Update IV: The Organizational Perspectives—External Stakeholders

May 5, 2006

The heart of the new Yale SOM Core Curriculum, the Organizational Perspectives segment, contains interdisciplinary courses structured around the network of perspectives that a leader needs to be able to engage and lead.

Four courses develop the perspectives of key external stakeholders (Investor, Customer, Competitor, and State & Society) and four courses develop the perspectives of key constituents within the organization (Sourcing & Managing Funds, Employee, Operations Engine, and Innovator). Each perspective requires integration of material from different functional areas, such as Finance, Economics, and Marketing.

While details of the Organizational Perspectives continue to be developed, we provide below the focus and rationale for each course, beginning with the four external perspectives. Next week we will provide similar information on the four internal perspectives.

• Investor: The inclusion of the investor perspective is premised on the fact that a manager’s success often depends on the ability to secure capital, and in order to do so, a manager must understand how an investor decides where to allocate his or her capital. The manager should understand the different types of investors and their motivations, should be aware of how investors rely on competitive industry analysis to make assessments of future earnings, should be able to identify features of an organization and its leadership that will generate investor enthusiasm or concern, and should be able to draw on macroeconomics and the analysis of political institutions to anticipate how investors will respond to events that are or are not outside the manager’s control.

• Customer: There are numerous examples of managers who fail because they do not appreciate what the customer needs or wants or are unable to formulate a value proposition consistent with those needs and wants. The successful manager must develop a holistic understanding of how such factors as product features, brand, pricing, and the organizational point of contact with the customer impact on a customer’s decision to purchase and remain loyal to the organization, and know how to lead an organization whose action is guided by this understanding. The manager also should be aware of and draw on the various tools and methodologies that can be employed for making assessments of the customer’s engagement with the organization’s current or intended value proposition.

• Competitor: A manager’s ability to realize his or her goals invariably depends on the manager’s ability to anticipate and influence how a competitor will respond to an organizational action that the manager initiates. Such anticipation and influence depend not only on perceiving the game in which the manager and competitor are involved, but understanding the identity-based constraints that inhibit the repertoire of responses that the competitor can make and understanding the full range of tactics at a competitor’s disposal. Sometimes the manager’s success depends on working with the competitor as an ally in an activity of joint interest; sometimes, it depends on being more effective than one’s competitors in working with complementors in related industries and product categories. Finally, sometimes the manager’s success depends on changing the rules of the game defining the basis of competition.

• State & Society: Elected and unelected political officials can be either assets or obstacles to a manager’s realization of his or her goals. A successful manager must understand the motivations and considerations of these officials and understand how those motivations vary with country and features of the officials’ position, such as whether the official is elected or appointed. Macroeconomic forces, pervasive cultural values, demographic trends, NGOs, legal precedent, and the defining attributes of the public sector organizations with which they are associated are among the factors that impact on the actions of these officials. The manager must be prepared and able to take actions that reflect these motivations and considerations.

Check mba.yale.edu next week for a preview of the four courses devoted to internal constituencies.