Management Online REview

6 January 2009 | Home

ISSN 1996-3300

International Business

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Business and Poverty - Bridges and Divides

Michael Blowfield

Can business be a genuine agent in tackling poverty? Is it asking too much to expect business to go beyond its conventional economic roles to become a more active, conscious, and accountable participant in the process of international development, and what are the consequences both for business and wider society if the private sector becomes a development agent? Is it something to be welcomed for the additional resources and comparative strengths it gives access to, or is it something to be wary of because of how it might influence the development process?

An Analysis of Sovereign Wealth Funds' Recent Venture in Developed Capital Markets

Surendranath Jory

Mark Perry

Thomas Hemphill

In 2007 and 2008, Sovereign Wealth Funds (SWFs), mostly from Asia and the Middle East, invested billions of dollars in the stocks of major US financial institutions, but prior to these investments, SWFs were relatively unknown in the US. Following major investments by SWFs in the US stock market, both investors and regulators are taking a closer look at them. The cause for concern is that many SWFs disclose very little about their corporate governance, organization structure, investment objectives, and short- and long-term targets, among other issues. These concerns led to fears by some that foreign governments might be using SWFs to acquire strategic assets in the U.S. for geopolitical gains. In this paper, we look at SWFs’ investment objectives, the benefits they bring to target firms, the rising public concern in the U.S. about SWFs, the governance structure of SWFs, their revenue sources and investment preferences, the performance of their U.S. investments, and their regulatory supervision.

Business Process Outsourcing and India

Sumitro Mukherjee

This article explores the recent boom in business process outsourcing, spurred on by the rapid development of information technology. India is a major destination for BPO and provides a case study of strengths and weaknesses for its future in this field. Business Process Outsourcing is the leveraging of technology or specialist process vendors to provide and manage an organization’s critical and/or non-critical enterprise processes and applications. Outsourcing, Offshore-Outsourcing and Offshoring are used interchangeably despite important technical differences. Outsourcing involves the transfer of organizational function to a third party; when the third party is located in another country it is called Offshore-Outsourcing; whereas offshoring represents the transfer of an organizational function to another country, regardless of whether the work stays in the corporation or not. Outsourcing and offshoring are not new concepts to the global economy. Earlier, offshoring was mostly restricted to manufacturing through technology-transfer during the maturity and decline phases of product life cycle. Major advantages of outsourcing are cost-reduction, comparative advantage by division of labour and economies of scale, lower turn-around time, and data-backup for disaster management. Areas of concern are service quality, data-theft, attrition rate, privacy laws and personal-information misuse and credit-card frauds. There are other issues also like job-losses in the outsourcing country, cultural differences and information security. The Indian outsourcing industry, a fast growing and major investment area, should benefit from an impetus in coming years due to its increased focus on information security and a comprehensive IT Act.

High Impact Areas of the New Media Technologies: A Review

Linda Weiser Friedman

Hershey H Friedman

The new media technologies encompass an extensive variety of web-related communication tools, such as blogs, wikis, online social networking, virtual worlds, and other social media forms. Organizations that wish to thrive in the Internet Age must understand the sea changes taking place thanks to the new media. Indeed, business, society, government, education and virtually every institution has been affected. This paper will review the new media phenomenon by examining the various application areas that have been dramatically impacted by the new media technologies. These high impact areas demonstrate how the new media are important for organizations that wish to make their mark in the 21st century.

Smart Big Moves: Making Strategic Breakthroughs

Paul Strebel

Anne-Valerie Ohlsson

Although the requirements for a successful strategy are well known, accomplished managers often make shifts that don’t add up in terms of the strategic logic. Hubris (presumptuous pride) fed by their previous success leads them into overestimating their abilities and underestimating the challenges involved. Their egos trap them. In our study of the histories of two dozen multinational companies, hubris emerged as one of the most common characteristics of failed strategic shifts. We looked at shifts involving a large commitment of resources to a new goal, what we call big moves. Five types of big move emerged. Each of these moves turns out to be commonly associated with a particular type of hubris. This creates a managerial blind spot with respect to a key success factor for the move in question. In this paper we discuss these manifestations of hubris, together with the strategic approach associated with successful big moves of the same type. The right strategic approach helps management to contain its hubris, thereby acting as an antidote to the ego trap.

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