Rotman Management Fall 2014

FEW PEOPLE WOULD ARGUE that some key aspects of modern life are off-kilter at the moment: wealth is badly skewed across — and within — nations; the environment is showing signs of the unprecedented pressures being placed upon it; and about half the world lacks access to clean water, adequate health care and education. Within organizations, the balancing act has its own set of challenges: improving existing products and services while innovating to create new ones; addressing financial, social and environmental missions; maximizing value in existing markets while exploring emerging markets; and embracing thinking that blends quantitative analysis with qualitative insights, to name just a few. While at one time, leaders might have been able to choose to focus on one or the other, today, success depends on effectively addressing these…

RALPH WALDO EMERSON CLAIMED that all you have to do is ‘build a better mousetrap, and the world will beat a path to your door’. However, it is well established that success rates for innovation are very low. In the U.S. alone, estimates suggest that as many as 75 per cent of all new product launches fail. Recent examples of innovations that failed to revolutionize the way we live include online grocery shopping services like Webvan, TiVo and the electric car. In the Global South, innovation is no less challenging, and one of the key hurdles in this context is scale: innovations that work well in a narrow, focused area often fail to scale — horizontally, throughout the Global South, as well as vertically, to other parts of the developed world.…

Let’s begin with some stark facts: the U.S. poverty rate substantially exceeds that of other developed nations, and nearly 25 per cent of workers find themselves in jobs that don’t pay enough to support a family. What is going on? There is no doubt about it, we are in the midst of a jobs crisis, and there are two aspects to it. First, there is simply not enough work to go around. Following the Great Recession that began in 2007, unemployment has remained stubbornly high. Historian Stephan Thernstrom studied the effects of the Great Depression of the 1930s on young people entering the job market at that time, and he found they suffered permanent career disadvantages. Today’s young people will likely confront a similar fate, and their parents — many of…

The Bank of Canada believes that the best way to foster economic growth is to keep inflation low and predictable. Describe the ongoing balancing act between inflation and growth. Let’s start by looking back to the 1970s. I was in high school at the time, and through that decade, inflation was high — often in the double digits — and variable. Every time you picked up a newspaper, there was a story about it: seniors were upset because their savings were being eroded; workers were angry because their wages did not always keep up with increases in the cost of living. There was all sorts of labour strife — many strikes — and businesses abhorred all the uncertainty. Worse still, nobody seemed to really understand where inflation was coming from: it…

MODERN ORGANIZATIONS inherently contain a wide variety of tensions that leaders must deal with every day: collaboration vs. control, individual vs. collective, flexibility vs. efficiency and profit vs. social responsibility, to name just a few. As environments become more fast paced and competitive, individual leaders’ responses to these tensions are a fundamental determinant of an organization’s fate. Contingency Theory offers one response to these tensions. Assuming that organizational systems are most effective when they achieve alignment or ‘fit’ amongst internal elements and with the external environment, this approach explores conditions for selecting among competing demands — for example, making choices between exploration and exploitation, and centralized vs. decentralized operations. In this article we will discuss an alternative approach to handling tensions: the Paradox Perspective explores how organizations can attend to competing demands…

EVER SINCE THE U.S. SUBPRIME CRISIS began in 2007-08, the world has struggled with a series of deep and seemingly-unrelated financial and economic crises. The most notable these days is the crisis affecting Europe, but it is not the just the United States and Europe that have been affected. The global crisis has also accelerated pressure on what was already going to be a very difficult transition for China, from an extremely imbalanced growth model to something more sustainable over the long term. As a consensus about the need for a radical transformation of China’s growth model develops, and it begins adjusting over the next few years, the impact of the global crisis will likely manifest itself in the form of a ‘lost decade’ or longer, featuring much slower growth and…