Ambiguous strategy or strategic ambiguity?

David Tinsley

CMGT 500

Week 05 Assignment 01: Application Assignment

Ambiguous strategy or strategic ambiguity?  from the HuffingtonPost.com

This week’s class readings focused on models and concepts regarding the elements of strategic communication.  One of the concepts of personal interest was the idea of strategic ambiguity.  This concept, simple to understand on one level, presented some complexities as well. 

The basic idea behind using strategic ambiguity in communication is the use of a message that is ambiguous enough to not elicit a single, narrow interpretation, but to let an individual’s own “language, perception and knowledge” (Eisenberg, 1984) create interpretations that are individually based, or within “the context in which a message is presented”  (1984).  Therefore a strategically ambiguous message could have many meanings to many people (1984).

An article from the HuffingtonPost.com website, entitled Ambiguous strategy or strategic ambiguity? dated February 19, 2009,  attempts to make an assessment of communications and messages coming from Pres. Barack Obama and  the White House regarding the war in Afghanistan.  It was 2009, and Pres. Obama was sending more troops into the Afghanistan theatre of operations, an action that was contrary to his stated campaign promises to “refocus America’s fight on terrorism” (HuffingtonPost.com, 2009).  At the same time, the article discusses the fact that little had been said by the Obama administration regarding its war strategy.  Outspoken members of the anti-war movement were calling on the President to provide more “clarity on the United States’ future mission in the Afghan war”(2009).  The argument from the opponents of the war was that the President was committing more troops to a mission without explicitly stating the purpose of that mission.

The author of the HuffingtonPost.com article,  Frankie Sturm, presented the question “if the lack of strategy was part of the actual strategy by the President?” (2009).  Strum noted that Obama had not stated a specific strategy, like his predecessor, George W. Bush (2009).  He also pointed out that the lack of concrete and visible progress in Afghanistan as compared to the explicitly stated strategy by Bush resulted in the perceived failure of the former President’s strategy.  Perhaps Obama was attempting to avoid this pitfall by being ambiguous, or by saying nothing at all publicly.

Strum brings up the idea that this strategic ambiguity could be allowing Obama to shift the actual strategy of the U.S. in a way that diplomatic measures could be affected at the local level as opposed to the national level in Afghanistan (2009). Based on past history in the region, the author stated that “local solutions were critical to solving national problems” (2009).  By being vague, or ambiguous, Obama would take the pressure off of having to define success in a concrete way.  Success could be measured within “the context of those who live in the reality of the situation” (Eisenberg, 1984).  As Eisenberg states, this would be considered a “relativist view of meaning.”  By taking advantage of a message that would be strategically ambiguous, the Obama administration would be able to “foster agreement on abstractions without limiting specific interpretations”(1984).  Each group that received the strategically ambiguous message could process and define the meaning within their own contextual environment, leading to a decrease in conflict or tension that could be caused by communication that left no room for interpretation (1984).

In conclusion, Strum gives an example of  real world, contemporary usage of strategic ambiguity within our very own federal government.  This “wiggle-room” provided by Obama and his administration in relation to the war would prove to be vital in the future success and direction of the of foreign policy in Afghanistan.

References

Strum, F., (2009, February 19).  Ambiguous strategy or strategic ambiguity? HuffingtonPost.com. Retrieved from http://www.huffingtonpost.com/frankie-sturm/ambiguous-strategy-or-str_b_168244.html

Eisenberg, E.M. (1984). Ambiguity as strategy in organizations communication. Communication Monographs, 51, pp. 227-242.

Maintaining your ethical compass in Strategic Ambiguity

Several of our readings this week discuss the concept of Strategic Ambiguity, and why it is an extremely sound way of conducting organizational communication. 

Eisenberg (1994) suggests that communicators should make a conscious shift from a strict adherence to clarity in their messages to receivers towards a more contingent, strategic orientation (p. 228).  This is the essence of Strategic Ambiguity; the ability to vary your language and leave room for multiple interpretations, while achieving the same desired effect across all receivers with your message.  The messages you send to receivers must remain ambiguous, with a lack of specific detail, absence of a course of action, and a perceived equivocality of the message across your receivers (Putnam and Sorenson, 1982). 

This allows your organization to achieve what Eisenberg refers to as, ‘unified diversity’ (p. 230).  By remaining ambiguous in your messages, you allow your receivers to come away with the main points, but still allow for their own unique interpretation.  While this may be a slippery slope if your message is not constructed correctly, if executed properly this can be a very fruitful tactic for maintaining organizational flexibility and for curtailing your message to whatever the situation dictates.

