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IContardo

In a reflection on the environmental changes happening around and within organizations, I came across a relatively old article. It is the fabulous yet rather unknown piece by Karl Weick on the collapse of sensemaking, an Administrative Science Quarterly paper (1993). Change management in strategy represents a fundamental topic. Its purpose consists in deeply analyzing actions and reactions between organic structures, i.e. organizations and the space in which these unravel, whether their sector, industry, market, internal environment or others. More and more, however, this analytic process meant to bring us closer to a satisfactory, controllable decision making path has forced academics and practitioners alike to question the rational boundaries within which organizational theory is debated.

Once more, my critical or “literary” vein (see the blog on the ZMET approach to strategic marketing) wishes to draw your attention in this other blog to a route that can be located in “contextual rationality” (White, 1988; reed, 1991) or a more emotionally-rooted explanation of phenomena on change.

Why are organizations vulnerable and where do their weaknesses come from? Simply stated, vulnerability can be described as those moments of uncertainty that threatens the existence of a given structure. We could compare organizations to “animals” which need to survive in an eco-system, and we as observers can thus notice their physical – read normally financial – appearance that either improves – the species reproduces itself – or extinguishes itself – usually because from a Darwinist lens they have not been able to adapt or have suddenly succumbed to the forces of changes they did not anticipate.

Continue reading 'How vulnerable are organizations?'

David Allen

This week Kellogg’s announced that it would stop advertising high-sugar and high-calorie content cereals to children.

While we may applaud Kellogg for doing “the right thing”, we would be foolish to think that Kellogg’s action will do very much to fix childhood obesity and nutritional health problems.

The problem is big, complex, and the social harm runs into the hundred of billions of dollars. Economists use the term “externalities” to describe the negative consequences of legal and normal firm behavior. Usually the cost of the negative consequences is paid for by others. The food industry legally goes about its business, while childhood obesity and its associated costs are absorbed within the health care system (private and public) or simply not paid for all, resulting in a diminished quality of life for the children.

Continue reading 'Fixing the world’s problems requires government regulation, not business do-gooders'

Santiago Iñiguez, Dean and Professor of Strategy

You may have read about the historical episode, which happened at the time of the Battle of Waterloo (18th June 1815), that contributed decisively to build up Rothschild Family’s financial empire. Rothschild had offices in different European capitals and acted as lender to important individuals and institutions, including the British Crown in its efforts to beat Napoleon. They had a potent information network, composed of messengers, carrier pigeons and regional offices, which earned them the reputation of being first with the news. When their informers reported "the scoop" of Napoleon’s defeat at Waterloo, Rothschild agents in London started to sell stocks, acting as if the French had won. Many other brokers, unaware of the British victory, replicated Rothschild’s initiative, causing the crash of stock prices. Shortly before news about the victory reached London, Rothschild started to buy stocks. As a result, the family amassed a huge fortune.

This episode epitomises the economic value of scoops and being first with the news. In the early 19th century, the elapsed time between the occurrence of events and their reporting could be many hours or even days. Nowadays, it may take just seconds. Perhaps a defining moment in the realisation (at least mine) of the power of blogs took place recently when Engadget (no.1 blog according to Technorati) inaccurately reported an Apple product-release delay causing Apple, in six minutes, to lose 4 billion dollars in stock market capitalisation. As you can see from Apple Inc price chart, (Zoom "1m") it quickly recovered.

Futhermore the web and multiple complementary devices, such as instant text messaging and “Twitter”, (Ogilvy PR Interactive Marketing Team´s view of it) have amplified the sources of information and anyone can virtually report about events as they attend them, even providing live pictures or video (e.g. "London Bombing Pictures Mark New Role for Camera Phones"). In addition, the channels of distribution have become massive, cheap and universally accessible. We live in the age of real time information, conditions that changes the way managers understand business and the time and forms of decision making processes.

For example, how much time do you take to respond to an e-mail or a text message? When ordinary mail was the prevalent channel of business communication it took days or weeks to get answers to letters. Facsimile machines reduced response time to hours. Today, agile managers answer text messages in minutes. Moreover, courtesy demands that light messages are answered on the same day and that messages that require elaborated responses take no more than two days –unless they are urgent. My golden rule is that e-mails should be answered, at most, on the same week. In order to comply with this I regularly dedicate the needed time over weekends to get updated.

In an interesting post published in Harvard Business Online Tammy Erickson explains that the “use of technology is heavily centered in Gen Y today. About half of Y’s surveyed say they sent or received a text message over the phone within the past day, approximately double the proportion of those in Gen X. It’s something that will, however, grow in use and eventually enter the world of business”. I am sure you have heard mentions of the "Blackberry withdrawal", felt by "Crackberries" when they cannot access their email. There is even TwitterBerry,  used to write those previously mentioned Twitter updates on a Blackberry.

I am intrigued about further developments of instant messaging devices. For example, how can mobile telephones, which are truly ubiquitous, (and especially Wifi-enabled ones) be used effectively as an education tool?