MBA's Dilemna

A bit of insight into the method of my madness in posting to this blog. During the course of my weekends at Fuqua, some theme or comment sticks in my mind as a something I could write about and at the end of the last class on Saturday afternoon, while everyone is hopping into their cars and heading home, I stick around the Fox Center atrium, log into the wi-fi connection, and compose my blog.

Nothing really stood out for me this weekend, mainly because I was so tired from compiling our Corporate Strategy case late into the night last night. For an assignment that constitutes 50% of our final grade in the class, our team became increasingly cavalier about the case as the night wore on (and we wore out). Anyway, I was pretty out of it for most of the classes – just mustering enough stamina to make it through to this afternoon, let alone trying to absorb something from Org Design, Operations and Corporate Strategy.

However, the last comment from the last class this afternoon got me thinking. For this thought to make any sense, I have to back up and tell you about the “Prisoner’s Dilemma.” The concept goes like this – two suspects are brought in for questioning regarding a particular crime. They are interviewed separately and each is offered the following choice: “If you are willing to testify against your partner on this crime, you will go free and your partner will go to jail. However, if neither of you confess, we will take you to court and let the courts decide your fate. What is the “prisoner” to do? If he indicts his co-conspirator, he will go free. But if his co-conspirator also indicts him, both “prisoners” will go to jail. The optimal solution is for neither prisoner to “squeal,” but if both act out of self-interest and “rat” on each other, than neither party wins.

The comment made in class today was that based on studies of undergraduate students offered the same type of situation, the types of student who were the most likely to “defect” (or rat out their co-conspirator) in this game was the business and pre-med majors, presumably because these were the most self-interested groups on campus (what about the pre-law students?). So what does that say about business and medicine in general, and more interestingly, how does that reflect on a school with a top-ranked business school and medical school?

Culture cause or effect?

I was about to give up hopes of getting anything useful out of the Organizational Design class this term, mainly because the concepts we've learned thus far seem so nebulous and have so little predictive value as to whether an organization will be successful or not. You see, correlation does not imply causation. For example, take Southwest Airlines. In the airline industry, it's fair to say Southwest has been successful where most of its competitors have failed. After taking a Southwest flight, one might get the impression that the airline is successful because they nurture a culture of fun and creativity and that is the secret of their success. But if we were to impose the Southwest "culture" on US Airways, would it help turn that company's fortunes around? Not likely. You see, Southwest Airlines is more than just about perky flight attendants - they hire good people, leverage operational efficiencies and execute on their strategy better than other airlines. But is it because of the culture at Southwest that it is able to excel in these areas? Aye, there's the rub.

You see, strong companies foster strong cultures that align their employees interests with the mission of the company. All companies have a culture, but its effectiveness depends on whether the mission is relevant and adaptable. So I guess the object lesson here is that by studying other companies and cultures and learning what worked for them and what didn't, we can begin to discern those concepts and frameworks that are a good "fit" with our own companies and reject those that aren't. Who said this was easy?