As part of its 10-year birthday celebrations, Working Knowledge - the Harvard Business School publication which provides a first glimpse into cutting-edge research from Harvard faculty - asked several influential management thinkers and faculty, including the new Dean, Nitin Nohria to shed some light on the most significant ideas and developments that have impacted business management in the first decade of the 21st century and also the most productive management research areas in the decade to follow.
Based on responses from the reputed faculty researchers, we take a look at five areas or trends which are emerging as the key influencers of business and management in the 21st century and are also likely to spawn a good share of research in the domain.
The melting of barriers among nations and their increasing interconnectedness, accelerated by technology, has led to a change in the world order that has had a profound impact on global business. The emergence of nations such as India and China has replaced the era of unquestioned dominance of the Western countries or any one particular region, paving the way for a flattened business arena where developments in one part of the other are certain to have a spiraling impact. Perhaps the best evidence of this is the recent financial crisis.
A recent 335-page study by the AACSB, the leading accreditation agency for business schools around the world, highlights the implications of this and asserts that rising expectations from business and society for graduates with global competencies, coupled with the increasing complexity and global connectedness of higher education, command the attention of business schools around the world.
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If the current wave of globalization has been the driving force behind the most far-reaching and powerful changes in business, then information technology has indisputably been the facilitator. Drawing attention to the fact that four out of the top five companies in Businessweek's annual list of most innovative companies are technology-driven businesses, Professor Teresa Amabile writes in Working Knowledge, Customers are courted and supply chains are managed via websites, social media, and email; marketing, manufacturing, and distribution processes are managed by sophisticated real-time information systems; colleagues working 12 time zones apart can see and hear each other as they work at their desks-or in airport lounges on opposite sides of the planet.
Sustainability and Corporate Social Responsibility
For business to be sustainable, and even profitable, our planet has to be sustainable - this realization has hit businesses perhaps the hardest in recent times. HBS Dean Nitin Nohria feels that in the coming decade, we are likely to see a lot of focus directed towards applying management principles to solutions of complex social issues such as environmental sustainability, energy security, access to healthcare etc. This will also underline the need for increased interdisciplinary interaction and influence on business management.
One evidence of this growing engagement with issues of society and sustainability is the increase in number of companies who have intensified their CSR focus and the innovative ways in which they have engaged themselves, points out professor of marketing, Michael Norton. Shifting steadily from corporate philanthropy to more direct and effective engagement, companies have devised new models of extending a social footprint. Drawing attention to the Pepsi Refresh project, Norton has highlighted how the company encouraged users to submit projects with social impact-from cleaning up a river to saving animals-and allowed other users to vote on which projects Pepsi should fund.
The Study of Psychology
Speaking of interdisciplinary influences on business, the study of human psychology - probing into cognition, motivation, behavior and performance - has become a key pillar of organizational management. From employee management to customer satisfaction and social engagement, satisfaction of business objectives requires effective analysis of both individual and institutional psychology. A good amount of research is therefore likely to be focused on how psychological theory and research can be integrated into business academics and management practice; Professor Amabile feels that with more evolved tools and access to ever-growing information databases, managers will have the power to substantially improve both the practice of business and the welfare of society.
Professor Carlyss Y. Baldwin feels that one of the most notable trends in management has been the rise of business ecosystems - defined as groups of firms which together provide complex products and related services to meet end-to- end requirements of users across the value chain. The integration between media, technology and telecommunication firms would be an apt contemporary example.
This has important implications for management because innovation in business ecosystems has a character distinct from traditional, vertically integrated firms. Every organization in the ecosystem has to be aware of the bigger picture. As Professor Baldwin tells Working Knowledge, Innovation in ecosystems requires collective action to both invent and appraise, efficient, cross-organization knowledge flows, modular architectures, and good stewardship of legacy systems. It rests on multiple, complementary platforms.