Thursday, June 30, 2011

Brazil: A Concise Profile 2011
© 2011 INSEAD Case Study

This is a concise profile of Brazil, the biggest Latin American economy. It gives information about its history, politics, foreign policy, society and economy. It also provides some data about the country: geography, economy, GDP, trade, people and society and quality of life.

Pedagogical Objectives: The objective is to provide background information about the country in order to understand the context in which multinationals investing in the country and/or Brazilian companies have to operate.

COOL Karel, BEHBEHANI Redha, JAWAD Abdulaziz
ABC and the Packages Non-Carbonated Soft Drinks Industry in Kuwait and the GCC Region in 2009
© 2011 INSEAD-Kuwait University Case Study

The case describes the turnaround of the Kuwaiti company ABC from a moribund bottler of carbonated drinks for Canada Dry to a successful independent competitor in the market for juices and bottled water. The case narrates the turnaround, how ABC decided upon the scope of its activities, how it expanded its product and geographic scope, the business model of ABC, the markets in which it competes and the challenges it faces in 2009.

Pedagogical Objectives: The case allows a fact-based business strategy analysis of the packaged non-carbonated drinks industry in Kuwait and the GCC region, the competition, and the ABC company. The focus is on how ABC accomplished the turnaround, how it built a new business model in the process, how it expanded in different countries and product markets, and the risks it was forced to take. The case allows an analysis of the entrepreneurial decisions of ABC management and the decisions it needs to take in 2009 to determine whether and how it will move from a niche position to becoming a full-fledged international competitor.
AUtube: Video-Based Knowledge Transfer within Alstom
© 2011 INSEAD Case Study

This case documents the conception, development and launch of an interactive enterprise video platform, AUtube, to support continuous learning and knowledge transfer within Alstom. This innovative journey is placed in the context of the collaboration opportunities, barriers and levers already present in the culture of this global industrial company.

Pedagogical Objectives: The case can be used to discuss a number of topics including collaboration, knowledge management, enterprise video, and measuring the value of collaboration tools. It is designed to be used in MBA and Executive Education programmes in modules on technology management, information technology and organizational behaviour.

Le Domaine de Pueblo Valley (A & B)

© 2011 INSEAD Case Study

Le cas “Le Domaine de Pueblo Valley” raconte l'histoire de trois générations d'une famille possédant et dirigeant un magnifique domaine touristique. L'histoire de la famille comprend des événements traumatiques, tels que décès prématurés, suicide et remariages, et un manque de communication sur les problèmes de succession. La succession s'est faite de façon brutale, suite à la mort des propriétaires-dirigeants, ou bien sous la menace de vente par leurs veuves. Le cas A décrit l'histoire de la famille et de l'entreprise jusqu'en 1996, quand la veuve de deuxième génération s'oppose aux enfants par sa détermination à vendre l'entreprise. Le cas B (à utiliser après discussion du cas) explique ce qui s'est passé ensuite.

Pedagogical Objectives: Le cas est conçu pour illustrer le concept de Fair Process lors d'évenements essentiels d'une entreprise familiale, c'est-à-dire succession de propriété et de direction. Quand la mère veut vendre, les enfants exigent une réunion et une discussion familiales avant de prendre une decision. Ils décident finalement de vendre, mais, grâce à un meilleur processus, ils obtiennent un bien meilleur prix et préservent les relations familiales. Le cas illustre également la dynamique familiale, les relations entre les beaux-enfants et leur belle-mère, la répétition de la première et deuxième génération, et la vente de l'entreprise familiale.
Winner of EFMD Excellence in Practice Award 2011
Category: Organisational Development
RBS Leadership Development Programme

Wednesday, June 29, 2011

Corporate social responsibility remains a deeply controversial issue in business circles. Critics argue that CEOs who want to support social initiatives should use their own money, not that of shareholders. In their view, CSR is a stealth tax that starves the value-creation process of capital. If we want to redistribute wealth, they say, let’s wait until the wealth has been created.
The CEO Pay Slice Journal of Financial Economics 102 (2011) 199-221

