specifically forbade it
   p31 After the 1890's, administrative innovations were much mor eimportant
to the development of American business than legal ones
   p55 Reorganization provided an opportunity to transform this loose
federation of many related small firms into a consolidated, integrated,
centrally managed industrial enterprise.. return for stock in th enew firm -
the E I du Pont de Nomours Powder Co - formed to take over the combined
properties
   p57 Each major department came to have its Vice-President and its
Director.  The latter was to be responsible for the smooth day-to-day
operations of the department, the former was to concentrate more on the
long-term planning and appraisal necessary to keep the company alive and
growing. Collectively, the Vice-Presidents with the President, acting as the
Executive Committee, were to make broad policy for the enterprise as a whole
   p61 From the very first, Pierre and Coleman insisted that the Executive
Committee should concentrate on long-term planning and appraisal: it must not
become involved in making decisions concerning th eoperating activities of
the different departments.. coorsination of day-to-day activities of the
different departments was left to the Admiistrative or "Operative" Committee
made up of Departmental Directors
   p116 In 1885, Durant, a twenty-four-year-old insurance salesman in Flint,
Michigan, purchased a patent for manufacturing two-wheel carts
   p117 By 1900, Ransom E Olds and one or two others had shown automobile
manufacturing to be commercially profitable. In that year, a variety of small
companies had produced 4,000 cars in the United States. In 1904, one of these
tiny ventures, the Buick Motor Co with a small factory in FLint,
failed. Durant needed little urging from its creditors to take over the
defunct automobile company
   p122 before the voting trust agreement with the Boston and New York
bankers had expired in November, 1915, Durant had acquired a major,
integrated, volume-production automobile company in Chevrolet as well as
substantial financial allies in the du Ponts of Wilmington. He used both to
obtain full control of General Motors. In August, 1916, after the the
resignation of Storrow and then Nash, Durant became President and Pierre S du
Pont, Chairman of the Board
   p131 Hyatt grew so rapidly that Sloan was able to sell to Durant for $13.5
million the firm he had purchased [out of MIT] for $5,000 in 1899. At
Durant's request, SLoan became President of United Motors - the parts and
accessories company of which Hyatt had become a subsidiary.. he set up
uniform accounting procedures.. evaluate the profitability of his operating
divisions
   p134 In outlining his program, Sloan began by defining the role and duties
of the Finance and Executive Committees. These he left much as they had been
outlined by the du Pont Company early in 1918. The first committee would
continue to set dividend rates and the salaries of top officials, to raise
funds, and to determine other financial policies. It would have "general
control" over the corporation's finances and accounting and would pass on
major appropriations recommended by the Executive Committee. The second
committee would retain its "entire supervision over the operations side of
the Corporation's activities, constituting as a whole practically the entire
operating staff." Each operating division would be represented in the
Executive Committee, "major operations [car and truck] by a single
representative, smaller operations being grouped together, one executive
representing several such minor operations." The PResident's primary role
would be to interpret the policies of the top committees and to see that they
were carried out
   p226 begins in 1895. Before this, Rochard Sears had sold only watches and
jewelry by mail order. In tha yea, Julius Rosenwald and his brother-in-law,
Aaron E Nussbaum, joined the company, providing the capital and executive
ability that Sears needed to make the most of the opportunity offered by
mail-order selling to American farms and villages
   p227 Under Skinner's general direction came a large number of buyers, each
handling a major line and each having a great deal of independence in
selecting an procuring, at the lowest possible prices, the goods that were
then advertised in the catalogue.. 190 Rosenwald went to a boyhood friend,
Harry Goldman, of Goldman, Sachs & Company of New York City. At Goldman's
suggestion, the Sears financial structre was re-formed and stock was offered
   p288 Before the 1920's, only du Pont COmpany developed this third role for
their financial offices. By the time of World War I, the Treasurer's
Department had its forecast and analysis section that maintained twelve
month's forecasts of probable financial conditions and revised them each
month. The Department also provided cost data on all the company's
activities, such as manufacturing, sales, construction, and research. In the
1920's the financial departments at the other three companies helped develop
comparable data.. One reason for the fairly general development of the
line-and-staff type of departmental structure was that it helped make
possible the delegation of authority and responsibility to the field
units.. experiense of both Sears and [SO] Jersey empasizes how the lack of
line-and-staff dstinction did result in centralization of decision making
   p293 Finally, the excutives at all four companies came to realize, some
more slowly than others, that systematic policy formulation and allocation of
resources called for carefully defined budgeting and capital appropriations
procedures
   p299 Complexity in itself, it should be emphasized, did not assure
innovation or change; some responsible administrator had to become aware of
the new conditions
   p307 One of the most important tasks facing Sloan and Brown in 1921 was
the creattion of an informational system to provide botthe division heads and
thegeneral executives with an intelligible picture of present performance and
anticipated conditions.. need to have the top executives be truly general
officers.. relieved of operating responsibilities, ad each was to have only
advisory contact with the division managers, as Sloan had recommended in his
original plan. Finally, through the device of the Inter-Divisional Committees
formed between 1922 and 1924, Sloan marked out another formal method or
channel of communication and authority through which the general executives,
staff specialists, and operating managers kept in constant conttact with each
other. By 1925, the General Motors structure was as clearly outlined as that
of du Pont
   p380 In general, the few firms among those studied here that remained
family held have tended to be slower in changing both structure and strategy
than the others. Deer, Distillers-Seagrams, Firestone, Swift, and Singer
Sewing Machine as well as Dow and Alcoa long preferred to stick to the old
ways [contrast how Ford, Motorola & oth fam held outgrew broadly held]
   p384 Antitrust activity [ditto tax & inflation changes?]  has probably had
the greatest impact on corporate structure and strategy in those reative;y
rare cases where it transformed a monopoly into an oligopoly. Yet even in the
case of the oil industry, the coming of a huge and entirely new automobile
market was as significant as was the breakup of Standard Oil to the
strategies and pace of growth of Gulf. Texaco, Shell, Sinclair, Phillips, and
other large oil companies
  p385 Thus four phases or chapters can be discerned in the history of the
large American industrial enterprise: the initial expnasion and accumulation
of resources; the rationalization of the use of resources; the expansion into
new markets and lines to help assure continuing full use of resources; and
finally the development of a new structure to make possible continuing
effective mobilization to meet both changing short-term market demands and
long-term market trends
				 #@#
   Strategy Implementn Galbraith&Nathanson 1978 West  0-8290-0214-7
   p9 Chandler's thesis, then, represents what is currently known in the
organization field as a contingency theory. COntingency theory states that
there is no one best way to organize, but that all ways or organizing are
equally effective (Galbraith 1973). The choice is dependent or contingent
upon something. Chandler suggests that structure is congent upon the growth
of strategy
   p22 If two units have reciprocal interdependence, then they also have
sequntial and pooled interdependence.. Organizations are predicted to grow by
incorporating within their boundaries those elements that, if left outside,
would pose critical contingencies for viability and be constly to manage by
contracting 
   p45 multi-divisional structure was the best performer for growth and had
average returns on equity and capital. Growth and returns were also
positively related, showing that the multi-divisional structure could achieve
growth without sacrificing profitability
   p54 Joan Woodward proposed that manufacturing technology was aprimiary
determinant of organization form (1965).. rate of change of the environment
that determined organization form (Burns and Stalker, 1961)..  industries
characterized by high rates of change of markets and
technology.. decentralized with ambiguous roles and a great deal of lateral
communication.. stable markets..  centralization and well-defined roles
   p55 Lawrence and Lorsch [Org&Env 1969].. high performing firms in an
uncertain environment had greater decentralization than low performers, and
that in the predictable industry, hte high performer was the more centralized
   p57 Khandwalla [1973].. greater the competition, the greater the use of
controls and the greater the decentralization.. strongest when competition
was based on new products rather than on mar-[keting or price; p58]
   p58 (Pfeffer and Leblebici 1973).. greater the competition, the greater
the degree of specification of procedures (formalization) and th emore
frequent the reporting of results.. Under competitive conditions,
organizations stay flat and increase spans of control and number of
departments. Also, the greater the numbe rof changes to products, the greater
the formalization and written reproting of performance
   p64 [L&L AW73] FIrst, organizations had to differentiate their functions
so that each functional department could deal with its different
subenvironment. Second, it had to integrate the differentiated functions
around the interdependencies brought on by the key competitive requirements
of the industry
   p80 Oliver Williamson (1976).. additional hierarchical levels in
functional organizations cause a loss of control and reduction of profit
maximizing behavior.. resources are more likely to be used optimally (profit
maximizing) in the multi-divisional firm when it is faced with large and
diverse businesses
   p81 best recent work summarizing research on reward systems, and
compensation in particular, is that of Lawler (1971, 1977). Lawler suggests
that the research confirms the conventional wisdom that when pay is tied to
performance, it motivates higher performance..  individual bonuses based on
productivity or profit are best at linking pay and performance but have the
strongest relation to side effects and are weakest at encouraging
cooperation.. more one opts for global and cooperative plans, the more
ambiguous the individual "pay for performance relation".. no single best
reward system. The best depends on the organization's task and strategy
   p84 In summary, the Lawler and the Salter schemes require that the reward
system designer start with the strategy of the organization, in order to
determine the behavior that is necessary for implementation of that
strategy. They identify some types for us, such as degree of cooperation
between units and need for goal congruence between successive layers. The
reward system chosen will be a trad-off between the various incentives for
particular behaviors. A typical trade-off is between division profit
incentives and total corporate profit. The total figure will encourage
cooperation and congruence between division and corporate goals, but will
reduce the degree to which an individual's performance is linked to his or
her bonus. A balanced incentive scheme should be formulated according to the
strategy, th einterdependence between units, and the individualism of the
managers in question
   p87 [Lorsch&Morse 1974] low tolerance for ambiguity was found among the
people in the manufacturing plants and high tolernce at the research and
development labs.. managerial transfer in EUropean multi-national firms
(Estrom and Galbraith 1977). The authors hypothesize that large numbers of
transfers of many nationalities lead to a decentralized subsidiary
structure. The work of Pitts is also relevant here (1977).  He finds that
firms that grow internally and presumably pursue "related diversification"
strategies make use of interdivisional careers to a greater extent than do
external growth firms pursuing unrelated diversification strategies
   p118 Table 8.1 Model Illustrating  Five Organizational Types
Type      Simple      Functional Holding     Muli-Divisional   Global-M
Characteristic
Strategy  Single      Single     Growth by   Related diversity Multiple products
          Product    Product and Acquisition of product lines  in multiple
                     Vertical    unrelated   -internal growth  countries
...                  Integration diversity   some acquisition
Organization Simple   Central    Decentralized Decentralized   Decentralized 
Structure  functional functional Profit Centers Product or     profit centers
                                 around product  area division  around world
                                 divisions Small  profit centers wide product
                                 Headquarters                   area divisions
Research and Not insti- Incresingly    Institutionalized search for new     
Development  tutionalized  Inst..         products and improvememnts
                       around product Decentralized Centralized  which is 
                       and process     to divisions    guidance  centralized
                       improvements                           and decentralized
                                                        in centers of expertise
Performance  By personal Increasingly  Impersonal  Impersonal based  Impersonal
Measurement  contact     impersonal     based on   on return on   with multiple
             subjective  based on cost,  return on  investment   goals like ROI,
                         productivity    investment and profitability    profit
                     but still subjective profitability with some   tailored to
                                                 subjective contribution product
                                                      to whole       and country
Rewards   Unsystematic   Increasingly   Formula based Bonus based Bonus based on
          paternalistic  related to     on ROI or     on profit   multiple 
          based on       performance    profitability performance planned goals
          loyalty        around         Equity        but more  More discretion
                         productivity   rewards     subjective than        Cash
                         and volume               holding-Cash rewards  rewards
Careers  Single function Functional    Cross fnction  Cross functional   Inter-
         specialist      specialists   but intra-     interdivisional divisional
                         with some     divisional     and corporate- Intersub..
                         generalist                    divisional   Subsidiary/
                      interfunctional moves              moves  Corporate moves
Leader  Personal         Top control of   Almost complete  Delegation Deleg..
Style   Control of       Strategic        deleg.. Indir..  ..indir..  results
and     strategic and    decisions     results and selection results according 
      Control operating  Some delegation     of management  Some decentr.. to
      decisions by top   of operations [via]  and capital   of strategy.. plan
          management     plans, procedures    funding                       ..
Strategic Need of owner  Degree of     Degree of diversity   Allocation..
Choices   vs needs       integration   Types of business    Exit and Entry..
          of firms       Market share  Acquisition targets  Rate of  Degree of
                  Breadth of Product line   Entry and Exit..Growth   Ownersh..
				     #@#
   Legal COntext Hostile Takeovers HBS 9-904-005 2004 disclose its
stockholdings in a target company when these holdings reach 5%.. tender offer
statement on Schedule 14D-1.. open for at least 20 business days.. withdraw
their shares at any time while the offer remains open.. bound to purchase as
many shares as it announced.. Williams Act that are generally designed to
level the playing field of all investors
				     #@#
   Strategic Alliances HBS 9-298-047 Gompers 2001 Williamson argued that, as
external market transactions become more costly, a firm is more apt to
internalize its activities to economize on transaction costs.. Mergers and
internal development may involved governance costs so large that the whole
may not be greater than the sum of its parts.. according to mansfield (1991),
the percentage of new products and processes based on academic research was
highest in the drug industry and lowest in the oil industry.. Some of the
motivational factors in forming strategic alliances include: Information
exchange * Complexity resources * Economies of scale * International
expansion
				     #@#
   Leadership and the Psychology of Turnarounds.  Kanter, Rosabeth Moss 1
Harvard Business Review; Jun2003, Vol. 81 Issue 6, p58-67, 10p, 5 color Each
of these executives restored their people's confidence in themselves and in
one another -- a necessary antecedent to restoring investor or public
confidence. They inspired and empowered their organizations to take new
actions that could renew profitability.. time and energy were spent on
self-protection instead of joint problem solving.. Executives found reasons
not to attend meetings because those few meetings that remained had
degenerated into diatribes by the CEO, followed by uninformative reports. No
one wanted to raise questions because that tended to produce angry exchanges,
as department heads accused other department heads of putting obstacles in
their paths. The game became one of blaming others before they could blame
you.. the only way a CEO can reverse a corporate decline is to change the
momentum and empower people anew, replacing secrecy and denial with dialogue,
blame and scorn with respect, avoidance and turf protection with
collaboration, and passivity and helplessness with initiative.. Executive
committee meetings were increasingly devoted to themes that cut across
divisions, and members discovered areas in which they could combine forces to
tackle new business opportunities..  Rather than continually reorganize,
which is highly disruptive, especially for a troubled company, turnaround
leaders simply augment the organization chart with flexible, often temporary,
groups that open relationships in multiple directions..  The push on the part
of the executive committee to support new ideas and to collaborate on
cross-division projects created some striking innovations.. A new team was
established to take action and to continue the process of empowerment.
