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This chapter seeks to advance our understanding of leadership and to show that it has the potential to be a science as well as an art. The author demonstrates how effective leaders make decisions by solving the classic prisoner's dilemma-a concept borrowed from economics. The prisoner's dilemma, simply put, is the choice between turning state's evidence against your partner in crime, confessing, and getting a lighter punishment (while your partner gets the maximum punishment), or risking the possibility that your partner will confess first, thereby condemning you to the maximum punishment. The ability to recast the prisoner's dilemma from a one-shot game to an indefinitely repeated game provides a key insight into the leader's role. Enabling members of an organization to move from what the author calls an "inferior equilibrium" (the one-shot game) to a "superior equilibrium" (the indefinitely repeated game) requires the leader to focus on six essential tasks: vision, enrollment, commitment, integrity, communication, and authenticity. This chapter was originally published as Chapter 10 of "Handbook of Leadership Theory and Practice: A Harvard Business School Centennial Colloquium."
Cyprus is a small Mediterranean island located at the cross-roads of Europe, Africa, and the Middle East. Since its 1974 split, Cyprus has grown real GDP more than fivefold-in large part because of its development as an "international business" center. The country developed a large network of double-taxation-treaties (including some of the most robust agreements with Russia and other ex-Soviet Republics) that allowed it to serve as a tax-efficient conduit for international capital flows. In 2002 it acceded to the European Union and in 2008 to the Eurozone. However in 2012, facing fiscal deficits and an insolvent banking sector, the island became the fourth EU country to formally request assistance from the EC-ECB-IMF Troika. The final assistance package required a "bail-in" from uninsured depositors in order to return the nation's largest banks to solvency. How had Cyprus's development model contributed to both the island's financial crisis as well as the structure of its ultimate assistance package?
Multinational corporations and wealthy individuals often use so-called tax havens to establish subsidiaries or holding companies in order to rebalance profits across borders with the primary purpose of lowering their effective tax rate. This note describes the use of tax havens, the implications for the financial sector in tax havens, as well as the debate around the effect of tax havens on welfare in other jurisdictions.
S.K. Ko managed Motorola's Penang, Malaysia factory, producing telecommunications components and equipment. As a female manager of a multi-ethnic and labor-intensive plant in Asia, Ko faced a number of challenges. She had already promoted quality circles and quality competitions to meet Motorola's raised standards. Extensive training gave workers the skills to solve problems and to troubleshoot equipment. But Ko was skeptical of empowerment efforts at other Motorola sites that aimed for much greater worker participation in decision making. She thought empowerment inappropriate to the Asian context. She also thought that many operators would have trouble upgrading their skills as the world became more information intensive. Other Southeast Asian nations with lower labor costs were a competitive threat to Penang's labor-intensive processes. She envisioned Penang transformed by the year 2000 into a fully automated manufacturing operation and a design center for all of Motorola's Asian operations.
The companies best able to pursue growth opportunities are equally aware of the need to impose rules and structure on their own decision-making process, advocating a decision process that pays particular attention to leadership economics and market control in new adjacencies, a robust profit pool, and a clear sense of relatedness to a strong core. This chapter looks at 24 companies to identify and compare some of the most critical criteria to be considered in any first-rate decision process regarding growth investments.
Executing Adjacency Moves: Managing the Key Organizational Issues That Most Influence Success or Failureby Chris Zook
The many CEOs interviewed for this book all stressed the organizational challenges of adjacency expansion. Based primarily on case examples and direct comments from senior executives who have grappled with these organizational concerns, this chapter examines issues related to the execution of adjacency moves that fall into three major areas that were emphasized again and again: managing linkages between the core and adjacencies, organizing for repeatability, and exiting adjacencies.
Finding or maintaining a source of sustained and profitable growth has become the number one concern of most CEOs, and pushing the boundaries of the core business into "adjacencies" is the strategy of choice for most companies. Outlining the book's promise to provide a practical framework, using company examples, interviews with CEOs, and statistical analysis for decreasing the substantial risks associated with adjacency expansion and improving the odds for success, this chapter asks the question, what are successful adjacency moves and why are they important?
Even the most attractive growth opportunity can turn unattractive, unrealistic, or even destructive when bolted onto the wrong core business, or onto the right business at the wrong time. Building growth on a core business that is prepared to support it, and for which the new adjacency moves might even reinforce the strength of that core rather than draining it of its energy, is crucial. This chapter examines the issue of timing and assessing the state of the core to support growth.
The primary reason that companies die or tumble into extended periods of value destruction is not because their market suddenly disappears or becomes uniformly unprofitable. Rather, it is because those companies failed to adapt, failed to redefine their core, and were overtaken by competitors. This chapter looks at how adjacency expansions done rapidly and effectively provide the best method to transform a company and redefine its core business.
Repeatability is the essence of mastery and control, and the discovery of a repeatable formula, one of the most critical elements in the growth of a company, drives profitable growth. This chapter tackles visualizing the ideal adjacency moves, focusing on the characteristic of repeatability--a trait at the heart of some of the great instances of sustained, profitable growth--to drive wave after wave of growth over time.
In the waning days of a lazy August holiday, Ellie Stone is enjoying a bright Adirondack-lake morning. Nearby, two men plummet to their deaths just a few feet short of the water of a dangerous diving pool. A tragic accident, it seems. But the police quickly establish that the two victims--one a stranger to the lake and the other a teenaged boy from a nearby music camp--surely didn't know each other. So how did they come to die together? Wading into a slippery morass of free-love intellectuals and charismatic evangelicals, Ellie's investigation forces her to navigate old grudges and cold war passions, lost ideals and betrayed loves. As usual, she sticks her nose where it's unwanted, rattling nerves and putting herself in jeopardy. But this time it's her heart that's also at risk.From the Trade Paperback edition.