We investigate the relation between the CEO Pay Slice (CPS)- the fraction of the aggregate compensation of the top-five executive team captured by the Chief Executive Officer - and the value, performance, and behavior of public firms. The CPS could reflect the relative importance of the CEO as well as the extent to which the CEO is able to extracts rents. We find that, controlling for all standard controls, CPS is negatively associated with firm value as measured by industry-adjusted Tobin’s q. CPS also has a rich set of relations with firms’ behavior and performance. In particular, CPS is correlated with lower (industry-adjusted) accounting profitability, lower stock returns accompanying acquisitions announced by the firm and higher likelihood of a negative stock return accompanying such announcements, higher odds of the CEO receiving a lucky option grant at the lowest price of the month, lower performance sensitivity of CEO turnover, and lower stock market returns accompanying the filing of proxy statements for periods when CPS increases. Taken together, our results are consistent with the hypothesis that higher CPS is associated with agency problems and indicate that CPS can provide a useful tool for studying the performance and behavior of firms.
HOGARTH Robin M., KARELAIA Natalia, TRUJILLO Carlos Andres
When should I Quit? Gender Differences in Exiting Competitions Journal of Economic Behavior and Organization 83, 1 (2012) 136-150

We study the gender gap in a competitive environment by exploiting the “naturalistic experiment” of a TV game show with self-selected participants and no gender-specific constraints nor discrimination. Games consist of multiple rounds where contestants answer general knowledge questions privately. One participant is eliminated or leaves voluntarily at the end of each round. Women earn 40% less than men and exit the game at a faster rate, but especially when in a minority. This latter result highlights the importance of structural arrangements in organizations that interact with behavior to maintain “glass ceilings” and explains the differential gender-related risk attitudes observed.
INSEAD PhD degree awards 2010-2011

"Contracting and Incentives for Sustainability"
KLEINDORFER Paul (co-chair), NETESSINE Serguei (co-chair),
LOCH Christoph, POPESCU Ioana

CUI Zhijian
"Management of Collaborations and Conflicts in New Product Development"
LOCH Christoph (chair)
HASIJA Sameer, LUO Xiaowei Rose
KAVADIAS Stylianos (Georgia Institute of Technology)

"Supply Chain Management and Technology Choice under Carbon Regulation"
KLEINDORFER Paul (co-chair), VAN WASSENHOVE Luk (co-chair),

"The Perils of the Profit Engine: Strategic Renewal via Integrated Corporate Strategy in a Dominant Business Diversified Firm"
DOZ Yves (co-chair), HASPESLAGH Philippe (co-chair, Vlerick Leuven Gent Management School)

OBLOJ Tomasz
"Incentive Life-cycles: The Role of Learning, Ability, and Cognitive Biases in the Division of Value within Firms"
ZEMSKY Peter (chair)
FRANK Douglas, RANGAN Subramanian, SENGUL Metin (Boston College)

PACHE Anne-Claire
"Organizational Responses to Conflicting Institutional Demands"
HANSEN Morten (co-chair), D'Aunno Thomas (co-chair, Columbia University), GREVE Henrich, SANTOS Filipe, EISENHARDT Kathleen (Stanford University)

"Last Mile Vehicle Fleet Management in Humanitarian Operations"
HASIJA Sameer, RUDI Nils, CORBETT Charles (UCLA)

"Threatened Identities: Essays on the Impact of Identity Threat on the Dynamics of Individuals' Identities"
IBARRA Herminia (chair),
GALUNIC Charles, HUY Quy and PRATT Mike (Boston College)

"Structure, Process, Performance"
SZULANSKI Gabriel (chair),
GIMENO Javier, MASSA Massimo, ZEMSKY Peter

"The Perceived Difficulty of Attainment versus Maintenance Goals: Why "Reaching for a Little More" Seems Easier than Simply "Holding on"
CHATTOPADHYAY Amitava (chair),
CHAKRAVARTI Dipankar (The Johns Hopkins Carey Business School)

TANG Wenjie
"Time and Decision"
TSETLIN Ilia (co-chair), RUDI Nils (co-chair),

XU Moqi
"Essays in Corporate Finance"
VERMAELEN Theo (chair),
GROMB Denis, MASSA Massimo, PEYER Urs

"Essays in Investment Management"
MASSA Massimo (chair),

Tuesday, June 28, 2011

PRAHL Michael, CANNARSI Alessandro, ZEISBERGER Claudia

INSEAD Working Paper 2011/75/DSSSRN's Top Ten download list for Corporate Governance: Governance of Special Types of Firms eJournal, INTL Subject Matter eJournals, LSN: Corporate Governance International Take a look at the statistics here