				     #@#
   Mergers That Stick.  Kanter, Rosabeth Moss 1 rkanter@hbs.edu Harvard
Business Review; Oct2009, Vol. 87 Issue 10, p121-125, 5p Studies by Boston
Consulting Group analysts have shown that in a weak economy acquiring
companies add only marginal value by cutting costs. As the economy
strengthens, successful mergers will be those that have invested in
profitable growth -- which requires integrating and motivating employees who
will work quickly and smoothly, minimize disruptions, increase market share,
innovate, and adapt to emergent trends..  These acquirers overcame the usual
barriers to successful mergers: employee shock, protests, and anxiety, all of
which can fuel supplier unrest, government disapproval, and customer
defections..  Building networks for new employees was a major emphasis..
they do not act like conquerors sending out occupying armies. Instead, they
act like welcoming hosts and eager learners. Their leaders are attuned to
emotions and culture, knowing the importance of symbols and signals in
communicating with employees about change. They establish transparent
processes to reduce anxieties about changes that have not yet been made. They
invest in the future, adding more than they take away and letting people
share in the fruits of success. They try to be fixers rather than destroyers,
which converts skeptics into fans. They value and facilitate relationships
				     #@#
   Integration Managers: Special Leaders for Special Times.  Ashkenas, Ronald
N.^1 Francis, Suzanne C.^1 Harvard Business Review; Nov/Dec2000, Vol. 78
Issue 6, p108-116, CONSIDER THE IRONY: LESS THAN HALF OF all mergers and
acquisitions ever reach their promised strategic and financial goals, yet
companies spent more on M&A last year than ever before.. The due-diligence
team develops a deep knowledge of the acquired company, but that team usually
disbands after the deal closes. A management team will eventually run the
merged organization, but often no one is responsible for the integration
process itself-for charting how the two companies will combine their
operations, for seeing to it that the integration meets its deadlines and
performance targets, for educating the new people about the parent company,
and vice versa..  We found that integration managers help the process in four
principal ways: they speed it up, create a structure for it, forge social
connections between the two organizations, and help engineer short-term
successes that produce business results..  Deep Knowledge of the Acquiring
Company..  No Need for Credit.. Not everyone can flip between being tough and
being supportive. And not everyone can do that with people at different
levels up and down an organization.. That's another reason why most
integration managers are veterans of their organizations.. a major generator
of this kind of flexibility is deep self-confidence combined with relatively
few ego requirements. The integration manager cannot be concerned with
getting credit- or even recognition- for an effective integration..  Comfort
with Chaos.. takes exquisite project management and organizational
skills. The teams need clear assignments; common formats for their outputs;
disciplined timelines; and coordinated meeting schedules, meeting formats,
communication mechanisms, and review processes..  A Responsible
Independence..  Emotional and Cultural Intelligence
				     #@#
   Your Best M&A Strategy. Rovit, Lemire Harvard Business Review; Mar2003,
Vol. 81 Issue 3, p16-17, Smart deal makers methodically acquire through good
times and bad.. Naturally, excess return varied a lot, and the outcome of
acquisitions was only one factor in the mix. But the performance of the less
frequent buyers and the nonbuyers varied more than the performance of the
frequent buyers, and the frequent buyers were more likely to achieve returns
above their cost of equity.. constant buyers were by far the most successful,
outperforming the growth buyers by a factor of 2.3 and the doldrums buyers by
a factor of 1.8. The 27 recession buyers came in second, outperforming the
growth buyers by a factor of 1.4..  They started with small deals,
institutionalized their processes, and created feedback systems to make sure
that they learned from their mistakes. They continually reviewed targets and
kept ready lists of companies they'd buy if the price was right..  All of the
successful acquirers in our study share Cintas's comfort with killing deals,
and many insist on high-level approvals. Some of the companies also adjust
incentives to ward off ill considered acquisitions. They tie rewards to the
long-term success of the acquired business rather than to the completion of
the deal.
				     #@#
  Desperately seeking synergy Goold, Campbell, Source: Harvard Business
Review; Sep/Oct98, Vol. 76 Issue 5, p131-143, synergy bias, which leads
executives to overestimate the benefits and underestimate the costs of
synergy. Then comes the parenting bias, a belief that synergy will be
captured only by cajoling or compelling business units to cooperate. The
parenting bias is usually accompanied by the skills bias-the assumption that
whatever know-how is required to achieve synergy will be available within the
organization. Finally, executives fall victim to the upside bias, which
causes them to concentrate so hard on the potential benefits of synergy that
they overlook the possible downside risks.. distracts managers' attention
from the nuts and bolts of their businesses, and it crowds out other
initiatives that might generate real benefits.. Executives should strive to
be as precise as possible about both the type of synergy being sought and its
ultimate payoff for the company.. She saw that the broad goal-leveraging
international brands-could be broken down into three separate components:
making the brand recognizable across borders, reducing duplicated effort, and
increasing the flow of marketing know-how.. Perception opportunities arise
when businesses are unaware of the potential benefits of synergy. The
oversight may be caused by a lack of interest, a lack of information, or a
lack of personal contacts. The parent can help fill the perception gap by,
for example, disseminating important information or by introducing aggressive
performance targets that encourage units to look to other units for better
ways to operate.. Evaluation opportunities arise when the businesses fail to
assess correctly the costs and benefits of a potential synergy. The
businesses' judgments may be biased by previous experiences with similar
initiatives, distorted by shortcomings in the processes or methods they use
to assess cost-benefit trade-offs, or skewed by their own strategic
priorities.. Motivation opportunities, which derive from a simple lack of
enthusiasm by one or more units, can stop collaboration dead in its
tracks.. Implementation opportunities open up when unit managers understand
and commit to a synergy program but, through a lack of skills, people, or
other resources, can't make it happen.. A final discipline is in order:
looking carefully for any collateral damage that may occur from the synergy
program.. In other cases, cooperation can distort the way unit managers think
about their business, leading to wrongheaded decisions.. All too often,
executives set overly broad goals for their synergy programs - goals that
make good slogans but provide little guidance to managers in the field. By
disaggregating a broad goal into more precisely defined objectives, managers
will be better able to evaluate costs and benefits and, when appropriate,
create concrete implementation plans. Here we see how one broad and
ill-defined goal - "leveraging international brands" - was systematically
broken down into meaningful components that could be addressed individually.
				     #@#
   Getting Offshoring Right. Aron raviaron@wharton.upenn.edu Singh
singhj@wharton.upenn.edu Harvard Business Review; Dec2005, Vol. 83 Issue 12,
p135-143 The higher a process's rank in the hierarchy, the more crucial it is
to the company's strategy, and the less the organization should think about
moving it offshore or outsourcing it.. Until service providers move up the
learning curve, they will make more errors and execute tasks more slowly than
companies' employees do. That often results in lower customer
satisfaction.. nature of information flows doesn't affect the quality of
execution. If companies codify work and develop metrics to evaluate quality,
they can contain operational risk even if work constantly moves between
companies' employees and vendors' agents.. Some structural risk arises
because vendors can stop investing in training or employ people who aren't as
qualified as the agents they presented during negotiations..  When companies
supervise providers' work, structural risk falls. Thanks to advances in
information technology, businesses can track providers' efforts in real
time.. when firms outsource processes that require the transfer of a large
amount of tacit knowledge, they have to invest time and effort in training
providers' employees. Second, some processes take a long time to stabilize
when companies offshore them.. In both cases, the cost of switching from
existing providers is very high. That accentuates the risk that over time,
vendors will dictate terms to buyers..  When a firm negotiates a contract
with a provider, it should specify a period after the contract's expiry
during which the provider must continue to offer the service at a certain
price. As a rule of thumb, the buffer should specify 150% of the time that it
took the provider to deliver output that matched the company's quality
standards. If it took 12 months for the vendor to come up to speed, the
vendor must continue to provide the service for 18 months after the contract
has expired. Lehman Brothers, for instance, has insisted on adding this
clause to all its contracts with providers.  Although it may be difficult,
companies should also split business between two providers.. Finally,
companies face the risk that rivals may steal their intellectual property and
proprietary processes if they transfer processes offshore, especially to
emerging markets.. We call this structure the extended organization. In this
hybrid organizational form, companies specify the quality of services they
want and work closely alongside providers to get that quality. They manage
providers carefully and monitor the agents' work to ensure that things are
done properly. Technology enables buyers and sellers of services to exchange
information in real time and to embed themselves deeply in each other's
companies. Firms can thus move away from command-and-control structures to
sense-and-respond forms of collaboration
				     #@#
   The PASSIVE-AGGRESSIVE Organization. Neilson neilson_gary@bah.com
Pasternack bpasternack@specialolympics.org Van Nuys van_nuys_karen@bah.com
Harvard Business Review; Oct2005, Vol. 83 Issue 10, p82-92 In
passive-aggressive organizations, people pay those directives lip service,
putting in only enough effort to appear compliant. Employees feel free to do
as they see fit because there are hardly ever unpleasant consequences, and
the directives themselves are often misguided and thus seem worthy of
defiance. Making matters worse, senior management has left unclear where
accountability actually lies, in effect absolving managers of final
responsibility for anything they do. Those with initiative must wait
interminably for a go-ahead, and their actions when finally taken are
accompanied by a chorus of second-guessing, a poor but understandable
substitute for the satisfaction of accomplishing the task at hand.. In such
organizations, people with authority lack the information to exercise it
wisely or the incentives to serve the company's strategy and interests or the
personnel that will carry out their directives. Conversely, people with the
incentives and information necessary to make good decisions lack the
authority to execute them or oversee their execution by others.. Before
bursting into full flower, passive-aggressive organizations are dotted with
frustrated world-beaters who cannot understand why their most promising
projects can't gain traction. After a couple of years, such individuals
either quit or become demoralized into ineffectuality by the thanklessness
and futility of effort.. To some venerable observers, the employees of such
companies bear a passing resemblance to the "organization man" of 1950s
sociology and literary fiction.. More specifically, we've seen organizations
descend into the passive-aggressive state through one or another of three
classic failings, as the following examples demonstrate: Unclear Scope of
Authority..  Misleading Goals.. Agreement Without Cooperation.. Ineffective
Motivators.. Unclear Decision Rights.. The Wrong Information..  Misleading
Structure.. The first order of business is the greatest challenge of all:
getting a passive-aggressive organization's attention.. In addition to these
catalysts, elements of successful programs to fix passive-aggressive
organizations include the following: Bring in new blood.. Leave no building
block unturned.. Make decisions, and make them stick.. Spread the word -- and
the data.. Match motivators to contribution
				     #@#
   BREAK FREE FROM THE PRODUCT LIFE CYCLE. Moon ymoon@hbs.edu Harvard Business
Review; May2005, Vol. 83 Issue 5, p86-94 There's nothing inevitable about the
product life cycle. Marketers are disrupting it by redefining the boundaries
between product types. In the process, they're rejuvenating categories and
creating whole new markets..  It's hard to win such a competition. As
marketers instinctively embrace the old life cycle paradigm, they needlessly
consign their products to following the curve into maturity and decline.. By
positioning -- or, often, repositioning -- their products in unexpected ways,
companies can change how customers mentally categorize them. As a result,
companies can rescue products foundering in the maturity phase of their life
cycles and return them to the growth phase. And they can catapult new
products forward into the growth phase, leapfrogging obstacles that could
slow consumers' acceptance. In this article, I describe three positioning
strategies that marketers use to force consumers' mental shift. Reverse
positioning strips away "sacred" product attributes while adding new ones;
breakaway positioning associates the product with a radically different
category; and stealth positioning acclimates leery consumers to a new
offering by cloaking the product's true nature.. In his disruptive innovation
model, Clayton Christensen describes how new, simple technologies can upend a
market. The proliferation of features and attributes that occurs as companies
ride the product life cycle can create the kind of "product overshoot" that
leaves them vulnerable to a disruptive competitor with a simpler
technology. In an analogous way, the strategies I describe can exploit the
vulnerability of established categories not to new technologies but, rather,
to new positioning.. make the heretical decision to step off the augmentation
treadmill, shedding product attributes the rest of the industry considers
sacred. Once a product is returned to its baseline state, reverse positioners
supplement the stripped-down product with one or more carefully selected
attributes that would typically be found only in a highly augmented
product.. With breakaway positioning, a product escapes its category by
deliberately associating with a different one. Marketers leverage the new
category's conventions to change both how products are consumed and with whom
they compete. Products communicate their category membership in many ways --
through their design, distribution channels, promotions, and pricing. Each of
these elements of the marketing mix cue consumers to mentally categorize an
offering in a certain way.. stealth positioning is a legitimate way to
diffuse prejudice about a product or company, encourage acceptance, and
deliver value to customers
				 #@#
   Hw Biz Stg Use Guerilla Warfare Tactics Ian MacMillan JBizStg Fall 1980 
   p63 establish and consolidate guerilla bases in militarily secure areas
where surplus resources.. engaged the enemy under conditions that suited him
rather than them.. decide that the situation suited him rather than the
enemy.. unless at least three of these conditions were present, he would
rather retreat than engage the enemy
   p64 wars of attrition leave the "victors" exhausted, with resources
depleted, and sometimes painfully vulnerable.. must be competitvely secure
either because competitors cannot or will not enter.. patent.. cost of
entry.. large long-term resource or managerial commitments, are often
inclined not to enter particular segments aggrssively because they are
otherwise engaged.. provide surplus resources which can be used to survive
times of adversity or to engage in competition elsewhere.. Find allies who
are willing and able to commit resources to the endeavor.. own resources can
then be saved for the really critical efforts.. Focusing effort on a narrow,
well defined segment or niche that is weakly defended by competitors enhances
the probability of success.. Centralize ideology but decentralize decision
making
   p65 Successful entry to a product/market segment or niche involves the
development of a "cause," a position that requires support of the customer,
supplier, and distributor, and which the competitor finds hard to
refute. Similarly, successful exit from a product/market segment seeks to
ensure that our temporary departure is viewed with regret by the customers,
suppliers, and distributors.. Seek decisive results.. longer the engagement
took place, the more likely that opponents would have time to
deploy.. attrition.. BUild superior commitment.. Low morale feeds
defeatism.. Rather build morale via small successes first.. Seek areas where
opponents have overextended resources.. capturing opponent's
resources.. personnel.. channels.. Retain the initiative.. Build superior
intelligence systems
				 #@#
   Corp Ideology & Stg Delgn Ian MacMillan JBizStg Wtr 83 3 
   p71 Management is able to delegate decison-making downwards, secure that
subordinates will make decisions that are "right" and "appropriate" to the
corporate ideology, and only in cases when there are conflicts concerning
ideological commitments, or when intense pressures develop to reshape
ideological commitments, do subordibnates need to have the decisions made by
higher level of management
   p74 Every organization is rich with such stories, which have the potential
of being used as powerful reinforcers for the corporate ideology.. Particular
attention, and a great deqal of time, of very senior management is devoted to
the screening and selection of initiates.. Once the selection has taken place
it is equally important for these inductees to receive early exposure to the
"ideology at work" preferably with a mentor, who can explain the trade-offs
being made as ideology is articulated on the job
   p75 Reinforcement by Managerial behavior.. Reinforcement by Reward Systems
				 #@#
   Hickson Hinings Lee Schneck & Pennings Strat Contingencies Theory
of Intraorg Power Adm Sci Q 16#2 1971
   p217 when organizations are conceived as interdepartmental systems, the
division of labor becomes the ultimate source of intraorganizational power,
and power is explained by variables thatare elements of each subunit's task,
its functioning, and its links with the activities of other subunits
   p219 table 1 VARIABLES AND OPERATIONALIZABLE SUBVARIABLES Power (weight,
domain, scope): Positional power (authority), Participation power, perceived
power, preferred power; Uncertainty: Variability of organizational inputs,
Feedback on subunit performance, speed, Specificity, Structuring of subbunit
activites; Coping with uncertaint, classified as: By prevention (forestalling
uncertainty), By information (forecasting), By absorption (action after the
event); Sustainability: availability of alternatives, Replaceability of
personnel; Centrality: Pervasiveness of worflows, Immediacy of workflows
				 #@#
   Org Design Galbraith 1977 AW 0-201-02558-2
   p36 Therefore the greater the task uncertainty, the greater the amount of
information that must be processed among decision makers during task
execution in order to achieve a greater level of performance
   p45 The shift to craft or professional workers represents a shift from
control based on supervision and surveillance to control based on selection
of responsible workers. Workers who have the appropriate skills and attitudes
are selected
   p97 [Dimensions of the Vertical Information System] Decision frequency or
timing.. scope of the data base.. degree of formalization.. capacity of the
decision mechanism
   pp173-4 four organizing modes.. Creation of slack resources..  Creation of
self-contained units.. Investment in vertical information systems.. expanding
the capapcity of hierarchical channels of communication, creating new ones,
and expanding the capapcity of decision mechanisms.. Creation of lateral
relations.. 1. Direct contact between managers. 2. Creation of liaison
role. 3. Creation of task forces. 4. Use of teams. 5. Creation of integrating
role. 6.  CHange to managerial linking role. 7. Establishment of the matrix
form
   p176 Fig 12.2 The Range of alternatives
   ^      \                          Product influence in decision making
   |                    \
Relative                             \ 
Influence                                             \
       Functional influence in decision making
       Functional organization  Matrix organization  Product organization
   Functional authority structure  Dual authority  Product authority structure
                      Product task forces  Functional task forces
                             Product teams Functional teams
                           Prduct managers Functional managers
                       Product departments Functional departments
         Functional reporting  Dual information and  Product reporting 
                  system          reporting system       system
   p297 unintended effects which can result when rule compliance is applied
in dynamic situations requiring spontaneous behaviors. The emphasis upon
reliability produces a rigidity of behavior. Employees fail to develop
programs of action which are tailored to the unique features of each
situation
    p305 when outcomes are measured and rewarded, those outcomes occur with a
high probability but they occur at the expense of unmeasured outcomes
   pp30-9-10 Implementation of Pay Systems.. Conflicting uses of pay..