But what if this communication strategy falls into the wrong hands?  Jim Paul and Christy Strbiak tackled this issue in their 1997 article, ‘The Ethics of Strategic Ambiguity’, and put the responsibility squarely on the communicator to remain ethical in their use of this style. 

The authors stated that individuals possess two types of cognitive maps in regards to ethics; espoused-ethics and ethics-in-use (p. 152).  Espoused-ethics refer to the ethical systems that inform their behavior, while ethics-in-use are the systems that actually govern their behavior (p. 152).  Put more simply, espoused-ethics are the lofty ideals we know should govern our ethical choices, and ethics-in-use are the factors that actually determine the choices we make.

This intrapersonal ethical examination is essential to using Strategic Ambiguity in the correct fashion (p. 157).  If we make our choices on how to use this philosophy with our espoused-ethics in mind, we will always use Strategic Ambiguity not only correctly, but also ethically (p. 157).   Once we allow ethics-in-use – or outside influences from a CEO or high-level executive – to govern our choices to simply meet the bottom line, our ethics are compromised.

As communicators, it is perhaps our most important job to remain ethically sound, especially when dealing with Strategic Ambiguity.  We must be aware of the power our messages can wield, and be constantly mindful of sending those messages in a strong ethical fashion.  Maintaining our integrity as people in our work environment is something that should always be possible, no matter how ambiguous our message.  While ambiguity can allow us to remain flexible and reach various stakeholders in a variety of situations, if these messages are not grounded in strong ethics, they will eventually create a lack of trust towards your organization.  It is up to us, if we choose to be ambiguous in our strategic endeavors, to always keep our moral compass intact.  If we do, we will always be able to reach any stakeholder, and get them to buy in to our message – even if it means something different to each person it reaches.

References

Eisenberg, E. (1984). Ambiguity as strategy in organizational communication. Communication Monographs, 51, pp. 227-242.

Paul, J. and Strbiak, C. (1997). The ethics of strategic ambiguity. Journal of Business Communication, 34, pp. 149-159.

Putnam, L. and Sorenson, R. (1982). Equivocal messages in organizations.  Human Communication Research, 8, pp. 114-132.

Perspective: Socio-Political Responsibility of the Black Church

This week’s Bonini, Mendonca and Oppenheim (2006) article captured me and I began to wonder how non-profit businesses like the church, particularly the African American church “incorporates an awareness of social and political trends” (Bonini, Mendonca and Oppenheim, 2006) into their strategies.

I grew up in the trenches of the African American church, where the call was to seek God and help others. It was in the church that the civil rights era was born and implemented through men like Rev. Martin Luther King, Jr., and Rev. Ralph Abernathy, then passed along to men like Rev. Al Sharpton, Rev. Jesse Jackson, Sr. And today men like Bishop T.D. Jakes to name a few.  As African American churches have grown into what is called “mega-churches” this clarion call has never been more necessary than in today’s society when social and political issues intersect.  Churches have so many opportunities to strategically influence their stakeholders.

Many pastors of leading churches are also businessmen, authors, and brands in and of themselves. They are tasked with the responsibility of dealing with social issues like the epidemic of HIV/AIDS among African American that is on the rise, youth violence and education, many pastors are also principals of charter schools. They even touch the political trends of today, sitting on Presidential councils and serving as surrogates or ‘spiritual advisors’ to elected officials.

Ernest Hemingway, an American writer and scholar, once penned, “Never mistake motion for action.” The socio-political responsibility of the black church is a necessary action. An action that keeps Pastor and author Patrick D. Shaffer of Chicago IL from the south side of the city creating strategic programs for youth and raising awareness about HIV/AIDs in the black community or as he says, “the silence of the church on these issues” (personal communication, February 26, 2012). So, I reached out to him via email to gather his thoughts on the socio-political responsibility of the black church.

I wondered how Shaffer as a black businessman who also pastors a church, how he defined sociopolitical issues, “It is defined within the context of faith but not exclusively limited by faith.  Rationally as we look beyond ourselves we see extraordinary injustices that are reflected in the work of Jesus.  Jesus synthesized social injustices and gave a theological context.  That socio-theological construct allows us to challenge socio-political strongholds to make equitable changes in the community” (personal communication, February 26, 2012).

Shaffer shared that his church which recently moved from the middle class Hype Park neighborhood to a neighborhood suffering from the effects of the recession, actually had a strategic sociopolitical platform. That did not surprise me as much as his reply. “Yes, it is rooted in listening to the words of Jesus and seeing Jesus as a champion and voice for those who had been forgotten, oppressed and targeted for economic violence by our government and each other “(personal communication, February 26, 2012).