Contains 92 illustrations and 45 maps of the Russian Campaign.A brilliant modern history of the German invasion of Russia to their bloody crushing defeat by the re-invigorated Russian forces at the siege of Stalingrad.During 1942, the Axis advance reached its high tide on all fronts and began to ebb. Nowhere was this more true than on the Eastern Front in the Soviet Union. After receiving a disastrous setback on the approaches to Moscow in the winter of 1941-1942, the German armies recovered sufficiently to embark on a sweeping summer offensive that carried them to the Volga River at Stalingrad and deep into the Caucasus Mountains. The Soviet armies suffered severe defeats in the spring and summer of 1942 but recovered to stop the German advances in October and encircle and begin the destruction of the German Sixth Army at Stalingrad in November and December. This volume describes the course of events from the Soviet December 1941 counteroffensive at Moscow to the Stalingrad offensive in late 1942 with particular attention to the interval from January through October 1942, which has been regarded as a hiatus between the two major battles but which in actuality constituted the period in which the German fortunes slid into irreversible decline and the Soviet forces acquired the means and capabilities that eventually brought them victory. These were the months of decision in the East.
Contains 72 illustrations and 42 maps of the Russian Campaign.After the disasters of the Stalingrad Campaign in the Russian winters of 1942-3, the German Wehrmacht was on the defensive under increasing Soviet pressure; this volume sets out to show how did the Russians manage to push the formerly all-conquering German soldiers back from Russian soil to the ruins of Berlin.Save for the introduction of nuclear weapons, the Soviet victory over Germany was the most fateful development of World War II. Both wrought changes and raised problems that have constantly preoccupied the world in the more than twenty years since the war ended. The purpose of this volume is to investigate one aspect of the Soviet victory-how the war was won on the battlefield. The author sought, in following the march of the Soviet and German armies from Stalingrad to Berlin, to depict the war as it was and to describe the manner in which the Soviet Union emerged as the predominant military power in Europe.
The ingenious people of the Garden State were instrumental in the early development of the submarine. The first American submarine sank off Fort Lee in 1776, and the first successful one adopted by the U.S. Navy was invented by Paterson's John Holland at the end of the nineteenth century. Those early vessels were tested in the Passaic River and on the Jersey City waterfront. Today, the only surviving Union Civil War submarine, built in Newark, sits in the National Guard Militia Museum in Sea Girt. In 1918, the technology pioneered there was turned against the Jersey Shore when U-151 went on a one-day ship-sinking rampage. A World War II U-boat offensive torpedoed numerous ships off the coast, leaving oil-soaked beaches strewn with wreckage. Authors Joseph G. Bilby and Harry Ziegler reveal the remarkable history of submarines off the New Jersey coastline.
From the author of the acclaimed 97 Orchard and her husband, a culinary historian, an in-depth exploration of the greatest food crisis the nation has ever faced--the Great Depression--and how it transformed America's culinary culture.The decade-long Great Depression, a period of shifts in the country's political and social landscape, forever changed the way America eats. Before 1929, America's relationship with food was defined by abundance. But the collapse of the economy, in both urban and rural America, left a quarter of all Americans out of work and undernourished--shattering long-held assumptions about the limitlessness of the national larder.In 1933, as women struggled to feed their families, President Roosevelt reversed long-standing biases toward government-sponsored "food charity." For the first time in American history, the federal government assumed, for a while, responsibility for feeding its citizens. The effects were widespread. Championed by Eleanor Roosevelt, "home economists" who had long fought to bring science into the kitchen rose to national stature.Tapping into America's long-standing ambivalence toward culinary enjoyment, they imposed their vision of a sturdy, utilitarian cuisine on the American dinner table. Through the Bureau of Home Economics, these women led a sweeping campaign to instill dietary recommendations, the forerunners of today's Dietary Guidelines for Americans.At the same time, rising food conglomerates introduced packaged and processed foods that gave rise to a new American cuisine based on speed and convenience. This movement toward a homogenized national cuisine sparked a revival of American regional cooking. In the ensuing decades, the tension between local traditions and culinary science has defined our national cuisine--a battle that continues today. A Square Meal examines the impact of economic contraction and environmental disaster on how Americans ate then--and the lessons and insights those experiences may hold for us today.A Square Meal features 25 black-and-white photographs.
Upwork, the world's largest freelance talent platform, was the result of a merger between the two leading online freelancing companies in 2014, Elance and oDesk. After the merger, the company operated as Elance-oDesk and continued to manage two online platforms - Elance.com and oDesk.com - independently of one another. However in 2015 the company relaunched as Upwork, with both a new brand and a new platform. The company began to migrate Elance.com members and functionalities over to the new platform, which was based on the technical infrastructure of oDesk.com. This case helps students consider the challenges and opportunities associated with such a platform merger, from strategy to implementation.
This note provides an overview of the Chinese Internet by describing its leading three companies: Baidu, Alibaba, and Tencent (BAT). While BAT had previously focused their respective businesses on distinct sectors of the online economy-Baidu for search, Alibaba for e-commerce, and Tencent for games and instant messaging-the proliferation of mobile devices in China introduced new territory to be conquered. By the end of 2014, BAT had each made a series of investments and acquisitions to aggressively compete with each other and with other competitors in the emerging mobile space. This note can be used as background for any discussion related to the Chinese Internet industry.
To make sound business decisions, managers must be comfortable with the concepts of correlation and causation. This background note provides an overview of correlation and causation using examples and explains why the former does not imply the latter. It also describes several methods for gaining insights into causal relations, including randomized experiments, panel data, matching, and regression discontinuity. The note is intended for a general audience and does not require advanced statistics knowledge.