Subjectivity of performance measures.. Insufficient variance in individual
rewards.. supervisors are reluctant to give highly variable rewards. The
consequences of this practice is that the individual recognizes that pay is
not directly tied to performance. Attempts to force distributions on
uncertain tasks can lead to serious morale problems, however.. Pay secrecy
policy.. overestimation of the raises and salaries of others.. Infrequent
distribution of rewards..  accounting convenience rather than motivational
consequences
   p359 Fig 21.1 Summary of reward systems and [coop] behaviors
Behavior        Join and  Reliable    Effort   Spontaneous  Cooperative
Reward\          remain     role       above     behavior     behavior
System  \                 behavior    minimum
Rule compliance     \+       +++          \-         \-           \-
System reward       ++         
Group reward        ++        +           ++         ++\-        ++\-
Individual rewards +++        +           +++         +\-         +\-
Leadership behavior +         ++           ++         ++          ++
Group acceptance    +         +\-          +\-        +\-         +\-     
Task involvement    \-       +++\--        +++       +++\--      +++\--
Goal identification  +++      +++          +++        +++         +++
				 #@#
   Limits of the Learning Curve Abernathy & Wayne HBR 9/74
   p110 The learning curve (also called the progress function and start-up
function) shows that manufacturing costs fall as volume rises.. The
experience curve traces declines in the total costs of a product line over
extended periods of time as volume grows
   p114 rate of product improvement halted the steady reduction of
costs. Nevertheless, to maintain market growth FOrd further cut the list
price along the experience-curve formula
   p115 Process innovations rise to a peak after eriods of product
innovation, as the manufacturer rationalizes the process and reduces
costs.. not only that the nature of innovation changes, but also that the
intensity of innovative activity diminishes.. changes introduced to trim
costs altered the innovative activity.. Not surprisingly, technology
transfers, increased in frequency through the period under consideration
   p118 In determining how the learning-curve strategy should be pursued,
management must realize that the risk of misjudging the limit rises dirctly
with the successful continuation of the strategy. There are two reasons for
this seemingly paradoxical development: first, the market becomes
increasingly vulnerable to performance competiton and second, attempts to
continue reducing costs diminish the organization'a ability to respond to
this kind of competition
	 			 #@#
   Rothschild How Ensure Continued Growth Strat Planning J Biz Stg 1#1 1980
   p12 critical success conditions are: TOp management commitment to and
practice of strategic planning precepts. The establishment of well-defined
SBUs within an organization, based on sound segmentation concepts. The
training and development of all levels of middle and top management in the
use of strategic planning techniques and concepts. The development of
strategic control systems to determine whether SBU strategies are being
implemented as proposed and approved
   p18 Growth will happen only if strategic planning is: APplied properly
with explicit CEO commitment and involvement; Used at the appropriate
organizational level by true SBUs; and Accompanied by the proper reviews and
controls.
				 #@#
   Competitive Marketing O'Shaughnessy 1984 Allen Unwin 0-04-658243-6
   p74 Figure 4.5 [Buyer decision model]
                    Buyer's goals          Buyer's belief
Indecision<-Unstable      Stable                |
         Goals agreed->    V <------------------|
              standing<- Wants -> occurent
      Non-buying <--------|----------------------------------->   Buying
Latent want      Passive wants     Exclusionary reasons  Extrinsic   Intrinsic
Creation  Want   Change     |     Incapacity  | Promises preference  preference
of       remains in    Forebearance      Authority    Evaluate/        | Habit|
awareness latent beliefs,                              decide        Choose   |
of              priorities        Generated-functions  +  Use-functions  Picking
product's       or terms of Integrative    |    Adaptive Legalistic Technical
potential       purchase       |          Economic     |           performance
|                              +              |Imitative|||Reputation factors
towards            Conventions | Ego/Status/  |    Advice|Sample
Buying                    Bandwagon/ integrity|      Seek Comparison
action                    fashion             |guarantees shopping
                    ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
                                    Choice of [roduct/brand
                                     Intention to buy
                           Buying action        Buying action...belief
                      and choice frustrated

   p113 Figure 6.1 Competitive Strategies
                                                 Move        Mix adjustments
                                                 before 
                                                 competition Deterrent action
                                                 Move        Imitate
                    Market share protection      with      
                    (hold/defend)                competition Compensate
                                                 Move        Merger/acquisition
                                                 away from
Competitive                                      competition Collusion
strategies                                                   New areas
                                                 Move        New segments
                                                 before      Additional channels
                                                 competition Penetration pricing
                        Market share advancement Move        Capitalize
                                 (growth)        with
                                                 competition Leapfrog
                                                 Move        New offerings
                                                 away from   Reciprocal
                                                 competition  agreement

   p151 Table 8.2 Typical Suggested Strategies Relating to Mix
Variables in the Product Life Cycle Stage
Stage in    Product          Pricing   Promotion            Distribution
life cycle  Iron out            High   Create awareness     Selective 
Introduction   product                  of products' potential  distribution
               deficiencies            Stimulate primary demand  
Growth       Focus on product          Selective advertising Extend to 
              quality                   of brand             coverage sought
             Variations of 
              product introduced
Maturity     Product adjustments     Image build and maintain  Seek close
              for further brand      Sales promotions       dealer relationships
              differentiation        Facilitate changes in product, etc
Decline      Simplify product line     Primary demand          Selected
             Seek new product uses      may again be            dealers 
   Changes to revitalize product Low     cultivated              cultivated

   p247 Figure 12.2 The Process of Industrial Purchasing
                        Company objectives
Efficiency                 Problems            material/component shortages
Saleability    }Opportunities  + Difficulties{ obsolete/old equipment
Asset protection               |               new projects
Flexibility                    |               poor current suppliers
                               |          Buying
                               |       particiapnts      image projected
                               |Specific       |Standing interpersonal relations
                               |responsibilites|wants   {integrity sought
                               |               |         innovation risk avoidance
                               |            Perceived    investment (personal) payoff
                            Present         supplier/
            straight rebuy  need            product need
                                       Decision      Disposition
                                       to make       to buy
                                       and not buy     |
+++++++++++++++++++++++++++++++++++++++++++++++++++++++|+++++++++++++++++++
Pick     Re-order  Purchase Purchase   Purchase  {technical     Purchase
supplier from      initiating advising deciding  {economic liaison | authorizing
from     current   Initiate   Advise            / adaptive    |monitoring|
approved suppliers inquiries   Determine needs { integrative  |    |     |
list               ............/    V           \ legalistic  |    |     |
                   |   Agreement Conflict                     |    |     |
                   |    |        Analytical Bargaining Jural Liaise Settle
                   |    |        mode       mode              |    |     |
                   |    V<------ Conflict resolved            |    |     |
                   |  Core      new offering                  |    |     |
                   |  offering  modified offering             |    |     |
                   |  specified same offering                 |    |     |
                   Search  directories    --Specify           |    |     |
                   for     catalogues       suppliers         |    |     |
             ......sources advertisements         |           |    |     |
             |    Inadequate  sales rep.          |           |    |     |
             |     Develop  Adequate              |           |    |     |
             |     sources   request              |           |    |     |
             |               details/quotations   |           |    |     |
             |               proposals /adaptive  |           |    |     |
             +- - - - - - - -+Evaluate{integrative|           |    |     |
             |               |         \legalistic|           |    |     |
             |               |          {technical|           |    |     |
             |               |          {economic |           |    |     |
             |     Agreement  Conflict            |           |    |     |
             |     |     Analytical Bargaining Jural     Liaise     Settle
             |     |          mode    mode      mode               |     |
             |     |          Conflict resolved   |                |     |
             |     +------------------------------+                |     |
             +-------------Supplier selected                       |     |
             |             Authorization sought- - - - - - -Approved Authorized
             + - - - Contracts signed/rder issued - - - - - - - - - - - -+
                                                             +-Supplier
                                                               performance
                                                               evaluation
                                [loop present need]..Unsatisfactory Satisfactory
                                                        performance performance 				 #@#
   Ray Ad & Commnxn Management 1982 PH 0-13-015230-7
   p54 Figure 2-5 The full decision sequence.. [J Mktg 1/73 p31]
                          SITUATION ANALYSIS
             Company Strengths, Weakness, Objectives/Product
             Characteristics & Price/Buyer Segments, Characterisitcs, and
             Behavior Competition/Trade/Past Experience with
             Communiation Elements
                                    V
                           MARKETING OJECTIVES
           Overall Objectives of the Total Program, Sales, Votes,
           Various Social Acts - by Segment, Time and Area
                                V ^
                SIZE OF TOTAL COMMUNCATION BUDGET
                                V ^
+-------------->       TENTATIVE BUDGET MIX
|    Proportion of Budget Tentatively Assigned to Communication Elements,
|  (eg Selling, Advertising, Publicity, Public Relations, Reseller Support-
|   Merchandising, Product Sampling, Packaging Changes)         V
|      V                    Advertising:     <----+        Tentative Budgets   
|   Selling:               Tentative Budget       |        for Other 
|   Tentative Buget            V ^                |        Mix Elements
|      V ^        +---> Communication Goals       |           V ^
|   Decisions     |             V ^               |        Decisions
|   Similar to    +---> Message Strategy:         |        Similar to
|   Advertising   |     Positioning & Format      |        Advertising
|                 |            V ^               Ad Budget
|      | |        +---> Message Distribution       Size       | |
|                 |           Plan               Revision 
|      V ^        |           V ^                  ^          V ^
|                 |     Budget Allocation ---------+       
|      | |        |            V ^                            | |
|                 |          Specific 
|                 |     Implementation
|                 |            V ^
+-------------  CONTROL EVALUATION: INFORMATION SYSTEM
    Continuous Measurement of Communications and Sales Effects for All
    Mix Elements, Separately and in TOtal, by Time, Area and Segment    
   p131 Define groups that differ in past or future propensity to
consume th eproduct.. Determine the different preference-consumption
groups.. relevant to the product class, the attributes sought, and the
relativ eimportance of the attributes.. oerceptions of the individual
brands or company offerings.. Adjust the prefernce groups.. Analyze
the resulting segments in terms of theitypical purchase and use
behavior and resultant comunication needs
   p161 Situational Factor               Relationship with
Product quality/uniqueness/ID          M/S  A/M  A/S [M=Mktg A=Ads S=Sales]
  with company                          0    +    +
Frequency of pruchase                   0    +    +   [Lilien, Mgt Sci,
Stage in life cycle                     -    0    -    2/79, 191-204]
Market share                            -    0    -
Concentration of sales                  -    +    0
Grwth in customer base                  +    +    +

  p198                   BEFORE COMMUNICATION
                         & TENTATIVE BUDGET MIX
   KEY DECISIONS:         KEY DECISIONS:           KEY DECISIONS:
     SELLING                ADVERTISING              GENERAL ALL
                                                    MIX ELELMNTS
Communication Goals:    Communication Goals:     Communication Goals:
     Selling                Advertising          Other Mix Elements

Message Appeals Used       Ad Appeals         Message Appeals Positioning
by Salespeople             and Position         Other Mix Elements
Sales Messgae Format:     Advertising Format     Message Format
Type of Salespeople       
Message DIstribution        Advertising          Message Distribution
Number of Salespeople,      Media Planning           Plan
Territories, Call Patterns
                  BUDGET - IMPLEMENTATION - CONTROL
				 #@#
   Customer Oriented Apr Id Product Mkts Day Shocker J Mktg 43#4 1979
   p11 Analytical methods for customer-oriented product-market.. Purchase
or Usage Behavior: A1 Cross-elasticity of demand, A2 Similarieties of
Behavior, A3 Brand switching. Customer Judgements: B1 Decision
sequence analysis, B2 Perceptual mapping, B3 Technology substituition
analysis, B4 Customer judgements of
substitutability.. Cross-elasticity of demand.. is a static measure,
and breaks down in the face of a market characterized by changing
product composition" (Cocks and Virts 1975 [Eli Lilly internal])
   p18 boundaries are seldom clear-cut - ultimately, all boundaries are
arbitrary
				 #@#
   Abell Strategic Windows J Mktg 42#3 1978
   p25 To what extent do the changes call for skills and resources completely
outside the traditional competence of the firm?.. To what extent can changes
be anticipated?.. How rapid are te changes which are taking place? Is there
enough time to adjust without forfeiting a major share of the market which
later may be difficult to regain?.. How long will realignmnet of the
functional activities of the firm take?.. What existing commitments - eg
technical skills, distribution channels, manufacturing approaches, etc -
constrain adaption?.. Can the new resources and new approaches be developed
internally or must they be acquired?.. Will changes completely obsolete
existing ways of doing business or will there be a chance for coexistence?
				 #@#
   Hambrick&MacMillan Prod Pflo & Man's Best Friend Cal Mgt Rvu 25#1 Fall 1982 
   p84 Cash cows "generate large amounts of cash, in excess of the
reinvestment required to maintain share. This excess need not, and should
not, be reinvested in those products." Dogs "may show an accounting profit,
but the profit must be reinvested to maintain share, leaving no cash
throwoff. The product is essentially worthless, except in liquidation."
