Business Horizons

Bridging current business research with pragmatic business strategy.

What is the lingua franca of business?

“Culture and language are difficult to separate in international business. Language is the vehicle for culture; cultural values are reflected in the language spoken. Cultural facility increases familiarity between negotiating partners, which thereby increases trust; language may simply be a business tool or may additionally serve to increase trust. But – crucially – language is a tool, while culture is not: parties cannot transact in a culture; they must transact in a language.”

— “International business complexity and the internationalization of languages” W. Travis Selmier II and Chang Hoon Oh in Business Horizons (2012) 55, 189-200

After stumbling across a response that Michael Geisler, an administrator at the Middlebury Language Schools, made to a claim by Larry Summers, a former Secretary of the Treasury, that Americans will have no real need to spend the time and energy to master a foreign language in the future, this Business Horizons published study authored by W. Travis Selmier II and Chang Hoon Oh, immediately came to mind. They found that a shared language was a factor contributing to trade and investment choices by companies and countries across the globe. Rather than accept English as the lingua franca of business, it appears that fostering a variety of language competence is critical to global functioning.

A recent Financial Times article “What is the second most useful language?” further introduces the idea that the cultural understanding often embedded in mastering a language many benefit a person beyond straightforward verbal exchanges.

What are your thoughts on language study for business? Have you ever been in a situation where learning a foreign language contributed to business success? Is language learning outdated and impractical, or is it vitally important with subtle and priceless benefits?

Transformational Leadership

“Consider the story of a janitor who worked for NASA in the mid-1960s. One day, as he was sweeping the floor late in the afternoon, someone asked him what he was doing. Without hesitation he replied, “Putting a man on the moon.” Someone, somewhere along the line, had turned his attention away from the mop closet and toward the launch pad. He saw the big picture and knew that he played a role in achieving it. A frame is just one particular perspective, and sometimes, perspective is everything! Transformational leaders know this and capitalize on opportunities to manage the meaning of work.”

— an excerpt from “It’s how you frame it: Transformational leadership and the meaning of work” in the May/June 2013 Business Horizons issue from Dean Cleavenger and Timothy Munyon

It is interesting to shift the primary focus of a leader away from exemplifying incredible productivity as an individual and instead toward the ability of a leader to cause that effect in the individuals managed by the leader. The encouragement and framing of an effective leader, when instilled at the grass roots level, sums to far greater purpose and productivity at the total firm level. Happier workers and greater innovation? It’s not a surprise that transformational leaders are a lively topic in management circles.

In the world of compensation, perhaps money can’t buy everything.

With high pay packages fueling performance decisions at competitive financial firms, and a millennial generation advancing into the prime of its work phase but rejecting the trappings of a typical corporate trajectory (long hours, stress, fewer job functions explored, high pay) in exchange for autonomy, there is impetus to explore the definition, varieties, and effectiveness of incentives in the workplace.

In the recent Business Horizons article “What monetary rewards can and cannot do: How to show employees the money” Herman Aguinis, Harry Joo, and Ryan Gottfredson conclude that while money often attracts talent and ambition to a position, it is rarely the reason that most people cite when describing job satisfaction. From a firm’s perspective, money isn’t the way to improve knowledge or skills, which is where a company truly benefits in the long term.

In fact, monetary compensation can easily pervert the success of a company. On April 3, Patrick Jenkins of the Financial Times wrote of the impact of a consulting report on the culture at Barclays in his piece “Salz attacks warped top pay at Barclays.” The author of the report, Anthony Salz, a respected lawyer and investment banker, independently audited the culture of the bank, and when interviewed by the Financial Times for the article, remarked, “Their (Barclays bankers) focus on short-term return on equity and their competitive position led to a vacuum in culture and values. Pay policies reinforced that.” Money may have always caused certain detriments to business practice in the past, but misused and indulgent monetary compensation in this day can heavily impair a company’s brand perception. The financial services firms are discovering this the hard way after the myriad financial crises swept away company profits but not banking pay packages.

Beyond the challenges presented by relying too heavily on monetary compensation to motivate workers, there is a field of organizational business that specifically studies what activities may produce not only happier and more satisfied workers, but also, ultimately, more efficient companies. On March 27, Susan Dominus, of The New York Times, profiled Professor Adam Grant of Wharton in “Is Giving the Secret to Getting Ahead?” Grant’s work has sparked a lot of attention, not only because he leads his life according to the idea that serving as a node of helpfulness reaps long-term rewards for a group’s collective efficiency and for a person’s sense of purpose in an organization, but also because his research, supported with substantial data sets, has groundbreaking implications for how organizations should encourage employees to interact and to produce greater work. Collegial environments where people give and take with a generosity of spirit make individuals happier and contribute to a much larger sense of belonging, productivity, and effectiveness at the firm level.

While few people would sneeze at a healthy pay package, the line that “money can’t buy everything” applies not just to our personal lives but increasingly to our professional lives as well. What do you think of these trends in compensation? What are the best motivators in the workplace?

