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Feature
Article
Mendoza
Faculty Challenge Management Myths
by Ann Therese Darin
Palmer ('73, MBA '75)
The
classroom isn't the only place where Mendoza College of Business faculty
distinguish themselves. Recently several professors won significant
national prizes for their research.
Their research ranges from how parents' preferences for certain brand-name products influence their children's purchasing behavior to how corporations inadvertently may be sending the wrong type of employees overseas for short-term assignments.
Research is an important priority at the Mendoza College, affirms Dean Carolyn Woo. Allocations for faculty research have increased by more than 100% during the past three years, she reports. Spending for information technology and research staff has increased 150% to 200% during the same time period.
"If a faculty member is pushing the envelope for knowledge, that professor can bring different perspectives to the classroom which enrich student learning," she says.
Alumni also benefit from a strong research program. "As alumni grow in their careers and deal with complex problems, it's important that they have a sounding board to repond to and challenge their ideas," asserts Woo.
In this issue, we feature snapshots of management and marketing faculty research that challenges conventional wisdom. We also include comments from alumni and the College's Business Advisory Council.
If
business is like a chess game, with contestants vigilantly trying to
outwit their opponents, how
important is knowing your competitor's countermoves?
More than most business executives might suspect, says Marketing Professor and Associate Dean Joe Urbany. "Economic theory assumes that managers are well-informed, can think strategically and think several periods ahead," he says.
But Urbany (and two co-authors) had their doubts. "We didn't think that conjecture about competitive reaction was entering into the decision-making model," he says. "Anecdotal evidence suggested that competitive reactions receive limited attention in decisions, contrary to theories which assume that managers tend to be very strategic."
Urbany and his co-authors spent two years interviewing more than 100 executives who had made recent pricing or new product decisions. They also talked to another 47 executives in a business game simulation. Expected competitive reactions were rarely mentioned in executives' accounts of how they made their decisions. Follow-up research with executives who specialize in competitive intelligence confirmed these results.
"Because competitors' reactions are often difficult to anticipate or ascertain, internal factors such as cost, productivity and capacity tend to dominate decision-making," says Urbany and his colleagues in their paper, "Down Playing the Unpredictable: Competitive Reactions and Modes of Competitive Reasoning." "There was a strong tendency for managers to avoid ambiguity," said Urbany. "Even when the ambiguous factors have a big effect on outcomes."
James Hunt ('73), chairman and chief executive officer of EYT, Inc., a Dulles, Virginia-based information technology company, says, "This is a startling report. We do think about the competition, but not to the extent of sitting down and mapping a matrix of what our competitors may or may not do and how we look at their response. There are some great next steps for this research."
For
years, companies have fretted and invested substantial amounts of money
on employees headed for overseas assignments. The focus was on language,
customs, schools and housing.
In "Skill Utilization and Underemployment among Expatriates: A Relative Deprivation Approach," Management Professor Mark Bolino adds a new focus. "Sending your best people abroad may be the worst thing you can do," he says."There's an assumption in some companies that all overseas assignments are meaty and will enhance an employee's job skills, but that's not true," he says. "If the assignment isn't a good fit with an employee's skills and experience, an overseas posting could be a disaster - with the employee bored and underutilized."
Twenty-five percent of respondents to Bolino's study said they felt overqualified. They wanted a position higher up in the hierarchy or something that used more of their skills. In the two-year study, 48 percent said they had envisioned more challenging assignments.
What's the solution? More clearly defined overseas assignments and sending employees abroad who are the best qualified, rather than the most qualified. "You can send high-level employees on these assignments as long as the assignments require a high level of skills," Bolino says.
His study is based on 268 questionnaires from Fortune 100 company expatriate employees working in 30 countries. It was funded partially by the Society for Human Resource Management.
Richard Starmann, a Chicago business consultant and former senior vice-president of McDonald's Corporation, says, "This research should change the way that international HR managers evaluate who will be successful in an overseas assignment. It's expensive to send people abroad. This will definitely help with retention problems." Starmann serves on the College's Business Advisory Council.
When
Marketing Professor Kevin Bradford was a fledgling marketing manager
at IBM Corporation 10 years ago, his assignment was to repair a bad
relationship with a major client. His solution? What Bradford calls
"relationship marketing."
"Rather than strictly selling, relationship marketing concentrates on partnering with a customer to solve his or her business problems," says Bradford. "That means walking away from selling opportunities if you don't have the right solution but another vendor does. It means sharing ideas that aren't product-related, but business-related. And, it means instead of one salesperson/one client, using teams of experts from different disciplines within a corporation to solve a customer's problem."