This report takes a closer look at a crucial aspect of private equity (PE), namely the ability of PE firms to exit from their investments in a manner that crystallizes the value created over the period of their ownership. Specifically, it considers exits from private equity investments in Asia’s two largest emerging markets, China and India. The aim is to increase the transparency of this asset class by providing an overview of the market and trends over time, highlighting differences between China and India, and delving deeper into a sample of detailed data provided by INSEAD's inaugural panel of limited partners (LPs). The report highlights the large number of exits in both markets, we observed about 12,502 in this study, and how the speed of established exits (IPOs, M&As) continues to accelerate, thereby boosting investor confidence in Asia’s two largest emerging markets, and fuelling the growth of the asset class through fund raising and investing. We show a divergence between the exit channels favoured in China (IPOs) and India (M&As), and how this has impacted overall exit size, as well as the influence of public market cycles on exit timing. As far as possible – given the limitations of a database relying on public data – we attempt to provide some indication of the broader performance of PE exits benchmarked against relevant public market indices. In both China and India we find a lower-than-expected correlation between PE returns and public market returns, pointing to company- and investment-specific factors as the main drivers of performance in these markets. This analysis is complemented with an in-depth look at realised vs. unrealised returns, drawing upon data from our LP panel. The report serves as the baseline research for a study that will be updated on an annual basis in the future, offering private equity investors in China and India increasingly valuable insights into the development of a fast-changing asset class.

Brazilian Private Equity: Moving Centre Stage
INSEAD Working Paper 2011/74/DS
SSRN's Top Ten download list for Emerging Markets: Theory & Practice eJournal and INTL: Descriptive Studies in Emerging MarketsTake a look at the statistics here

This report provides an overview of Brazil’s private equity industry, discussing its history, current status and outlook. It draws on surveys of leading limited partners (LPs or investors) and general partners (GPs or PE firms) who are currently investing or intend to invest in the Brazilian private equity (PE) industry. The INSEAD-PwC Private Equity Survey was conducted from February to April 2011 among 15 GPs from across the region and 10 LPs investing or considering investing in Brazil. The first part of the report offers an introduction to Brazilian private equity, starting with a summary of its historical evolution and followed by a discussion of recent developments in the industry, including the increasing flow of funds into this asset class. It then takes a look at the current market situation from both the GP and LP perspectives in terms of investment strategies and fund raising trends, seen in a context of growth, minority investing, and change resulting from the entrance of international buy-out funds into the market. The core of the report focuses on the investment outlook. It analyzes investors' perspectives on the country and discusses the new pools of capital (domestic and international)feeding the growth of the industry, as well as the historic returns on private equity investments, which have been achieved with very limited leverage given the high cost of debt. It assesses expected future returns given the interplay between great investment opportunities and increasing competition among PE funds. Conditions for continued growth in the PE industry - the emerging consumer society, the recent development of capital markets, and a high level of fragmentation in several sectors - are laid out, as are the main challenges faced by LPs and GPs investing in the country.

MADDUX William
A Moveable Feast: How Transformational Cross-cultural Experiences Facilitate Creativity in Festschrift Volume in Honor of Marilynn B. Brewer Kramer R., Leonardelli G. J., Livingston R. (Eds) Association for Psychological Science Festschrift Series(2011)

Using Both your Head and your Heart to Manage Conflict: The Role of Perspective-taking and Empathy in Mixed-motive Interactions in The Sydney Symposium in Social Psychology (2011)
Cultural Differences in the Function and Meaning of Apologies International Negotiation 16 (2011) 405-425

One of the most effective means for re-establishing trust in negotiations and disputes is by making an apology. However, the function and meaning of an apology (and thus its effectiveness for negotiators) may differ across cultures. We hypothesized that people from an individual-agency culture (such as the United States) understand apologies as analytic mechanisms for assigning blame and re-establishing personal credibility. In contrast, apologies in collective-agency cultures (such as Japan) are understood to be general expressions of remorse rather than a means to assign culpability. A survey of Japanese and Americans found that, compared to Americans, Japanese apologized more often and were more likely to apologize for actions in which they were not involved; on the other hand, Americans were more likely than Japanese to equate apologizing with personal blame. A subsequent experimental study showed that these cultural differences in the function and meaning of apologies have implications for trust repair in disputes: apologies for integrity violations led to greater trust repair for Japanese than for Americans, but apologies for competence violations were somewhat more effective for Americans than Japanese. Implications for theory and practice are discussed.

