The corporation has emerged as perhaps the most powerful social and economic institution of modern society. Yet, corporations and their managers suffer from a profound social ambivalence. Believing this to be symptomatic of the unrealistically pessimistic assumptions that underlie current management doctrine, Ghoshal et al. encourage managers to replace the narrow economic assumptions of the past.

Firms have always had difficulty spotting new competitors, and business history is full of stories about incumbent market leaders being displaced by a smart new entrant. If anything, the task seems even harder today. Unrelentingly rapid changes in technology, shifts in consumer tastes, and the rise of global markets are blurring traditional industry boundaries. Many [...]

Traditional strategic planning draws from forecasts of parameters like market growth, prices, exchange rates, and input costs that managers are unable to predict five or 10 years in advance with any accuracy. The author discusses a strategy that embodies a coherent portfolio of options, sketches a process managers can use to develop this kind of strategy, and explains how planning and management opportunism can reinforce each other.

When Gillette introduced its Mach3 razor in 1998, with an investment of more than $1 billion in development and advertising, it was attempting to redefine the rules of competition. The move forces competitors to play catch-up against a powerful new en-hancement of the value proposition. It means Gillette continues to dictate the rules in an [...]

In a world of corporate refocusing, down-sizing, and outsourcing, a critical strategic decision that many senior managers make is determining their firm’s boundary. “Which business activities should be brought within the boundary of the firm?” and “Which business activities should be outsourced?” are essential strategic questions in determining a firm’s boundary. Firms that bring the [...]

Some of the greatest failings of strategic management, the authors say, occur when managers take one point of view too seriously. Ideas and practices that originate from collaborative contacts between organizations, from competition and confrontation, from recasting of the old, and from the sheer creativity of managers are driving the evolution of strategic management today.

The emerging competitive landscape poses a challenge to the internal-governance capacity of large, established firms. Internal governance refers to the wealth-creation processes inside diversified multinational corporations (DMNCs). Three main processes constitute internal governance: cultivating strong corporate–business-unit relationships, fostering inter-unit linkages, and pursuing growth and innovation. First, it is easier to create wealth when frictions in [...]

Value innovation places equal emphasis on value and innovation, since innovation without value can be too strategic or wild, too technology-driven or futuristic. Hence, value innovation is not the same as value creation. Although value creation on an incremental scale creates some value, it is not sufficient for high performance, the authors say. Value innovation as strategy creates a pattern of punctuated equilibrium, in which bursts of value innovation that reshape the industrial landscape are interspersed with periods of improvements, geographic and product-line extensions, and consolidation.

Strategic failure usually comes from an inability to make clear choices on which customers to target, what products to offer, and how to improve efficiency. Incumbents routinely bow to upstarts that innovate in those areas. The author shows established companies how to prepare for and counter such disruption with a dynamic process of continual strategic renewal.

Many executives realize that to prosper in the coming decade, they need to turn to the fundamental issue of strategy. What is strategy? To use a simple yet powerful definition from The Economist, strategy answers two basic questions: “Where do you want to go?” and “How do you want to get there?”1
Traditional approaches to strategy [...]

Maximizing present capabilities and developing new ones in anticipation of the future characterize the high performer in all fields of endeavor. Athletes train, compete, and train further to build skills for future events. Armies fight battles deploying whatever materiel and personnel they have at their disposal and, in more peaceful times, develop new military strengths [...]

Every decade or two, a big idea in management thinking takes hold and becomes widely accepted. The next big idea must enable businesses to improve the hit rate of strategic initiatives and attain the level of renewal necessary for successful execution. Scientific research on complex adaptive systems has identified principles that apply to living things, from amoebae to organizations. Four principles relevant to strategic work at Royal Dutch/Shell are outlined.

The author recommends cultivating and managing populations of multiple strategies that evolve over time, because the forces of evolution acting on a population of strategies make them more robust and adaptive. Because both biological evolution and business evolution are complex adaptive systems, to better understand business strategy, managers can employ a tool that scientists use to better understand biological evolution. An imaginary grid called a fitness landscape is an aid to comprehending how evolution increases the odds of survival in nature. In general, the rules for success in fitness landscapes also apply to business problems, though their specific application differs significantly by company and situation.

Most companies today are using precious little of the computing power available to them through the machines and software they already own. PCs, servers and mainframes all sit idle much of time, while the people who operate them are away from the office or the plant. And as a recent IBM Corp. study points out, [...]

RESEARCH BRIEF: Emerging supply-chain e-technologies provide opportunities for growth –