Sense & Respond Stephen P. Bradley and Richard L. Nolan, editors (Harvard Business School Press)

In the Network Era - where access to and use of information technology is increasing at an ever-faster pace - the way companies interact with and respond to their customers is significantly transforming traditional business practices. Fueled by the Internet, the Information Age allows companies to create infrastructures to connect with their customers electronically. With this connection they can sense their customers' needs in real time and respond instantaneously. This "sense and respond" strategy represents the new competitive standard, replacing the conventional "make and sell" method of doing business. Sense & Respond: Capturing Value in the Network Era, edited by HBS professors Stephen P. Bradley and Richard L. Nolan, is a collection of essays that addresses the impact information technology is having on business practices. Drawing from papers presented at the 1995 HBS colloquium "Multimedia and the Boundaryless World," the 24 authors - many of whom are HBS faculty members - observe the effects new technologies are having on how customer needs are being met.

Using examples from a broad range of companies and industries, including Microsoft, General Electric, and L.L. Bean, the contributors address important topics such as connecting with customers, merging network infrastructures, and developing strategy.

"The authors in this volume have collectively demonstrated how bottom-line value is extracted from the key dimensions of implementing sense and respond strategies," says Nolan, the William Barclay Harding Professor of Management of Technology, who is a frequent collaborator with Bradley, the William Ziegler Professor of Business Administration. Each of the volume's four sections addresses a different aspect of the changing business landscape: Creating and Capturing Value, Sensing the Customer, Responding with Capabilities, and Transforming the Organization.

Sense & Respond blends the expertise of academic and executive leaders in the fields of marketing, service, and knowledge management in examining the implications of this paradigm shift for managers, entrepreneurs, and policymakers.

Cost & Effect by Robert S. Kaplan and Robin Cooper (Harvard Business School Press)

Cost & Effect: Using Integrated Cost Systems to Drive Profitability and Performance is a practical guide for managers who wish to understand how cost and performance management systems can increase profits and performance. Its authors, HBS professor Robert S. Kaplan and Robin Cooper of the Peter F. Drucker Graduate Management Center at Claremont Graduate School, are pathbreaking leaders in the financial management field. Over the last fifteen years, they have developed and described key concepts, such as activity-based costing (ABC), activity-based management, operational systems for learning and improvement, and target costing. Their new book integrates these concepts and demonstrates how they can become embedded in a company's ongoing reporting, budgeting, and transfer-pricing systems, especially in companies with new enterprise resource planning capabilities.

The authors note, "Only if managers understand the fundamental concepts of activity-based costing and performance improvement will they be able to take full advantage of the cost management potential of their new systems." Presenting a blueprint for the design of systems that promote both learning and better decision-making, the authors highlight their points with examples from a variety of companies - including Hewlett-Packard, Ford Motor Company, Kirin Brewery Co., and Procter & Gamble - that have successfully implemented such systems.

Cost & Effect describes systems that help frontline employees to improve their daily operations and help managers to make smarter capital investment decisions, manage capacity, and identify where improvements in quality and productivity will have the highest payoffs. The authors reveal how managers can conduct fact-based negotiations with customers and suppliers - concerning price, product features, quality, delivery, and service - to create profit-enhancing relationships throughout the value chain. And Kaplan and Cooper explain how product engineers use activity-based cost information to design products and services that meet customers' expectations at minimum cost.

Islamic Law and Finance by Samuel L. Hayes III and Frank E. Vogel (Kluwer)

The ancient teachings of Muhammad prohibit Muslims from accepting or charging interest. As oil prices and the individual incomes of many Muslims in the Middle East skyrocketed in the 1970s, so too did the need for financial instruments that allowed devout Muslims to invest their money - a market potentially in the trillions of dollars - without violating their religious beliefs.

"Islamic finance is a significant element in the capital markets today, and it is becoming more relevant to Western capital users and institutional investors who are being asked to manage money for Muslims," notes HBS professor Samuel L. Hayes III, who, with Frank E. Vogel, an assistant professor at Harvard Law School, is the coauthor of Islamic Law and Finance: Religion, Risk, and Return. The book explains the theory behind Islamic religious law and contemporary practice in banking and finance and seeks to bridge the divide between Islamic and Western legal and financial concepts and practices.

While charging interest is ruled out, the Koran does allow Muslims to participate in profits. "They can become a partner on a level playing field with other participants in a business, but they can't put themselves in a superior level where they have some special hold over those receiving the money," explains Hayes. There are a number of acceptable financial contracts dating from the Middle Ages that do allow certain investments other than a straight equity investment; leases are one example. "These contracts can be cumbersome, but there are ways to make them more flexible, a number of which we explain in this book," says Hayes.

The authors note that many Western financial institutions have set up either Islamic banks or Islamic sections in existing banks. But more needs to be done. Observes Hayes, "Given the amount of capital that is in Muslim hands and the inescapable requirements of dealing in our modern, integrated financial and business world, there is a pressing need to develop procedures that meet the religious requirements of Islam and fulfill the needs of modern-day investors and businesses." Islamic Law and Finance takes a significant step in that direction.

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