Wildcats (or Problem Children) "almost always require far more cash than they
can generate. If cash is not supplied, they fall behind and die." Stars
"nearly always show reported profit, but may or may not generate all of their
own cash" [Henderson pp164-6 Abt 1979]
   p94 Dogs perform better that BCG has led us to believe. In fact, some dogs
perform very well. Cartain strategic factors are associated with high
profitability among Dogs. The notable factors are low apital intensity,
attention to efficiency, a narrow focus, high product quality, and low to
moderate prices. Top management of a company can effect whether Dogs achieve
their potential as long-term, reliable cash generators. Among the ways:
assign first-rate managers to head DOgs, avoid incessant milking, and use
substantive rewards and symbolic actions to maintain morale in Dogs
				 #@#
   HBR 3/93 71#2 93204 Hamel & Prahalad Strategy as Stretch and Leverage
(Competitiveness is born in the gap between a compay's resources and its
managers' goals)
   p79 If convergence prevents the diversion of resources over time, focus
prevents the dilution if resources at any given time
   p80 Being a "learning organization" is not enough; a company must also be
capable of learning more efficiently than its competitors.. "Borrowing" the
resources of other companies is another way yo accumulate and leverage
resources
  p83 dissguise their true intentions. They reconnoiter enemy territory
before advancing. They don't attack heavily fortified positions
				     #@#
   Product Portfolio Planning HBS 9-581-107 Yip 8/82 p8 [BCG Growth:Share]
(1) Both margins and cash generation tend to increase with increasing
relative market share. Experience curve and scale effects link high margins
with high relative market share. (2) Product sales growth requires cash input
to finance added capacity, working capital, etc. Thus cash input is needed to
maintain share of a growht market. (3) An increase in market share requires
cash input to finance increased edvertising expenditutre, additional plant
and cost-reducing equipment. Growth in each market will untimately slow as th
eproduct approaches maturity. Cash generated as growth slows must be
reinvested in other, still growing products
				     #@#
   Market share - key to profitability [PIMS], HBS 1/75 75103 Buzzell Gale &
Sultan, As market share rises, turnover on investment rises only somewhat,
but profit margin on sales increases sharply.. The biggest single difference
in costs, as related to market share, is in purchases-to-sales ratio.. As
market share increases, there is some tendency for marketing costs, as a
percentage of sales, to decline.. Market leaders develop unique strategies
and have higher prices for their higher-quality products than do
smaller-share businesses.. Market share is more important for infrequently
purchased products than for infrequently purchased ones.. Market share is
more important to businesses when buyers are "fragmented" than concentrated
				     #@#
   Successful share-building strategies, HBR 1/81 81101 Buzzell & Wiersema [PIMS]
difference of 10 points in market share is accompanied, on avergae, by an
increment of about 5 percentage points in ROI.. the strategict factors
generally involved in market share gains include all of the following:
Increase in new product activity. Increse in relative product
quality. Increase in expenditures for sales force, advertising, and sales
promotion, relative tot he growth rate of the served market
				     #@#
   Limits of the learning curve HBR74501 9/74 Aberarnathy & Wayne Product:
Standardization increases, models change less frequently, and the product
line offers less diversity. As the implementation of the strategy continues,
the total contribution improves with acceptance of lower margins accompanying
larger volume. Capital equipment and process technology: Vertical integration
expands and specialization in process equipmetn, machine tools, and
facilities increases. The rate of capital investments rises while the
flexibility of these investments declines. Task characteristics and process
structure: The throughput time improves and the division of labor is extended
as the production process is rationalized and oriented more toward a
line-flow operation. The amount of direct supervision decreases as the labor
input falls. Scale: THe process is segmented to take advantage of economies
of scale. Facilities offering economies of scale, such as engine plants, are
centralized as volume rises, while others, like assembly plants, are
dispersed to trim transportation costs. Spreading the higher overhead over
larger volume gains savings. Material inputs: Through either vertical
integration or capture of sources of supply, material inputs come under
control. Costs are reduced by forcing suppliers to develop materials that
meet process needs and by directly reducing processing costs. Labor: The
heightening rationalization of the process leads to greater specialization in
labor skills and may ultimately lessen workers' pride in their jobs and
concern for product quality. Process changes alter the skills requirments
from the flaxibility of the craftsman to the dexterity of the operative
				     #@#
   Impact of strategic planning on profit performance HBR74210 3/75
Schoeffler, Buzzell & Heany [PIMS] p141 The best of all possible worlds is to
have both high market share and superior quality: business in this category
averaged 28.3% return on investment. But even when quality was relatively
inferior, average ROI for high-share businesses was a respectable 19.5%. On
the other hand, superior-quality producers with weak market positions earned
an average 17.4% on investment, which suggests that quality can partly offset
low share
				     #@#
   Industrial buyer behavior HBS 9-582-117 4/89 stage in the procurement
cycle, either early stages of formulating requirments of the later stages of
meeting ongoing needs.. interest and involvement of other functional
areas.. supplier/customer relationships, say, technical versus
management.. performance measures imposed on purchasing
				 #@#
   Arthur Rock [Fairchild, Apple] HBR 11/87 Strategy vs Tactics from a
venture capitalist
   p63 Frankly, how anyone can figure out what sales and earnings and returns
are going to be five years from now is beyond me. The first place I look is
the resumes.. especially interest in what kind of financial people they
intend to recruit. So many entrepreneurial companies make mistakes in the
accounting end of the business. Many start shipping products before they
confirm orders are good, or that customers will take the product, or that
accounts are collectible
   p65 After being honest with yourself, the nest most important
characteristic for the entrepreneur is to know whom to listen to and when to
listen, and then which questions to ask..  thin line between refusing to
accept criticism and sticking to your guns
   p66 aware of their own limitations.. "entrepreneurial personality." I
suppose there are certain common qualities - a high energy level, strong
commitment.. just overpowering.. Good entrepreneurs are tough-minded with
themselves and with their teams. They can make hard decisions
				 #@#
   Top Ten Lies of Entrepreneurs HBR 1/01 Guy Kawasaki Garage.com
   p22 Nobody believes the financial forecasts - investors simply want to see
that the entrepreneur understands the industry, the logic involved in putting
together a reasonable financial model, and how companies grow.. Instead of
trying to prove that the market will be big, enable investors to fantasize
about its size. Give them the facts and the context
   p23 Few new economy companies ever definitievley say no to any alliance,
partnership, or offer. They're all afraid of missing the Next Big
Thing. Instead, everyone says, "You have an interesting idea. We'll get back
to you about it," and then they don't.. one of the litmus tests of
fundability and entrepreneurial skill is the ability to attract talent
without money.. If an idea is great, ten companies are working on
it.. Investors won't sign your nondisclosure agreement because they usually
see several similar plans: what if they sign one company's nondisclosure
agreement and fund another? In reality, the ability to implement an idea, not
the ability to keep it a secret, is the key to a sucessful start-up.. Show a
healthy respect for the incumbents while demonstrating a compelling and
believable way to compete with them.. investors believe that what makes a
company defensible is the ability to out-implement, not
out-litigate.. Shooting for the top-dog position is much more attractive to
an investor than claiming it will take only a miniscule market share to
succeed
				 #@#
   George Jenkins [Patricof] HBR 11/89 p117 we are trying to invest in
increments of no less than $5 million and have become much more selective
regading the startups we will fund: startups are huge time-sinks and
generally require modest amounts of money in early phases. THey are however,
still the source of greatest investment return for us. Moreover, the venture
capital industry is now almost entirely dependant on institutionalized
sources of funds.. removal of capital gains incentive has seriously eroded
the availability of early stage, high-risk capital
				 #@#
   How venture capital works Zider 11/98 hbr
   p132 PROFILE OF THE IDEAL ENTREPRENEUR. From the venture capitalis's
perspective, the ideal entrepreneur: is qualified in a "hot" area of
interest; delivers sales or technical advances such as FDA approval with
reasonable probability; tells a compelling story and is presentable to
outside investors; recognizes the need for an IPO for liquidity [really? in
good times there are 15x M&A:IPO and in bad times 30x]; has a good reputation
and can provide references that show competence and skill; understands the
needs for a team with a variety of skills and therefore sees why equity has
to be allocated to other people; works diligently toward a goal but maintains
flexibility; gets along witht he investor group; understands the cost of
capital and typical deal structures and is not offended by them; is sought
after bymany VCs; has realistic expectations about process and outcome
   p137 HOW VENTURE CAPITALISTS SPEND THEIR TIME Soliciting business 10%
Selecting opportunities 5% Analyzing busines splans 5% Negotiating
investments 5% Serving as directors and monitors 25% Acting as consultants
15% Recruiting management 20% Assisting outside relationships 10% Exiting 5%
				 #@#
   Bootstrap Finance Amar Bhide HBR 11/92 
   p109 The big-money model has little in common with the traditional 
low-budget start-up
   p110 attest to the value of bootstraping: launching ventures with modest
personal funds.. founders' personal savings, credit cards, second mortgages,
and in one case "a $50 check that bounced."  THe median start-up capital was
about $10,000.  Furthermore, fewer than one-fifth of the bootstratppers had
raised equity for follow-on financing in the five or more years that they had
been in business. THey relied on debt or retained earnings to grow.. For the
majority of would-be founders, the biggest challenge is not raising money but
having the wits and hussle to do without it.. Venture capitalists (and other
investors in start-ups) are neither greedy nor shortsighted, as some
disappointed entrepreneurs believe; they are simply inappropriate fro most
start-ups.
   p111 7% of the investments account for more than 60% of the [VC] profits
   p112 Winning over investors too early, they said, can compromise your
discipline and flexibility. Bootstrapping in a start-up is like zero
inventory in a just-in-time system: it reveals hidden problems and forces the
company to solve them.. Diminished flexibility is often another consquence of
premature funding. STart-ups entering new industries seldom get it right the
first time. Suuccess, especially in new and growing industries, follows many
detours and unanticipates setbacks, strategies may have to be altered
radically as events unfold.. pressure to stick with untenable strategies that
outside investors can create
   p113 1. Get operational quickly.. Imitation saves the costs of market
research, and the start-up entering a small market is unlikely to face
competiton from large, establisehd companies.. 2. Look for quick break-even
cash-generating projects.. Profit opportunities that might be regarded as
distractions in a large company are immensely valuable tot he entrepreeur
   p114 3. Offer high-value products or services that can sustain direct
personal selling.. overcoming customer inertia
   p115 4. Forget about the crack team.. diamonds in the rough.. 5. Keep growth
in check. Start-ups that failed because they could not fund their growth are
legion. Successful bootstrappers take special care to expand only at the rate
they can afford and control
   p116 6. Focus on cash, not on profits, market share, or anything else
   p117 7. Cultivate banks before the business becomes
creditworthy.. preparation and careful timing.. records were immaculate.. may
also have to effect a U-turn and abandon the very policies that allowed them
to get up.. Emerge from it niche and compete with a large competitor.. Offer
more standard, less customized products.. Bring critical services
in-house.. Change management's focus from cash flow up to startegic
goals.. Recruit higher priced talent, perhaps encouraging early employees to
move on
				 #@#
   Kaplan & Stromberg J_Finance LIX 5 10/04
   p2194 VENTURE CAPITALIST ACTIONS [% of companies]..  VC Active in
recruiting or changing management team before investing.. 16%..  VC expects
to be active in recruiting or changing management team after
investing.. 43%..  Any of the above.. 51%..  VC explicitly active in shaping
strategy/busines smodel before investing.. 9%..  VC explicitly expects to be
active in shaping strategy/business model after investing.. 30%..  Any of the
above.. 34%
				 #@#
   What do Venture Capitalists do? Gorman & Sahlman, HBS 9-288-015 1987
   p5 Table 2                          Mean Std Dev High Low
# of Active Partners per Firm          5.1    3.8   25.0 1.0
# of Investments Managed per Partner   8.8    3.5   20.0 4.0
# of Seats on Boards per Partner       5.1    3.0   21.0 0.0
   p8 Table 4 Form of Assistance                      Rank  Frequency
1. Help obtaining additional financing                 1.9   75.0
2. Strategic planning                                  2.4   67.5
3. Management recruitment                              2.6   62.5
4. Operational planning                                4.1   55.0
5. Introduction to potential customers and suppliers   4.6   52.5
6. Resolve compensation issues                         5.6   55.0
   p11 Table 5   [worst problems]                  Frequency Rank Std Dev..
 (1) Inneffective Senior Management (SMAN)               95% 1.6   1.0
 (2) Innefective Functional Management (FMAN)            50  2.5   1.1 ..
 (3) En user market failed to develop as (MKT)           43  2.7   1.9 ..
 (4) Poor channel selection/ (DIST)                      35  3.3   1.5 ..
 (5) Competition (COMP)                                  34  3.0   1.3
 (6) Poor product/market fit (FIT)                       28  3.5   1.7 ..
 (7) Devlopment delayed or unsuccessful (DEVT)           51  2.4   1.4
 (8) Manufacturing failure (MFG)                         11  2.9   1.4
 (9) Poor product performance (PROD)                     18  4.2   1.4
(10) Inadequate quality control (QUAL)                   13  4.7   2.4
				 #@#
   Financial Contracting: "DEALS" HBS 9-288-014 6/89 p43 deals that have
proved successful over a long period of time: they are simple; they are
robust (they do not fall apart when there are minor deviations from
projections); they are organic (they are not immutable); they take into
account the incentives of each party to the deal under a variety of
circumstances; they provide mechanisms for communications and interpretation;
they are based primarily on trust rather than on legalese; they are not
patently unfair; they do not make it too difficult to raise additional
capital; they match the needs of the user of capital with the needs of the
supplier; they reveal information about each party (eg, their faith in their
ability to deliver on the promises); they allow for arrival of new
information before financing is required; they do not have perverse
discontinuities (eg, boundary conditions that will evoke dysfunctional
behavior on the part of the agents of principals); they take into account the
fact that it takes time to raise money; and, they improve the chances of
success for the venture.
				 #@#
   Amis & Stevenson, Winning Angels, FT/PH/Pearson 2001 ISBN 0-273-64916-7
   p86 [Landrum Profiles of Genius 1993 Prometheus p232]
1. Promethean (Carl Jung and MBTI) - INTJ, ENTJ, ENTP
   Intuitive - Perception of world (forest vs trees / macro vs micro)
2 Competttive to a fault
   Aggressive behavior where winning is more important than playing
3. Innovator operating style (Kirton's style inventory)
   Preference for "doing things differently" vs "doing things excellently"
4. Self-employed father - Early vision fo achievement outside establishment
   Fathers made their own way in the world as dentist,truck driver,or lawyer
5. Big "T" personalities (high in testosterone, thrill seeking -
   enormous risk takers): Big Ts - High in risk taking. Preference for
   uncertainty, unpredictability, variety, intensity, novelty; Little 
   Ts - Low in risk taking. Preference for certainty, predicatbility,
   simplicity, low intensity, familiarity. 
6. Self-confidence/high self-esteem - Built in early childhood - permissive
   parent allowing error and building sense of self. Arrogant attitude 
   preferable to submissive one for innovative pursuits.
7. "Type A" behavior (Meyer Friedman and Ray Rossenman) - Impatient
   and impulsive. Impatient to a fault, obsession with winning, short
   attention span, multitasking personality types
8. Charismatic - The consumate salesman. 
   Enthusiastic, passionate and inspirational leadership qualities. 
9. Right-brain,qualitative "gut" decision makers - qualitative vs quantitative 
   They utilize macro vs micro, long term vs short term, qualitative vs 
   quantitative, analogue vs digital, indutive vs deductive, and subjective vs
   objective operating styles. 
10.Psychosexually driven - Sublimated libidinal drives of insecurity and 
   inferiority. Intensely driven individuals with high sex drive and /or need 
   to overcome innate fears of failure. Consumate overachievers.
11.First-born males (Adler and Kevin Leman) - Morber the major influence.
   Perfectionism, stiving for superiority, and need to achieve, Natural
   leaders (12 of 13 innovative geniuses studied were first-born males,
   as were all seven of the Mercury austronauts)
12.Personality focused and goal oriented - Edison's aphorism
   "persistence vs inspiration". Persevering prevails in
   entrepreneurship. Individuals who never give up never lose! 
13.Transient childhoods - Leading to consummate self-sufficiency.
   Ability to cope in foreign environments learned early in life.

   p123 looks for in a start-up opportunity:

1. Quality dedicated management that is passionate for what they are doing with
   industry experience and a willingness to test new ideas. If I walk away 
   everything continues to move forward!!!
2. A business that is simple and has a clearly defined product and revenue
   model with clear customer benefits.
3. A reasonable time to market advantage, channel control, or technology
   advantage that creates some barrier to entry
4. A scalable business that creates long-term customers and or a product
   that when generated can be sold in perpetuity to become marginally
   more profitable over time.

   p125 REDFLAGS
1 Salary is utmost on their mind (they should be thinking about
  creating share value)
2 The business plan claims 10 revenue sources or products (ealry stage
  companies need to focus on one or two and make them work)
3 They say or do anything that is dishonest. (If they do not have a 
  strong moral code, your money is history)
4 They are not realistic about their own abilities (eg, lacking any 
  financial knowledge, the entrepreneur does not have "financial guy"
  on his list of to-dos)
5 They only "need 1% of the market"
6 They have not identified the first customer

   p127 Top 10 things Manny Villafana [MN] looks for in a medical start-up..

1 Is threr a technical need for the device?
2 Is the technology readily available for the manufacturing of the device?
3 The management; composition of the team; previous experience..
4 Capital requirements. Is the capital going to be raised in stages?
5 The make-up of the scientific advisory board
6 The capitalization of the company. Is there fairness to the incoming
  investor? Is the valuation correct? Does the CEO have a meaningful
  investment in the company? 
7 Does the CEO and do the members of the management team have a proper
  proportion of the ownership to make it worthwhile to invest their
  time and effort into this project?
