SUSTAINABLE

COMPETITIVE EDGE
 Effects of economic inequality on management
• What are the mechanisms, e.g. lack of skills, lack of trust, lack of
motivation, etc., through which societal level economic inequality
impacts management and organizations? What counter mechanisms
can organizations adopt to manage these effects of economic
inequality?
• What are the direct and indirect costs, e.g. guard labor, supervision
costs, legitimacy and reputation costs, etc., that organizations face
due to increased economic inequality? How can organizations
manage these costs, or find ways to obliterate them?
• Does economic inequality create demand for certain products and
services? Do organizations need new products, services and
practices for a world with rising inequality? What are the
management and organizational challenges associated with this?
• How do the interactions of economic inequality and
other forms of inequality (social status, gender,
ethnic, racial) influence management and
organizations?
• How does country context impact the relationship
between economic inequality and management? For
example, are the mechanisms and costs of economic
inequality different in some Western countries, as
compared to some Asian cultures that are collectivist,
power-distant, and more tolerant of uncertainty? Are
these effects easier to manage for organizations
operating in some cultures as compared to others
(e.g., are monitoring costs engendered by economic
inequality lower because of collectivism)?
 Effects of management on economic inequality

• How do management practices, such as executive

compensation, employee stock options, dividend
payment, and cash accumulation, impact economic
inequality in society?

• How do certain practices in organizations provide

legitimating mechanisms for economic inequality in
society, e.g., beliefs concerning efficiency, reward
allocation, equity and economic inequality in
organizations?
• How do organizational practices aimed at CSR
initiatives and BOP markets influence economic
inequality in society? Do sustainable products and
fair-trade practices decrease economic inequality? Do
affordable products and services aimed at BOP
markets reduce the effect of economic inequality on
the poor?
• How are managerial and organizational resources
used to create, maintain or disrupt societal
institutions underlying economic inequality? For
example, how do political lobbying, charity initiatives,
professional training and rhetoric influence
regulations, norms and cultural beliefs related to
economic inequality?
The USA, Japan and China have most millionaire-homes
 Trends shaping the industry

• Emerging markets will fuel the growth of global

wealth
• Clients will become more sophisticated and more
self-directed regarding more vanilla-like products
• Products will become simpler and more modular
• Multichannel capabilities and the social media
emergence
• Advanced technology and infrastructure will be
essential
• Risk management capabilities are critical
 Creating Sustainable Performance – 1

How organizations can help employees thrive:

 Providing decision making discretion

 Sharing information

 Minimizing incivility

 Offering performance feedback

 Creating Sustainable Performance – 2

Individual Strategies for Thriving:

 Take a break

 Craft your own work to be more meaningful

 Look for opportunities to innovate and learn

 Invest in relationships that energize you

 Recognize that thriving can spill over outside the office

 Conventional View of Strategy for
Sustainable Competitive Edge
STRATEGY • What business are we in?
• How will we compete?

FUNCTIONAL STRATEGIES • Marketing, Manufacturing, Finance,

etc.

KEY SUCCESS FACTORS • What critical tasks must get done to

execute the strategy?

ORGANIZATIONAL ALIGNMENT • Design practices and systems

(recruitment & selection, PMS, T & D,
etc.)

SENIOR MANAGEMENT ROLE • Monitor alignment and compliance

 Value-Based View of Strategy for
Sustainable Competitive Edge
• What are our basic principles?
Fundamental Values Or Beliefs • What do we believe in?

Design management practices that • What policies and practices are

reflect and embody these values consistent with these values?

• What can we do for the customer

Use these to build core capabilities better than our competitors?

Invent a strategy that is consistent with • Given our capabilities, how can we
the values and uses the capabilities to deliver value to customers in a way our
compete in new and unusual ways competitors cannot easily imitate?

• Senior management “manages” the

Senior Management’s Role values and culture of the firm
 Organizational Alignment – I
• Define key success factors for your organization’s
strategy:
– Articulate strategy:
• Is the focus the business unit or the corporation
• Is the focus on multiple business organizations
– Translate sustainable sources of competitive
advantage you have into Key Success Factors (KSF)
– Define requisite capabilities/skills needed to
execute against the KSFs you identified
• Identify critical competencies
• Coordination
• Managerial competencies
• Commitment
• Communication
 Organizational Alignment – II
• Diagnose organizational alignment with the strategy and
KSFs
– How effective is the function whose unique competencies are critical
to the execution of the KSFs?
– Does the organization achieve the coordination or teamwork between
functions, businesses, regions, or line and staff departments that were
identified as critical to accomplishment of the strategic task?
– Does the organization have sufficient managerial and interpersonal
skills to manage requisite coordination? Examine the skills of the top
management team that provides the context for coordination, as well
as the skills of broader employee groups
– Does the organization have sufficient commitment from employee
groups critical to the achievement of the strategic tasks?
– Do people express their viewpoints directly and candidly, and attempt
to inquire into the validity of their own viewpoint and that of others?
– How well does the leadership team develop agreement about
priorities and allocate resources?
 Organizational Alignment – III

• Design a strategically aligned model of the organization

– What changes in structure, systems, staff, style
(particularly in the leadership) or shared values are
needed?
– How will the organization function better after these
changes are made? Go beyond simply naming the
elements or organizational architecture that need change.
Describe exactly how the things will function differently to
increase one or more capabilities
– What are the flaws in the new design? What new
problems does it create?
 Organizational Alignment – IV
• Develop a change Plan
– Are members of the organization, especially key managers
and opinion leaders, sufficiently dissatisfied with the status
quo? Does energy for change exist? If the answer is no,
what interventions should the team make to generate
energy for change?
– In what way will the top management team and other key
employees and constituencies be involved in diagnosis and
development of a strategically aligned organizational
model?
– What are the sources of resistance to change and the
power dependencies of the situation?
– Given the conditions, what is the appropriate change
strategy?
 Organizational Alignment – V
• What are the implications for the manager in managing change?
– If you are the general manager, what are the
implications for your own role, particularly your
leadership of the organization?
– If you are not the general manager, what can you do
to help your boss and other key players gain new
insights about the organization and lead a change
process?
– Plan in concrete terms the first steps you need to take
to begin the change process
• What are the personal and organizational risks?
CHANGE BEGINS BY ASKING WHO, WHY, WHAT AND HOW
The GE Model for organizational transformation