• Abraham, Stan, (2005), Stretching Strategic Thinking, Strategy & Leadership, Vol 33, No 5, 5-12
  • A compilation of techniques for building strategic thinking competency.

    "Strategic thinking is defined as coming up with alternative viable strategies or business models that deliver customer value." Strategic thinking has to do with finding alternative ways of competing and providing customer value. A company needs to compete, it needs a strategy to compete. A strategy is more than a plan, as strategy implies competing -- outwitting competitors and providing unique value.

  • Ackerman, Laurence D., (2000), Identity Is Destiny: Leadership and the Roots of Value Creation, Berrett-Koehler Publishers
  • Identity is a powerful source of energy for innovation and producing value in pursuit of a mission. The organizational identity is reinforced by the wealth that feeds back into the business. Strategic and operational philosophies should be based on the organizational identity. Identity is a "governing force" that completely shapes an organization and determines the relationship it enjoys with stakeholders. It can be managed to become a positive governing force. Ackerman identifies eight laws of identity and their applications --

    • Law of being -- The organization exhibits the distinct capacities of the individuals who make up that organization. Being is defined by the value it creates in the members of the organization, the marketplace, society, and the business itself.
    • Law of individuality -- The organization's human capacities fuse into a unique discernable identity. Live according to who you are. Live authentically.
    • Law of constancy -- Identity is fixed. How the identity is manifested needs to constantly change. Make change in concert with the identity of the organization.
    • Law of will -- Every organization is compelled by the need to create value in accordance with its identity. Drives people to be the best at whatever they do.
    • Law of possibility -- Identity foreshadows potential. The richest avenues with the greatest potential for growth lie in understanding the natural drive of the organization.
    • Law of relationship -- Organizations are inherently relational, and those relationships are only as strong as the natural alignment between the identities of the participants. Leaders must manage relationships with stakeholders as a whole system, not as a portfolio of separate distinct relationships. Value circle in motion builds relationship momentum that stands the test of time.
    • Law of comprehension -- The individual capacities of the organization are only as valuable as the perceived value of the whole of that organization. We must know who we are before we can build potent relationships with others. (Be authentic).
    • Law of the cycle -- Identity governs value, which produces wealth, which fuels identity. Companies will receive in direct accordance with what they give.
  • Ackoff, Russell L., (1970), A Concept of Corporate Planning, Wiley Interscience
  • A holistic approach to strategy formation, planning, and deployment in the context of the firm as a social system.

    Ackoff addresses business design with the idealized design concept. It is called idealized because it is unencumbered by the current culture, trajectory, and specific solutions to put the design in place, not because it is unrealistic. This design must be technologically feasible and operationally viable in the business's environment -- but it comes in two forms, bounded and unbounded.

    A bounded design assumes the environment of the business organization remains the same while the business organization design is unconstrained. An unbounded design permits the designers to change elements of the environment that can improve the performance of the business organization. This holds out the possibility of an enacted environment.

    Ackoff presents an integrated adaptive management system that incorporates this idealized design and regards the firm as a social system.

  • Ackoff, Russell L., (1972), and Emery, Fred E., On Purposeful Systems, Aldine Atherton, Inc.
  • The general systems theory is extended into humans and human organizations. Individual and social behavior if viewed as a system of purposeful events. From this basis, they produce a detailed model of social systems and their classifications. This culminates in the view and definition of social groups as social systems and as ideal seeking systems.

    The authors develop operational definitions of terms such as knowledge, understanding, and wisdom -- being thorough in providing definitions and operational application of their concepts.

  • Ackoff, Russell L., (1981), Creating the Corporate Future, John Wiley & Sons
  • Ackoff, Russell L., (1994), The Democratic Corporation, Oxford University Press
  • Ackoff, Russell L., (1999), Re-Creating the Corporation - A Design of Organizations for the 21 st Century, Oxford
  • Ackoff, Russell L., (1999), Ackoff's Best, Wiley

  • A holistic approach to strategy formation, planning, and deployment in the context of the firm as a social system.

    Ackoff addresses business design with the idealized design concept. It is called idealized because it is unencumbered by the current culture, trajectory, and specific solutions to put the design in place, not because it is unrealistic. This design must be technologically feasible and operationally viable in the business's environment -- but it comes in two forms, bounded and unbounded.

    A bounded design assumes the environment of the business organization remains the same while the business organization design is unconstrained. An unbounded design permits the designers to change elements of the environment that can improve the performance of the business organization. This holds out the possibility of an enacted environment.

    Ackoff presents an integrated adaptive management system that incorporates this idealized design and regards the firm as a social system.

  • Adner, Ron, (2006), Zemsky, Peter, A Demand-Based Perspective on Sustainable Competitive Advantage, Strategic Management Journal, 27: 215-239
  • Adner and Zemsky present an analysis of sustainable competitive advantage emphasizing the demand-side factors. In particular, the effects of decreasing marginal utility and consumer heterogeneity across market segments is shown to affect the sustainability of competitive advantage through shifts in consumer willingness to pay.

    Competitive advantage definition -- The authors define competitive advantage as superior value creation -- with the firm's ability to sustain competitive advantage equivalent to its ability to sustain added value.

    The demand-side drivers are 1) marginal utility from performance improvements, 2) consumer taste for quality, and 3) the extent of consumer heterogeneity. At the level of firm resources, competitive advantage erodes not only because imitation undermines the uniqueness of resources, but also because consumer valuation of firm differences declines due to effects of decreasing marginal utility. At the level of firm positions, strategic heterogeneity is shown to be rooted not only in differences between firms' internal resources but also in the extent of consumer heterogeneity in the firms' demand environment.

  • Aldrich, Howard E., and Martin Ruef, (2006), Organizations Evolving, Sage Publications, 2nd Edition, (First Edition 1999)
  • Andrews, Kenneth R, (1971), The Concept of Corporate Strategy, Irwin Homewood, IL, Second Edition, 1980; Third Edition, 1987
  • See the 1987 edition.

  • Andrews, Kenneth R, (1987), The Concept of Corporate Strategy, Irwin Homewood, IL, First Edition, 1971; Second Edition, 1980; Third Edition, 1987
  • Corporate strategy is the pattern of decisions in a company that determines and reveals its objectives, purposes, or goals, produces the principal policies and plans for achieving those goals, and defines the range of business the company is to pursue, the kind of economic and human organization it is or intends to be, and the nature of the economic and noneconomic contribution it intends to make to its shareholders, employees, customer, and communities. In an organization of any size or diversity, "corporate strategy" usually applies to the whole enterprise, while "business strategy", less comprehensive, defines the choice of product or service and market of individual businesses within the firm. Business strategy is the determination of how a company will compete in a given business and position itself among its competitors. Corporate strategy defines the businesses in which a company will compete, preferably in a way that focuses resources to convert distinctive competence into competitive advantage. Both are outcomes of a continuous process of strategic management.

