MIS40910 - 'Misunderstanding the Nature of Company Performance: The halo effect and other business delusions'

Module - Skills for Business Enquiry

Class or Article - Article

Lesson or Name - Rosenzweig, Phil (2007) 'Misunderstanding the Nature of Company Performance: The halo effect and other business delusions', California Management Review, 49(4): 6-20.

Additional Info - 16-20

Precis

Phil Rosenzweig’s article, MIS40910 (2007), presents that companies performance and the lens they are viewed under can be biased based on their perceived performance. Rozenweig supports his claim by analysing studies of successful companies attributes, presenting the flaws in the underpinning research and data that drove the findings. Rosenzweig purpose is to present the issue with flawed research and present the benefits of valid and unbiased data. Rosenzweig states “The studies reviewed above are not only ones to be based on questionable data but they are worthy of attention because they are amongst the most prominent and most widely quoted business books of recent years.”

Reflection

In retrospect while compiling research it is easy to make positive connotations,  attributions and factors when things are going right and then also negative connotations,  attributions and factors when things are going wrong. We need to be careful of presentation of information that promise to guide us to success based on the successes of other companies and what one sees and the contributing factors that led a company there. This premise is a dangerous precedent for people and businesses, while it may have some merit, these will not be a silver bullet and a one size fits all for all companies. There are factors such as strategy which involves and element of choice which in turn choice presents risk. It would be better for companies to make assessments of their own atributes and key factors, compare their to their rivals and then work from there making key decisions and evaluations of their competition. There is a paradox equally as even through a company might do well, be working in the right direction they may be consumed in the shadow of a competitor who eats their lunch. My analysis of this is know what your doing, know what you competition are doing, differentiate and attack.

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