MIT Sloan Management Review Spring 2013

LARRY BENNIGSON AND OLUBUNMI FALEYE work in the same town, but they had never met. Although they didn’t know each other, both men began exploring essentially the same business question with colleagues: How have the increased monitoring demands that have been placed on corporate boards affected innovation and value creation in publicly traded companies? That’s an important issue — for board members, for corporate executives, for shareholders and for the economy as a whole. Faleye, who is an associate professor of finance and the Trahan Family Faculty Fellow at Northeastern University in Boston, together with his coauthors Rani Hoitash of Bentley University and Udi Hoitash of Northeastern University, addressed the question through academic research. Bennigson, a Boston-based consultant and a former lead director and chair of a publicly traded company, and his…

Visit Our Redesigned Website MIT Sloan Management Review has launched a new version of our desktop/laptop website. This redesign comes on the heels of the award-winning tablet version of our site, launched in 2012. In the new site design, we have responded to visitor feedback with improved advanced search, more ways to find related content, clear and intuitive navigation and expanded access to the archives for subscribers. We’ve also implemented a modern, clean design to provide a much enhanced reading experience. sloanreview.mit.edu Sustainability and the Innovation Bottom Line In a global survey, nearly half of respondents said their companies had changed their business models as a result of sustainability opportunities — a 20% jump over the previous year’s survey results. And half of the companies that changed their business models reported that sustainability contributed…

“While consumers often have no idea what companies’ actual privacy policies are, our research indicates that they have become more suspicious over time that companies are selling or misusing their data — even if companies are in fact managing consumer data appropriately.” (From Goldfarb and Tucker, “Why Managing Consumer Privacy Can Be an Opportunity,” page 10.) “For a successful digital business model , your enterprise has to have good content, customer experience and digital platforms. But does your company have to be a leader in all three? We don’t think so — at least not yet.” (From Weill and Woerner, “Optimizing Your Digital Business Model,” page 71.) “We have found that the traditional methods of onboarding have some serious weaknesses. They assume that organizational values are something to be taught to and…

How many privacy policy updates does your credit card company send you each year? How many of them do you read through — and how many get immediately trashed? Companies often “manage privacy” and “keep consumers informed” by drafting their privacy policies as broadly as possible and consider their job done if they change the policy 10 times a year to fit with changing practices within the company. However, there is a difference between informing consumers and respecting them. Managing privacy should not be seen by businesses as a burden. Instead, it can be a valuable way to generate and maintain a good relationship with your customers. Companies should view the establishment of a framework of consumer privacy controls as a key marketing and strategic variable that conveys considerable benefits. Many…

Though strategic alliances have always been important, they are arguably more critical now than ever before. In this highly digital age, organizations rely increasingly on Internet-based or computerized products and services that require the simultaneous cooperation of multiple organizations. Customer-facing applications often draw real-time information from several companies at the same time. Research and development (R&D) collaborations often require integration of data across organizational boundaries. And inventory-management systems frequently link multiple companies in a supply chain. Through strategic alliances, companies often codevelop products, jointly develop new information systems and share technical or managerial expertise. While managers give significant attention to cultural, marketing or product synergies in strategic alliances, information technology (IT) usually receives much less attention. This is myopic, since, according to our research, IT can play a significant role in…

The idea that messages frequently go “viral” and diffuse through social networks is now a given in corporate marketing and the culture. But recent research suggests that the term “viral” marketing does not accurately describe what most often happens online. Truly viral diffusion is extremely rare, according to Sharad Goel, a senior researcher at Microsoft Research in New York. In a paper called “The Structure of Online Diffusion Networks” that was presented at the 13th ACM Conference on Electronic Commerce, Goel, Duncan J. Watts and Daniel G. Goldstein (all of Yahoo! Research when they wrote the paper, now at Microsoft Research) describe how they studied seven online scenarios to see how a variety of applications and content spread. The researchers studied: 1. Yahoo! Voice, an online phone service started in 2004; 2. Zync, a…