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Summary
Corporate renewal utilizes management networks, defined as CEO-assembled groups focused on strategy. These networks drive behavioral change through enhanced dialogue and collaboration, requiring clear goals and performance metrics.
Area of Science:
- Organizational Behavior
- Strategic Management
Background:
- The term 'networks' is emerging in corporate renewal literature, but definitions and operational mechanisms remain unclear.
- Ram Charan's four-year study observed network creation in ten North American and European companies.
Purpose of the Study:
- To clarify the definition and operational dynamics of management networks in corporate renewal.
- To identify the key roles of senior management in establishing and leveraging these networks.
Main Methods:
- Qualitative research involving observation and participation in network creation processes.
- Analysis of network formation and function within ten diverse corporations.
Main Results:
- Networks are defined as select groups of managers (typically <100) assembled by the CEO based on strategic positioning.
- Networks impact corporate renewal by altering the frequency, intensity, and honesty of managerial dialogue.
- Effective network implementation involves senior management acting as change agents to build social architecture.
Conclusions:
- Networks are crucial for corporate renewal, requiring clear output expectations, information transparency, and performance evaluations that reward collaboration.
- Senior leaders must actively define network objectives, ensure information flow, and adapt performance metrics to foster horizontal leadership.