Aristotle

The orator persuades by moral character when his speech is delivered in such a manner as to render him worthy of confidence; for we trust such persons to a greater degree, and more readily. This is generally true for all types of arguments, and absolutely true when there is uncertainty and room for doubt.

Trading Technology: Multinationals Lead the Way

The global spread of technology can improve nations’ productivity and growth. Oftentimes, multinational companies are the ones that trade or carry technology across borders. To better understand this phenomenon, Pedro Mendi has studied how Spanish multinationals transfer technology to their subsidiaries. His paper, “Contracting for the Transfer of Technology Within Multinational Corporations: Empirical Evidence From Spain,” sheds light on important considerations such as contracts, methods … [ Read more ]

Measuring the Success of International Logistics Partnerships

International logistics partnerships are a key class of strategic alliance, but until now little has been known about their performance. The paper “Measuring the Performance of Intenational Logistics Outsourcing Partnerships: A Dyadic Perspective Analysis” introduces, for the first time, a reliable methodology to measure the performance of a partnership between a logistics provider and its customer. Using data from 75 top European logistics companies and … [ Read more ]

Risk and Return in Emerging Markets: Family Matters

In order to evaluate projects, value firms, optimize capital structures and implement investment strategies, companies and investors need to know the risk variables that ultimately determine expected returns. While in developed markets there is at least a “model to beat,” the CAPM, in emerging markets there is no standard, widely accepted way of estimating required returns on equity. In this article, the authors perform a … [ Read more ]

After the Bubble Burst: A Groundbreaking Analysis

We are still seeking to understand the astonishing rise and then sharp fall of U.S. stock prices in 2000. The paper “U.S Public and Private Venture Capital Markets, 1998-2001,” describes what happened in a new light, by looking through the lens of underlying company financial fundamentals. The research reveals some important insights. For instance, contrary to popular belief, there was no single “bubble point” at … [ Read more ]

Henry Ford

Business must be run at a profit, else it will die. But when anyone tries to run a business solely for profit… then the business must die as well, for it no longer has a reason for existence.

Miguel Angel Ariño

Saying that a company’s purpose is to maximize profits is like saying that man exists in order to breathe. The fact that a man cannot live without breathing is one thing, but the ultimate purpose to which all man’s energies must be directed is quite another. Similarly, it is one thing to say that a company cannot survive without a certain minimum of profits, and … [ Read more ]

Put Your Dreams To Work

As the years go by, we resign ourselves to the pessimistic view that “dreams are just dreams”. And yet, for IESE Professor Luis Huete, dreams are essential to a full life, which consists essentially of developing and mobilizing personal resources to attain inner and outer abundance. In the book “Construye tu sueño” (“Build your Dream”), Huete invites us to identify the factors that determine how … [ Read more ]

CSR Should Stand for Company Stakeholder Responsibility

While more and more businesses embrace Corporate Social Responsibility (CSR) principles, R. Edward Freeman of The Darden School, University of Virginia, and S. Ramakrishna Velamuri of IESE Business School claim that the CSR concept as it is understood today is just superfluous. Their paper “A New Approach to CSR: Company Stakeholder Responsibility” proposes to replace “Corporate Social Responsibility” with an idea called “Company Stakeholder Responsibility”, … [ Read more ]

Competent to Lead

Results and talent. In people management, competencies should be given equal consideration to objectives, say Pablo Cardona and Pilar García-Lombardía in their book “Cómo desarrollar las competencias de liderazgo” (“How to Develop Leadership Competencies”). In the authors’ view, organizations that adapt tasks to fit their employees’ competency profile have a better chance of success, especially if they take steps to develop the desired competencies. Cardona … [ Read more ]

Birth of New Firms: Knowledge is Key

Ever since Ronald Coase posed the question in 1937 -“Why do firms exist?”-, all the answers given have explained the genesis of firms o­nly in terms of the need to economize o­n costs, such as transaction costs, agency costs, and supervision and monitoring costs. In their paper “Dispersed Knowledge and an Entrepreneurial Theory of the Firm”, Nicholas Dew of the Naval Postgraduate School, S. Ramakrishna … [ Read more ]

Knowledge Integration Across Organizations: How Different Types of Knowledge Suggest Different Practices and Different ‘Integration Trajectories’

This paper establishes a framework for analyzing knowledge integration across organizations from a corporate standpoint, pinpointing the challenges of a firm wishing to effectively integrate knowledge among its business units to improve its efficiency as a unique firm and its effectiveness through a better competitive positioning. Typical examples are those of a firm whose divisions benefit from better knowledge sharing in specific areas, or of … [ Read more ]