Archive for September/2009

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Foreign job postings slow the climb up the corporate ladder for executives, according to research presented at the annual meeting of the Academy of Management, which ended on Tuesday.

A chief executive without an overseas work background reaches the top job about two years sooner than those who went abroad, said Monika Hamori, professor of management at IE Business School in Madrid. The more assignments and the longer time spent outside the home organization, the longer it takes, she said. “The results show that executives with international assignment experience take longer to reach the top echelon,” said Hamori, who with IE colleague Burak Koyuncu studied the careers of chief executives at companies on the S&P 500 and Financial Times Europe 500 indices.

“Our findings suggest that you advance faster if you are in proximity to the corporate headquarters’ social networks than if you are on assignment abroad.” With a few exceptions, foreign divisions represent the periphery, far from companies’ centers of power, she said. The average chief executive is appointed to the top job in 24.83 years from the start of his or her career but those with international assignments take 1.96 years longer than those without international experience, the researchers found. “Do it for a year or two, do it when you’re young and don’t switch companies when you get back,” said Hamori.

One third of the chief executives in the study had international assignments.

IE Business School is the No. 1 business school worldwide in the Wall Street Journal ranking of one-year programs. This result further consolidates IE Business School’s position as an international leader in the field of management education.

The ranking is based on the opinions held by some 1,300 MBAs students from 48 business schools on the quality of their programs, and the leadership and management skills they have acquired. It also took into consideration the experience of 735 alumni who had graduated 2 years earlier, and who provided opinions on the impact of the MBA program on their careers, the quality of their MBA and the opportunities it affords to develop leadership and management skills.

This year the IE Business School International MBA program has students from 68 countries, making it one of the most diverse MBA programs in the world. In order to leverage the international experience and take learning beyond management, the program includes modules designed to foster critical thought coupled with a capacity for teamwork and networking. Students are immersed in activities that include workshops on communication led by actors from Shakespeare’s Globe Theatre, or sessions led by professors from the Architectural Association School of Architecture in London, associated with architects like Norman Foster, David Chipperfield or Zaha Hadid. Furthermore, sessions on humanities provide insights into the Arab world, Indian and Chinese civilizations, and contemporary culture.

IE Focus | By Rafael Hurtado, Professor at IE Business School

The collapse of the stock market has highlighted the shortcomings of the hedge fund system of short sales and fuelled debate on the need to set limits and rules for this type of operation.In recent months, and in particular after the great crash of the stock markets as from September 2008, the hedge fund system of short sales has been a subject of analysis and debate by many players on financial markets. The consequences and system of short sales are a source of great controversy in the financial sector.

Short sales take place through the loan of securities. A short position (short sale) takes place through the sale of an asset that is not held by the investor, but borrowed through an intermediary and later bought to pay the loan. The profit is obtained if the initial sale is completed at a higher price than the purchase price. With a short sale, the investor obtains greater profit if the price of the asset falls.

On many occasions, hedge funds not only involve short sales, but also use a significant amount of leverage. For a short sale, an intermediary must lend a certain number of shares. Some companies say that they have uncovered signs of their shares being lent as part of a chain. This type of transaction involves further risk. Read more…

IE Focus | By Enrique Dans, Professor at IE Business School

The concept we have had of computers to date is set to disappear under a landslide of Internet realities that offer a new way of working online. Google´s announcement of its project to launch an operating system, Google Chrome OS, is not just another announcement in the hyperactive wasteland of technology news. The announcement is something more than that. It is a change of concept that affects the definition of a computer and what we do with it. Something that is going to change the way we work.

For many years now a computer has been the machine used to do the same things that were done without it, only more quickly and more efficiently. The word processor was a post-modern typewriter that produced results that were aesthetically better in less time by separating the composition process from the printing process. The spreadsheet was a “calculator on steroids”, which avoided the sequential repetition of chains of operations by placing them on coordinates. A bookkeeping or salary application was the fast way to tackle a monthly task that was both tedious and repetitive. For workers, a computer was a machine they used for doing the same thing, but more quickly. And to do that, they needed hardware, an operating system and the right applications. Last century´s computing system: buy a computer, which comes with a large, heavy operating system “that has everything” (including a computer and a game of solitaire!) and then buy the programmes you need to “do things”. Read more…

IE Focus | By Kenneth Dubin, Professor at IE Business School

In an environment marked by uncertainty, scant resources and a lack of interconnectivity, people management should be based on structures that are more horizontal and less formal coordination systems.The present crisis should mark a before and after in human resources management. Politicians and social players will (or may not) reform the employment market and the labour relations system. However, for businesses and managers (and also for employees), the change is a must: yesterday´s competitive strategies have expired and taken with them the (bad) habits we acquired in people management.

The current situation is defined by uncertainty, the shortage of financial resources and the revolution of inter-connectivity; new business commitments in both SMEs and multinationals must be quick, flexible and innovative. This means working by project and generating value through knowledge rather than capital resources. Projects require collaboration between the functional areas of the company and also between the company and external agents (suppliers, other businesses and, more often than not, clients) and who may be located far from Spain. Read more…