    The essence of strategy is pattern. The interdependence of purposes, policies, and organized action is crucial to the particularity of an individual strategy and its opportunity to identify competitive advantage. It is the unity, coherence, and internal consistency of a company's strategic decisions that position the company in its environment and give the firm its identity, its power to mobilize its strengths, and its likelihood of success in the marketplace. It is the interrelationship of a set of goals and policies that crystallizes, from the formless reality of a company's environment, a set of problems an organization can seize upon and solve.

    The pattern of goals and policies, rather than their separate substance, is the source of uniqueness that ideally should distinguish every company from its competitors. Especially when values visibly affect economic choices, the special character of a company becomes apparent to its employees and customers.
    (from pages 13-15)

    "Andrews characterized the role of a strategist as one of finding the match between what a firm can do (organizational strengths and weaknesses) within the universe of what it might do (environmental opportunities and threats)." Foss, 1995.

  • Ansoff, Igor H., (1965), Corporate Strategy - An Analytical Approach to Business Policy for Growth and Expansion, McGraw-Hill
  • Ansoff presents strategy as executive decision making.

    The need for strategy come out of the realization that a firm needs a well-defined scope and growth direction, that objectives alone do not meet this need, and that additional decision rules are required if the firm is going to have orderly and profitable growth. Such decision rules and guidelines have been broadly defined as strategy or, sometimes, as the concept of the firm's businesss. (pp 103)

    Strategy and objectives together define the concept of the firm's business (pp 112) --

    • Objectives --
      • ROI
      • Sales growth rate
    • Strategy, a common thread for four interrelated issues --
      • product-market scope
      • growth vector: product development and concentric diversification
      • competitive advantage: patents, research competence
      • synergy: use of the firm's research capabilities and production technologies

    Ansoff presented the product -- mission matrix as a way for firms to define the common thread of their own strategy and has been used as a means of identifying avenues for growth. One side of the matrix is the present and new mission as compared to the other side of present and new product. The matrix cells are thus --

    • Market penetration -- present mission and present product
    • Product development -- present mission and new product
    • Market development -- New mission and present product
    • Diversification -- New mission and new product
  • Anthony, Scott D, Mark W. Johnson, Joseph V. Sinfield, and Elizabeth J. Altman, (2008), The Innovator's Guide to Growth, Putting Disruptive Innovation to Work, Harvard Business Press
  • These authors are Clayton Christensen's colleagues, the disruptive innovation guru and author of The Innovator's Dilema. The first three author's are members of Innosight, an innovation and investment company founded on disruptive innovation principles. This book serves as a guide to the management and mastery of innovation. See Innovator's Guide to Growth for an introduction to the book.

  • Argyris, Chris, (1976), Single-Loop and Double-Loop Models in Research on Decision Making, Administrative Science Quarterly, Vol 21, No. 3, (Sep 1976), pp 363 - 375
  • This paper addresses the potential role of learning and feedback in the decision-making process which had, up to the time of its publication, largely been ignored. The single-loop model of decision making is presented as the most general model of action. A double-loop model is proposed as resulting in more effective decision making when the general model fails.

    `Argyris (1982) labels adaptive behaviors that result not simply in different activities but in different rules for choosing activities `double-loop learning.` Monitoring environmental feedback on the system’s past performance... is an important mechanism of adaptation for any open system.` (Scott & Davis, 2007, 92).

    In Argyris' terms: `Learning to become aware of one's present theory-in-use and then altering it is a very difficult process, because it requires that individuals question the theories of action that have formed the framework for their actions.` (p 370) emphasis added. `...theories-in-use are the basis of behavior, then they represent a source of confidence that one has in functioning effectively in one's world. To change one's theory-in-use would be risky. There are few group, organizational, or societal supports for significantly different behaviors.` (p 370)

  • Ashby, W. Ross, (1952), Design for a Brain, New York: John Wiley & Sons
  • This book is one of the building blocks of cognitive psychology, with its mechanistic/cybernetic view of the human brain. It specifically addresses the human ability of adaptive behavior. The hypothesis is that adaptive behavior is essentially mechanistic. Without a "critical state," variables of behavior are constant. When a critical state is reached, a "step-function" changes the field of variables (pp 90-91).

    This appears to be an early model of double-loop learning as described by Argyris (1976).

  • Axelrod, Robert, (2000), and Cohen, Michael D., Harnessing Complexity, The Free Press
  • A framework is presented for harnessing complexity -- "deliberately changing the structure of the system in order to increase some measure of performance, and to do so by exploiting an understanding that the system itself is complex." The three stages of the framework are variation, interaction, and selection.

    Strategy is trivialized as "a conditional action pattern that indicates what to do in which circumstances" or "the way an agent responds to its surroundings and pursues its goals." Biological evolution is touched on as point of reference to teach about business organizations dealing with complexity. This is not done effectively. "Exploitation" is misinterpreted as copying, or replication, as opposed to the refinement and extension of existing competencies, technologies, and paradigms. The framework seems to be more problem focused than opportunity discovery focused.

  • Baldwin, Carliss Y., (1997), & Clark, Kim B., Managing in an Age of Modularity, HBR, Sep-Oct, pp. 84-93
  • Baldwin, Carliss Y., (2000), & Clark, Kim B., Design Rules - Volume 1, The MIT Press
  • Baldwin, Carliss Y., (2003), & Clark, Kim B., Managing in an Age of Modularity - Commentary, in Raghu Garud, Arun Kumaraswamy, and Richard N. Langlois, Eds, Managing in the Modular Age, Blackwell Publishing, 2003
  • Barnard, Chester I., (1938), The Functions of the Executive, Cambridge, MA, Harvard University Press
  • Chester Barnard was the chief executive of AT&T. Along with Alfred Sloan of General Motors in 1963, he was one of the first executives to draw attention to the need for strategy in the context of business.

    This book is the first, or one of the first, to bring explicit definition to the functions of the executive, "executive processes, which are specialized functions in what we know as "organizations."" (1938, xxvii). Barnard notes the lack of understanding of psychologists, sociologists, and economists in explaining the phenomenon of organization while he also found that leaders of organizations of all types recognized "universal characteristics of organization that are active understandings, evaluations, concepts, of men skilled in organizing not only in the present but in past generations..." (xxviii). The uniqueness, at the time it was written, of Barnard's contribution is reflected in his comment about separating himself from economics and those who regarded man as "economic man" -- "though I early found out how to behave effectively in organizations, not until I had much later relegated economic theory and economic interests to a secondary -- though indispensable -- place did I begin to understand organizations or human behavior." (xxxi).

  • Barney, Jay B, (1986a), Organizational Culture: Can it be a source of sustained competitive advantage, Academy of Management Review, 11, 656-665
  • Barney defines culture and the criteria it meets in order to enable a sustained competitive advantage.