Opportunity for Men and Women

There has been a lot of noise in the business community about Sheryl Sandberg’s manifesto for professional women in the workplace — Lean In. Women securing professional equality on their own terms is a difficult and complex issue, and there are many views as to how it can be achieved. While this theme is the thrust of the book, what is perhaps less emphasized in discussions, but just as valuable, is the pure optimistic ambition and enthusiasm for successful business that comes through in Sandberg’s framing of her experiences. Throughout the book are quotes, snippets, and lines that apply to anyone looking to navigate a professional career in business. The following was of particular note:

“Padmasree Warrior, Cisco’s chief technology officer, was asked by the Huffington Post, ‘What’s the most important lesson you’ve learned from a mistake you’ve made in the past?’ She responded, ‘I said no to a lot of opportunities when I was just starting out because I thought,’That’s not what my degree is in’ or ‘I don’t know about that domain.’ In retrospect, at a certain point, it’s your ability to learn quickly and contribute quickly that matters. One of the things that I tell people these days is that there is no perfect fit when you’re looking for the next big thing to do. You have to take opportunities and make an opportunity fit for you, rather than the other way around. The ability to learn is the most important quality a leader can have.'”

What do you think? Is that the most important quality of a leader — man or woman?

How should we define intellectual property?

Alan Zimmerman, in his recent Business Horizons article, presents a context for the pervasive culture of Chinese counterfeits. “Reviewing the history of intellectual property (IP) in China, it is clear that Chinese political culture did not lend itself to the concept of IP ownership. Confucianism required control of information, and it is a traditional Chinese belief that invention drew on past knowledge belonging to all citizens. The basic tenets of Communism dovetailed with these attitudes.” While this is certainly not an excuse for intellectual property infringement, the fact that the concept of intellectual property isn’t universal and that it can be debated is important to consider.

It isn’t just the Chinese who are grappling with intellectual property either. In developed Western economies, when we consider an intellectual property construct, such as a patent, how exactly do we define what can and can’t be claimed as unique and proprietary? There was a great piece published in The Verge, entitled “The ‘broken patent system’: how we got here and how to fix it”, which discusses some of the challenges that we face in defining and protecting our own intellectual property. It is particularly important when we accept that future innovation will be built upon existing innovation.

Considering both cultural expectations and the quickening pace of technological innovation, how should we define intellectual property? At what point should a thought become protected property? Has the current system gone too far in protecting intellectual property, or has it not gone far enough?

A Strategy for the Strategies

“Every social system is a book, but the more organization…you have between the ears, the less you need to read between the covers.” – Robert Keidel, from The Geometry of Strategy (2010)

In his recent Business Horizons article, “Strategy made simple: Thinking in threes,” Robert Keidel raises the question of how business professionals, with increasing research and theories to consider, might organize the plethora of information at their fingertips into one useful system. While the author advocates a schema that places strategies into three basic buckets – autonomy, control, and cooperation – allowing the manager to “’speed-read’ the literatures on strategy, technology/organization, mergers and acquisitions, and cognition – as well as to see the parallels across these writings,” other approaches surely exist as well.

How do you organize and reconcile management strategies in your mind? Do you have a master schema for sifting through business theories?

How do business leaders learn to think ethically?

When ethics are discussed in relation to corporations, they are overwhelmingly mentioned at the time that a breach has occurred and a company has been publicly exposed. But why is this so? If we value ethical decision making because ethical behavior contributes to trustworthy and reliable business environments, then why are ethics conundrums ignored until a problem exists?

While business schools have begun to offer ethics modules, and professional credentialing services, such as the CFA Institute, have devoted considerable time and resources to reinforcing the importance of thoughtful ethical dialogue, structured ethics programs in the real work place are rarely given attention, unless the discussion follows an ethics disaster, and in this case, the dialogue takes place through a PR department. Incidents, such as the LIBOR rigging scandal, appear to be more and more frequent, which is bothersome. One might argue that this trend is simply a product of increased journalistic scrutiny and greater policing of business, or is it a lack of ethical training when ethical conundrums are evolving with new business practices? Who is training business leaders to recognize the ethical choices that they, personally, must make every day? The ethical situations of business leaders in the past might not closely resemble the same set of ethical situations in the present, or in the future.

In “Developing and sustaining an ethical corporate culture: The core elements”, Mark Schwartz discusses the structures and precedents that are most likely to build a credible ethical program in a company. He justifies the topic with a really interesting statistic and observation:

“Are employees who can be socialized to act in an ethically appropriate manner even able to initially recognize that they are in the midst of an ethical dilemma? For example, one study found that when asked to describe a moral dilemma they had experienced, two-thirds of 19 to 23-year olds were ‘unable to answer the question or described problems that are not moral at all, like whether they could afford to rent a certain apartment or whether they had enough quarters to feed the meter at a parking spot’ (Brooks, 2011).”

What if many ethical breaches are committed, not intentionally, but because even though an ethical structure had been put into place, the participants weren’t able to identify that they were actively involved in making ethical decisions for their organizations? Before we can take advantage of an active ethical structure, how do we convince people to think in terms of their ethical responsibilities?