Friday, June 24, 2011

DOZ Yves, WILSON Keeley
Managing Global Innovation: Frameworks for Integrating Capabilities around the World Harvard Business School Press (2012) 272

Powerful, practical frameworks for managing your global innovation network. In the past, your company could rely on a handful of resources close to its home markets to innovate new offerings. But today, knowledge and other resources critical to your innovation efforts lie outside your company’s home territories—sometimes far outside. And this distance makes it harder than ever to obtain and integrate these resources, eating away at your competitive edge. How to surmount this challenge? In this practical new book, Yves Doz and Keeley Wilson show how to build and leverage a global innovation network. Drawing on extensive research and a wealth of real company examples, the authors walk you through a set of practical frameworks for acquiring and integrating innovation-critical knowledge from multiple far-flung sources. You’ll learn to: • Optimize your innovation footprint—by understanding where you need to locate your overseas innovation activities, extracting maximum value from each site, and gaining access to capabilities and knowledge without having to establish costly sites. • Optimize communication and receptivity—by understanding and breaking down barriers to both among your sites. • Optimize collaboration to succeed globally—by better managing external collaboration as well as internal global projects to drive innovations through their three critical phases: identification, definition, and delivery.

SMITH N. Craig, ANSETT Sean, EREZ Lior
How Gap Inc. Engaged With its Stakeholders Sloan Management Review 52 (2011) 69-76

Back when protesters were targeting the company, the Gap realized that it needed to overhaul the way it interacted with its critics. So the company launched a strategy of stakeholder engagement

Thursday, June 23, 2011

Qualitative Research for International Business Journal of International Business Studies 42 (2011) 582-590

Qualitative research in international business has been rare, the main research streams of the field relying more on quantitative methods. This paper first outlines why qualitative research has been scant. It then presents areas, such as theory building, where qualitative research could make a substantial contribution. Third, it reviews approaches to ensuring high standards of qualitative research and criteria for evaluating it. Finally, research areas where qualitative research might prove fruitful are suggested
Public and Corporate Governance After the Crisis European Financial Review 2011

Of the many lessons from the global financial crisis, a glaring one has been to emphasize the poor state of regulatory and corporate governance practices, including the role of boards and regulators in managing crisis and turbulence.
INSEAD Working Paper 2011/73/FIN

This paper studies contract horizon and investment using a new dataset of 3,717 US CEO employment contracts. It finds that contract horizon (1) predicts realized tenure, (2) is positively correlated with both capital expenditure and R&D expenses, and (3) firms do not perform better when the CEO has less time. I control for endogeneity using inter-state differences in the judicial treatment of contracts as an instrumental variable for the choice between contract types. The impact of contract horizon remains significant controlling for long-term compensation and executive fixed effects. I conclude that CEO contract horizon has a positive influence on investment.
How Local Sourcing Advances Corporate Strategy Stanford Social Innovation Review Forthcoming

Tuesday, June 21, 2011

MEZIAS Stephen J., PEDERSTEN Jesper Strandgaard, KIM Ji-Hyun, SVEJENOVA Silviya, MAZZA Carmelo
Transforming Film Product Identities: The Status Effects of European Premier Film Festivals, 1996-2005 in Negotiating Values in the Creative Industries: Fairs, Festivals and Competitive Events Brian Moeran and Jesper Strandgaard Pedersen (Eds.) Cambridge University Press (2011) 169-196
LOCH Christoph, KAVADIAS Stylianos
Implementing Strategy Through Projects in The Oxford Handbook on the Management of Projects Oxford University Press (2011) 224-251

The discipline of project management has focused since 1970 on the execution of projects, taking the mission and the strategic context as fixed and given. This narrow approach to projects, however, leads to project failures because strategy is often not given but emergent and ambiguous. This chapter offers methods to (a) align projects with expressed strategy, and (b) use projects to articulate and modify strategies based on the learnings that emerge.
XU Moqi
Winner of 2010 Michael J. Barclay Award
Financial Research Association
"CEO Contract Horizon and Investment"
PACHE Anne-Claire, SANTOS Filipe
Finalist for 2010 Best Paper Award
Academy of Management Review
"When Worlds Collide: The Internal Dynamics of Organizational Responses to Conflicting Institutional Demands" 