  • Barney, Jay B., (1986b), Strategic factor markets: Expectations, luck, and business strategy, Management Science, Vol 32, No 10, October, 1986
  • Barney introduces the concept of a strategic factor market, i.e. a market where the resources necessary to implement a strategy are acquired. Based on this construct, he concludes that a firm seeking greater than normal economic performance should seek it in its unique skills and capabilities, rather than from the analysis of its competitive environment.

  • Barney, Jay B., (1991), Firm Resources and Sustained Competitive Advantage, Journal of Management, Vol. 17, No. 1, 99-120
  • Barney provides fundamental definitions and criteria for sustained competitive advantage and the resource-view of strategy.

  • Barney, Jay B., (2001), Resource-based theories of competitive advantage: A ten year retrospective on the resource-based view, Journal of Management, 27 (2001) 643-650
  • An interesting discussion of positioning the resource-based view relative to the Structure-Conduct-Performance theories of advantage (Porter, 1980), neo-classical economics (Ricardo, 1817), and evolutionary economics (Nelson & Winter, 1982).

  • Barney, Jay B., (2007), Gaining and Sustaining Competitive Advantage, Pearson/Prentice Hall, 3rd Edition
  • A textbook covering the basics of strategy, strategic analysis, business strategies, and corporate strategies.

  • Bartlett, Christopher A., (1993), Ghoshal, Sumantra, Beyond the M-Form: Toward a Managerial Theory of the Firm, Strategic Management Journal, Vol. 14, Special Issue: Organizations, Decision Making and Strategy (Winter, 1993), pp. 23-46
  • Beinhocker, Eric D., (1999), & Kaplan, Sarah, Tired of strategic planning, The McKinsey Quarterly, 2002, Special Edition: Risk and Resilience
  • Effective formal strategic planning -
    Premise: Real strategies are rarely, if ever, made in a formal meeting, but do develop in less formal settings such as informal gatherings and during times for reflection. The formal planning process must be owned by the CEO, though the planning group can convene and run the meetings.

    Formal planning has two productive uses --
    The first is to create prepared minds to make sure decision makers have a solid understanding of the business, its strategy, and the assumptions behind that strategy. This enables the executives to make effective real-time strategic decisions throughout the year. The critical details:

    1. Real conversations take place in small groups of no more than ten.
    2. One third of an executive's time should be spent on strategy. 80 days, of which 20 to 30 days should be in intensive, well prepared discussions.
    3. The venue for the sessions should be the site of the business unit.
    4. Avoid combining strategy reviews with discussions of budgets and financial targets. Separate the meetings in time.
    5. Those who carry out the strategy must make it.
    6. Corporate guidance for the reviews should only specify the basic requirements, leaving a lot of leeway for the business unit.
    7. Provide a week for the documents to be covered at the meeting to be reviewed by the attendees.
    8. Culture and tone is critical. The sessions are to be constructive, not confrontational.
    9. Disciplined follow-up with notes and connections to other critical corporate processes is essential.

    Second, is to drive strategic creativity, increasing the innovativeness of a company's strategies through engaging conversations that challenge the status quo, produce experiments, and address themes that cut across the business units. Creative thinking cannot be forced. Nevertheless, companies can create conditions where it is much more likely that creative accidents will happen. The mechanisms to increase the odds of promoting creative accidents in strategy :

    1. Bottom-up strategy by experiment. Experiments are built around the core competencies of the business and designed to test hypotheses regarding future opportunities.
    2. Top-down: Drive cross-cutting themes to deal with issues that are bigger than individual business units. This is where the CEO level can add strategic value to the organization.
  • Beinhocker, Eric D., (1999), Robust Adaptive Strategies, Sloan Management Review, Spring 1999, Volume 40, Number 3
  • The method for approaching strategy accounts for the real world phenomena such as evolving complexity, punctuated equilibrium, and path dependence. In this type of world, the ability to make accurate predictions is suspect. The basis for strategy therefore needs to by based more on a portfolio of strategic initiatives that cover the competitive landscape, allowing for progressive evolution of the business in an unpredictable world.

    Six major actions for creating robust adaptive strategies are given:

    • Invest in diversity
    • Value strategies as real options
    • Map jumps on the landscape -- the population of strategies needs to be diverse along the dimensions of time, risk, and relatedness to the current business.
    • Test the population of strategies -- to ensure the population of strategies is sufficiently diverse
    • Bring the market inside -- the selection pressures on the internal population of strategies reflects the selection pressures of the marketplace
    • Use venture capital performance metrics -- meeting milestones against a business plan, progress in technology development, establishing key relationships, building talent, and market acceptance -- all better than traditional financial measures at assessing the creation of value.
  • Beinhocker, Eric D., (2006), The Origin of Wealth - Evolution, Complexity, and the Radical Remaking of Economics, Harvard Business School Press
  • Insightful, Intriguing, significant weaknesses

    Beinhocker presents an economic paradigm he calls complexity economics. It serves to explain the true nature of the economy and patterns of business performance. He presents an evolutionary algorithm to explain the evolutionary nature of economics, markets, and businesses. Businesses which fail to evolve, which is most of them, certainly fail to thrive and often go out of existence.

    Because economic evolution is unpredictable, there is no such thing as a static sustainable competitive advantage. Designing organizations to be better evolvers is what increases the odds of longevity and greater value creation.

    Complex and dynamic problems cannot be solved by rigid structures and bureaucratic decision making. Culture that enables dynamic decision makes for a more responsive organization.

    In the first section of the book, Beinhocker does a great job of presenting classical and neoclassical economics, along with their associated problems. This insightful compendium of economics history is worthy of a five star rating.

    The later sections of the book are also engaging for the implications of dynamics for management and leadership in strategically guiding their organizations. Call it the practical application of complexity economics. The explanatory framework of wealth created out of the increasing order produced by the co-evolution of physical technologies, social technologies, and business designs is useful. Business designs are reflected in Business Plans that meld the physical and social technologies under a strategy. In an evolutionary world, there is no optimal strategy, the shelf-life of a strategy is limited, and that shelf-life is unpredictable. At best, strategies can only be better than others for a limited time. Unfortunately, as intriguing as the later sections are, the build up is weak.

    The core of the book explains complexity economics Beinhocker's integrity is negatively impacted by his erroneous conclusions from his many cited resources and lack of sufficient citing. For example, in describing the source of economic progress, Beinhocker throws out Schumpeter's entrepreneur as the driving force of creative destruction, replacing him with impersonal technology evolution. He uses a 1990 study by Romer as his justification, saying Romer's study replaced the entrepreneur with technology as the driving force. Here is a quote from Romer (1990), "The source of energy for growth is technological change, knowledge built upon knowledge, arising from intentional actions taken by people who respond to market incentives." There is an intelligent agent in Romer's process that Beinhocker does not acknowledge.

