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    Can the domino effect be avoided?

    Management Performance Societal Wellbeing Strategy
    Every time a major company fails, smaller suppliers and associated companies are at risk of the domino effect—of becoming a statistic themselves. It's through not fault of their own, save choosing to do business in good faith with the failed company. This was highlighted in fairly stark terms in the last week, when companies either sub-contracted to, or associated with, New Zealand's third largest construction company, Mainzeal, started suffering.

    The domino effect has major implications on economic performance and the wellbeing of communities. When major companies succeed and grow strongly, many smaller and associated companies also gain considerable benefit. Sadly, the domino effect also applies when major companies struggle or, worse still, fail.

    While suppliers are generally very happy to benefit from upswings, downsides are something to be avoided. But can the downside of the domino effect be avoided? Thankfully, suppliers do have options. Here's two for starters:
    • Diversify their customer base, so that they are not reliant any one customer for a major portion of their business. 
    • Negotiate more favourable commercial terms, which may well include fortnightly invoicing and payment cycles (although this can be very difficult to achieve).

    What other "defence" mechanisms can put in place to avoid the domino effect?
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    ICMLG Conference: Post-conference summary

    Conferences Governance Management Performance Research Societal Wellbeing Strategy
    I've just arrived home after a demanding but highly enjoyable trip to attend the ICMLG Conference in Bangkok. On the long flight back to New Zealand I found myself reflecting on the conference overall. Here's a selection of what I wrote down in my notebook:
    • While diverse in topic, research methodology and scope, the general calibre of papers and presentations was impressive. ACI did a great job pulling together and running the conference.
    • Input-output research designs and quantitive data sets continue to dominate the research landscape, despite qualitative data and empirical data being more well suited to understanding and explaining social dynamic phenomena (like governance).
    • The case study approach appears to be gaining ground as a credible methodology for governance and leadership research.
    • Those researchers who are using qualitative methods are attempting to move from purely descriptive (exploratory) studies towards explanatory studies. (One of my objectives in attending ICMLG was to gain a better understanding of contemporary research methodologies.)
    • Relatively few researchers are investigating the link between governance and company performance.
    • I met some wonderful people! The conference was a melting pot of cultures. People from many different nations, religions and cultures were in attendance—a true "global village".
    Overall, I learnt a lot and the investment was well worthwhile. ICMLG 2014 will be at Babson College in Boston, Mass. On the strength of this year's conference, expect to see me in Boston in 2014!
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    ICMLG Conference: Reflection #6

    Conferences Management Performance Research Strategy
    Gender diversity: a new competitive advantage?

    Manasi Shukla (Bangkok University) and Aurilla Aurelie Arntzen (Buskerud University, Norway) presented a conceptual paper which explored gender diversity in management and systems design as an important element for competitive advantage.

    They outlined the challenges many women face, whereby many systems and products are designed by men, without any significant consideration for female cognitive or physical elements. They suggested that a woman's response to "design shortfalls" is to dismiss or avoid using a particular product.

    Shukla and Arntzen tentatively proposed a leadership practices inventory, to assist organisations design for, and accommodate, the needs of women. They asserted that organisations that take such steps have the opportunity to secure a competitive advantage in the marketplace. This is an interesting assertion—one that merits further research via the analysis of empirical data to determine if/how the practices they suggest are indeed significant. I look forward to reading more about this in the future.
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    ICMLG Conference: Reflections #3

    Conferences Governance Management Research Strategy
    Management attitudes toward currency hedging in a dynamic environment

    Worasinchai (Bangkok University, Thailand) investigated the relationship between management attitudes and hedging risks in foreign exchange transactions. She analysed data gathered from semi-structured interviews, and presented an interesting theoretical model created to inform best practice to assist firms, trading partners and central government trading with Thai firms.

    Worasinchai concluded—for large Thai firms and firms trading with Thai firms at least—that management attitude has an important impact on the strategic choices that a firm makes when considering currency hedging. She found that more conservative attitudes seem to be associated with a longer-term planning horizon. When asked about risk and subsequent performance, Worasinchai acknowledged this work is yet to be undertaken. If progress can be made in this area, and relationships and correlations between hedging, risk and subsequent company performance identified, then the prospect for a more stable global trading environment may well await.
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    ICMLG Conference: Keynote address

    Conferences Governance Research Societal Wellbeing Strategy
    The keynote address was delivered by Richard Hames, a corporate philosopher. Notes and observations from Hames' address:

    Leadership is changing and needing to change—in response to a major transition occurring in the world. We are moving from industrial economism (which has sustained the world for the last 300 years) and a new world order. Population growth is putting huge pressure on “life critical” systems, systems initially created to sustain order in our society. These included the economy, trade, production and distribution of food, cleaning drinking water, education, and the law.

    The occidental lens, through which most world systems have been developed, is no longer valid. Systems are beginning to fail. Extreme events (weather, for example) are fundamentally changing life on the planet. The pressures being exerted and the emergent failures are now creating opportunities for change, particularly in the leadership arena.

    The emergent change is that we are starting to exit the CEO (competitive business achiever) meme, and to enter a “community” meme, where shared purpose (collaboration) will begin to prevail over the accumulation mindset. Hames said the vehicle to lead through this transition are the “the five literacies of leadership”.

    Hames’ talk was interesting, and the five literacies coherent. However, the talk seemed to assume that the CEO meme is inherently flawed (ie: selfish and subject to corrupt practice) and must be replaced. This troubles me. Cannot CEO and community memes co-exist? 
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    ICMLG Conference: observations and insights

    Conferences Governance Phd Research Strategy
    Later this week—on Thu 7 and Fri 8 February—I will be speaking at the International Conference on Management, Leadership and Governance in Bangkok, Thailand. I'm looking forward to the challenge of speaking to a learned international audience, and to learning from other speakers and researchers throughout the two days.

    I plan to share session summaries, observations and insights here during the conference, so check back if you'd like to hear about current developments in the fields of management, leadership and governance.