This strategy not only salvaged the troubled client relationship, but also provided Bradford (and a co-author) with the idea for a prize-winning article five years later, "Personal Selling and Sales Management: A Relationship Marketing Perspective." Published in the Journal of the Academy of Marketing Science, the article won the 1999 Excellence in Sales Scholarship Award.
"Relationship marketing is very effective. But because it's new, there hasn't been a great deal of research published about how to manage and evaluate team performance or intra-team conflicts," says Bradford. "You can't measure performance by a sales dollar alone. You have to look at how a customer behaves, how much time he or she spends with you, how much he or she trusts you and how committed he or she is to you as a vendor."
James M. Corgel ('73, MBA '75), general manager, Global Net Generation Business, IBM Corporation, says, "Bradford's research is meaningful in today's sales environment. Emerging business models are creating a new kind of interaction between buyer and seller. Both parties are looking for 'value-added' beyond specific products and services."
Elizabeth Moore & William Wilkie
How
do parents' preferences for certain brand-name products influence their
children's purchasing behavior? That's the question that Marketing
Professor Elizabeth Moore and William L. Wilkie, Nathe Professor of
Marketing, have been investigating. "There has been great interest in
brand equity. But its link to intergenerational influences has been
overlooked," says Moore. To better understand these intergenerational
influences, Moore and Wilkie (and their co-author) surveyed mothers
and their daughters, then conducted three waves of in-depth interviews
with young adult daughters as a follow-up.
In a recent paper, "Passing the Torch: Intergenerational Influences as a Source of Brand Equity," Moore and Wilkie found that intergenerational influences could be significant. "There is some evidence that children become emotionally attached to some brands, but not to every brand," says Moore. "If a mother bought Tide, for example, chances are her daughter will too. Surprisingly, the same thing didn't hold true for Cheer. Our in-depth interviews helped us to better understand these findings."
"In our sample, we saw some single strong brands, including Campbell's Soup (84% of mothers' and daughters' preferences for this brand matched) and Heinz Ketchup (80% of mother-daughter preferences matched), Peter Pan peanut butter (67% of mother-daughter preferences matched), and Skippy peanut butter (48% of mother-daughter preferences matched)," said Moore. "We also found some rather unexpected lesser-known brands with intense family loyalties, including Newman's Own spaghetti sauce (86% of mother-daughter preferences matched). While we're confident that these effects are real, alert marketers need to replicate this kind of study for their own product categories."
Parents also influence whether a son or daughter uses certain types of packaged goods. For example, if a mother doesn't use canned vegetables, says Moore, chances are, her daughter won't either.
Heidi W. Clarke ('93), associate director of global learning, Procter & Gamble Company, says "Moore and Wilkie have made a deep dive where no one has gone before, and have produced specific research by brand which I haven't seen. Smart packaged goods marketing managers would do well to incorporate these findings into their planning. The cost to bring a new user into a business is pretty high. But it's more than worth the cost, according to this research, because instead of just one new user, you're bringing in generations of users."
Don't
like being the bearer of bad news - especially when it has to be delivered
face-to-face? Neither does nearly everyone in corporate (and
military) America, says Management Professor Renee Tynan. But somebody's
got to do it or an organization will be deprived of critical information
needed for decision-making. In a recent paper, "The Impact of Threat
Sensitivity and Face Giving on Information Transfer in Organizational
Hierarchies," Tynan examines why employees are so reticent about delivering
bad news and how this situation can be changed. She spent three years
studying commercial airline pilots, military helicopter pilots, people
in other occupations and students.
"People don't realize how strongly a group leader affects communication norms," says Tynan. "There are certain personality types to whom people are much less likely to disclose difficult communication. If you are one of these types, you need to work much harder to create a good climate."
Other factors contributing to effective bottom-to-top communication include rewarding bottom-up communication - even when it hurts - and having a self-deprecating leader set the tone for open disclosure in the group.
"A lot of really important information is lost because people try to save face - their own and others," says Tynan. "Believe it or not, planes have crashed because co-pilots didn't want to disagree too strongly with the captain."
John R. Mullen ('53), president and CEO, JR Mullen International, and retired public affairs vice-president of Johnson & Johnson, says, "The human characteristics which have been analyzed and addressed in Professor Tynan's article suggest that the success of an organization depends not so much on education as on basic and honest interactions. Organizations which have and live a credo or code of ethics have a greater chance of honest communication up and down the management structure." Mullen serves on the College's Business Advisory Council.
Ms. Palmer writes for Business Week magazine from Chicago. Editor's note: for more information on the faculty research described above, or to submit your own comments, click here.