8 The quality of the regulatory officer as a medical device company 
  needs to have a top person in that field
9 Are there any possible litigation factors?
10 What does my gut tell me?

   p129 Must have: Match of interest and experience; Management team A+++;
Big market opportunity, rapid growth to $1bn+; Compelling business model;
Concise and convincing differentiation.  Ought to have: 2 customers already
identified; Draft business plan; Demo version of product; 2-4 people already
involved; Entrepreneurs that know how to use advisors.  Nice to have:
Revenue; Track record in this kind of deal; Good advisors.  Must avoid:
Dishonest entrepreneur; Self-destructive ego; Lifestyle entrepreneur.  Ought
to avoid: Empire builders.  Nice to avoid: Inexperienced CEO.
   p150 David Berkus created his own methodology for investing in early-stage
deals. Typically he invests $200k and values the deal based on the simple
formula: For a sound idea $1m [million]; For a prototype +$1m; For a quality
management team +1-2m; For a quality board +$1m; For any roll-out, sales +$1m
   p152 [Multiplier Method, eg D&B Std Biz Ratios] Mutiply a key number in
the business plan times an industry standard, eg, a nursing home start-up
might project 2,000 beds and if $60k per bed is an industry standard for
valuing a nursing home, the company couls be worth $120 when it attains its
target
   p153 Venture capital method.. 1. Determine the future value of a company
using the multiplier [industry ratios] in a given year, say $25m in year
5. 2. Decide what ROI you need on your investment and calculate the future
value to the same year. So if you are investing $100k and need a 50% return,
in year 5, your investment should be worth $759,375 at that time. 3. Now
sipmly divde the value you need ($759k) by the future value of the company
($25m) and that will tell you the percentage of the compnay you need to own
$759k/$25m=3%
   p196 [STRUCT] Impact on Exit      Downside Protection   Upside Potential

Common stock/  None, expect it gives None                  Limited to initial  
units no rights the entrepreneur                           shares/units 
                maximum freedom                            ownsership, no 
                                                           rights to invest 
                                                           additional capital

Common with   None                    None           1 Investor is given
pre-emptive and                                        the chance to invest 
tag-along rights                                       additional capital - to
                                                       avoid dilution
                                                     2 Entrepreneur cannot sell
                                                       his shares without also 
                                                       offering the investor a
                                                       similar exit
Preferred     Depends on additional    1 In the event   Depends on the terms
convertible with    terms. Complicated   of liuidation, but is generally the
various terms       or irregular terms   the investor   best structure for
                 reduce the likelihood   is ahead of    capturing upside
                 of second-round         the common
                 financings and          shareholders
                 some exit events      2 Additonal terms may provide
                                         further protection, eg buy-out
                                         clauses or board seats
Convertible note  Facilitates a VC      Loan note provides  Yes, if the
with various terms  round, and VCs are  best leverage in    conversion terms 
                    the exit pros       the event of        are favorable or
                                        liquidation or      if investors get
                                        work-out      the same terms as the VC
   p214 Capitalyst [author Amis] Preferred Deal Terms
Common share structure    Preferred share structure  Convertible note
Must have                 Must have                  Must have
Pre-emtive right          Pre-emtive right        Set conversion price     
Tag-along right           Tag-along right             or discount
Registration right        Registration right      Cumulative interest
Reasonable price          Reasonable price              (deferrable)
                          Anti-dilution
Ought to have             Ought to have              Ought to have
Entrepreurial compensation Visitation rights       Convertible into preferred
limit (not necessarily    Redemption rights
contractual)              Warranties and representations
Anti-dilution             Cumulative dividend (although deferrable)
                          Board representation (far all preferreds)
Nice to have              Nice to have               Nice to have
Warranties and repr..     Put                      Potential payback with
Put                                                warrants to provide upside
Board representation (for all current-round investors)
Must avoid                Must avoid                  Must avoid
A call                    Anything too complicated Forced conversion by
                          Anything that will turn   entrepreneur without a
                          off next investors        trigger event related to
                                                    significant progress
   p264 [Benefits from angel] INDUSTRY: Strategic advice; product
development advice; Introducion to industry players. FUNCTIONAL:
Management advice; Assitance in interviewing job candidates; Hands-on
assistance. NETWORK: Opens doors: New partners, New team members, New
capital providers, Other professionals. ANGEL EXPERIENCE: Raise more
angel capital; Raise venture capital; Allround advice on dealing with
financial or growth issues. ENTREPRENUER EXPERIENCE: High-impact
general advice and support on a variety of growth and management
issues; Hands-on assistance
				 #@#
   Ehernfeld on Doriot HBR 5/90 
   p218 Spending money is the art of giving every cent a meaning
   p219 I don't know of anyobody who looked who didn't find money.. art of
using your new ideas sparingly and in the right dosage.. Lack of information
is true of 99 decisions I make out of 100.. ownership of money seems to bring
out the worst
				     #@#
   Done Deals [VC] Gupta HBS 2000
   p19 [Kagle/Benchmark] We observed that in many cases they had so much
money they could raise more than $100 million so we wouldn't feel presure to
put money out. In terms of capital per partner, we were going to be among the
lowest in the industry. That would give us the opportunity to write the
half-million dollar check without feeling guilty about it
   p44 [Knox/Cornerstone] Most corporate venture capital investment programs
are widely viewed to have been failures, in part because their rate of return
objective was subordinate to their corporate objectives - the industries they
wanted to be in, the intelligence they wanted, the strategic corporate
relationships they wanted
   p105 [Eugene Kleiner] We ran the companies as if they were smaller
departments of large comapnies because that's where our experience was. We
worked closely with the entrepreneurs to develop their business and we didn't
make too many technical mistakes. It was more the question of
execution. Indeed, we had very few technical failures. THings failed because
of the inability to execute.. Venture capital was very different then. People
focused on building companies rather than on exits. Securities regulations
such as RUle 144 have helped investors exit a firm but it may also have hurt
the chances of building companies. We had very few companies going public
early. And we always worried about that kind of early exposure.
   p142 [Arthur ROck] Fred Terman. He was head of the engineering school at
Stanford, and he encouraged his students, especially the doctoral and
postdoctoral students, to form companies and continue to teach at Stanford
   p161 [Wythes/Sutter] The big money poured in by pension funds is a bad
influence.. We think universities and endowments are the best source of
venture capital money, because they have a long view of commitment to our
asset class.. The money will probably be there a long time because the
trustees want to keep things stabilized and not move quickly in or out of
these assets. THey don't have a quarter-to-quarter, mark-to-market
mentality. So, I think the source of institutional money in our industry can
and should dictate how venture capital firms run their shop.. Those are the
institutional sources that don't know what they're doing
   p189 [Dennis IVP] We hav eincubation space downstairs and across the
hallway.. But the business has gotten so competitve, one of the best ways to
control your investment pace is to incubate companies in your offices, so
you're completely up to speed when the company does its first round of
financing
   p218 [Sonsini Lawyer] id you can't make an investment liquid through the
IPO market, what are you going to do? YOu'r egoing to start running companies
to merge.. What we might do is build projects, rather than
enterprises. Develop a particular market, a particular product, and then sell
or merge it
   p231 [Waite Greylock] Doriot's philosophy. Many of the people in venture
capital have some connection to him. For example, Tom Perkins and Peter Crisp
were his students, and I'm sure there are many others. And he stayed in touch
with these people. Not only were they students of his, but he had substantial
influence on them. Doriot's thesis was that if you took a team of people with
business experience and a willingness to expend time and effort as well as
money, and mixed them with an entrepreneur they could invest in.. This pool
of knowledge, money, and time would ad dmaterially to the mix.. there was a
missionary zeal about it - that's how Doriot got away with underpaying us
all, because we believed we were doing something for the greater good
   p361 [Lazarus ARCH] In the early '80s, COngress passed the Stevenson
Wydler Act and the amendments to the Bayh Dole Patent Act and essentially the
two pieces of legislation together gave the University of CHicago the
opportunity ti take title at no cost to discoveries at Argonne
   p371 because you want to stay in control of the deal. Everything you've
learned about that business at the beginning becomes more and more valid and
valuable as the company matures. You don't want to put its destiny in the
hand sof someone whos ebackground may be an investmentbank, because it's a
different style of thought than the development of enterprise
				     #@#
    Venture Capitalists usually take convertible preferred stock for their
investments as precisely a way of mitigating downside risk and being paid
before other owners as well as providing a tax subsidy. [Gilson Schizer,
Harvard Law Rvu, 116#3, p874]
				     #@#
  Alternative Financing HBS 9-384-187 1984 convertible debt or preferred
gives the venture firm a liquidation preference
				     #@#
   Venture Capital Method HBS 9-288-006 6/89 Sahlman Forecasting future
results..  Determining a value that is likely to apply at that point.. how
much capital will be reuired to attain.. new shares that will have to be
awarded.. Determining the shares of the final "pie" that each group will
demand, fiven a set of required rates of return, where the discount rates
depend on: (a) The level of risk-free interest rates in the economy; (b) A
premium for risk [50%, high CAPM beta]; (c) A return premium for illiquidity
[50%]; (d) A premium for value-added by the investor; and (e) A premium
related to past experience.. Converting the future value back to the present
in order to determine share prices and ownership
				     #@#
   Valuation of Venture Capital Hellmann Stanford E95 3/01 A valuation method is
a sophisticated tool [failure rate as nergative Gordon growth] for
determining how entrepreneurs and venture capitalists should split the rturns
of the new venture. But the actual split, ie, the actual deal, is not really
driven by the valuation method, but rather by the outcome of the bargaining
between the entrepreneurs and the venture capitalists.
				     #@#
   Venture Industry HBS 9-285-096 11/85 American Research and Development
Corporation (ARD) was the first independent firm that did not trace its
origins to a family fortune and, as such, was considered a pioneer. Created
in 1946 and led by General Georges Doriot, a Harvard business School
professor, ARD was a publicly traded firm.. General partners of the venture
firm prepared a private placement memorandum that explained the structure of
the fund. SEC regulations required that the memorandum be offered to a
limited number of prospective investors. Each plan was labelled confidential
and numbered. THese memoranda were offered to institutions, to corporations
and to wealthy individuals.. Two years after the date of purchase, those
privately issued shares could be sold gradually under Rule 144a or, if held
privately within the venture firm, the could be registeres subsequent to the
IPO and sold as a block.. WHile realizing cash returns through public sales
of securities of successful ventures was a common form of harvesting for
venture firms, acquisition of venture-backed companies was a more frequent
form of liquidation over the long term
				     #@#
   Attracting Shareholders Bhide HBS 9-389-139 Since irreversible investments
required by an enterprise cannot be entirely eliminated, another
entrepreneurial task is to select stakeholders who are the most willing to
and capable of bearing the risk. All other things being equal, the most
desirable stakeholders fit one or more of the following characteristics: they
are diversified, experienced in th etype of risks they are expected to bear,
have excess capacity and are risk seekers
				     #@#
   Private Equity Fundraising HBS 9-201-042 2007 Lerner Hardymon & Leamon
These included old-line endowments such as Yale and Harvard, family offices
with longstanding management groups, and other organizations that knew what
to expect from the asset class and/or could help differentiate the firm in
terms of contacts or technological knowledge. Younger and less experienced
institutions are generally viewed as less desirable, because they frequently
need more help in understanding the nature of the asset class. Public pension
funds often face the greatest hurdles in accessing desirable private equity
funds. Not only do they face political pressures, but they areoften plagued
by "revolving door" staff that loses talented members to more lucrative
opportunities.. Strong evidence supports the claims regarding capital gains
tax rates: lower capital gains taxes seem to have a particularly strong
effect on the ammount of venture capital supplied by tax-exempt investors
[Gompers & Lerner Brookings 1998]
				     #@#
   IPO Process HBS 9-200-018 2001 The legal, accounting and investment banking
fees from an ofering are substantial, frequently totaling 10% of the total
amount raised in the offering or more
				     #@#
   Angel Financing HBS 9-298-083 2001 Gompers Myers and Majluf (1984) and
Greenwald, Stiglitz and Weiss (1984 [AERPP]) demonstrate that the offerings
of firms may be associated with a "lomons" problem (first indetified by
Akerlof [1970 QJE]).. Stiglitz and Weiss (1981[AER 71 393-409]) show that if
banks find it difficult to discriminate among companies, raising rates can
have perverse selections effects.. First, business plans are intensively
scrutinized: of those firms that submit business plans to venture capital
orgnainzations, historically only 1% have been funded (Fenn, Liang, and
Prowse [1995]). The decision to invest is frequently made conditional on the
identification of a syndication partner who agrees that this is an attractive
investment (Lerner [1994]). Once the decision to invest is made, the venture
capitalists frequently disburse funds in stages. The entrepreneur must
periodically prove prove the company is making progress and not squandering
money in order to receive additional capital. In addition, venture
capitalists intensively monitor managers. THe investors demand preferred
stock with numerous restrictive covenants and representation on the board of
directors
				     #@#
   Private Equity Securities HBS 9-200-027 Lerner & Hardymon 2001 The driver
behind the recent acceptance of participating convertible preferred is the
willingness of later stage investors to pay very high prices if the terms
include a participation feature.. preferred stock structures do a better job
of implementing the "reward for preformance" principle since they rely on the
investment's terminal value.. Vesting creates the "golden handcuffs".. sales
of assets are often restricted.. founders cannot sell any of their common
stock without approval.. restricting the issuance of new securities.. coupled
with supermajority voting provisions
				     #@#
   Private Equity Partnership Agreements HBS 9-294-084 Lerner & Gompers 2001
In most cases, however, one percent is still the general partners'
contribution.. Since the private equity partnership will only invest the
funds gradually, if the funds are simply sitting in the fund''s bank account,
they will depress the partnership's rate of return.. A few of the very oldest
organizations, however have managed to maintain simple contracts with few
restrictions. THese covenants can be divided into three broad classes: those
relating to the overall management of the fund, the activities of the general
partners, and the permissible types of investments.. If the institutional
investors see that a new prvate equity manager is willing to take a cut in
his base fee in the hopes of making a substantial amount of carried interest
				     #@#
   Elevator Pitch HBS 9-802-222 Applegate 2001 Our business [list name] will
deliver [list key deliverables] to [list key benefiiaries] to enable them to
[list key bbenefits]. THe business is headed by [list founder ans key
executives, investos, and advisors] that have [list key background and
qualifications]. The business [will launch/was launched] on [date] and we
[will begin/began] delivering [first product or service] on [date]. We expect
to prove our business model and achieve profitable growth on [date] and
anticipate that the temrinal value of the business will be [list aticipated
value], which represents a [list return] to investors. The total cost to
achieve this goal will be [total cost], which included the following key
categories [list]. We have currently received [list dollars of funding
secured to date] from the following sources [list]. We anticipaet receiving
the remained of the funding by [date] from [lis sources]. The key risks for
th eproject are [list risks]. THese risks will be managed by [list key
approaches to managing each risk]
				     #@#
   Valuation in Private Equity HBS 9-297-050 Lerner 2002 one should attempt to
match the maturity of the investment with that of the risk free
rate.. necessary to "unlever and relever the beta [mult by fraction of
capital that is equity]
				     #@#
   Pre-Start Analysis HBS 9-386-075 Van Style 1985 Considerations.. nature of
the opportunity.. critical skills, resources, relationships and approvals
that will be required.. indicated plan of action.. plan for putting together
a business entity to incorporate or control the required skills and
resources.. plan for actually controlling.. strategy for harvesting
				     #@#
   Distributions of Venture HBS 9-295-095 Lerber 1995 Venture capitalists
harvest their stakes in companies that have gone public in two ways. First,
the venture capitalist sell heir shares in the market and distribute the cash
to the limited partners. More often, however, the venture capitalist
distributes the actual shares to each of the limited partners and keeps a
certain fraction of shares or cash based on the value of the stocks on the
day the distribution is decalred.. The negative attitude of most limited
partners towards stock distributions suggest that they do not benefit from
these transactions. Indeedm several theories predict that the market should
react negatively to the distribution of shares by venture capitalists to
limited partners, making it difficult for the limited partners to realize the
stated value of shares at the time of the distribution. There are thee main
theories: inside information, corporate control, and price pressure
				     #@#
   Valuing Equity Cash Flows HBS 9-295-085 Luerman 1994 impossible to apply
option-pricing techniques to highly levered equity..With high leverage,
valuing equity directly is probably simpler than assets-minus-debt and, under
certain assumptions, he sign of the bias in the equity-cash-flow approach is
known.. Valuing the equity directly - ie discounting equity cash flows at the
cost of equity - requires one complex analysis rather than four. But more
importantly, by making certain assumptions, we can be fairly confident that
this approach will underestaimte the value of the equity
				     #@#
   Start-up Strategies HBS 9-394-067 Bhide 1993 entrepreneur does only enough
research to justify the next action or investment.. purpose of analysis is
not ot find fault with new ventures or find reason for abandoning
them. Analysis should be considered as an exercise in what to do nextmore
than what not to do.. Entrepreneurs often blur te line between research and
selling.. don't just seek opinions and information, thay also seek to gain
others' commitment.. Entrepreneurs who act on sketchy information and back of
the envelope plans must stand ready to change their strategies as event
unfold
				     #@#
   Deal Structure HBS 9-384-186 8/88 Understanding the business.. amount of
funds required.. riskiness of the venture.. potential magnitude of
returns.. Understanding FInanciers.. magnitude of rtunr required.. risk which
is acceptable - preception of risk and reward - magnitude of investment -
timing of return - form of return - degree of control - mechanisms for
control..  Undertandin the Entrepreneur.. degree of control desired -
mechanisms of control desired - amount of financing required - magnitude of
financial return desired - degree of risk which is acceptable
				     #@#
   Entrepreneurship HBS 9-384-131 8/88 strategic orientation, the commitment
to opportunity, the resource commitment process, the concept of control over
resources, the concept of management, and compensation policy.. "promoter"
who feels confident of his or her ability to seize opportunity regardless of
the resources under current control.. maximize value creation by minimizing
the resource set
				 #@#
   New Venture Planning Karl Vesper J Biz Stg 
   p75 Three general types of practical objceives mightbe served by study of
new ventures: One is to accomplish those that would be done anyway, btu do
them sooner, more economically, and with less pain. This might be regarded as
improvnihe efficiency of venture prodcu on. A second objceive is to avoid
those venture that don't deserve being done; these generally being the ones
that lose money. THis would be reduction of wasted effort. The third
objective is to minimize opportunity losses by reducing failures of
ommission, failure to exploit those venture opportunities that should be
utilized
				     #@#
   Diana I. Angelis Capturing the Option Value of R&D Research Technology
Management 43 no4 31-4 Jl/Ag 2000 Instead, it is suggested that the cost and
revenue cash flows associated with implementing a project be used to measure
the option value of R&D..  must use the expected value of V* [NPV] as an
estimate. Let X be the net cash flows, X = R - K.. By relaxing the log-normal
assumption in the Black-Scholes model.. Because it is based on cost and
revenue projections routinely used to determine the net present value of
investment alternatives, it should have an intuitive appeal to practitioners.