    His message is also much more trivial than he makes out. If the origin of wealth creation is knowledge, so what? Drucker told us that decades ago: "Business can be defined as a process that converts an outside resource, namely knowledge, into outside results, namely economic values." (Peter F. Drucker, Managing for Results, Harper, 1964, page 5).

    Though the book has great information and ideas, it is less than it purports to be.

    See the reviews on Amazon.com for further criticisms.

  • Benner, Mary J. and Tushman, Michael, (2005), TQM, ISO 9000, Six Sigma: Do Process Management Programs Discourage Innovation?, Knowledge@Wharton, November 16-29, 2005
  • Bennis, Warren, 1972, Today, Tomorrow... and the day after, University of Cincinnati
  • This is a collection of four of Bennis's short writings. The one entitled Everything You Always Wanted to Know About Change is a treasure of insights into innovation and organizational change. In reference to change, Bennis speaks of "Role innovators shift the whole paradigm in a practice sense." The impetus for the organization to change comes from the power of the new paradigm communicated as a metaphor. "It is not so much the articulation of goals of what... should be... that creates a new practice. It's the imagery that creates the understanding, the compelling moral necessity that the new way is right." (p 30),

  • Bennis, Warren, and Burt Nanus, (1985), Leaders, Strategies for Taking Charge, HarperBusiness, 2nd Edition 1997
  • The authors identify four leadership strategies, each with their own themes, areas of competency, and human handling skills (p 25-72):

    • attention through vision -- the creation of focus with compelling visions that pull people toward them.
    • meaning through communication -- the capacity to relate a compelling image of a desired state of affairs -- the kind of image that induces enthusiasm and commitment in others
    • trust through positioning -- trust is based on predictability of people who make themselves known and make their positions clear. Positioning is the set of actions necessary to implement the vision of the leader.
    • the deployment of self through --
      • positive self-regard -- the creative and healthy use of one's self. 1- recognize strengths and compensate for weaknesses; 2 - nurture skills with discipline, having a capacity to develop and improve, being a self-evolver; 3 - the capacity to discern the fit of one's skills with what the job requires. Positive self-regard is related to emotional wisdom.
      • the Wallenda factor -- learning requires trying which involves failure, something from which one can continue to learn. To continue to try in the face of the potential for failure requires a fusion between positive self-regard and optimism about a desired outcome.

    Bennis and Nanus emphasize key points that they feel get at the essence of leadership in their introduction to the second edition.

    • Leadership is about character
    • To keep organizations competitive, leaders must be instrumental in creating a social architecture (i.e. culture) capable of generating intellectual capital (engaging people's interest and desires in achieving the objective of the leader or purpose of the organization).
    • A strong determination to achieve a goal or realize a vision -- a conviction, even a passion... defining reality... purpose and direction.
    • The capacity to generate and sustain trust is the central ingredient in leadership.
    • True leaders have an uncanny way of enrolling people in their vision through their optimism -- sometimes unwarranted optimism.
    • Leaders have an action towards bias toward action the results in success -- translating vision and purpose into reality.

    Contrast the leadership criteria above with the oft used criteria organizations use to evaluate their executives:

    • technical competence
    • people skills
    • conceptual skills
    • track record
    • taste
    • judgment and character

    What is most important to leadership cannot be quantified.

    Pettigrew (1987, p 655) leveled charges at Bennis and Nanus's work which is worthy of consideration by the student of management. "As yet the absence of sustained empirical inquiry into the activities of corporate leaders suggests an over confident and over simple view of their role in organizational transformation. Part of the difficulty here is a rush into prescriptive writing before description and analysis (Bennis and Nanus, 1985), but more important are the analytical deficiencies underlying much of the research on leadership behaviour in the firm. These analytical difficulties include a concentration on leadership episodes rather than long-term leadership processes, a tendency to explore leader—follower relations without reference to the antecedent conditions which may influence their expression, and more significantly, the limited attempts to place leader behaviour in the context of political and cultural forces within the organization, and the wider economic and competitive forces with which the firm must operate."

  • Bertalanffy, Ludwig von, (1968), General Systems Theory, George Braziller, New York
  • "...there exist models, principles, and laws that apply to generalized systems or their subclasses, irrespective of their particular kind, the nature of their component elements, and the relations or "forces" between them. It seems legitimate to ask for a theory, not of systems of a more or less special kind, but of universal principles applying to systems in general." (Bertalanffy, 1968, pp 32)
  • Bossidy, Larry (2002) & Charan, Ram, Execution: The Discipline of Getting Things Done, Crown Business
  • Bossidy, Larry (2004) and Charan, Ram, Confronting Reality: Doing What Matters to Get Things Right, Crown Business
  • Box, George E. P., (1982), Improving Almost Anything - Ideas and Essays, John Wiley and Son, (2006 Edition).
  • Brown, Shona L. and Kathleen M. Eisenhardt, (1998), Competing on the Edge - Strategy as Structured Chaos, Harvard Business School Press
  • Strategy as structured chaos addresses the dilemma of how to exploit the and explore the new without falling into either what the authors call the "overconnect trap" associated with efficient exploitation or the "disconnect trap" of creating such a big chasm between the old and the new that it cannot be overcome. The edge of chaos is the 'happy medium' between these two extremes. The book includes other illuminating frameworks about strategy as well.

    Brown and Eisenhardt present the concept of patching, a concept underpinned by the idea of modularity. "Patching refers to the dynamic mapping of modular business (or products and services) onto marketplace opportunities. It is about continuously realigning businesses with markets." (228)

  • Burgelman, Robert A., (1983) A Model of the Interaction of Strategic Behavior, Corporate Context, and the Concept of Strategy, Academy of Management Review, 1983, Vol. 8, No. 1, 61-70
  • Burgelman presents a framework for strategy creation in large, complex firms. This model is consistent with the variation-selection-retention, i.e. evolutionary, model explaining organizational survival, growth, and development. These firms are relatively independent of the tight control of external environment selection, such as large enough firms or sufficiently resource-rich, can engage in "strategic choice" (Child, 1972). Their strategic choice process involves substantive inputs from managers from different levels of the organization. Internally generated variation, resulting from the "enactment" (Weick, 1979) fo the environment, is at the minimum, a very important source of variation in such firms (Penrose, 1968). Strategic behavior, in Burgelman's model, refers to such enactments.

    This model integrates the business and corporate levels of analysis.

    The strategic behaviors in this model include the generic categories of induced and autonomous. Induced strategic behavior uses the categories provide by the current concepts of strategy to identify opportunities in the "enactable environment" (Weick, 1979). This behavior is shaped by the current structural context of the firm. The autonomous behavior comes from the reservoir of entrepreneurial potential that exists at the operational levels of these firms. Autonomous strategic behavior introduces new categories for the definition of opportunities -- concepts of new business opportunities. Unlike induced strategic behavior, which follows corporate strategy, autonomous behavior precedes corporate strategy.