Emphatically, Shaffer believed that black churches and/or religious denominations “absolutely do” (personal communication, February 26, 2012) have an obligation to create and implement strategic sociopolitical platforms. One of the many he and his congregation address is the HIV/AIDs epidemic and youth violence. As a a frequent writer & commentator within various media he identified other their sociopolitical issues or campaigns that he believed to be necessary and  successful.

           

One being “combating the food and dessert issues in urban communities is a paramount public exercise and there are a number of growing organizations that see America as a mission field and set up shop in areas of the country that are seemingly forgotten.  When people have no access to healthy food, it leads to poor health for a people that have little access to health care, which drives up the mortality rate disproportionately” (personal communication, February 26, 2012).

I asked Shaffer if his church, City of Faith has a 'social contract' (Bonini, S. M. J., Mendonca, L., and Oppenheim, J. 2006) with its parishioners and community. ‘Yes we do.  Church and its meaning must be lived out publically.  We must be advocates for social and political change and instruments to bring resources to communities in which we are planted to aid and transform the community" (personal communication, February 26, 2012).

Finally as an author, pastor, 35-year old sacred activist I asked Shaffer if he felt that black institutional non-profits (NAACP, NUL, etc.) and media companies (BET, TV-One, Radio-One, etc.) have been strategic in addressing sociopolitical issues for both their internal and external stakeholders, namely their viewers and community to which they serve? “Yes they have but not effective and consistent ones.  Those outlets need funding for their main source of business.  For them to give attention and resources to use their platforms to advocate for their core audiences have not been a part of their strategic business plans” (personal communication, February 26, 2012).

References

Bonini, S. M. J., Mendonca, L., and Oppenheim, J. (2006). When social issues become strategic. The McKinsey Quarterly, 2, pp. 19-31.

P. Shaffer, personal communication, February 26, 2012. Interview conducted via email.

Innovation Theory and Strategic Communication: A Match Made in Heaven

1. Academic article: Locate, read and summarize an academic article that presents a related theory, case example, etc. Draw connections between the ideas in the article and those you read for class.


As I searched for an academic article to draw connections with this week’s readings, I found Innovation, Communication, and Leadership: New Developments in Strategic Communication by Ansgar Zerfass and Simone Huck. Zerfass and Huck present a theory called Innovation Theory. Throughout the article, Zerfass and Huck present research that states innovation management is crucial to any managerial arm of a company. A company, in order to compete, must be innovative. Innovation is the creation of an idea, which then, must be communicated to the entire company including its leadership. Aside from leaders are “Promoters of Innovation.”

When ideas fast become innovations, there has to be a person in the company who can communicate the innovation so others can understand it. “Promoters of Innovation” possess skills to entice and enthrall the organization through convincing strategic communication. One example mentioned is the innovation of text messaging.

Stakeholders within the organization viewed text messaging as a very simple means for messages to appear on a cell phone. However, stakeholders outside of the company, i.e. teenagers, took a hold on text messaging and used it for far more reasons than expected, i.e. sexting.

Innovative ideas in a company come from a number of employees. The article states that ideas from lower-tier employees enhances an employees self-worth and provides a more favorable working environment. Leadership level members of an organization can use innovation theory as a tool to keep the organization’s employees fresh and creative. These methods of strategic management are similar to our readings because it includes not only changing the culture of the organization, but also adapting to differing ideas and cultures.

The The Strategic Communication Imperative (1) and When Social Issues Become Strategic (2) are similar to Zerfass and Huck’s academic article because they indicate and describe the importance of communication within an organization and making the employee feel empowered. 1 and 2 give good examples of how companies need to understand their potential impact on people, environments, countries, and etc. 2 explains a social contract companies have with stakeholders inside and outside of their organization. 2 goes further to layout grounds for creating long-term goals, because a short-term thinking management could have catastrophic consequences, i.e. Monsanto, ExxonMobil, and Enron. 1 also lists the importance of long-term goals and it actually describes Zerfass and Huck’s Innovation Theory.

Furthermore, 1 states that a company cannot have a “laissez-faire approach.” A company must continue to innovate and communicate within its own employees, as well as stakeholders. The five principles discussed in Strategic Ambiguity, Communication, and Public Diplomacy in an Uncertain World: Principles and Practices also relate back to the academic article by Zerfass and Huck because it states the importance of understanding cultures, communicating strategically, and being cognizant of the fact that outside stakeholders may interpret certain things differently.