				 #@#
   Prahalad & Hamel Core Competence 5/90 HBR
   p80 strategic alliances.. aimed at building competencies rapidly and at
low cost
   p81 competencies that spawn unanticipated products.. consolidate
corporatewide technologies and production skills into competencies that
empower individual businesses to adapt quickly to changing opportunities
   p82 Core competenecies are the collective learning in the
organization.. Core competence does not diminish with use
   p84 core competence ishould be difficult for competitors to imitate. And
it will be difficult if it is a complex harmonization of individual
technologies and production skills
				 #@#
   Strategies for Declining Industries J Biz Stg 1980 1#1 p27 Harrigan
Increasing the firm's investment (to dominate or get a good competitve
position); Holding the firm's investment level until the uncertainties about
the industry were resolved; Decreasing the firm's investment posture
selectively, by sloughing off unpromising models of customer groups, while
simultaneously strengthening the firm's investment posture within the
lucrative niches of enduring customer demand; Harvesting (or milking) the
firm's investment to recover cash quickly, regardless of the resulting
investment posture; and Divesting the business quickly by disposing of its
assets as advantageously as possible.
				 #@#
   Funding Growth in an Age of Austerity, Hamel & Getz HBR 7/04 Strategos.com
   p78 Raise the ratio of innovators tot he total number of employees.. Raise
the ratio of radical innovation to incremental innovation.. Raise the ratio
of externally sourced innovation to internally sourced innovation.. Raise the
ratio of learning over invwestment in innovation projects.. Raise the ratio of
commitment over the number of key innovation priorities
   p80 An idea is radical if.. changes customer expectations and
behaviors.. changes the basis of competitive advantage.. changes industry
economics
   p83 Product Testing                Experimentation
Scope  Product or Service             Business Model
       Product testing focuses on     Strategic experiments seek to 
       enhancements or extensions to  explore the merits of a number of
       well-establisehd products or   interrelated changes to a 
       services within the context of company's business model
       a mostly static business model
Philosophy   Prune                    Learn
       Products testing is typically  Strategic experiments are designed 
       designed to winnow out         to create opportunities for iterative 
       potential duds. The basic      learning. The basic principle is,
       principle is, "Don't invest    "Don't killa great idea prematurely."
       in losers."
Methodology    In Vitro               In Vivo
       Product testing takes place    Wherever possible, experiments are
       in laboratory-like conditions, conducted in live commercial settings
       where new products are         where customers can buy the product or
       subjected to ever more         service or some reasonable facsimile.
       rigorous tests with customer   The goal is to learn how customers 
       panels. Customers use the      interact with all the elements of
       products but have no chance    the redesigned business model
       to buy them until a formal 
       launch decision has been made
				 #@#
   Economic decline Hayes & Abernathy HBR 7/80
   p73  Imitative design        Innovative design
Market demand is relatively well Potentially large but unpredictable
known and predictable       demand; the risk of a flop is also large
Market recognition and       Market acceptance may be slow initially
acceptance are rapid      but the imitative response of competitors 
                          may also be slowed
Readily adaptable to existing May require unique, tailored marketing
market sales and              distribution and sales policies to
distribution policies         educate customers or because of
                              special repair and warranty problems
Fits with existing market     Demand may cut accross traditional
segmentation and              marketing segments, disrupting
product policies              divisional responsibilites and
                              cannibalizing other products
				 #@#
   MacMillan & George Corp Vent J Biz Stg 
   p36 1. Selection of context 2. Design of structure 3 Provision of adequate
support 4 Appointment of a venture ombudsman
   p42 Difficulty in getting support from key stakeholders; Diffuliculty in
securing internal support; Imptience in the firm with the venture's progress;
and Difficulty in coping with the rapid growth when success is fully achieved
				     #@#
   Corp Venturing Zenas BLock JBizStg 3#2 fall 1982 Review of the five
pivotal decisions - format, management and compensation, venture plan
approval, positioning, and financing triggers - will provide developing
certainly about the new business, and the application of professional
management where it belongs, which is not in the management of the venture
intself but the conditions surrounding it. Venturing is primarily a learning
process. The entrepreneur adjusts to new information by manipulating every
relevant variable - products, marketing, distribution methods to develop the
complex of activity, and products needed to succeed.. Perhaps th emost
important thing to learn is how to identify, develop, reward, and support the
quintessential element needed for any venture success - the people who have
the skill, drive, energy, creativity, persistence, and leadership that create
new businessses
				     #@#
   Commercializing Technology HBS 9-694-102 9/94 Since innovative products and
processes are derivative, users can directly help shap their
design. Extensive tools and methods exist for elicting user needs - even
uncommunicated ones - for such products.. next managerial frontier for
technology commercialization is to explore methods for better understanding
uncommunicated, non-obvious but current user needs and unarticulated,
non-obvious future needs. If one primary method for creating this
understanding is harnessing the creative imagination of individual
"gurus".. Truly understanding needs - not just their demands - enables speed
at no sacrifice of inventiveness
			 	 #@#
   Nichols/Lewent/Sci Mgt Merck HBR 1/94
   p91 Monte Carlo analysis is a sophisticated form of mathematical analysis
that lets us come up with a range of possibilites or outcomes for a certain
set of possible actions.. simultaneous changes in numerous variables
   p92 [Gary Sender] Merck's finance group used the Black-Scholes
option-pricing model to determine the project's option value. Five factors
that influence an option's price are used in the Black-Scholes model. The
finance group defined those factors as follows: The excercise price is the
capital investment to be made approximately two years hence. The stock price,
or value of the underlying asset, is the present calue of the cash flows from
the project (excluding the above-mentioned cpaital investment to be made and
the present value of the up-front fees and development costs over the next
two years). The time to expiration was varied over two, three, and four
years. The option could be excercised in two years at the earliest. The
option was structured to expire in four years because Merck thought that
competing products, making market entry unfeasible, would exist by then. A
sample of the annual standard deviation of returns for typical biotechnology
stocks was obtained from an investment bank as aproxy measure for project
volatility. A conservative range for the volatility of the project was set at
40% to 60%. A risk-free rate of interest of 4.5% was assumed. This figure
roughly represents the US Treasury rate over the two to four year period
referred to in the time to expiration of the model.
				 #@#
   R N Anthony We dont have the accounting concepts we need HBR 1/87
   p81 limited to the information in the primary financial
statements. (Broadening it to include supplementary information leads to an
undesirable dilution of effort, as was demonstrated by the inflation
accounting program.)
   p82 Standards governing the information in financial staements should be
based on the appropriate trade-off between relevance and
reliability.. reporting an entity's performanc in maintaining its financial
capital.. effect of highly unusual events - whose inclusion would result in a
serious distortion of reported performance - should be excluded from net
income and entered dirctly in entity equity.. Revenues are additions to
entity equity resulting from events of the period, including realized
gains.. Expences are costs incurred in a current or previous period that will
not benefit future periods.. balance sheet should report the sources of an
entity's financial capital and the forms in which that capital existed as of
the balance sheet date.. Assets are the forms in which the entity's capital
exist as of the balance sheet date.. Accounting should report the flow of
financial resources into, through and out of the organization
				     #@#
   Burton Malkiel Random Walk Dn Wall St 4ed ISBN 0-393-95460-9
   p21 In The_Theory_of_Investment_Value, [John B.]Williams [Harvard 1937
Thesis, Fraser 1938] presented an actual formula for determining the
intrinsic value of stock. Williams based his approach on dividend income. In
a fiendishly clever attempt to keep things from being simple, he introduced
the concept of "discounting" into the process. Discounting basically involves
looking at income backward
   p22 The castle-in-the-air [technical analysis] theory of investing
concentrates on psychic values. Lord Keynes, a famous economist and
outstandingly successful investor, enunciated the theory most lucidly in
1936. It was his opinion that professional investors prefer to devote their
energies not to estimating intrinsic values, but rather to analyzing how the
crowd of investors is likely to behave in the future and how during periods
of optimism they tend to build their hopes into castle sin the air.
   p25 Some readers may pooh-poh the mad public rush to buy tulip bulbs in
seventeenth-century Holland and the eighteenth-century South-Sea Bubble in
England. But no one can disregard the new-issue mania of 1959-61, the
conglomerate wave of the middle 1960s, the boom and bust of the so-called
concept stocks during the 1967-70 period, the "Nifty-Fifty" and gambling
stock crazes of the 1970s, and the 1980s version of a new issue craze
   p45 The consistent losers in the market, from my personal experience, are
those who are unable to resist being swept up in some kind of tulip-bulb
craze. It is not hard, really, to make money in th emarket. As we shall see
later, investors who select stocks by throwing darts at the stock listings in
the Wall_Street_Journal can make fairly handsome long-run returns. What is
hard to avloid is the alluring temptation to throw your money away on short,
get-rich-quick speculative binges
   p92 The point to remember from such examples is that the mathematical
precision of the firm-foundation [fundamental analysis] value formulas is
based on treacherous ground: forecasting the future
   p123 restating the first two rules: Look for growth situations with low-price
earnings multiples. If the growth takes place there's often a double bonus -
both the earnings and the multiple rise, producing large gains. Beware of
very-high-multiple stocks where future growth is already discounted. If the
growth doesn't materialize, losses are doubly heavy - both the earning and
the multiple drop. Rule 3: Look for stocks whose stories of anticipated
growth are o the kind which investors build castles in the air
   p127 Technical analysis is anathema to the aademic world. We love to pick on
it. Our bullying tactics are prompted by two considerations: (1) the method
is patently false and (2) it's easy to pick on. And while it may seem a bit
unfair to pick on such a sorry target, just remember: it's your money we are
trying to save
   p186 The stock market is such an efficient creature that nothing and no one
can predict its future course in a superior manner. And, becaus eof the
actions of the pros, the prices of individual stocks quickly reflect all the
information that is availbale.. but the method of beating the market, they
say, is not to excercise superior clairvoyance but rather to assume greater
risk.. reduce risk through diversification
   p326-8 Rule:1 Confine stock purchases to companies that appear able to
sustain above-average growth for at least five years.. Rule 2: Never pay more
for a stock than can reasonably be justified by a firm foundation of
value.. Rule 3: It helps to buy stocks with the kinds of stories of
anticipated growth on which investors can build castles in the air..RUle 4:
Trade as little as possible
				     #@#
   The Moral Hazard Economy.  Bernstein, Peter L. 1 Harvard Business Review;
Jul/Aug2009, Vol. 87 Issue 7/8, p101-103, The economist Hyman Minsky has
reminded us, "Each state nurtures forces that lead to its own destruction."
All of history testifies to the truth of this observation. Greater liquidity
leads firms to borrow more than before. But higher levels of debt mean
increasing vulnerability to adversity and negative shocks in an ever-changing
world. For these reasons, as Minsky put it, stability leads inevitably to
instability.  Now let me offer an alternative version with the emphasis and
predictions in reverse: We are moving through an environment perceived as
high risk, especially in the credit area, where banks are loath to lend money
and where yield spreads between Treasury bonds and corporate bonds are
huge. But the more we emphasize the high risks in the environment, the
stronger our normal and rational inclination to risk aversion becomes and the
more our actions alter the character of the environment to reduce risk. At
the same time, less liquidity leads firms to borrow less than before,
reducing their vulnerability to adversity and negative shocks in a volatile
world. For these reasons, instability leads inevitably to stability.  Will
this inverse Minsky dynamic be enough to counteract the effects of the
bailout on our finances, institutions, and managerial incentives? If pressed,
I would argue that this dynamic will win out, in much the way the trauma of
the Great Depression in the 1930s set corporate behavior and economic policy
in a risk-averse mold that lasted nearly three decades. On the other hand,
much about this current crisis is unprecedented, which means that history is
less relevant than it has been, well, historically.
				     #@#
   Knee Accidental Investment Banker Random 2006
   xvi In the 1960s Morgan Stanley quite pointedly did not have a securities
sales and trading operation, viewing it as a low-class business engaged in by
mere, and largely Jewish, traders. In 1971, however, the bank had established
its own sales and trading desk, and put [RIchard B] Fisher, a younf partner
at the time, in charge. In recent years, the profits from these operations
had come to dwarf those of traditional gentlemen banking in which they
engaged in their heyday. The introduction of sales and trading at Morgan
Stanley coincide with the firm's launch of one of the first mergers and
acquisitions departments among the major investment banking houses. Prior to
that, these firms had often treated advice on mergers and acquisitions as
something to give away free to longstanding clients of the firm. Within a
decade or two, "M&A" would establish itself as a profit engine of traditional
finance, wit high-profile bankers whose names were often better known than
that of either the clients or financial institutions they in theory served
   p19 Many of the other investment banking controversies of recent years
have stemmed from the decision by most investment banks to cross the line
from agent to principal to a greater or lesser degree. THe use of proprietary
trading strategies, where the firm put its own capital at risk, usually
developed in windowless rooms by rocket scientists of various stripe, had
resulted in sales and trading accounting for the majority of the profits of
some investment banks during certain periods
   p43 The single figure who best epitomizes this era is Sidney Weinberg,
leader of Goldman Sachs from 1930 until his death in 1969.. assistant porter
in 1907 at the age of 15.. But as John Kenneth Galbraith would write 25 years
later in his seminal review of the crash and its aftermath, GOldman, Sachs
and Company rescued its firm name from its deliquent offspring and returned
to an earlier role of strict ractitude and stern conservatism." This was
thanks largely to Weinberg's leadership.
   p45 Weinberg refused to set a fee "saying that he would just as soon work
for a dollar a year and then, when everything was over, let the members of
the Ford family decide what they felt his efforts were worth.".. ANd the idea
that a senior partner of a major firm would spend half of his own time over
two years on a single acocunt and leave the fee to the client's good
judgement once it was all over is unthinkable
   p91 The relationship banker is left stuck in the middle potentially trying
to sell assorted financial products that may or may not be in the client's
best interest. And sometimes the banker might even be put in the position of
threatening to withhold needed credit from a "trusted relationship" unless
addition banking services are purchased. The follow-on megabank mergers that
these misguided deals spawned caused a corporate credit crisis that made the
tactic of using access to credit as a tool to obtain investment banking
business all the more effective. After the crash of 2001, this credit crisis
would be exacerbated by the unprecedented number of high-profile
bankruptcies. The result would be that during th ebust even blue-chip
corporate clients would have difficulty putting a basic credit line in place
   p117 At GOldman, any banker (no matter how junior) would not think twice
about leaving a voice mail for any banker (no matter how senior) to seek
information relevant to a project he was working on. And he would get a
prompt, concise, responsive reply. In the more balkanized environment of
Morgan [Stanley], I soon discovered, bankers only share information and
resources across groups if an explicitly symbiotic relationship has been
established between the bankers involved.