  • Burgelman, Robert A., (2002), Strategy is Destiny - How Strategy Making Shapes a Company's Future, The Free Press
  • This is largely a case study of the history of the evolution of Intel. The framework used to lend perspective and understanding to Intel's strategies is an evolutionary framework of the strategy making process. This process consists of balance of an induced strategy process and an autonomous strategy process. The induced process creates alignment amongst the strategic actions of the firm, reduces variation, and carries out a defined strategic intent. The autonomous process creates linkage of new business opportunities to the corporate strategy, thereby amending it. It increases variation and fosters internal entrepreneurship.

  • Burgelman, Robert A., (2007), & Andrew S. Grove, Let Chaos Reign, Then Rein In Chaos -- Repeatedly: Managing Strategic Dynamics for Corporate Longevity, Strategic Management Journal, Vol. 28, No. 10, October, 2007, pp 965-979
  • A masterful synthesis of the essential elements of the strategy process. More importantly, the authors go beyond the concept of balancing the induced (which seeks to reduce variation) vs. autonomous (which seeks to increase variation) strategy making process to providing pragmatic insights to managing this paradox. The relationship between strategic leadership and strategy making is a key highlight.

  • Burns, James MacGregor, (1978), Leadership, Harper & Row
  • Burns presents a taxonomy of leadership, distinguishing, for example, intellectual leadership from executive leadership. He developed the concept of transformational leadership which stands in contrast to transactional leadership -- the two basic styles of leadership.

    • leadership -- "I define leadership as leaders inducing followers to act for certain goals that represent the values and the motivations -- the wants and needs, the aspirations and expectations -- of both leaders and followers." (Burns, 1978, pp 19).
    • transactional leadership -- "Such leadership occurs when one person takes the initiative in making contact with others for the purpose of an exchange of valued things." (Burns, 1978, pp 19).
    • transformational leadership -- "Such leadership occurs when one or more persons engage with others in a way that leaders and followers raise one another to higher levels of motivation and morality." (Burns, 1978, pp 20)
  • Burrell, Gibson and Gareth Morgan, (1979), Sociological Paradigms and Organizational Analysis, Heinemann Educational Books
  • Social theory is explained in terms of four distinctively different perspectives, paradigms, of the phenomena of society and organizations. Burell and Morgan's framework juxtaposes the subjective and objective views of social reality against two alternative models for the analysis of social processes -- conflict, which they call radical change, and order, which they call regulation. This framework, and the four paradigms it defines, brings a depth of understanding to the theories and practices related to organizations.

    In the process of explaining their sociology framework, they provide a framework primer, explaining in depth what a frameworks are, how to use them, and their benefits.

  • Carroll, Glenn R. and Michael T. Hannan, (2000), The Demography of Corporations and Industries, Princeton University Press
  • In setting the stage for presenting their research on corporate demographics, Carroll & Hannan present solid definitions of organizational form, identity, and populations.

  • Cathcart, Thomas & Daniel Klein, (2007), Plato and a Platypus Walk Into a Bar...Understanding Philosophy Through Jokes, Abrams Image
  • This book is a short-course in philosophy using jokes to make the philosophical points. See the author's website.

  • Chandler, Alfred D., Jr., (1962), Strategy and Structure: Chapters in the History of the American Industrial Enterprise, MIT Press
  • A series of case studies on the effective administration and growth of major American companies.

    Chandler explored how large businesses adapted their administrative structures to accommodate strategies of growth. In this work he gave a basic definition of strategy and structure which would have long-lasting resonance in the field: "strategy can be defined as the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals...Structure can be defined as the design of organization through which the enterprise is administered" (1962: 15-16). Chandler also suggested, based on his data, that "structure follows strategy and that the most complex type of structure is the result of the concatenation of several basic strategies" (1962: 16). (From: Heracleous, 2003, pp 4)

  • Chandler, Alfred D., Jr., (1990), Scale and Scope, the Dynamics of Industrial Capitalism, The Belknap Press of Harvard University Press
  • Chandler, Alfred D., Jr., (1992), Organizational Capabilities and the Economic History of the Industrial Enterprise, Journal of Economic Perspectives, Vol. 6, Number 3, Summer 1992, pp 79-100
  • Chesbrough, Henry & Rosenbloom, Richard S., (2002), The role of business model in capturing value from innovation: evidence from Xerox Corporation's technology spin-off companies, Industrial and Corporate Change, Volume 11, Number 3, pp. 529-555
  • Chesbrough, Henry William, (2003), Open Innovation: The New Imperative for Creating and Profiting from Technology, Harvard Business School Press, March, 2003
  • Christensen, Clayton M., (2003a), and Raynor, Michael E., The Innovator's Solution, Harvard Business School Press
  • Christensen, Clayton M., (2003b), and Raynor, Michael E., Why Hard-Nosed Executives Should Care About Management Theory, Harvard Business Review, Sep 2003
  • An excellent discussion of the role of theory in business. Theory definition, development, and application is covered. Causation vs. correlation is examined to reveal the common problems resulting from a lack of rigor in distinguishing between the two.
  • Christensen, Clayton M., (2006), Looking at the Future Through the Lens of Management Theory, Business The Ultimate Resource, Basic Books (Ed.), 2nd Edition, 359 - 361
  • Noting that invention and innovation typically evolve from experimentation to pattern recognition, Christensen analogously identifies the initial set of patterns for companies to understand in forming a competitive advantage, from how to disrupt competitors to how to purse strategy.

  • Churchman, C. West, (1971), The Design of Inquiring Systems, Basic Books, Inc.
  • Churchman (1971, p.18) recast the theories of knowledge of philosophers Leibnitz, Locke, Kant, Hegel, and Singer "in the language and design of inquiring systems," providing "a description of how learning can be designed, and how the design can be justified." Each of the philosopher's approaches provides for a different way of gathering evidence and building models to represent a view of the world.

  • Coase, Ronald H., (1937), The Nature of the Firm, Economica
  • Coase examined the question of why business organizations exist in a specialized exchange economy in which the distribution of resources is "organized" by the price mechanism.

    Key points:

    • He theorized that the reasons business organizations form, as opposed to a network of freelance contractors, is to minimize transaction costs.
    • A firm consists of a system of relationships where the direction of resources is dependent upon an entrepreneur. li>
    • Outside the firm production is coordinated through a series of exchange transactions in the market. Inside the firm, these complicated market transactions are eliminated, and instead the entrepreneur-coordinator directs production. li>
    • The firm eliminates at least two costs it would have using the price mechanism to "organize" production: (1) discovering what relevant prices are, and (2) the costs of negotiating and concluding a separate contract for each exchange transaction
    • At the margin, the costs of organizing within the firm will be equal either to the costs of organizing in another firm or to the costs involved in leaving the transaction to be "organized" by the price mechanism.
  • Cohen, Michael D., March, James G, Olsen, Johan P., (1972), A Garbage Can Model of Organizational Choice, Administrative Science Quarterly, Vol. 17, No. 1 (Mar., 1972, pp. 1-25
  • Synopsis from Weick (Weick, 1979, 21-22) --
    Organizations are characterized as garbage cans into which are dumped problems, people, choice situations, and solutions (See organizations for the resulting definition of organization. A crucial variable in this model is timing. It is assumed that there is a continual stream of people, solutions, choices and problems that flow in an organization. Every now and then some clusters of these elements coincide, and a decision is produced. In other words, problems may attach themselves first to one choice situation then to another, and the same holds true for people and solutions.