Innovation can be described in a plethora of forms. The academic article and the three readings discussed illustrate that innovation should be in every company that strives to be successful. Long-term goals and the willingness to adapt to cultures are both innovative in their own way. Looking out for the best interest of your employee can also be viewed as an innovative tool. Listening to their ideas is a plus, but so is looking out for them financially even when you have to cutback, i.e. FedEx severance packages. The readings about strategic communication were very educational. The company profiles, married with the Zerfass and Huck article, made for a better understanding of communicating practices.

References


Argenti, P., Howell, R., Beck, K. (2005) The Strategic Communication Imperative, MIT
Sloan Management Review, 46(3), 83-89.

Bonini, S. M. J., Mendonca, L., and Oppenheim, J. (2006) When Social Issues Become
Strategic, The McKinsey Quarterly, 2, pp. 19-31.

Goodall, B., Terthewey, A., and McDonald, K. (2006) Strategic Ambiguity,
Communication and Public Diplomacy in an Uncertain World: Principles and
Practices, Consortium for Strategic Communication, 1-14.

Southwest Airlines: Perks and Quirks of the Airline's Comm Strategy

When the latest issue of Texas Monthly, a monthly magazine that celebrates everything Texas, showed up in my mailbox this week, the cover story grabbed my attention: “Luv & War: How Southwest Airlines Battled the Worst Decade in Airline History – and Conquered the Skies.” Growing up in Texas, Southwest Airlines was often the preferred airline for short jumps across the state. San Antonio to Dallas, a drive that would take 5 or more hours, was just a quick 45 minute hop. To Houston was even shorter: just 35 minutes in the air. I would always take Southwest back home for weekends in college, going from Lubbock to San Antonio for less than $100 round trip. The Southwest Airlines brand has grown to be as iconic as Imperial Sugar or the Dallas Cowboys (Gwyne, 2012).

Southwest’s communication strategy is one of the major reasons they have been successful in its 40+ year history when every other major airline in the country has filed for bankruptcy (Gwyne, 2012). The airline president and CEO, Gary Kelly, is ever-present in employees’ lives, from showing up to announce the annual “Kick Tail” awards to dressing like a member from the band Kiss at the annual Halloween party to having a say in what the company’s 160-member culture committee does.

But Southwest’s history hasn’t always been fun and games with a culture filled with parties, pride and hot pants, which is what the flight attendants (they called themselves hostesses) wore on all flights in the 1970s. In 1979, the Wright Amendment was passed, “which severely restricted Southwest’s flights from its home base of (Dallas) Love Field.” Founder Herb Kelleher quickly turned the airline into as much of a cause as a means of getting around, and the company adopted LUV as its stock symbol on the New York Stock Exchange (Gwyne, 2012). Kelleher rallied the employees behind the culture revolution and the airline was blowing and going until the morning of September 11, 2001.

The airline industry seemed to have the bottom drop out of it overnight after 9/11. In a new era of airport security, rising fuel costs and extra fees, Southwest tried to be the anomaly. The airline communicated to customers that they could cancel their reservations for no penalty, unlike what every other major carrier in the US was doing, if they didn’t feel safe flying. A well publicized event that happened the morning of 9/11 also has a positive effect on the airline: the crew of a flight that was forced to land then subsequently grounded in Grand Rapids, MI, unloaded all bags off the plane, retuned them to passengers, bussed them to the nearest train station and bought all of them train tickets back to their homes.

In 2002, Southwest found some more choppy air: it began a two-year negotiation with its flight attendant union, who wanted better work rules, benefits and compensation (Gwyne, 2012). The union held the “summer of tough luv” where they took their cause to airports across the country. When an agreement was reached two years later and the results shared with the employees, a sea of scattered cheers and boos could be heard in the room (Gwyne, 2012).

Southwest has also been strategic with the way it handles fees. Southwest has always been the airline without fees, so when all other major carriers began charging for bags, they came out with a new ad campaign to highlight the fact that they don’t. Real employees bared their chests and painted “bags fly free” on their skin like frat boys at a college football game to get the message across. And it worked. Southwest also strategically communicates it does not charge reservation change fees or even cancellation fees. This worked, Kelleher said, because they trust their customers and told them the truth about what they were actually doing (Gwyne, 2012).

And now finally, rising fuel costs have put the brakes on Southwest enormous profits. So what’s the solution: look into new markets. Southwest recently purchased AirTran and has begun picking up some of its routes to Mexico and the Caribbean. Kelleher believes the future profits of Southwest will come to this expanded route network (Gwyne, 2012).