Monday, June 20, 2011

Using an original data set matching individual birthdays to Vietnam War draft lottery numbers, I study how the random lottery number assignment affects representation in a sample of top corporate executives decades after the war's end. I find that men with lottery numbers placing them at risk of induction are underrepresented among top U.S. executives in the 1990s. In contrast, I find that high draft risk is positively correlated with indicators of human capital such as earnings and speed of reaching the executive ranks. If the executives are viewed as the winners of a multistage elimination tournament that selected on productivity, these results are consistent with the hypothesis that draft risk led to a mean-reducing spread in the productivity distribution of draft-eligible males.
Emotional Capital as Strategy Harvard Business Press Forthcoming
Winner of Best PhD Student Paper Award
Financial Management Association International Conference 2011
"Portfolio Matching by Multi-fund Managers: Effects on Fund Performance and Flows"

Tuesday, June 14, 2011

LOCH Christoph, PAYNE F.
Strategic Management: Developing Policies and Strategies  in Understanding Complexity in Projects: Directions for Practitioners, Managers and Researchers T. Cooke-Davies (Ed.) Project Management Initiative Forthcoming

This chapter gives an overview of complexity in projects: its sources, the management challenges it poses, and responses to complexity at the strategic and portfolio level as well as at the project execution level.
WU Yaozhong, LOCH Christoph, AHMAD Ghufran
The Interaction Between Competitive and Cooperative Preferences in Social Dilemma Situations in Teams Journal of Operations Management Forthcoming

A social dilemma occurs when it is optimal for each member of a team to act in his own interest but, if all participants do so, everyone is worse-off than if they had done otherwise. Social dilemmas are often observed in operational processes involving teamwork, such as developing new products or implementing total quality programs. The extent to which an employee cooperates with others is driven not only by material incentives but also by social preferences: individuals have an interest in the welfare of others as well as their own. Two known social preferences are status and relationship maintenance. Multiple studies have shown that status seeking leads team members to compete more whereas relationship building leads them to cooperate more. The question remains of whether these two preferences can coexist and complement one another (as when status seeking triggers effort and relationship building encourages cooperation) or whether they are at odds. In this experimental study we demonstrate that these two social preferences hinder one another: status reduces the collaboration benefit from relationships, and increases only individual, but not collaborative, effort. These results suggest that managerial interventions that promote status seeking and relationship building behavior cannot easily be used simultaneously when motivating teams to perform in situations involving social dilemmas.
The Relational Advantages of Intermediation
INSEAD Working Paper 2011/72/TOM revised version of 2010/82/TOM

 This paper provides a novel explanation for the use of supply chain intermediaries such as Li & Fung Ltd. We find that even in the absence of the well-known transactional and informational advantages of mediation, intermediaries improve supply chain performance. In particular, intermediaries facilitate responsive adaptation of the buyers’ supplier base to their changing needs while simultaneously ensuring that suppliers behave as if they had long-term sourcing commitments from buying firms. In the face of changing buyer needs, an intermediary that sources on behalf of multiple buyers can responsively change the composition of future business committed to a supplier such that a sufficient level of business comes from the buyer(s) that most prefer this supplier. On the other hand, direct buyers that source only for themselves must provide all their committed business to a supplier from their own sourcing needs, even if they no longer prefer this supplier. Unlike existing theories of intermediation, our theory better explains the observed phenomenon that while transactional barriers and information asymmetries have steadily decreased, the use of intermediaries has increased rapidly, even among large companies such as Walmart.
PETRIGLIERI Gianpiero, WOOD Jack Denfeld, PETRIGLIERI Jennifer Louise
Nominated for 2011 Dexter Award
Academy of Management

"Up Close and Personal: Building Foundations for Leaders' Development through the Personalization of Management Learning" 
PETRIGLIERI Gianpiero, WOOD Jack Denfeld, PETRIGLIERI Jennifer Louise
Up Close and Personal: Building Foundations for Leaders' Development through the Personalization of Management Learning Academy of Management Learning and Education 10, 3 (2011) 410-450 special issue on “Teaching Leadership"

Courses that aim to foster reflection and personal development in the service of leaders’ development are increasingly popular within MBA curricula and executive education portfolios. This paper explores the process through which these courses may enrich their institutional context and enhance students’ ongoing development and practice of leadership. Through an inductive, qualitative study of the “Personal Development Elective,” an offering within the leadership curriculum of an international MBA that gives students the option to work with a psychotherapist, we develop a model of how the interplay between the regressive and holding features of an intensive management program foster the personalization of management learning. The personalization process, we posit, allows management education to provide the foundations for leaders’ development by transforming potentially regressive experiences into material for participants’ personal learning, experimentation, and growth.

