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Charles Baden-Fuller Editorial
This issue reports the results of research that has some
important managerial implications for all businesses. Danny Miller and Isabelle
Le Breton-Miller take a fresh look at ‘‘family businesses’’.
They draw insights from comparing successful and less successful large family
firms such as Michelin, Ikea and the New York Times. They suggest that some
of the core, deeply-held values of family firms that are so often criticised
appear to be the very features that make them long-lived and successful. While
the data focuses mainly on larger firms, it has some important implications
for all family-held firms.
Bernd Vogel’s piece on collective and energetic behaviour looks at how
change management can be driven by informal collective action across companies.
His perspectives add fresh insights to those that seek to manage change, by
focusing attention away from formal teams to mobilising energy among a much
wider group. The article holds special value for change management experts
as it gives clues on how informal action can be mobilised and why it is so
powerful.
Taieb Hafsi and Zhilong Tian address the very difficult question of change
for large complex organisations. The processes of change in the Chinese Electricity
industry is spelled out and analysed carefully. Managers in western institutions
such as utility companies, hospitals and local governments will find much
relevance and value here. The authors explain how and why change needs a long
period of time to take hold, and how effective change takes place in waves
(cultural-societal norms, regulatory systems and business systems), and by
different groups (central government, local government and senior managers)
that deal with different agenda.
David Conklin looks at the role of outsourcing in Human Resource Management.
Again, the issues are ones related to change management, because HR typically
plays a pivotal role in facilitating the introduction of new business processes
and new ways of working. He documents the experiences of Canadian Imperial
Bank of Commerce to explain in concrete terms the risks and rewards of HR
outsourcing.
Danny Miller and Isabelle Le Breton-Miller Management Insights
from Great and Struggling Family Businesses Danny.Miller@hec.ca
Family-controlled businesses (FCBs) have a reputation of
being outdated, sluggish and beset by nepotism and cronyism. Yet this reputation
does not stand up under the scrutiny of systematic studies which consistently
find that family businesses can be more profitable and more apt to survive
than their rivals. Names such as Michelin, Ikea and the New York Times are
trailblazers in their respective fields, and yet each is a business controlled
by a family. This paper sets out to explore the paradox. It examines 46 successful
and 24 struggling FCBs to determine how they differ in their strategic, organisational
and leadership priorities. The authors identified four key priorities, drawn
from a qualitative analysis, which they call ‘‘the 4Cs’’:
continuity in strategy; cohesive organisational community; close connections
with stakeholders; and independent leadership, or command. The authors note
that each of these priorities contain disadvantages. However the successful
FCBs exploited each priority to their advantage: in the realm of continuity,
they made investments for the long run; they also built a coherent community
by communicating and living their strong values; they favoured enduring connections
with stakeholders over one-shot transactions; and their leaders could be decisive
due to their independence from clamouring shareholders. The authors found
that the unsuccessful companies manifested these priorities and practices
less frequently and fell victim to their negative aspects. The paper concludes
with concrete examples and lessons for managers which could be applied to
more publicly-owned companies as well.
Bernd Vogel Linking for Change: Network Action as Collective,
Focused and Energetic Behaviour bernd.vogel@unisg.ch
Change processes in an organisation can be undertaken by
individuals or by collective action. Management research has increasingly
pointed to the contribution of one such collective action e networks e to
successful change and innovation in organisations. These networks are a set
of actors connected by relationships, and they are by their nature informal
and only exist and act due to their aim to pursue shared intentions. This
paper aims to contribute to the research that suggests how to trigger collective
action of networks. If researchers could identify the factors that bring about
the interactive and constructive process of collective behaviour, managers
could then address these factors to initiate change. The author draws mainly
on two empirical studies conducted in companies undergoing major changes:
a qualitative study at Lufthansa, the German airline, and a quantitative study
at Swisscom, the Swiss telecoms company. Based on the studies the paperoutlines
a model of collective network action, which is defined as collective, focused,
energeticbehaviour. The proposed model considers specific aspects and behaviour
of network participants and suggests that emotions, cognition and volition
are factors that reflect the internal processes and interactions of the network.
Two ways that managers can trigger collective action are: to take individual
action themselves for a collective initiative and drive the action-taking;
or to act as an enabler by providing the conditions that stimulate collective
activities.
Taïeb Hafsi and Zhilong Tian Towards a Theory of Large
Scale Institutional Change: The Transformation of the Chinese Electricity Industry
taieb.hafsi@hec.ca
Originally intent on gathering data on the performance of
the Chinese electricity system over 20 years, the authors became so impressed
at the success of its post-Mao transformation, they set out to try to explain
it. Their charting of the measured changeover from communist/ideological to
market economy/pragmatic gains added sophistication from their understanding
of the history of Imperial China, with its technical sophistication and respect
for bureaucracy, and of the subtle operation of quanxi in Chinese society.
They show how both theoretical and practical changes were made acceptable
in a still-socialist country by their reference back to deeply embedded pre-existent
elements in the Chinese social psyche. The authors observe three separate
and sequential cycles, each with its specialist actors, and each concerned
with a particular area of change: central government law-makers initiating
fundamental changes in culture and values; provincial authorities codifying
industrial norms and regulations and (much retrained) managers handling professional
matters at firm level. Their analysis leads them to promote a broad theory
of large-scale institutional change, using change and institutional theories
to specify their three-cycle framework in proposition format, and to suggest
its implications for managers in charge of complex organizations.
David W. Conklin Risks and Rewards in HR Business Process
Outsourcing dconklin@ivey.uwo.ca
Companies are increasingly outsourcing activities, including
their management of human resources (HR). However, managers are divided on
whether this is to the long-term benefit of the company, with each side highlighting
the risks and rewards of HR outsourcing. This article explains why differences
of opinion exist, and provides guidance in decisions concerning outsourcing.
With HR business process resourcing (HR-BPO), a vendor assumes responsibilityfor
HR activities, as well as for the information technology, software and systems
that perform them. It is an area that is changing and offering additional
rewards as innovations in HR, particularly in the use of web-based technologies,
come online. Furthermore, by outsourcing the business processes, the company’s
HR department can assume a role in facilitating strategic change by focusing
on strategic responsibilities. However, HR outsourcing involves risks, and
this article analyses three themes in risk mitigation: how to choose HR activities
as potential candidates for outsourcing; how to analyse these potential candidates;
and how to achieve successful inter-company governance. The analysis of HR-BPO
emphasises issues such as price, the ability of buyer and vendor to benchmark
objectives for each activity and to collaborate on technological change. For
HR-BPO, these issues mean that risk and trust play a central role in designing
the inter-company governance procedures and in choosing appropriate managers.
The paper offers insights and lessons through the analysis of one of the first
HR-BPO arrangements, between the Canadian Imperial Bank of Commerce (CIBC)
and Electronic Data Systems (EDS). CIBC sought to merge divisions that had
different HR procedures. This novel arrangement required the design of a governance
structure which included the involvement of senior executives, procedures
to build trust and the capacity to add other HR activities to the outsourcing
arrangement. The paper concludes with lessons that managers can apply when
considering potential processes for outsourcing.
This issue is available in full on-line at www.sciencedirect.com
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