Southwest subscribes to the notion that “when  companies  take  a  strategic  approach  to  communication, communication  becomes  integral  to  the  formulation  and implementation  of strategy (Argenti, Howell and Beck, 2005, p. 84). The role communications takes at SWA is a basis of why the company has been so successful over the years, having only posted an annual loss the first two years the airline was operating (Gwyne, 2012). Its CEO is a driver of strategic communication, and its strategy has a multi-level approach, one factor Argenti, Howell and Beck say is imperative (2005).

How will Southwest fare in the future? Nobody knows. But if the company keeps its current strategy in place, something tells me they’ll do just fine. The ticket prices might not be the lowest in the industry anymore, but where else can you get a flight attendant to sing happy birthday over the intercom, rap the safety instructions to you or act like they genuinely enjoy their job? Southwest, that’s where. 


References:

Gwynne, S.C. Luv and war at 30,000 feet: Texas Monthly, 2012 (vol. 40).

Argenti, P., Howell, R., Beck, K. (2005). The Strategic Communication Imperative, MIT Sloan     Management Review, 46 #3, pp. 83-89

Lessons from a Supervisor: Strategic Communication

This week afforded me the opportunity to visit with one of my previous supervisors from my days as a sales representative. When I first decided to contact my supervisor, I had just finished the Bonini, Mendonca and Oppenheim (2006) article. What I had read reminded me of a program that the company I worked for had initiated during my tenure, a program that incorporated donations to charities with a revenue-building program.

As I looked back on the program, let’s call it OTB, I began to wonder if our company’s decision to get incorporate the charities had been a strategic approach; perhaps a preemptive response to calls for social responsibility (Bonini, Mendonca and Oppenheim, 2006). Given my preconceived notions of the OTB program as a member of the sales team, it was intriguing to hear my supervisor’s perspective on the program and the company’s communication strategy. Her take was quite different from what I had expected.

The OTB was a program in which the company would match customer dollars in in-kind donations to certain charities. It was rolled out in what I thought was a rather unorganized and complicated way, which I thought made it rather confusing to explain and a headache to get customers on board. My supervisor’s perspective was a little different and shed a little more light on the subject.  

My supervisor explained that as she saw it OTB was initially designed to do three things: meet the needs expressed by customers, meet the needs of the larger community and help the company’s bottom line. Where my impression was that the company had used poor messaging with regard to the OTB program, my supervisor felt that it allowed customers room to embrace the it in the way that made the most sense for them.

In light of this, what I perceived at the time as a “confusing message” had actually been strategic on the part of the company (Eisenberg, 1984). By not giving explaining OTB with concrete boundaries, the company left it open to interpretation on the part of employees and customers who could fill in their own blanks about the program (Eisenberg, 1984). This was a “strategic communications approach” as described by Argenti, Howell and Beck (2005). The message presented to the customers was tied to their expressed needs and the message to internal employees was linked to the company’s mission.

So, what I had thought would be a conversation solely about corporate responses to social issues turned out to be an altogether different conversation. It’s interesting how understanding “strategic ambiguity” (Eisenberg, 1984, p. 228) has changed my appreciation for the company’s approach. It makes sense to me now why they might choose such a method. I also have a greater respect for the mammoth juggling act of that is managing corporate communications. It inclines me to be a little more generous in my recollections of my days in sales.

It also makes me wonder… if I had known then what I know now would I have approached my sales job differently?

References

Argenti, P., Howell, R., Beck, K. (2005). The strategic communication imperative. MIT Sloan Management Review, 46, 3, pp. 83-89.

Bonini, S. M. J., Mendonca, L., and Oppenheim, J. (2006). When social issues become strategic. The McKinsey Quarterly, 2, pp. 19-31.

Eisenberg, E. (1984). Ambiguity as strategy in organizational communication. Communication Monographs, 51, pp.227-242.

Strategic Communications: A Consul’s Perspective

A few months ago, I met Carlos Ponce Martinez, Mexican Consul based in San Jose, California. During our first interaction, I mentioned that I had recently read an article on CNN about the number of people kidnapped in Mexico and how alarming this was for many potential tourists.  He diplomatically blamed the media for sensationalizing this news and changed the topic.  The readings this week prompted me to set up a meeting with him to discuss his feelings about strategic ambiguity in communications given his current role and his experiences with the Mexican political system.

