Over the past fifteen years, the world’s perception of the competence of U.S. companies in managing technology has come full circle. In 1967, a Frenchman, J.-J. Servan-Schreiber, expressed with alarm in his book, The American Challenge, that U.S. technology was far ahead of the rest of the industrialized world.1 This “technology gap,” he argued, was continually widening because of the superior ability of Americans to organize and manage technological development.

Today, the situation is perceived to have changed drastically. The concern now is that the gap is reversing: the onslaught of Japanese and/or European challenges is threatening America’s technological leadership. Even such informed Americans as Dr. Simon Ramo express great concern: In his book, America’s Technology Slip, Dr. Ramo notes the apparent inability of U.S. companies to compete technologically with their foreign counterparts.2 Moreover, in the best seller The Art of Japanese Management, the authors use as a basis of comparison two technology-based firms: Matsushita (Japanese) and ITT (American).3 Here, the Japanese firm is depicted as a model for managers, while the management practices of the U.S. firm are sharply criticized.

Nevertheless, a number of U.S. companies appear to be fending off these foreign challenges successfully. These firms are repeatedly included on lists of “America’s best-managed companies.” Many of them are competitors in the R&D intensive industries, a sector of our economy that has come under particular criticism. Ironically, some of them have even served as models for highly successful Japanese and European high-tech firms.

For example, of the forty-three companies that Peters and Waterman, Jr., judged to be “excellent” in In Search of Excellence, almost half were classified as “high technology,” or as containing a substantial high-technology component.4 Similarly, of the five U.S. organizations that William Ouchi described as best prepared to meet the Japanese challenge, three (IBM, Hewlett-Packard, and Kodak) were high-technology companies.5 Indeed, high-technology corporations are among the most admired firms in America. In a Fortune study that ranked the corporate reputation of the 200 largest U.S. corporations, IBM and Hewlett-Packard (HP) ranked first and second, respectively.6 And of the top ten firms, nine compete in such high-technology fields as pharmaceuticals, precision instruments, communications, office equipment, computers, jet engines, and electronics.

The above studies reinforce our own findings, which have led us to conclude that U.S. high-technology firms that seek to improve their management practices to succeed