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Emerald Group Publishing Limited
Copyright © 2006, Emerald Group Publishing Limited
We wish more academics would do what Rich Allen and his colleagues from the University of Tennessee at Chattanooga and Dalton State did for the Journal of Business Strategy: take an academic, very technical study and translate it into an eminently readable and valuable article for business practitioners. Not only is this a way for researchers and professors to get extra mileage from their studies and original research, but it adds to a body of knowledge not always easily accessible to practitioners. Allen and his associates surveyed key employees in over 200 organizations to better understand how to implement Michael Porter’s generic strategies and which ones correlate with high levels or organizational performance. They also identified a set of key tactics to describe each of the generic strategies.
We think one of the ways to close the gap between academic business studies and “real life” is for more academics to convert their research into clear, direct articles for journals such as JBS. This does not preclude their publishing their original research in academic journals and it seems a logical way to reach those perhaps most likely to implement on a short-term basis.
In an interview on www.business-in-asia.com, Usha Haley and George Haley, authors of the two-part article that begins in this issue and authors, along with Chin Tiong Tan (2005), of The Chinese Tao of Business: The Logic of Successful Business Strategy, discussed their new book. They cannot emphasize too strongly the need to understand China’s history and culture in order to do business in that nation in the twenty-first century. “The economic and ethical roots of Chinese strategy,” they note in the online interview, “draw on Confucian and neo-Taoist philosophies, as well as China’s unique history of development … Maoist bureaucracies, which have seeped into present-day China, borrowed their frameworks, systems and inspiration directly from the Imperial bureaucracies. The economic implications stem in part from a network-based economy built on basic personal concepts such as trust rather than impersonal legal institutions. Additionally, the contextual nature of Confucian ethics continues to hold sway within the multiple Chinese networks.” In both their article for JBS and their book, the authors point out that “strategic planning as developed in industrialized Western democracies” is not necessarily the only foundation for strategic decision-making. In emerging markets such as China and India, strategic planning begins with different assumptions from those considered standard in Western industrialized nations and it unfolds in variant forms as well.
In the first of another two-part article, R. Duane Ireland, Donald F. Kuratko and Michael H. Morris discuss corporate entrepreneurship and the competitive advantages it lends an organization, especially when it fosters a culture where every employee is encouraged to think in innovative ways.
Nigel Piercy and Nikala Lane from the UK’s Warwick Business School take a new look at accepted practices of strategic account management. Suppliers to large companies (like Wal-Mart and General Motors) tend to think their largest accounts are their most important and their most profitable and reliable. But the evidence is that this is often illusory. In today’s ruthless and competitive marketplace, “large accounts exploit their buying power for lower prices, offer suppliers lower profit, and leave them to make their money from smaller and medium-sized accounts with less market power.” The authors take a long hard look at the disadvantages of strategic account management and urge suppliers to take a careful and objective look at their largest customers and what these relationships are really worth. As the authors conclude, somewhat tongue-in-cheek, “In many situations, it appears that the adoption of SAM models is based on the suspect logic that the best use of a company’s resources is to invest heavily in that part of the business (the largest customers) which has the lowest margins and the highest business risk. This is a somewhat unconvincing case for investment.”
Christopher Senn’s article on a successful account management initiative at Siemens works in harmony with the Piercy paper, taking a different perspective on the complexities of dealing with large, important customers. While it seems intuitive that senior executives would get involved with major customers and take a personal, focused interest in their counterparts, this is not often the case. Even when top executives meet with their customer counterparts, these contacts and the information gathered are seldom shared with others who manage the day-to-day relationship. Siemens realized that this lack of coordination and communication was hurting business and introduced an executive engagement process called the “Top Executive Relationship Process.” Today “there is a formal process by which account managers plan at least eight executive engagements per year that are linked to their account plans, attended by the account manager, and prepared with formatted documentation for both pre- and postmeeting reporting.” All information generated is shared with all appropriate managers. The results are in the profits, with those accounts managed under the Top Executive Relationship Process showing double the sales growth of non-managed accounts.