During the first part of the interview, we discussed Eisenberg’s (1984) exploration of ambiguous communication.  The consul personally regarded ambiguity as unacceptable as did the critics mentioned by Eisenberg (pp. 227 & 239).  He mentioned that he tries to be clear when he communicates and appreciates clarity from others (personal communication, February 25, 2012).  If he does not know something, he usually changes the topic or doesn’t answer the question, but his personal values prevent him from giving confusing messages that could have multiple interpretations and negative ramifications (personal communication, February 25, 2012).  With the emergence of virtual communication channels, he stated that “people are more savvy and educated, so they demand better and clear communication from their representatives” (personal communication, February 25, 2012).

Without offending him, I raised the example cited by Einserberg (1984) regarding politicians and their strategies during news interviews when they want their messages to be interpreted in multiple ways (p. 236). He said ambiguous communication by politicians happened in the Mexico and in the US very frequently, but in his position he did not have to use this communication method because he was an appointed official, not an elected one. He shared examples of how politicians are using social media to create an image and send ambiguous messages, but fortunately his role does not depend on public opinion, so he can be very clear with his colleagues and partners (personal communication, February 25, 2012).  He did agree with the fact that in his current role, he has to “balance between being understood, not offending others, and maintaining one’s own image” (Einsenberg, 194, p. 228).  This means that he has to be very diplomatic in the way he approaches conversations and in some cases he uses the strategies outlined by Eisenberg which include “avoiding interaction altogether, remaining silent or changing topics” (p. 228) and the last two are his preferred options. Based on my personal observations of his interactions with his employees and potential partners though, I feel that he inadvertently uses strategic ambiguity to “facilitate relational development” (Eisenberg, 1984, p. 233).

In an effort to elicit his reaction, I walked him through the “one-way” communication model and asked him to share with me what he thought of it (Goodall et al., 2006, pp. 5-6).  He pointed out that in Mexico this model would face some challenges since there are some people who would automatically question the trustworthiness of the communicators (personal communication, February 25, 2012).  Finally, I shared the “five pragmatic principles to guide a new communications policy” (Goodall et al., 2006, pp. 10-11), and despite his disdain for ambiguous communications, he approved of each one, specifically the focus on cultural competence illustrated in strategies 3-5, and felt this would be a good communications approach for the US to follow in order to improve its image abroad (personal communication, February 25, 2012).

References

C. Martinez, personal communication, February 25, 2012. Interview conducted in Spanish.


Eisenberg, E.M. (1984). Ambiguity as strategy in organizations communication. Communication   Monographs,  51,227-242.

Goodall, B., Trethewey, A., & McDonald, K. (2006). Strategic Ambiguity, communication and public         diplomacy in an uncertain world: Principles and practices. Consortium for Strategic Communication, 1-14.

Interview with: Looking at India from the Inside .... and Outside

Week 04 Assignment 01: Application Assignment


Interview with:  Looking at India from the Inside .... and Outside

This week we've taken at look at alliances and partnerships among organizations, and have been provided with examples and cases that illustrate different methodologies and practices for organizations and companies.
In 2010, Kanter concludes that one of three important elements of business alliances is that the partners must benefit in other ways besides the key details of the particular deal.

I took some time to sit down with Todd A. MacCallum,  MBA, a Senior Director at Salesforce.com, who has more than 10 years working with companies such as Infosys Technologies Limited, Accenture and IBM Global Business Services in India through various partnership models. 
(he spoke from his home in Orange County, California)

Before we began the interview Mr. MacCallum noted that nearly all of his work was initiated and created by the partnership or alliance entity before he began his work at the ground level (T.A MacCallum, personal communication, February 18 - 19, 2012). 



_________________________________________________________________________

AA:  So you've worked in India since the late 90s.  What kind of partnership models work best? Did...did they differ?

TM:  They... you know, they were different,  they seemed different, the way each project was handled, but at my level, especially at IBM, I was brought in to sell or manage the project.  The length of the project seemed to be the driver. And the type of work, of course.

AA: What do you mean?

TM: If the project was already sold and budgeted, it had a finite shelf life to it and say the owners.... the principals...they would be profit sharing at specific junctures, so they would structure it, or it would be structured to facilitate that kind of result. For me, for us, IP -- intellectual property -- was the key in securing because one piece of IP could drive an enterprise's revenue stream.  So making sure that key assets were shared and protected were written in at the beginning of the project. 

AA: There was one paper that we read  in the Harvard Business Review on how organizations and companies choose between a joint venture and whole ownership venture -- that based on the company and their strengths ...or how they operate... and how they transfer their expertise, they select a strategic partner and settle on the optimal choice of partnership for both companies Gomes-Casseres, (1993).

