Back to B-School

In the current economy, market research presents many companies with a catch-22: you need market research to attract new customers, but you need customers to pay for market research.

In a recent post on his Harvard Business blog Marketing Knowhow, Harvard Business School professor John Quelch writes that many businesses are sacrificing their market research efforts due to budget constraints:

In the U.S., spending on market research has dipped for four consecutive quarters, and chief marketing officers don’t expect the situation to turn around soon. Most big consumer marketers are seeking to shave 10 to 20 percent off research budgets.

Quelch points out that during a recession, companies need solid market research more than ever, saying, “In flush times, a rising tide of consumption can compensate for less than optimal branding, positioning, pricing or segmentation. That is certainly not the case now.” Read the rest of this entry »

Professor Neil Malhotra of the Stanford GSB focuses on business ethics and non-market strategy. Last week, we discussed the increased emphasis on ethics training within Stanford’s curriculum. Today, we’ll talk about what kind of approaches will be most effective in driving home the importance of ethics to future business leaders.

BNET: How is the mindset of students and young business people changing when it comes to ethics?

Malhotra: Well, because of the economic crisis and the attention paid to ethics now, I think there’s been a good reaction and a bad reaction. I think most of this crisis was caused by an emphasis on instant gratification. One reaction to an overemphasis on instant gratification is to structure our corporations such that we don’t fall into that trap. Some companies are so obsessed with quarterly earnings they employees force employees to reach unrealistic quarterly benchmarks where other companies take a longer-term view. Those short-term views are very problematic; that causes a lot of incentive problems. But a number of people have the opposite reaction: you don’t know when you’re going to have good economic times again. You need to get yours while the getting’s good.

BNET: Do you think business schools are doing enough on the ethics front?

Malhotra: I think that the quantity is less important that the quality of the education. Most business schools have some required ethics class, but a lot of students haven’t taken it seriously…maybe they don’t like to be there.

Harvard Business School has done this thing with the MBA pledge on ethics. It’s a nice gesture, but I don’t think it’s going to cause anyone to be ethical. Either people who were going to behave ethically will self-select into it, or potentially, more dangerously, it’s going to provide cover for people who might do unethical things. They can say, “Well, I signed the pledge. I must be doing the right things; I’m an ethical person.” So I think this MBA pledge at Harvard is potentially more dangerous than it seems on the surface.

Reframing ethics away from “we can tell you how to be good people” to “this is how you strategically manage an organization where people are looking out for their own interests” is maybe a better way to do things. Business school students are very concerned with strategy; building an understanding [within the students] that ethics is an integral part of corporate strategy might be the way to go.

BNET: Ethics as central to overall corporate strategy…is that conventional wisdom or is that a new approach?

Malhotra: I don’t know if it’s conventional wisdom. I don’t think all of the students understand it, because I think a lot of students think, “Ethics is a constraint on profits.” A lot of corporate social responsibility is taught as a part of marketing, which is kind of simplistic…but I think it’s fine. The bigger concern with ethics, though, is a lot of these firms [who did not pay enough attention to ethics] just don’t exist anymore, potentially because some practices were unethical. Lehman Brothers doesn’t exist. Enron doesn’t exist because some practices were unethical. We’re saying that managing people in an organization is very difficult if you only view them as contributing labor to the production function. You would be ignoring that they are human beings who are fallible and sensitive to incentives. Behavioral economists have known this for a long time—there’s been a long concern about what incentives do. If you say to loan originators “you get more money the more loans you originate,” is that going to induce unethical behavior? So, when considering people’s market-based decisions, we need to think about the non-market consequences of them.

Next week, we’ll discuss another of Professor Malhotra’s interests: “non-market strategy.”  He contends future business leaders need a broader array of capabilities for managing the complex world of activists, government officials, the courts and the media.

Last week, Harvard’s Ben Heineman, Jr., shared his thoughts on improving business school education, namely by better integrating the skills taught in other professional schools such as law and public policy. He believes that doing so will produce better business leaders than many of those currently in power:

The fundamental problem in the financial meltdown is bad decision making by the CEOs and the boards and other top leadership on the allocation of capital and other fundamental tasks facing a corporation. We therefore really need to change the nature of leadership. Leadership is about integrating many perspectives to truly understand the nature of the problem. That broader perspective in defining problems will likely lead to better resolutions.

