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Who Does Good and Why
While it's common knowledge that business leaders often serve on nonprofit boards, there has been little formal information about the characteristics and motivations of such individuals. In a 1997 working paper series on social enterprise,* HBS professor James E. Austin documents the details of business involvement in the nonprofit sector and analyzes how volunteerism helps forge links between good deeds and good business. "How do nonprofits figure into the lives of business leaders? And how do business leaders figure into the lives of nonprofits?" asks Austin. "Our aim was to provide empirical data answering these questions."
In the course of his research, Austin surveyed nearly ten thousand of the School's MBA and Executive Education graduates, held eleven focus groups with managers, interviewed more than seventy executives, polled the CEOs of over three hundred Fortune 500 companies, and studied the nonprofit involvement of executives in twelve companies. He found that 81 percent of the Harvard MBAs were volunteering and that 57 percent of the surveyed graduates were active board members.
"Our data show that involvement starts early and grows to nearly universal participation later on," notes Austin. "Over 60 percent of the recent graduates in the 25Ð 29 age group are involved with nonprofits; toward the other end of the career - ages 55 and above - almost 90 percent are involved, and 70 percent are on boards."
And while the executives surveyed cited altruistic reasons for serving, many also reported that such participation allowed them to practice business skills and make professional contacts not always possible through their everyday duties. "One focus group of top-level managers agreed that what they learned most in nonprofit settings was how to work with a diverse group of people in a situation where you are not the boss. You have to lead with your ability, passion, and conviction," says Austin.
His findings also indicate that corporate involvement in the community not only provides nonprofit organizations with rich resources, it enhances business performance as well. "Community involvement can contribute to the definition and development of a company's organizational culture, which is an important determinant of corporate performance," he observes. "Volunteering in the public sector provides a triple win for the managers, their company, and the nonprofit."
*The above summary was based on "Business Leaders and Nonprofits" and "Making Business Sense of Community Service." The other two papers in the series are "Corporate Community Service: Achieving Effective Engagement" and "Business Leadership from The Cleveland Turnaround."
Techno Angst
Technology: like it or not, gadgets and gizmos are here to stay, filling our homes and defining our lifestyles. But while researchers may know how consumers make decisions about buying a new telephone answering machine or computer, they know little about how consumers use such items and are affected by them.
For their 1996 study, "The Paradoxes of Technology," HBS assistant professor Susan M. Fournier and David Glen Mick, associate professor at the University of Wisconsin, interviewed 29 households about their purchase and use of various technological products. "We intercepted them at consumer electronics stores and followed them home to talk about what they bought and why," says Fournier.
"We then followed up to see how their responses evolved over the next six months."
Fournier and Mick found that consumers have ambivalent feelings about bringing new technology home. "The experience of technology is inherently paradoxical," says Fournier. "People want it and feel they need it but they also recognize that it can create more work while making things more efficient or make them feel stupid while putting them on the leading edge. The experience causes stress that people can't anticipate or avoid."
According to the study, consumers do not let paradoxes get the best of them. They combat such inner conflict by adopting coping mechanisms. They might, explains Fournier, use confrontative strategies such as accommodation - changing their behavior to fit the demands of the new machine; partnering - developing a relationship in which the machine is cared for; or mastery - becoming an expert on the gadget's ins and outs. People may also try avoidance strategies such as distancing - creating rules for when and why a certain technology will be used and not used; or abandonment - refusing to repair a broken product. "People feel most satisfied with their purchases when they can put the paradoxes of technology in relative balance in their lives," says Fournier.
Fournier hopes this research will prompt marketers to adopt a more consumer-oriented viewpoint when designing and selling new products. "Marketers have to understand that consumers have a lot to deal with when they bring a new technology into the home," she notes. "In this world of 'relationship marketing,' why can't marketers be the allies who help consumers cope?"
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