   p120 The reason why bankers were so generous with each other on revenue
credit is that it cost them nothing (it didn't diminish their own
contribution) and provided some significant upside: the thankful banker who
got unearned secondary credit on your deal could be trusted to do the same
for you
   p142 Although Meeker's celebrity was a source of frustration to banker's
hungry to exploit every revenue-generating opportunity, it is clear in
retrospect that in many instances she saved Morgan Stanley from itself. By
enforcing her role as the ultimate bottleneck for doing Internet deals,
Meeker ensured that there was some consistent quality control in an era when
there was none. The evidence is that as a group, the companies she took
public did better than those of other banks. And the reason ultimatelythat
Meeker, unlike Henry Blodget, her counterpart at Merrill, never became a
regulatory target is that she actually chose companies to take public based
on quality. Her singular focus was determining which company would be the
leader in each category
   p189 Shortly after the mergerFisher found himself tryingto buy his young
wife something expensive at a Fifth Avenue boutique using a Discover Card. "I
have some bad news," the store manager gravely intoned, when Fisher asked if
they accepted the card. "Not only don't we accept it," the manager continued,
"I am afraid we don't serve anyoe who has one."
   p217 there was never any correlation between which research analysts won
the Instutional_Investor survey and stock-picking prowess.. reports widely
available.. accident waiting to happen.. Many senior banking executives were
quietly thankful for SPitzer's intervention, as the price of maintaining a
superstar roster of research analysts had reached as hig as $1 billion
annually at som efirms.. relieved to find a way of reducung their cost base
that was government-mandated (thus avoiding any charge of interfirm
collusion)
				     #@#
   Geisst Deals of the Century WIley 2004
   p85 McFadden Act also allowed the comptroller of the currency to
decide whether banks could begin dealing in common stocks as well.
   p93 mostly Republican, neo-Progressive group wielded influence out of all
proportion to its numbers. Its constant references to conspiracies among Wall
STreet bankers combined all the ingredients of agrarian populaism with
distrust of the federal government and the occassional twinge of nativism and
anti-Semitism.
   p183 In response to severe problems within the banking industry, in 1980
COngress passed the Monetary COntrol Act, designed to phase in deregualtion
of interest rates over a six-year period
   p189 Milken recognized that the new breed of investor emerging from the
inflation-ridden 1970s wanted a combination of both [stock & bond].. junk
financing became very common
   p202 It would have been unimaginable before World War II that deal makers
would be dictating terms to investment bankers
   p206 William Baxter, formerly professor of law and economics at Stanford,
who employed economic analysis of potential mergers
   p212 FInally in 1982 AT&T consented to the breakup, which had been pressed
by William Baxter when he became the head of the Antitrust Division
   p224 Alan Greenspan, Paul Volcker's successor at the Fed, also made his
fears about the takeover trend be known. He asked the Senate Banking
Committee to reconsider the tax laws so that corporate borrowing was not
encouraged even more
   p247 Cisco acquired 62 compaqnies between 1996 and 2002 alone and
developed specific methodologies through which it could assess another
company's potential fro becoming integrated into its own corporate culture or
operations
   p272 FAS 141.. required the use of the purchase method only after June 30,
2001. The older, softer way of pooling interests finally was put to sleep in
favor of a more stringent method of accounting for premiums paid by many
firms when they acquired others. The results were drmataic. Now firms were
required to record the premium paid for acquisitions as goodwill above market
value and the difference was to be amortized, resulting in losses to income
in many cases.. intangibles had become standard in many high tech and dot-com
   p284 The gradual approach was supported by the fact that many top
regulators were not clear about the original intent of the Glass-Steagll
Act. Banks first began attacking the law in the 1960s, when they wanted the
authority to underwrite certain types of municipal bonds [sim WW1 bonds]
				     #@#
   Lewis Panic Norton 2009
   p4 When a market is crashing and no one is willing to buy, it's impossible
to sell short. If too many investors are trying to unload stocks as a market
falls, they create the very disaster they are seeking to avoid.
   p5 The very theory underlying all insurance against financial panic falls
apart in the face of an anctual panic
   p60-61 [USNWR 6jun88] how they popose to ward off a repeat of Black
Monday: BAKER: The Treasury Secretary's group would have a "circuit breaker"
halt all trading for 1 hour if a market moved the equivalent of 250 points on
the Dow. RUDER: The SEC chairman wants to raise margin requirements in
stock-index futures and to let the SEC regulate the futures as well as
stocks. BOWSSHER: Charles Bowsher of the General Accounting Office wants
better communications and contingency plans among fderal authorities and
exchanges. / BRADY: His task force calls for coorsinating markets under one
regukatory agency, circuit breakers, upgraded information systems to monitor
transactions in related markets, consistent margins accross markets and a
unified clearing systems
   p147 [Stiglitz 7/2007] Reforms are still needed - including an overhaul of
the global reserve system
   p241 [Lewis NYT 27oct02] Cohen was wrong, and Blodget was right, and
Merrill Lynch was the laughingstock of the market. And so Merrill fired
Cohen, hired Blodget and in effect, bought into AMazon.com at four hundred
bucks a share. / It occured to no one at the time tha Merrill was conspiring
to drive up Internet stocks. They were simply giving their brokeage clients
what they wanted
   p269 [Dave Barry Money Secrets 2006 Crown, How to get RIch in Real Estate]
The reason people usually give for buying an older house is that older houses
have "character." What do we mean by "character"? We mean "dry rot."
   p272 Unlike old houses, which fall apart over time, new houses start
falling apart immediately. Oftne the last subcintractors on the job have to
spring from the house as it begins to collapse around them, like Indiana
Jones in the Temple of Doom
   p277 [WSJ 13dec02] Federal regulators require some form of appraisal for
virtually every residential real-estate loan to protect lenders and
homoeowners against overextending themselves.. profession organized in the
1930s, when plunging Depression prices made valuing property more difficult,
In 1989, when appraisers came under fire for valuations that supported shaky
S&L loans, COngress passed a law establishing state licensing.. Many lenders
also have lost a long-term interest in their loans, because they sell them
off to investors
   p290 [New Yorker 11nov02] Many families have offset their losses in the
stock market by refinancing their mortgages and taking out home-equity
loans. During the past two and a half years, homeowners have raised more than
three hundred and fifty billion dollars in this way, of which they have
already spent more than a hundred biillion, on SUVs, furniture, and other
goods. In the words of Fortune, "The American home has become a virtual ATM."
   p343 [Bloomberg 26mar08] It isn't because Wall Street CEOs are lazy, or
stupid. It's because tey are trapped. The Wall Street CEO can't interfere
with te new thing on Wall Street because the new thing is the profit center,
and the people who create it are mobile. Anything he does to slow tem down
increases the risk that his most lucrative employees will quit and join
another big firm, or start their own hedge fund. He isn't a boss in the
conventional sense. He's a hostage of his cleverest employees
				     #@#
   Hedging Political Risk in China.  Bremmer, Ian 1 Zakaria, Fareed 2 Harvard
Business Review; Nov2006, Vol. 84 Issue 11, p22-25, especially vulnerable to
external shocks, such as spikes in global commodity prices (particularly
energy), epidemics, regional political unrest, and protectionist sentiment in
the Western world. Domestic political unrest also poses risks: Rapid growth;
the dislocation of tens of millions of people as state-owned companies have
shed workers; public anger over land redistribution; widening wealth gaps;
and major industrial accidents, including toxic spills, have all fueled
social instability. This volatility has the potential to force sweeping
governmental action, such as large-scale social spending or systemic
crackdowns; disrupt supply chains; endanger fixed assets; and erode investor
confidence.. foreign firms in China should employ several hedging
strategies. First, they should work with their home governments to press the
Chinese government to honor its commitment to open markets, institute basic
economic rules of the road, enforce those rules it does have, and protect
intellectual property rights.. Second, to minimize reputational risks at
home, foreign companies should establish and firmly adhere to corporate
responsibility standards.. Third, foreign companies should prepare in the
following specific ways.. Create emergency response plans.. Preparing Chinese
workers to assume the functions vacated by foreign workers is essential for
the continuity of operations.. even when workers cannot all assemble in one
place.. Develop strategies to recruit and train talented
managers.. partnerships with Chinese colleges and universities, trading
promises of future employment for influence in the business management
curriculum.. Safeguard intellectual property rights.. Involving Chinese
stakeholders in the benefits that flow from technical innovation may over
time promote greater enforcement protection.. Understand the
competition. Increasingly, Chinese companies are competing not just on their
home turf but also in foreign competitors' home markets and around the
world.. Diversify risk.. Develop strategies for exercising corporate social
responsibility.. Seek outside perspectives. Firms should supplement the views
of their in-country teams and consultants with those of truly independent
experts. They should also institutionalize the application of their
risk-mitigation framework.. Have an exit strategy.
				     #@#
   Management Lessons from the Bust; Joseph Weber; Business Week Aug. 27,
2001, pp. 104-112.  As the widely touted "new paradigm" fades into bitter
memory and the management gurus look for the next new thing, the search for
lessons begins. This report discovers that there were people at such "old
economy" companies as Eaton who saw it coming and took appropriate steps,
like accumulating cash. Others are now learning such lessons as "don't base
forecasts on order backlogs," and "know your customers' customers." As MIT
professor John D. Sterman told BW, "If you are in the pasta business, you
want to know how much pasta people are cooking and eating, not how much they
are buying, and certainly not how much supermarkets and distributors are
ordering from the factory."
				     #@#
   Symposium:   The  Going-private   Phenomenon:   Venture  Capital   Limited
Partnership Agreements: Understanding  Compensation Arrangements Winter, 2009
76 U.  Chi. L. Rev.  161 Kate Litvak  compensation of venture  capitalists is
comprised not only  of management fee and carried  interest, the two elements
commonly identified, but includes a third element. This additional element is
the  value  of   the  interest-free  loan  that  VCs   receive  from  limited
partners. The amount and term of this loan are specified through distribution
rules determining when VCs receive  their share of profits..  Because of this
interest-free loan,  VCs almost  always capture a  higher fraction  of funds'
profits..   VC  compensation  is  substantially less  performance-based  than
commonly believed..  pay-performance elasticity is similar to that of CEOs of
public companies during the same years and  is lower than that of CEOs of S&P
500 financial firms..   VC funds very rarely use  hurdle rates..  Carry. This
variable  is the  percent  of the  fund's  profits payable  to  VCs as  risky
compensation. Distribution  coefficient. This variable is the  ratio of carry
that a  VC would receive  according to the  distribution rule specified  in a
partnership  agreement over  carry that  a VC  would receive  under  the most
investor-friendly  distribution rule..  if  more successful  VCs are  able to
raise  larger funds,  they may  get a  double benefit  - they  will  earn the
management  fee  and  carry on  a  larger  base,  and  may also  earn  higher
compensation  per  dollar  of  committed  capital..  the  management  fee  is
typically  calculated as  a  portion of  fund  size. And  carry, measured  in
dollars,  is directly  related to  fund size.   Thus, fund  size is  a strong
predictor of VCs'  overall take-home pay..  VCs who raised  more money in the
past  raise  more  money  in  the future..   Past  performance  matters,  too
(Hypothesis  1b): VCs  with  an above-median  sold/total  ratio raise  larger
funds.  However,  the  IPO/total  ratio  does not  predict  new  fund  size..
suggests that older  VCs may, in part, be coasting on  past reputation..  A 1
percent increase in  fund returns translates into a  0.47 percent increase on
average in  total VC compensation  across vintage years,  with a low  of 0.38
percent (in  vintage year 1997) and a  high of 0.5 percent  (in vintage years
1989 and 1990). This is not surprising given that a significant portion of VC
compensation  does  not  depend  on fund  performance..   greater  complexity
predicts lower compensation..  older VCs  and more reputable VCs (as measured
by total dollars raised in prior  funds) make less use of the managed-capital
base.. VCs with a higher portion of failed companies are more likely to use a
managed-capital base..  carry is based  on the sales of portfolio companies..
VCs can smooth their income by front-loading their management fees.. A VC who
raises a new fund every four to  six years can expect a stream of carry every
four to  six years; he might prefer  higher management fees in  the middle of
each fund's  life..  more established VCs  (who raised more  capital in prior
funds)  are less  likely  to have  a  front-loaded fee..  The sold/total  and
failed/total  ratios are  not significant  predictors of  front-loading..  In
particular,  distribution   rules  vary   widely  across  funds,   yet  their
VC-friendliness is not strongly predicted  by proxies for VC quality. Nor are
distribution rules simply delegated to lawyers - the same law firm will often
draft different distribution rules for  different clients. Better VCs tend to
raise  larger funds,  as do  VCs who  have raised  larger funds  before. Some
elements of  VC compensation appear  to be used  to smooth VC  incomes...  My
findings have implications for  executive compensation. They suggest that the
legal  and  institutional  barriers  to  investor  participation  in  setting
executive compensation do not fully explain some key features of compensation
contracts.  Investors in  venture funds  are able  to  negotiate compensation
terms  directly..  On  the other  hand,  with the  exception of  distribution
rules,  there is  no  evidence that  the  contractual complexity  is used  to
increase stealth compensation.
				     #@#
   Symposium:  The  Going-private  Phenomenon:  Does  Private  Equity  Create
Wealth? The Effects of Private Equity and Derivatives on Corporate Governance
Winter, 2009  76 U. Chi. L.  Rev. 219 Ronald  W. Masulis & Randall  S. Thomas
private-equity investors are better risk monitors with better incentives than
public shareholders at firms with significant derivative trading activity and
derivative contract  positions..  Federal  Reserve has relaxed  its stringent
regulations on private-equity investment  in banks and bank holding companies
to facilitate the flow of capital into banks. The Comptroller of the Currency
has  also  permitted  a  private-equity  fund  manager  to  purchase  a  bank
personally, rather than through the use of his fund, and thereby avoid having
his   fund  classified  as   a  bank   holding  company..    debtholders  and
institutional investors  can further improve firm risk  monitoring since they
are large  investors who  frequently hold both  debt and equity  positions in
private-equity-controlled firms.  This gives them  good access to  and strong
incentives to  monitor proprietary firm information flows  to accomplish this
goal. Thus, the shift toward  greater private-equity ownership in the economy
can be viewed  as a value-creating response to  increased derivative activity
and contract  exposure levels..The buyout firms  earn fees from  a variety of
different  sources:  management  fees,  which  are  typically  2  percent  of
committed  and/or invested  capital; carried  interest, which  is  usually 20
percent of  the profits  earned by  the fund on  its investments,  subject to
various  adjustments, thresholds,  and hurdles;  transaction fees,  which are
paid to  the fund when it buys  or sells a portfolio  company; and monitoring
fees for its  work helping to manage the portfolio company  while it is owned
by  the buyout firm..   Prior to  1980, the  total amount  of capital  in the
private-equity  market equaled  between $  2.5 and  $ 3.0  billion,  with new
capital inflows  at less than $ 100  million per year.  [  Daniel A. Wingerd,
The Private Equity  Market: History and Prospects, Investment  Policy Mag 26,
30 (Sept/Oct 1997) ] Only in the 1980s, after deregulatory initiatives at the
Department of Labor and the  SEC removed important obstacles to institutional
investors  putting large amounts  of capital  into the  asset class,  did the
first  private-equity  boom  begin..   in 2005-2006,  the  private-equity/LBO
market had reached 5 percent of the capitalization of the US stock market, or
about 1.4 percent  of global GDP..  Michael Jensen  argues that going-private
transactions reduce the  agency costs of equity by  cutting down on managers'
discretion to misallocate cash into empire building, empire preservation, and
excessive perquisites [67  Harv Bus Rev 61(Sept/Oct 1989)]..   Why might this
managerial domination  persist? One possible  answer is because  the director
nomination  process  at  public   companies  has  historically  ensured  that
directors  care more  about what  CEOs  think than  what shareholders  think 
Melvin Aron  [Eisenberg, The Structure  of the Corporation: A  Legal Analysis
146-48 (Little,  Brown 1976); 63  J Fin 1729,  1733 (2008)]..  In  sum, there
seem to be significant regulatory cost  savings that can be obtained by going
private, and for at least  some firms, particularly smaller firms, these cost
savings  may exceed the  benefits of  being a  public company..   increase in
interest payments is  the enhanced corporate tax deductions  available to the
firm..  This  asymmetric information  distribution can provide  managers with
superior understanding about  the future value of the  firm, allowing them to
time their  purchase of  the company in  a going-private transaction  to take
advantage  of a  temporarily depressed  price for  the company's  stock. More
perniciously,  unfaithful  managers  may  engage in  techniques  designed  to
depress artificially  the stock  price in order  to facilitate an  MBO deal..
