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ISBM Pulse: Corporate strategy

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Book: Grow the Pie

The book, ‘Grow the Pie, by London Business School Professor of Finance Alex Edmans, sets apart the concept of ‘growing the pie’ from the notion of ‘splitting the pie’. The latter suggests that anything a company gives to stakeholders such as increased wages, price reduction, or a better treatment of the environment lowers company profit. A ‘splitting the pie’ approach results in friction, and a trade-off focus. An alternative is the ‘grow the pie’ approach. The main idea is that if companies deliver value to stakeholders, this will actually benefit investors.

wooden chair

Should a B2B Firm Have a Customer on the Board of Directors? (Bommaraju et al.)

One way to gain insight into their customers’ needs is to invite customers to have a seat on the board of directors. Based on a sample of 329 B2B firms in S&P 900 firms over nine-year period (2007-2015), Bommaraju et al. (2019) concluded that having a customer on the board of directors enhances customer orientation of firms and provides unique insights, especially when demand uncertainty is high.

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Challenging Organizational Assumptions

Assumptions are a barrier to new thinking or new solutions though – and that makes assumptions ineffective. How can an organization uncover – and, more important – challenge its assumptions? It is a necessary process, as untested assumptions may lead decision making astray. 

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The Temporary Marketing Organization (Hadida, Heide, and Bell)

As marketing departments are shrinking and CMO tenures are getting shorter, marketers are increasingly relying on temporary marketing organizations to meets objectives with immediate impacts. However, temporary marketing organizations’ outcomes exhibit high variance. Thus, Hadida et al. (2019) propose a conceptual framework to guide firms in determination of the most appropriate selection and enforcement mechanisms depending on the form of temporary marketing organization.  

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Leading Diversity: Listening and Learning Come Before Strategy

This episode of the Knowledge@Wharton podcast deals with diversity. It offers interesting interview with Rohini Anand – former senior vice president of corporate responsibility and global chief diversity officer at Sodexo. At the other side of the table we hear Stephanie Creary – Wharton management professor specialized in identity and diversity.

Addressing Society’s Sustainability Challenges

Just over a week ago, the Yale School of Management organized their Business Sustainability Summit to commemorate the 50th anniversary of Earth Day. The conference was held virtually as a result of the COVID-19 pandemic. Several business leaders shared details on the sustainability initiatives deployed at their organizations.

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3 Biases That Shaped CEOs’ Pandemic Response

This article reports on survey research among the CEOs of over 500 Chinese firms. The research discusses three biases and how they affect CEO decision making during the pandemic. The optimism-versus-pessimism bias impacts aspects like leadership, employee engagement, and messaging. Another source of bias comes from a cost focus – as opposed to a people focus. The third aspect of this research is the short-term-versus-long-term bias, affecting survival of the firm.

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Does Cognitive Bias Influence Your Managerial Decision Making?

Decision making is – mostly – done by humans. And human beings are not necessarily always rational beings. Some of our business decisions are affected by cognitive and organizational biases. McKinsey has collected articles in their “Bias Busters series”, which presents articles on the most common biases and ways you can address them.

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Increasing Board Diversity

This article discusses a study that discerns between demographic diversity and cognitive diversity in the context of boardroom composition. It discusses the benefits and drawbacks of both types of diversity for board compositions, and offers recommendations on how to go about recruiting cognitively diverse board members. A key aspect discussed in this article is the difficulty of offering dissenting opinions in discussions in less diverse boards. Cognitive diversity helps to break that pattern. 

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Announcement: Journal of Marketing Webinar on Social Responsibility

On July 15, the Journal of Marketing Webinar Series ‘Insights for Managers’ will deal with firm’s social responsibility. Two research projects will be presented. The first presentation discusses corporate sociopolitical activism, the second presentation discusses corporate social irresponsibility.