Thought Leadership

Strategic interaction within and across nations involves conflict and cooperation. Disagreement between a country’s population and its leadership can cause internal conflict, oppression, and terrorism. Disagreements between countries may lead to war. Wars and civil conflicts are not only a recurrent cause of human suffering but also a primary impediment to economic development.

This research area focuses on the fundamental causes of conflict and cooperation, using a rigorous methodological approach that integrates empirical research and formal modeling and brings together economists and political scientists. The Center’s affiliates contributed to understanding of the nature of war, including mutual fear (preemptive war) and inability to contract on peace (preventive war) and to the way political incentives and desire for political survival results in internal conflict and oppression or democracy and growth.

Firms’ counterparties are not just customers and suppliers. Firms and organizations interact with regulators, NGOs, regulators, politicians, influencers, and even with each other in ways that are not mediated by markets. This strategic non-market interaction is often called private politics, following David Baron, a former Kellogg faculty and pioneer in the field. Non-market environments present risks and opportunities that are fundamental to the growth of firms, industries, and organizations. For any organization, its non-market landscape is particularly critical at the times of crises.

The Ford Center’s affiliates’ research contributes to development of rigorous frameworks that help understand and navigate the non-market landscape in normal times and to manage corporate crises successfully. This research puts particular emphasis on crises that involve media, both traditional and social, corporate and political activists, and political and regulatory environment. Apart academic contribution to the field of private politics, the Ford Center faculty have developed numerous cases and entire courses that provide managers with conceptual tools and frameworks to help them master non-market strategy and turn crises into opportunities. These include classes and executive workshops on Crisis Management and Strategy Beyond Markets, as well on Values-Based Leadership.

All organizations exist within some governmental landscape that shapes the rules of the game and defines mechanisms for changing the game. Governments can enforce contracts and set regulatory constraints. Understanding the rules of the game, the laws and norms of jurisdictions and locations where they operate, and the capabilities, capacities and incentives of governments and their agents is critical for any organization or business. Leaders of organizations need to understand how the governmental landscape operates, as well as how to anticipate and influence changes in this landscape.

Ford Center’s faculty has provided intellectual leadership to numerous questions studying the functioning of governments and their interactions with organizations and the society as a whole. These include questions central to functioning of democratic governments: why people vote, how elections aggregate diverse preferences and private information, how organizations influence democratic governments through campaign contributions or direct lobbying. These includes questions pertinent to less-than-perfect democracies, such as whether and when such governments are run by the best agents or by incompetent loyalists, how power transitions in such countries, and what is the interplay between formal institutions, such as elections, and raw political or military power. These include fundamental questions about dynamics of institutions, stability of democratic and autocratic forms of government, as well as the impact of political transitions on long-run development.

The social environment of business is complex and involves actors with different motivations. In this context, values and ethical concerns play a critical role. Corporate and political activists, consumers, and employees frequently are motivated by moral concerns. Firms must be able to anticipate these concerns, predict their effects, and incorporate them into their overall strategic planning, from communication strategies to coalition building, from industry-alliances to the development of organizational solutions and corporate structures.

Research and teaching in ethics at the Kellogg School focuses on the problem of incorporating a wide variety of value perspectives into decision-making. Such integration depends on understanding the salient and often competing values within an organization and its social environment; on understanding the ways individuals respond to moral and emotional arguments and to more classical material incentives; and on understanding the psychological regulators and predispositions that affect behavior. The research focus is less concerned with addressing normative questions of what ought to be done in any particular instance, and more concerned with asking positive questions regarding what can be done. As such, the methodological approach is interdisciplinary, incorporating insights from social psychology, game theory and behavioral economics. Ford Center faculty contributed, in particular, to research on ethics and norms in collective decision-making within large groups by the way of elections and multilateral bargaining, as well as the role diversity in collective decision-making within organizations.