TM:  Yeah, I'm sure there are many types [of joint ventures]. And most of our partners were not first-timers; they might have worked for an American company previously. So sometimes the only thing that changed was their business card.

AA:  Wow.  Interesting.
          We are working -- I'm working with my class group on a paper written about the Wal-Mart Bharti partnership -- the strengths and weaknesses of the partnership... and opportunities     
    and threats for entering the Indian market together.  Recently the government pulled a proposal that would have allowed that type of partnership. (Bose, 2012)  Is that kind of      partnership going to work  well?  They seem to be a kind of dream team as far as resources and know-how.

TM:  (sighs).... It's really hard to do business in India (laughs). It's easier to do business in China than in India.

AA: Why? Because ....

TM: Because... Well, there are something like 26 languages that are used in India daily...and like 100 dialects.  In each state, a different language is spoken. They call it their "mother tongue."
 And India is a democracy. In China, there is no political process -- or multiple processes, let me say -- to slow a project down. In India, everybody has a vote.     It's just a longer process in getting approval.  The polical winds change so much..and like here, the people can vote someone new in office.

AA: So the language issue -- multiple languages - that's a problem?  Or was it a problem?

TM:  Well, when we had team meetings, with 10-15 people from  many states around the country, we had to do the meeting in English. Even though Hindi is the national language, one of the team members only spoke his language and English.

AA: Not Hindi? Do you speak it?

TM: Yeah, but not enough to run a meeting.  English is the primary business language.

AA: The language issue, then, would be more of an issue for a retailer, rather than IT infrastructure you were doing there. 

TM:  Surprisingly, most of the business community speaks English. Like customer service reps, you know lots of companies here outsource there.  

AA: Right.

TM:  That's why their different. In China, they are good in manufacturing. In India it's service industries

AA:  So do you think the Wal-Mart model will work in India?  The government tabled it until March. Is waiting until March going to make much of a difference.

TM:  The supermarket concept - Wal-Mart - is an enormously disruptive model.  Over there, they [consumers]  get their stuff at different stores.  They get their spices from one store.  They get their produce, their vegetables at another store, vendor.

Mr. MacCallum and I discussed more about the strength of Bharti, Wal-Mart's partner (Bose, 2012). I mentioned the cultural changes among women and youth that helped spur retail growth (Bose, 2012).  He shared his view on  the speed of these changes below (T.A MacCallum, personal communication, February 18-19, 2012).   


AA: So kids wearing the brands the American kids wear, that's not going to help push demand in that category?  How about for other demographics?

TM: I'm not a retail expert but there's other stuff going on there.  I mean, it's happening.

AA: Yeah, it seems there is a lot happening --

TM: Yeah,  it's amazing.  Its blowing up there.  When I got there in 1999, it was just starting to blow up.   What I mean- what I mean is there's lot of things - like India is still a country where most marriages are still arranged. 

AA: Uh huh, right, a lot of Indians living in England still arrange marriages

TM: Exactly. It is extremely traditional.  China is also traditional.

AA: But India's democracy makes things more challenging when added to the mix. 

TM: Yes.

AA: And language.

TM: Yes, but India's cool. It's very social, very open. I know they still have a caste system, but they are still growing. they just got their independence something like 46 years ago.  They are still coming out of another time in their history-- In the 1990's Omar Singh was the economic minister who opened it up after relying on the Soviet Union's support.

AA: I think that's the same Singh who is the current Prime Minister?

TM: Yeah.  It's kind of weird....when you go the airports there, you can still lots of soviet influences -- there are still lots of signs in Russian, lots of the planes still have the old soviet airline names.  They (India) are still growing?

AA: So do you think it -- the Wal-Mart / Bharti partnership -- could work?  Wall-Mart will be doing the back end supply stuff and Bharti will run the front end of the retail.  We don't know how far, if at all, the Wal-Mart brand will be in the background.

TM: [They] Bharti might be able to make it work. They know the target demos, they know where to be. 

AA: You've been traveling there for years and seen lots of changes. So it just is going to take time? Or what will it take?

TM: You know.....it's different as far as how long it takes to get some things -- not everything -- patience. it's going to take patience. I don't see why they can't be successful once they [Wal-Mart and Bharti]  get on the ground.

(While he did not have direct retail experience in India, Mr. MacCallum  did point out that he sees change -- a  change that is constant -- occurring. The Indian retail market will speed up, slow down, but continue to grow like other developing countries.)