    Two major decision strategies in a garbage can organization are the strategies of oversight and flight. The strategy of oversight involves making quick choices. You make a choice whenever important problems are attached to some other choice and before they can drift to the choice you're making. Having made the choice you solve nothing, since the problems are still attached to other choices. Likewise, the decision style of flight involves delaying a choice until the problems wander away and attach themselves to other choices. Once the problems have left, then you make the choice. Again the choice solves no problems, since none are attached to it.

    In the computer simulation of this process, most decisions involve flight and oversight. This suggests why organizations can keep making decisions yet never solve any of their problems.

    Decision styles (From Cohen, March, and Olsen, 1972, pp 8) --
    Within the kind of organization postulated, decisions are made in three different ways.

      By resolution. Some choices resolve problems after some period of working on them. The length of time may vary, depending on the number of problems. This is the familiar case that is implicit in most discussions of choice within organizations.

      By oversight. If a choice is activated when problems are attached to other choices and if there is energy available to make the new choice quickly, it will be made without any attention to existing problems and with a minimum of time and energy.

      By flight. In some cases choices are associated with problems (unsuccessfully) for some time until a choice more attractive to the problems comes along. The problems leave the choice, and thus it is now possible to make the decision. The decision resolves no problems; they having now attached themselves to a new choice.

      Some choices involve both flight and resolution—some problems leave, the remainder are solved. These have been defined as resolution, thus slightly exaggerating the importance of that style. As a result of that convention, the three styles are mutually exclusive and exhaustive with respect to any one choice. The same organization, however, may use any one of them in different choices. Thus, the decision style of any particular variation of the model can be described by specifying the proportion of completed choices which are made in each of these three ways.

  • Collins, James C. (1994) and Porras, Jerry I., Built to Last, Successful Habits of Visionary Companies, Harper Business
  • Collins and Porras (1994) identified visionary companies, those with "underlying timeless, fundamental principles and patterns that might apply across eras." These companies had superior market performance over the long term (as long as 1926 - 1990 for many of the companies). They identified 18 companies that met their visionary criteria. Eighteen comparison companies were selected. These companies that started at similar times, were in the same industry, and had performed well. In many cases, they performed better than the visionary companies early in their life. The study sought to identify what was different about the visionary companies that gave them the performance edge over the merely good companies. The visionary companies' success was attributed to the following characteristics:

    1. Clock building, not time telling - leaders of these companies build companies that prosper far beyond the term of any one leader. The company's success is not based on a leader with one great idea or a charismatic leader. The visionary leaders focus on the creation of the company itself.
    2. No "tyranny of the OR" (embrace the "genius of the AND") - accept paradox, manage paradox. The "tyranny of the OR" leads people to believe "it" must be one or the other, not both. This is overly analytic, arrogant, and narrow-sighted. If fails to recognize the inherent irresolvable conflicts in most the real world situations.
    3. More than profits - visionary companies have an ideological nature. This is a pragmatic idealism of a core ideology made up of the organization's core values and a sense of purpose beyond just making money which guides and inspires.
    4. Preserve the core/stimulate progress - visionary companies have a relentless drive for progress that drives change and forward movement in all that is not core ideology. A visionary company culture satisfies the human need to explore, create, discover, achieve, change, and improve.
    5. Big hairy audacious goals - A BHAG engages people with clear and compelling goals that stimulates and orients organizational change and progress toward great achievements. BHAGs are bold, going beyond reason in determining what they should be. They are visionary. BHAGs require commitment, thus the risk of irreversible decisions made along the way.
    6. Cult-like cultures - visionary leaders build an organization that fervently preserves it core ideology in specific ways with tangible mechanisms that send a consistent set of reinforcing signals. A sense of belonging to something special is created.
    7. Try a lot of stuff and keep what works - experimentation, trial and error, and opportunism are key to success. Consciously harnessing the evolutionary process of undirected variation and selection stimulated progress and the addition to the gene pool of the company of what is selected.
    8. Home grown management - promoting from within preserves the core, but it requires developing leaders from within. Of the "seventeen hundred years of combined history in the visionary companies, we found on four individual cases of an outsider coming directly into the role of chief executive."
    9. Good enough never is - visionary high performance companies are very demanding of themselves. Comfort of the members is not the objective. Powerful mechanisms produce a creative discomfort that obliterates complacency and stimulates improvement before the outside world demands it.

    Like other writers of blockbuster business books, the authors are astute observers of the business world. What they dispense is knowledge worthy of strong consideration. Unfortunately, Collins and Porras cannot rightfully claim that their 1994 Built To Last work is scientific. It is all post hoc and lacks predictive value. The timeframe of Collins and Porras' study ends in 1990. In the next five and ten year periods, one-half of the visionary companies failed to match the performance of the S&P 500. In the five years following the study, 11 of these companies had profits decrease while 5 increased. The comparison companies, those that were merely good, had a majority perform above the S&P 500, 8 with increased profits and 4 with decreased profits.

  • Collins, James C., (1996) and Porras, Jerry I., Building Your Company's Vision, Harvard Business Review, Sep-Oct, 1996
  • Collins, Jim, (2001a), Good To Great, Harper Business
  • Collins (2001) identified companies that had been good for at least 15 years that subsequently became great. These companies had the following pattern: "fifteen-year cumulative stock returns at or below the general stock market, punctuated by a transition point, then cumulative returns at least three times the market over the next fifteen years." Directly comparable companies were found that did not make the same transition and some companies that made a short-term shift from good-to-great but failed to sustain it. These candidate companies were studied in depth to determine what was different about the good-to-great companies vs. the others. The distinctive characteristics of good-to-great companies are complementary and are part of an integrated set of behaviors that includes a continual disciplined management process, analogous to building momentum in a flywheel, which results in a breakthrough to greatness. The distinctive characteristics of the good-to-great companies are as follows:

    1. Level 5 Leadership - a paradoxical blend of personal humility and professional will.
    2. First Who...Then What - using the analogy of a bus - first get the right people on the bus, the wrong people off, get people in the right seats, and then figure out where to drive the bus. The "right people" are your most important asset.
    3. Confront the Brutal Facts - this is the Stockdale paradox, employing the image of Admiral Stockdale's imprisonment in the Hanoi Hilton as a prisoner of war - "You must maintain unwavering faith that you can an will prevail in the end... AND at the same time have the discipline to confront the most brutal facts of your current reality..."
    4. Hedgehog Concept - you must determine what you can be the best in the world at, not necessarily what you are currently the best at. The "place" where you can be the best in the world is a place where three elements intersect - what you are deeply passionate about, competence wise what you can be the best in the world at, and the profound insight as to what exactly drives your economic engine, ideally expressed in the form of a single "economic denominator," expressed as profit per ___, that ties the strategy and performance measures together.
    5. Culture of Discipline - discipline provides structure while freeing people to exercise their fullest potential while pursuing the Hedgehog Concept. This culture of discipline combines with an ethic of entrepreneurship to create a great company.
    6. Technology Accelerators - technology is never a primary reason for the greatness of a company, but its successful employment makes the company great, and can even result in radical new technological discoveries.