Robert  Merton  was the  first  to argue  that  the  existence of  derivative
contracts raises the relative advantage of being private over being public by
permitting private firms to spread risks more widely.[19 J Banking & Fin 461,
462 (1995)] Given the tremendous growth in derivative markets since 1995, the
relative benefits of public ownership as a means of risk-sharing and lowering
the cost of  capital appear to have substantially  declined..  expected costs
of an LBO: higher expected  bankruptcy costs, agency costs due to intensified
conflicts of interest  among firm stakeholders, the lack  of stock liquidity,
owners' reduced  diversification of risk,  the disappearance of  timely stock
price information, the  lack of periodic financial disclosure,  and a reduced
ability to tap  public capital markets..  managers of  highly leveraged firms
can have strong incentives to  "bet the farm" to avoid potential bankruptcy..
if a leveraged firm experiences an adverse economic event that pushes it into
financial distress,  then regardless  of whether it  is closely  or diffusely
held, managers have  incentives to substantially raise firm  risk to increase
the firm's equity's (call option)  market value by raising volatility (a call
option is a  positive function of volatility since  it raises the probability
of  a large  gain in  value), even  though the  debt's value  suffers  from a
greater  probability  of default..   most  firms  appear  to have  inadequate
internal   accounting  and   control  systems   to  track   these  derivative
transactions on a timely basis or to police effectively any existing position
limits. The  many derivatives-related financial  scandals are a  testament to
this  weakness.  The problem  has  been compounded  by  the  failure of  many
derivative  traders to  require  highly detailed  information  on the  assets
underlying their financial contracts..   Robert Merton and Myron Scholes both
observe that  current financial and  regulatory accounting systems do  a poor
job of tracking the risks associated with derivatives [Merton, 19 J Banking &
Fin at 470]..  default risk of counterparties in derivative contracts is also
very dynamic.. Two particularly serious  areas of deficiency appear to be the
assessment of counterparty  default risk exposure and the  adverse effects on
insurers  of  potential macro  events,  which  can  overwhelm their  reserves
against losses.  However,  a more fundamental problem is  that risks taken by
counterparties  can change  quickly, but  there  is no  real-time control  or
monitoring of  these risk  exposures.. tendency of  many financial  assets to
suddenly become highly correlated in periods of capital market distress.. One
result of  this greater  risk exposure is  that FIs  have a greater  need for
sophisticated directors who are  knowledgeable about derivative contracts and
markets. These directors  need to monitor intensively these  FIs on an almost
continuous basis and implement rigorous internal risk controls and monitoring
systems,  which  require updating  as  the  financial engineering  technology
evolves.  While  regulatory authorities have  tried to reduce  these concerns
through  their own  monitoring mechanisms,  they have  suffered  from similar
weaknesses..  board  oversight  has   been  significantly  weakened  by  poor
incentives and higher  monitoring costs. In addition, there  has been a shift
toward    nominating   directors   based    on   their    independence   from
management..  while  many  outside  corporate  directors  appear  to  exhibit
financial independence,  this is  often offset by  these directors  not being
well  informed  about  company  operations..   A general  prediction  of  the
literature  on optimal  contracting is  that as  it gets  more  difficult and
costly  to  monitor   managers,  there  should  be  a   greater  reliance  on
risk-sharing  through larger  equity-based compensation  contracts[10  Bell J
Econ 74,  75-80 (1979)]..  use  of private debt  allows creditors to  be more
flexible  in dealing  with  covenant violations,  permitting more  customized
covenants to be used and potentially resulting in tighter contracts
				     #@#
   Predicting  Corporate  Governance Risk:  Evidence  from  the Directors'  &
Officers' Liability Insurance Market Spring, 2007  74 U. Chi. L. Rev. 487 Tom
Baker and Sean J. Griffith Liability insurers bankroll shareholder litigation
in  the United States.   Directors' and  officers' (D&O)  liability insurance
policies  cover  the  risk  of  shareholder  litigation.  Nearly  all  public
corporations purchase  D&O policies.   And nearly all  shareholder litigation
settles within  the limits of these  policies..  The D&O  insurer has several
means of  reintroducing the deterrence  function of corporate  and securities
law and, because  it is the one ultimately footing  the bill, ample incentive
to do so..  Because  this cost is, in part, a function  of the quality of the
insured's corporate  governance practices, it fulfills  a necessary condition
for  advancing   the  deterrence  objectives  of   corporate  and  securities
law..  unique  perspective  on   what  (if  anything)  matters  in  corporate
governance,  underscoring the  role of  "deep governance"  variables  such as
"culture"  and "character" in  contrast to  the formal  governance structures
commonly emphasized  in previous scholarship..  two insurers  (AIG and Chubb)
together account  for more than half  of the market..   public companies have
about a 2 percent  chance of being sued in a shareholder  class action in any
given year..   average settlement  value for the  years 2002-2005 was  $ 22.3
million, significantly  higher than  the average settlement  value of  $ 13.3
million for the  years 1996-2001..  basic concern underlying  all such claims
is a  divergence between  managerial conduct and  shareholder welfare  -- the
problem, in other words,  of agency costs..  capitalization, volatility, n120
and various  accounting ratios.  Industry and volatility  are associated with
frequency: some  industries are sued  more often than others  and shareholder
litigation   tends  to  coincide   with  sudden   declines  in   share  price
(volatility).  Market  capitalization, meanwhile,  is  used  to predict  both
frequency  and  severity:  larger   firms  are  sued  more  often..   Several
underwriters  cited executive compensation  as a  key indicator  of intrafirm
incentives.  An  equally  large  number  also emphasized  the  constraint  of
internal controls.  In their discussion of these  incentives and constraints,
it was clear that underwriters looked  past the formal rules, seeking a sense
of how strong  the norm of compliance is within  the organization or whether,
by contrast, there  is a norm of defection..  liability  risk comes from what
the  firm's executive  compensation  practices suggest  about the  incentives
operating within the  firm.  For similar reasons, our  participants cited the
stringency of a firm's insider trading policies (and the care with which they
are  observed) as  significant  factors in  risk  assessment..  pressures  to
manipulate results  may exist throughout the firm..   Insurers are interested
in  whether acquisition  activity is  value enhancing  or rather  mere empire
building,  further  evidence   of  unconstrained  management..   underwriters
reported that they take the ownership structure of a prospective insured into
account..  take into account such  structural governance features as state of
incorporation, board  independence, committee composition,  and separation of
the  chief  executive and  board  chair  roles..   Arrogance, our  interviews
suggested,  may indicate  individuals  who hold  themselves  above rules  and
norms..  arrogance indicates a lack of  restraint, as well as the ability and
willingness to rationalize  one's conduct in a way that  makes the rules seem
not to apply..   that the company is overcommitted to  growth because in such
situations there will be a strong temptation to misstate results when reality
falls behind expectations. Excessive risk taking, in other words, can lead to
fraud..   market   capitalization  (all  insurers),   industry  sector  (most
insurers), stock  price volatility  (many insurers), accounting  ratios (many
insurers),   and   age/maturity    of   the   applicant   corporation   (some
insurers)..  Most  insurers  allocate  even  more  discretion  to  individual
underwriters  in  setting  premiums..   the primary  insurer's  quotation  is
disclosed  to all  excess carriers  before  they provide  their final  quote,
putting them  in an  even better  position to predict  the prices  charged by
their competitors
				     #@#
   Pernicious  Art   of  Securities  Regulation.   Anglo-American  Securities
Regulation:   Cultural  and  Political   Roots,  1690-1860.   Stuart  Banner.
Cambridge   University  Press,   1998.  Pp   xviii,  318.    Fall,   1999  66
U.  Chi. L.  Rev. 1373  Reviewd by:  Paul  G. Mahoney  To see  where such  an
analysis  might   have  led,  consider   two  steps  that  have   been  taken
elsewhere. Historians have situated English antispeculation commentary within
a  broader  seventeenth-century  dispute  about  the role  of  the  state  in
"managing"  the  economy. n3  Many  of  the  commentators who  believed  that
government  must  enforce moral  precepts  against  profiting  from trade  in
necessary commodities  also argued more  generally for "the  subordination of
economic  life to social  and political  considerations." n4  Such commentary
provided  intellectual  support  for  mercantilism,  a  system  of  pervasive
economic regulation that sought to maintain social order by bringing economic
activity under  the centralized control  of the state. Economists  have taken
the further step  of identifying rent-seeking interest groups  who took cover
under that desire  for stability. n5 Once we  discover in seventeenth-century
arguments about speculation an  undercurrent of ideological dispute about the
desirability of  industrial planning, fueled  in part by producers  trying to
hobble their competitors, the whole debate begins to look remarkably modern..
Starting  in the  mid-1690s,  Defoe  wrote a  series  of pamphlets  attacking
"stockjobbers.".. Banner  alludes to the least important  of Defoe's personal
interests--his bankruptcy, which gives his  diatribes a strong flavor of sour
grapes (p  29)--but the brief mention  does not nearly do  justice to Defoe's
remarkable commercial career.  Defoe inherited from his father the privileged
status of a liveryman of the City  of London, one of the powerful few able to
engage in trade, vote in  Parliamentary elections, and reap the privileges of
control of  a local government devoted  largely to rent-seeking  on behalf of
merchants..  swindler, embezzling money  from his mother-in-law, tying up his
creditors  in litigation,  hiding  assets,  and selling  the  same assets  to
multiple purchasers..   Defoe's most consistent  complaint about stockjobbers
is that they  were responsible for the existence of  two competing East India
Companies.  The  "Old Company" received its  first royal charter  in 1600 and
enjoyed a  monopoly of the trade  to India until Parliament  created the "New
Company" in 1698.  Defoe argues that competition between  the two reduced the
prices of imported goods to the detriment of domestic manufacturers..  Anyone
who could  convince the  crown to  grant a charter  (which in  practice meant
paying for  a charter through loans or  gifts to the King)  could establish a
business.  In that sense, the joint-stock company represented an incursion by
national authorities  on municipal privileges..  "stockjobber" was  in part a
code  word meaning the  proprietors of  businesses organized  as joint-stocks
rather   than  regulated   companies.    Their  real   complaint  was   about
competition..  [other] recurring complaints. Securities trading was described
as  "a breeding  ground for  deceit" (p  49); a  nonproductive  activity that
"diverted time and effort from  other, more worthwhile activities" (p 58); an
activity that tended  "to divide the public into factions"  (p 62) and divert
the government from pursuing the public interest; and an activity that "upset
accustomed patterns of  social life" (p 65) by creating  a moneyed class that
was neither propertied nor well-bred  and in many cases not Christian. Banner
notes  that "some of  these complaints  are unlikely  to sound  persuasive to
modern readers" but maintains that these views were widely and sincerely held
(p  49).  Moreover, he  argues, these  criticisms "would  become long-running
motifs in English and American culture" (p 48)..  As Banner recognizes, these
criticisms were  essentially warmed-over versions of  the traditional attacks
on  grain  speculators  and  money-lenders..   when  the  English  government
temporarily stepped up its enforcement of grain speculation laws in the early
seventeenth century, the effect was to reduce food supplies in London and the
effort  was  abandoned.   [Christopher   Hill,  The  Century  of  Revolution,
1603-1714 31  (Thomas Nelson &  Sons 1961)]..  Securities regulation,  on the
other hand,  was clearly a  forum through which  brokers gained rents  at the
expense of their customers. We get  our first hint from the wonderfully named
"Act to restrain the number and ill practice of brokers and stock jobbers" of
1697, the first statute to regulate the new securities market.  Its principal
feature was  indeed to limit the  number of stockbrokers to  one hundred. The
Lord  Mayor of  London was  given the  power to  hand out  the  licenses. The
brokers apparently understood the benefits of entry barriers without the help
of modern  economic theory.  The collapse  of the price of  South Sea Company
shares  in 1720  occupies  a prominent  place  in the  history of  securities
regulation, and Banner describes the  public reaction to the fiasco in detail
(pp 45-48)..  The Bubble Act was enacted before, not after, the steep drop in
the South Sea Company's share price.   Moreover, it is clear that the statute
was enacted at the South  Sea Company's behest. One recent commentator argues
that  the   Company's  purpose  was   to  cut  off  competition   for  scarce
capital.  Whether  or  not  that  was the  motivation,  the  Company  induced
Parliament  to enact a  statute that  then backfired  by causing  a financial
panic that brought the Company down with the rest [Garber, 4 J Econ Persp 35,
51 (1990); Harris, 54 J Econ Hist 610, 612 (1994)]
				     #@#
   Implications of the Private Securities Litigation Reform Act of 1995 for
Judicial Presumptions of Market Efficiency Summer, 1998 65
U. Chi. L. Rev. 879 Nathaniel Carden In 1995, however, Congress passed the
Private Securities Litigation Reform Act of 1995 ("PSLRA"). The measure was
designed to stem what Congress believed to be an epidemic of frivolous
securities fraud suits...  distinct uses of "efficiency": (1) as a goal for
the market, (2) as a description of the market, and (3) as a heuristic device
needed because of courts' limited competence in predicting market movements..
efficiency is often a normative goal.  Certain judicial decisions attempt to
make the capital markets more efficient.. an efficient market is desirable
because it ensures that society's productive assets are transferred to those
who can make the best use of them, thereby maximizing aggregate welfare...
weak form predicts that it is futile for investors to undertake so-called
technical analysis based on patterns in historical price data. The
intermediate version of the theory, termed "semi-strong," asserts that all
publicly available information is reflected in market price, and that newly
available public information becomes incorporated in that market price almost
instantaneously.  This version suggests that further "fundamental value"
analysis, such as using information about the firm, the industry, or the
economy, will not yield superior returns. Finally, the "strong" form
maintains that all information, public and private, is fully incorporated
into the market price at any given time. Under this theory, even insider
trading would not be profitable..  semi-strong version, however, has been
accepted by courts and become relevant to liability under Rule 10b-5..  Armed
with statistical evidence of the frequency and magnitude of suits, n65 as
well as anecdotal evidence of frivolous or abusive litigation practices, n66
Congress began considering legislation to reform securities fraud liability
in early 1995. This effort culminated in the PSLRA, which had three
objectives: (1) to encourage voluntary disclosure of information; (2) to
"empower investors" so that they, not their lawyers, control litigation; and
(3) to encourage plaintiffs to pursue valid claims while simultaneously
facilitating defendants' resistance to frivolous suits..  provides for a
"look-back" period following the corrective disclosure so that plaintiffs
will not be overcompensated if the markets overreact to a disclosure
correcting the initial misleading statement or omission. In arriving at this
conclusion, Congress relied heavily on a "crash" theory of market movement
posited by Professors Baruch Lev and Meiring de Villiers.[47 Stan L Rev 7,
20-21 (1994)] This model predicts that share prices will systematically
overreact and correct following a corrective disclosure..  Congress
apparently believes that price movement subsequent to the corrective
disclosure is attributable not to new information entering the market, but
rather to market readjustment following the initial overreaction to the
unveiling of the fraud. Over the course of the ninety day postdisclosure
"look-back" period, other macroeconomic, industry, and firmspecific
information is likely to enter the market. Congress appears to think that
price changes will be a reflection of both this new information and the
response to the overreaction..  reflect a congressional desire to limit
plaintiffs' leverage and ensure that defrauded plaintiffs are not
overcompensated by market overreactions..  common sense presumption that
arises with a showing of a sufficiently active market along with credible and
widely dispersed information. Simply put, fraud is likely to cause a change
in the price at which investors buy or sell securities in an active
market. As a consequence, there is no reason for courts to rely on theories
that describe the market as efficient. Instead, using "common sense and
probability," courts should attempt to ensure that no investor must "roll the
dice in a crooked crap game."