We discussed more about differences between Indian culture and Western (specifically U.S.) culture regarding companies in joint venture.  I mentioned that one reading underscores some common characteristics of organizational relationships that are successful (Kanter, 2010).  Noting that he has received education and training on Indian life and culture by his aforementioned employers Mr. MacCallum agreed with those principles in general.  He asserts that many of his relationships with his partners in India have lasted well beyond his project life and turned into friendships and sometimes back into business contacts(T.A MacCallum, personal communication, February 18-19, 2012).

I learned that there are so many factors affecting success in the Indian retail environment, and this complexity in the external environment may affect the speed (and forecasting) of results for foreign companies entering the marketplace.  Some of these factors are language, religion and government.  The B2B community there is familiar with foreign partnership models. But the maturity on the retail side isn't there and while I believe there will be change, no one can predict how that growth curve will look.

Once that door is open, the challenges will present themselves without prompting. Perhaps  at that point, clarifying (or re-examining, in some cases) objectives and goals for these  retail organizations' projects will provide for achievable, meaningful growth on many fronts (credibility, trust and loyalty) and help build a bridge to new relationships with other organizations and consumers. 

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                                                            REFERENCES  

Gomes-Casseres, (1993). "Managing International Alliances: A Conceptual Framework." Harvard
               Business School. pp. 1-20.

Bose, I. (2012). "Wal-Mart and Bharti: Transforming Retail in India." Asia Case Research Centre.
             pp.    1-18.

Kanter, R. (2010). "Collaborative Advantage: The Art of Alliances."Harvard Business Review. pp.
          1-16.

Gulati, R. (1998) "Alliances and Networks" Strategic Management Journal, Vol. 19, pp. 293-317

A review of: Managing in complex business networks Ritter, Wilkinson and Johnston

Week 04 Assignment 01-Application Assignment-Academic Article Review

A review of:  Managing in complex business networks

Ritter, Wilkinson and Johnston

Throughout the class reading for this week, we have been introduced to the concepts and theories of creating and managing various levels of collaborations through networks and alliances. These networks and alliances are based on several facets of the organizations that participate in them.  This review will focus on the some of the social factors that are involved in networks and alliances.  

Gulati (1998) introduces “the notion that a firm’s social connections is one of the primary drivers in providing interest and opportunity in joining in an alliance.”  Organizations are given “many new opportunities for alliances through their existing alliance partners” (Gulati, 1998).  We could use the very simple and basic example of meeting a new friend or partner through our own group, or network,  of current friends.  That relationship is initiated by someone we already know,  introducing us to someone they know,  who may share very similar interests and goals.  The similarity of those interests and goals forms the basis for a new and rewarding friendship.  If we accept Gulati’s proposal that this type of interaction and partnership occurs between, and through organizations in a similar fashion, the social aspects of those relationships must be addressed in the overall analysis of networks and alliances.

Ritter, Wilkinson & Johnston propose that “a firm is embedded in a network of ongoing business and non-business relationships” (2004).  A part of their overall analysis of networks and firms takes place from the relationship level.  In an organization there is the need to “manage both relationship and network situations” (Ritter, et al., 2004).  Networks and alliances can be based on both inter-organizational and intra-organizational relationships.  Ritter, et al., also point out that these relationships paths are driven by “actors” or individuals, within each part of the relationships (2004). These actors can be viewed from both “isolated” and “the individual dyad”, or relationships between individuals (Ritter et al., 2004).

While Ritter et al., look at many angles of managing the relationships between networks, the salient point for this review is that a person, or individual is the basic foundation for any alliance to exist and/or succeed.  Individuals bring with them existing relationships to an organization, and use those relationships to develop their own personal networks over time.  These personal networks of “actors” can then be connected to the organizational networks, both internally and externally. (2004).   An individual’s knowledge and experience can be shared with the organization to which they belong.  The organization can use that person’s resources to connect with other “actors” in other organizations as the basis for new networking and alliance opportunities (Ritter et al., 2004).  This interaction between  individuals, organizations and networks that are naturally formed or negotiated is much like that of a “living organism, working in harmony with other members of the ecosystem to maintain productive and effective relationships” (Ritter et al., 2004).  If a relationship reaches the desired state of effectiveness and productivity for “all organisms within the ecosystem (network or alliance)” (Ritter et al., 2004), then it would follow that the entire ecosystem would reap positive and rewarding benefits of that successful interaction.

References

Gulati, R. (1998). Alliances and networks. Strategic Management Journal, Vol. 19, 293-317.

Ritter, T., Wilkinson, I.F.,  & Johnston, W. J. (2004).  Managing in complex business networks. Industrial Marketing Management, 33(3),  175-183.  Retrieved from http://www.impgroup.org