Management Quality and Strategic Positioning

In 2002, two managers from organizations that had won the INSEAD/WHU Industrial Excellence Award gave presentations to INSEAD’s International Council, an annual discussion forum for senior managers. The topic was “High Performance Organizations,” and the two winning companies presented their action programs and reported on their successes, including impressive productivity gains. A participant in the audience, a senior German manager, raised his hand and said: “It is impressive how you are making this succeed, and you are certainly doing very well for yourself, but you are aware that you are stealing jobs? Your clients save costs and become more profitable, you make money, people in India get jobs, but you are using your productivity gains to win against your competition, and so you are destroying jobs in Europe, just shifting those jobs out of Europe and contributing to the flow of jobs to low-cost countries. Companies become profitable, but at the cost of the home population who are losing their livelihoods. How do you feel about doing your country and its economy such a disservice?” His challenge was the start of a fiercely contested debate.