    The good-to-great companies are Abbott, Circuit City, Fannie Mae, Gillette, Kimberly-Clark, Kroger, Nucor, Philip Morris, Pitney Bose, Walgreens, Wells Fargo.

    Like other writers of blockbuster business books, the authors are astute observers of the business world. What they dispense is knowledge worthy of strong consideration. Unfortunately, Collins cannot rightfully claim that this work is scientific. It is all post hoc and lacks predictive value.

  • Collins, Jim, (2001b), Level 5 Leadership, Harvard Business Review, 2001
  • Collins, Jim, (2005), Good To Great and the Social Sectors, Jim Collins
  • Collis, David J. and Cynthia A. Montgomery, (1995), Competing on Resources, Harvard Business Review, Jul-Aug, 1995
  • A description of the resource-based view of strategy with five tests of what constitutes a valuable resource-capability combination.

  • Collis, David J. and Rukstad, Michael G., (2008), Can You Say What Your Strategy Is?, Harvard Business Review, April 2008, 82-90
  • Contains the definition of a Statement of Strategy, identifying the three critical components of objective, scope, and advantage. This statement definition is a brief statement, typically one concise sentence for each critical components accompanied by detailed annotations that "elucidate the strategy's nuances...and spell out its implications."

    The Strategy Statement's most critical element is the statement of advantage with its two components -- a statement of customer value proposition and the unique activities allowing that firm alone to deliver the customer value proposition.

    The process to prepare the statement, of course following the development of a great strategy, is rigorous and challenging. A concise, well thought out statement, provides guidance critical to the effective organizational pursuit of the strategy. In the "Hierarchy of Company Statements, Strategy follows the Mission - Why we exist; Values - What we believe in and how we behave; and Vision - What we want to be -- with "What our competitive game plan will be; its ends, domain, and means.

  • Collis, David J., (1995), and Cynthia Montgomery, Creating Corporate Advantage, Harvard Business Review, May-Jun, 1998
  • A methodological approach to defining corporate strategy.
  • Copeland, Tom (2004) & Tufano, Peter, A Real-World Way to Manage Real Options, Harvard Business Review, Mar 2004
  • The fundamental differences between financial and real options is clearly explained. The case is made as to why the Black-Scholes-Merton model used for financial option valuation does not apply to real options. An alternative binomial algebraic model is not only suitable for spreadsheet use but is well suited to real options and their nested nature -- where the exercising of the first option uncovers not an underlying asset but another option.
    A decision tree is incorporated into the investment characterization process to reflect the dependent decisions and outcomes.
    Particular emphasis is placed on the need to manage real options like financial options from a timing perspective. Failure to decide late or early on the option execution destroys significant value in both cases.
  • Courtney, James F. (1998) , Croasdell, David T. and Paradice, David B., Inquiring Organizations, Australian Journal of Information Systems Sept 14, 1998
  • Identifies the philisophical bases for variouis systematic methods of inquiry.
  • Davenport, Thomas H. (1998), David W. De Long, Michael C. Beers, Successful Knowledge Management Projects, Sloan Management Review, Winter, 1998, Vol 39, No. 2, pp 43-57
  • Davis, Stanley M. (1987), Future Perfect, Addison Wesley
  • de Bono, Edward, (1985), Six Thinking Hats, Back Bay Books
  • de Geus, Arie, 1997, The Living Company, Harvard Business School Press, Boston
  • "Companies die because their managers focus on the economic activity of producing goods and services, and they forget that their organizations' true nature is that of a community of humans."

    Business organization success and longevity are interwoven. The business world has shifted from one dominated by capital to one dominated by knowledge. Unless their companies can accelerate the rate at which they learn, their primary asset will stagnate, and their competitors will pass them by.

  • de Waal, Andr√© A., (2007), The characteristics of a high performance organization, Business Strategy Series, Emerald Group, Vol 8, No. 3, pp 179-185
  • This is a meta-analysis of the studies since 1990 that have identified the characteristics of high performance organizations (HPOs). From this analysis, several characteristics that seem to be decisive factors for achieving lasting good performance are identified.

    A framework with eight factors organizes the HPO characteristics --

    • Organization design
    • Strategy
    • Process management
    • Technology
    • Leadership
    • Individuals & Roles
    • Culture
    • External orientation

    There is a white paper associated with this article that includes the details of the study.

  • Denrell, Jerker, (2004), Random Walks and Sustained Competitive Advantage, Management Science, Vol. 50, No. 7, July 2004, pp. 922-934
  • Jerker demonstrates that in a population of organizations that the outstanding performance of a few companies can be explained by purely random events. This finding strikes at the foundation of research that selects winners, post hoc, then draws conclusions about the behavior that leads to that success.

    This dramatic finding is important for strategists to understand in where they look for guidance in achieving and sustaining their own organization's competitive advantage.

    Related works -- This article is a great complement to Rosenzweig's The Halo Effect and Wiggins & Ruefli's, Sustained Competitive Advantage... and Schumpeter's Ghost.... It also ties in with understanding how humans tend to think, and their difficulty with probabilistic events, as revealed in Talib's The Black Swan and Douglas's Trading in the Zone.

  • Dopfer, Kurt ed., (2005), The Evolutionary Foundations of Economics, Cambridge University Press
  • Douglas, Mark, (2000), Trading in the Zone, New York Institute of Finance
  • Why would a strategist care about the ideas of a trader? Mark Douglas defines a particular way of thinking that enables one to thrive in an environment fraught with uncertainty. It is a sort of intuition combined with disciplined anti-intuitive thinking where pattern recognition meets rigorous rules in order to make consistent gains in the face of continuous uncertainty.

    This type of thinking holds some clues to how managers might train their minds to be highly capable probabilistic thinkers. Knowing anything can happen, you find you don't need to know what is going to happen next in order to make money. When facing an environment with Gaussian events (normal distribution), an edge with a lot of bets will serve you well.

