The McKinsey Quarterly articles from January 1998

The McKinsey Quarterly archives from January 1998

The New Economics of Organization
January 1, 1998... In their purest forms, markets motivate and hierarchies coordinate Have we learned to combine the best of both? Two challenges for the corporations of the future: entrepreneurialism and knowledge In a classical microeconomic theory, a company...

Best Practice and Beyond: Knowledge Strategies
January 1, 1998... Value created by knowledge is often not captured Five accounts of knowledge strategies The business press is filled with accounts of the power of knowledge to reshape corporate fortunes. Conferences on knowledge management are announced with...

Industrial Venture Capitalism: Sharing Ownership to Create Value
January 1, 1998... The idea is this: share ownership of assets with the managers responsible for generating value from them Then create greater transparency between markets and these owners And make sure intervention is both difficult and expensive Our employees...

Help Wanted
January 1, 1998... America's service sector has created millions of new jobs. That's the problem Companies will need to segment labor markets or change the way they produce a service Turning dead-end jobs into careers Companies in the US service sector are second...

Why Are Service Turnarounds So Tough?
January 1, 1998... Because you are trying to balance customer satisfaction, employee morale, and shareholder returns It's very easy to start a vicious cycle of deteriorating performance Taking out the right costs Resuscitating a failing company is one of the...

Purchasing's Big Moment - after a Merger
January 1, 1998... Savings can amount to half the acquisition premium Ensuring that reduced costs actually get to the bottom line can be as challenging us mining for gold Five mistakes to avoid After an acquisition or merger, senior managers often find themselves...

Wholesale Banking: The Ugly Implications of EMU
January 1, 1998... It's the same story in foreign exchange, corporate banking, and government bond trading - big chunks of profit are about to disappear For would-be global players, a key question is whether to build a position in US securities For small players,...

Retail Banking: Managing Competition among Your Own Channels
January 1, 1998... Channels don't own customers How far into your bank do you allow the market to penetrate? Rules of the road The promise of lower transaction costs, increased sales productivity, and more convenient service has lured banks into setting up new...

Must It Always Be Risky Business?
January 1, 1998... Companies insure against property and casualty loss; why not against rogue trading, new product failure, and other business risks? Business risk insurance should be thought of as a new and efficient source of capital But banks and insurers will...

Food for West Africa
January 1, 1998... West Africa uses scarce resources to import food Western companies can now play a big role either through direct investment or via alliances A market of 225 million people West Africa is one of the business world's last frontiers. Blessed with...

Government: The Ultimate Service Turnaround
January 1, 1998... No coordination - all the way down the line Reorganizing Illinois's Department of Human Services The story of Julie With its talk of fair play, social justice, and finding a balance between sympathy and self-sufficiency, the debate about social...

A Hard and Soft Look at IT Investments
January 1, 1998... It's getting tougher and tougher to calculate costs and estimate benefits No methodology can substitute for judgment A new approach: total value of ownership Throwing good money after bad would make any manager uneasy. But then, uneasiness...

Manufacturing's Use and Abuse of It
January 1, 1998... Research indicates the greatest potential for IT lies in product development and sales Moving from laggard to star will take two to three years Seven highly effective habits In service industries such as banking and airlines, information...

Electronic Commerce: Three Emerging Strategies
January 1, 1998... Electronic commerce is fulfilling its early promise for business-to-business trade. Marketplaces that connect buyers and sellers are up and running in many product categories, and are creating value by making trading more efficient. The experience...

Group Purchasing Is Not a Panacea for US Hospitals
January 1, 1998... Improved purchasing has played an important role in US hospitals' efforts to cut costs and raise profit margins in the competitive market of the past decade. Given that a multihospital system with a $1 billion operating budget spends $300 to $350...

Wooing Investors to Prevent Cyclicality
January 1, 1998... Producers of commodity chemicals have long been plagued by cyclicality, which causes huge swings in prices and thus in operating margins. At the top of a cycle, the return on invested capital (ROIC) can approach or exceed 100 percent; in a trough,...

Cashing in on Your ATM Network
January 1, 1998... Automatic teller machines [ATMs) have met with mixed success since their introduction in the early 1970s. Some 165,000 are now installed in the United States, handling 900 million transactions a month. Yet few of them earn their keep. An...

Banks Need Fewer Checks, Not Fewer Branches
January 1, 1998... Branch density, staff productivity, a nation's stage of economic development, and the share of its financial assets controlled by banks have all been held responsible for variations in the cost of national banking systems. Of these factors, the...