Another key to Heineman’s ideas about leadership is integrity. In his book High Performance with High Integrity, Heineman argues that acting with integrity is key to any business’ success. As he put it during our conversation: Read the rest of this entry »

Did you take advantage of a study abroad program while you were in college? If so, you may be more creative than those who didn’t.

According to research appearing in the May issue of the Journal of Personality and Social Psychology, people who have lived in foreign countries carry with them life-long enhanced creative skills.

The research was conducted by William Maddux, an assistant professor of organizational behavior at Insead in France, and Adam Galinsky, the Morris and Alice Kaplan professor of ethics and decision in management at the Kellogg School of Management at Northwestern University.

Read the rest of this entry »

While many professionals contemplating going back for an MBA are drawn to the convenience of an online degree, some worry that their title won’t have the weight of one accompanied by the words Harvard or Stanford.

However, former General Electric Chief Executive Jack Welch plans to change that. Students getting an online MBA from Chancellor University will be able to boast that they are graduates of The Jack Welch Institute. 

According to The Wall Street Journal, “Mr. Welch’s name may help add allure to for-profit, online education, which is growing rapidly despite nagging questions about quality.” Read the rest of this entry »

Most of you reading this are fortunate enough to reside at the top of the income pyramid, living and working in the United States or other highly developed countries. At the base of the pyramid reside people of developing countries, where access to things we take for granted in high income countries – think clean drinking water or reliable electricity — remain elusive.

The bottom and the top of the pyramid are worlds away, right? Not exactly. In fact, many businesses are starting to take the view that working to introduce sustainability at the base of the pyramid will be essential to continued success at the top of the pyramid.

At its first Global Forum on Sustainable Enterprise, the Center for Sustainable Global Enterprise at the Johnson Graduate School of Management at Cornell University recently hosted speakers including Cornell professor Stuart Hart, who believes businesses can profit by bringing clean technology to developing countries.

Hart spoke at the conference about introducing sustainable technologies in developing areas: Read the rest of this entry »

Professor Neil Malhotra brings his background in political psychology and political economy to the Stanford Graduate School of Business. Teaching the required course “Ethics and Management,” he exposes students to the philosophies and approaches necessary for navigating the ethical quandaries they may encounter leading organizations. He talked with us about the growing demand for ethics training — and why it’s a tricky subject to teach. Read the rest of this entry »

The idea that business schools need fixing has gained a near consensus post-economic crisis, but exactly how to fix them has been a matter of much debate. I recently spoke about the issue with Ben Heineman, Jr., a senior fellow at the Belfer Center for Science and International Affairs at Harvard’s Kennedy School of Government and a distinguished senior fellow at Harvard Law’s Program on the Legal Profession. He believes that the true problem business schools face is one of scope:

We need to make sure business school students are having courses that give all dimensions of business problems and it’s not just focused on finance. The narrowness of the focus doesn’t prepare people for the breadth of issues that they’re going to face.

One way to address this, according to Heineman, is to integrate MBA education with other professional schools, namely law and public policy, in a “more intense and realistic way” than schools do currently: Read the rest of this entry »

Remember the movie Silkwood? In the 1983 drama, Meryl Streep portrayed the real-life Karen Silkwood, who suffered radiation poisoning thanks to lax safety standards at the plant where she worked and was preparing to take her story to The New York Times when she died in a car crash under mysterious circumstances.

Silkwood portrays what the public thinks of as the consummate whistle-blower, yet the story of most whistle-blowers’ is far less dramatic. In the majority of cases, new research shows, the more management encourages whistle-blowing, the lesser the chances that reported incidents will become a story at all. Read the rest of this entry »

Countless workers dream of trading in their nail-biting commute and bustling office for the peace and quiet of home, where they can get things done without interruption while wearing their favorite pair of jeans. Many companies are also on board with letting staff work remotely, and some even give their employees a great degree of geographic freedom, allowing them to live hundreds of miles from company offices.

While most agree that working remotely can be good for employees, there is less consensus on whether or not it benefits employers.

The benefits of working in an office

Tom Davenport, the President’s Chair in Information Technology and Management at Babson College, recently blogged about Eclipsys, a software company that changed CEOs because the board of directors wanted someone to run the company from its Atlanta headquarters. (The previous CEO lived in Silicon Valley.) Read the rest of this entry »