Friday, June 10, 2011

Crisis and Consumption Smoothing Marketing Science 30, 3 (2011) 491-512

The dramatic impact of the current crisis on performance of businesses across sectors and economies has been headlining the business press for many months. Extant reconciliations of these patterns in the popular press rely on ad-hoc reasoning. Using historical data on currency crisis episodes across the world, we examine how consumers respond to a crisis and identify interesting patterns in consumer behavior. The results reveal that consumer behavior in a crisis is characterized by consumption smoothing at various levels – inter-temporal, inter-category and intra-category. These behavioral adjustments result in significant reallocation of consumption expenditures. More importantly, the smoothing decisions due to a crisis are distinct and independent of the impact of changes in income and prices that accompany it. Interestingly, there is marked variation in patterns of consumption smoothing across different types of economies. Taken together, these results have important and interesting implications for managers, policy makers and academics.

Thursday, June 9, 2011

ELY Robin J., IBARRA Herminia, KOLB Deborah
INSEAD Working Paper 2011/69/OB revised version of 2011/57/OB

We conceptualize leadership development as identity work and show how subtle forms of gender bias in the culture and in organizations interfere with the identity work of women leaders. Based on this insight, we revisit traditional approaches to standard leadership topics, such as negotiations and leading change, as well as currently popular developmental tools, such as 360-degree feedback and networking; reinterpret them through the lens of women’s experiences in organizations; and revise them in order to meet the particular challenges women face when transitioning into senior leadership. By framing leadership development as identity work, we reveal the gender dynamics involved in becoming a leader, offer a theoretical rationale for teaching leadership in women-only groups, and suggest design and delivery principles to increase the likelihood that women’s leadership programs will help women advance into more senior leadership roles.
The Emergence of the Russian Mobile Telecom Market: Local Technical Leadership and Global Investors in a Shadow of the State in Market Emergence and Transformation J. Padgett, W. Powell (Eds.) Princeton University Press (2012) 334-346

Wednesday, June 8, 2011

Human Judgment is Heavy-Tailed: Empirical Evidence and Implications for the Aggregation of Estimates and Forecasts Management Science Forthcoming

How frequent are large disagreements in human judgment? The substantial literature relating to expert assessments of real-valued quantities and their aggregation almost universally assumes that errors follow a jointly normal distribution. We investigate this question empirically using 17 datasets that include over 20,000 estimates and forecasts. We find incontrovertible evidence for excess kurtosis, that is, of fat tails. Despite the diversity of the analyzed datasets as regards the degree of uncertainty about the quantity being assessed and the level of expertise and sophistication of those making the assessments, we find consistency in the frequency with which an expert is in large disagreement with the consensus. Fitting a generalized normal distribution to the data, we find values for the shape parameter ranging from 1 to 1.6 (where 1 is the double-exponential distribution, and 2 the normal distribution). This has important implications, in particular for the aggregation of expert estimates and forecasts. We describe optimal Bayesian aggregation with heavy tails, and propose a simple average-median average heuristic that performs well for the range of empirically observed distributions.
Getting the Best out of People: Creating Authentizotic Organisations in People Strategy in Organisations, Johan Heroldt (Ed.) Knowres Publishing Ltd.(2012)

The Retirement Syndrome: Helping CEOs Transition in People Strategy in Organisations, Johan Heroldt (Ed.) Knowres Publishing Ltd.(2012)

In today's global world organizations rely more and more on virtual teams. In his latest book on group coaching for high-performance teams, Manfred Kets de Vries provides a clear understanding of how to coach groups of managers and make them effective teams that can bring greatly improved performance for their companies. Executives, consultants, and coaches will learn what factors drive their success or failure and how to improve their ability to adapt to changing situations.