When a 125-year old commercial icon like Kodak — one of America’s most ubiquitous brands — began selling off patents as part of a plan to emerge from bankruptcy in 2012, most journalists, analysts and scholars focused on the tangible signals such as declining revenues and a plunging stock price.
Katalin Takacs-Haynes, assistant professor of management in the University of Delaware’s Alfred Lerner College of Business and Economics, takes both a more wide-angle and humanistic view when she leads Lerner MBA students through the Kodak case study in her course in Corporate Strategy.
While it’s true that Kodak exemplifies a once dominant market leader that grew slow-footed and inflexible over time, Takacs-Haynes knows that humans — not algorithms — ultimately shaped the company’s fate. As the coming digital revolution flashed, Kodak focused its strategic attention on the acquisition of a pharmaceutical giant and plans to move into the battery business.
“Think about the trajectories of say Kodak and Apple,” Takacs-Haynes says. “There was no rule back in 2000 declaring that cameras couldn’t become communication devices. Kodak’s future could have taken a very different turn.” Camera-enabled phones debuted in 2002 — two years before Kodak was removed from the Dow Jones Industrial Average where it had been a member since 1930.
Takacs-Haynes says that the strategic questions asked among a cohort of MBA students, each with several years of experience working across various industries, yields fertile discussion. “We dig beneath the headlines and look at how behaviors within the boardroom or top management reflect something essential about leadership and corporate cultures,” Takacs-Haynes says. “If you look close, you might find patterns of hubris and other behaviors that become lasting constraints. There are often conscious and unconscious behaviors and cognitive biases that play a significant role in the success or failure of a company.”
She finds that Lerner MBA students enjoy the complexities that emerge when you ask the fundamental question of what makes a company successful. “At first blush, you might assume that everyone within the company shares the same goal and is working toward becoming more successful,” Takacs-Haynes says. “But evidence often tells us otherwise.”
Takacs-Haynes focuses much of her research and scholarly writing on board composition and executive compensation, as well as how CEO behaviors impact company performance. In 2015, she joined with colleagues Matthew Josefy (University of Indiana) and Michael A. Hitt (Texas A&M University) to publish a paper titled Tipping Point: Managers’ Self-Interest, Greed, and Altruism in the Journal of Leadership & Organizational Studies.
The paper explores the potential effects of managers’ greed and altruism on their behaviors and firm outcomes. Haynes found that both extreme self-interest and its counterpart, extreme altruism each cause problems. The paper reports: “Managerial greed is likely to lead to turnover for non-performance related reasons while managerial altruism is more likely to produce managerial turnover for performance reasons.”
Haynes concludes that “measured self-interest keeps managers focused on the firm’s goals and measured altruism helps the firm to build and maintain strong human and social capital. The extremes of either greed or altruism likely will harm firm performance. Thus, balance between managerial self-interest and managerial altruism leads to the greatest success.”