    Modes of thinking -- The "trader mindset - probabilistic thinker" is in contrast to the "uncertainty realist", who recognizes that the "big" events in this world are not only unpredictable but cannot even be assigned probabilities (see Taleb, The Black Swan) and the "modeler's" mind where analysis is king and the objective is to eliminate uncertainty.

  • Drucker, Peter F., (1945), Concept of the Corporation, John Day Company, followed by a 1983 edition and 1993 copyright by Transaction Publishers
  • The first book to look upon a "business" as an "organization" that is, as a social structure that brings together human beings in order to satisfy economic needs an wants of a community.

    This is the first book to identify the management discipline. The ideas in it launched the field of management and essentially created the field of management consulting.

  • Drucker, Peter F., (1954), The Practice of Management, Harper Perennial
  • The first comprehensive definition of the discipline of management. Coined the term knowledge worker.

    Drucker argued for an active approach to management which entailed planning and actions intended to shape a firm's environment as opposed to reacting passively to it. This is in essence strategic management. This is consistent with Drucker's later famous quote that the purpose of a business is to 'create a customer.'

  • Drucker, Peter F., (1964), Managing For Results, Harper Perennial, 1986
  • The three different dimensions of the economic task of a business, thus the entrepreneurial tasks, are: (1) Make the present business effective, (2) the business potential must be identified and realized, and (3) make the business into a different business in the future.

    Drucker identifies eight business principles that must be pulled together into a coherent whole for effective management. A couple of key points: (1) management needs to focus on allocating resources to finding opportunities, not solving problems (innovating, not optimizing), and (2) businesses have a tendency to drift towards a diffusion of energy while concentration is the key to economic results.

    One of management's biggest challenges is developing and maintaining the discipline of sticking to what they clearly know are sound principles of business. Note Collin's keys to becoming a great company -- disciplined people, disciplined thought, disciplined action.

  • Drucker, Peter F., (1967), The Effective Executive, Harper Business Essentials
  • Drucker, Peter F., (1973, 1974), Management: Tasks, Responsibilities, Practices, Harper & Row
  • Gave us the notion that strategic planning is action oriented - at at time when it was elitist thinking, centralized, and bureaucratic. It has not been until the early 2000s that strategy based on the evolutionary algorithm is being promoted as a learning by experimentation process as opposed to comprehensive analysis.

  • Drucker, Peter F., (1978), Managing in Turbulent Times, Harper & Row
  • Drucker essentially explained that the world is flat, over 20 years before Friedman.

  • Drucker, Peter F., (1985), Innovation and Entrepreneurship, Harper Perennial
  • The overall economy is as described by Joseph Schumpeter, one of dynamic disequilibrium brought on by the innovating entrepreneur. Innovation is the tool of entrepreneurs used to exploit change. Entrepreneurship is necessary for competitive advantage to be produced or sustained. Not being entrepreneurial is higher risk than being entrepreneurial. Entrepreneurship is a management discipline which practices systematic innovation.

  • Drucker, Peter F., (1986), Managing for Results, Harper Perennial, 1986, 1964
  • Drucker, Peter F., (1986), The Practice of Management, Harper Perennial, other than the preface, originally published in 1954, Harper & Row
  • Drucker, Peter F., (1994), The Theory of Business, Harvard Business Review, Sep-Oct
  • Drucker, Peter F., (1995), The Information Executive Truly Need, Harvard Business Review, Jan-Feb
  • Managers need to focus on wealth creation, not the fiction of financial profits.

  • Drucker, Peter F., (2004), The American CEO, Wall Street Journal, December 30, 2004
  • Eisenberg, Dan TA, Benjamin Campbell, Peter B Gray, and Michael D Sorenson, (2008), Dopamine receptor genetic polymorphisms and body composition in undernourished pastoralists: An exploration of nutrition indices among nomadic and recently settled Ariaal men of northern Kenya, BMC Evolutionary Biology, 2008, 8:173, 10 June 2008
  • A comparative study of ADHD in a population of nomadic people, some of whom are nomadic and some now settled. Those with ADHD and nomadic were found to have higher BMI, due primarily to differences in fat free body mass, than those who were settled.

    This seems to indicate that certain behavioral characteristics, such as that behavior in people with ADHD genetics, favor an exploratory existence as a nomad vs. a more exploitative existence of a settled person.

  • Fahey, Liam, (2003), How corporations learn from scenarios, Strategy & Leadership, Vol 31, No 2, pp. 5-15
  • Fahey lays out the principles and process of scenario planning.

  • Faulkner, David O. and Andrew Campbell. (2003). "Introduction" in The Oxford Handbook of Strategy, ed. David O. Faulkner and Andrew Campbell, 3, Oxford University Press
  • Fonseca, Jos√©, (2002), Complexity and Innovation in Organizations, Routledge
  • See Stacey, 2000, for information on the series this book is part of.

  • Foss, Nicolai Juul, Christian Knudsen, & Cynthia Montgomery, (1995), An Exploration of Common Ground: Integrating Evolutionary and Strategic Theories of the Firm, in Resource-Based and Evolutionary Theories of the Firm: Towards a Synthesis, Cynthia A Montgomery, editor, Kluwer Academic Publishers, 1995
  • This reveals the complementary nature of the resource-based and evolutionary theories of the firm and in strategy process development. These schools of thought have continued on in the theories of dynamic capability.

  • Foster, Richard, and Sarah Kaplan, (2001), Creative Destruction - Why Companies That Are Built to Last Underperform the Market -- and How to Successfully Transform Them, Currency Doubleday
  • Fr√©ry, Fr√©d√©ric, (2006), The Fundamental Dimensions of Strategy, MIT Sloan Management Review, Fall 2006, Vol 48, No. 1, pp 71 - 75
  • Garud, Raghu and Kumaraswamy, Arun, (2003a), Technological and Organizational Designs to Achieve Economies of Substitution, Strategic Management Journal, 16, pp. 93-109
  • Garud, Raghu and Kumaraswamy, Arun, (2003b), Technological and Organizational Designs to Achieve Economies of Substitution - Commentary, in Raghu Garud, Arun Kumaraswamy, and Richard N. Langlois, Eds, Managing in the Modular Age, Blackwell Publishing, 2003
  • Gharajedaghi, Jamshid, (1999), Systems Thinking - Managing Chaos and Complexity - A Platform for Designing Business Architecture, Butterworth Heinemann
  • Gharajedaghi, Jamshid, (2006), Systems Thinking - Managing Chaos and Complexity - A Platform for Designing Business Architecture, 2nd Edition, Butterworth Heinemann
  • Giddens, Anthony, (1984), The Constitution of Society - Outline of the Theory of Structuration, University of California Press
  • Conceptualization of social systems (pp 23-26) -

    • Structure(s) - the rules implicated in the production and reproduction of social systems and resources. Rules and resources, or sets of transformation relations, organized as properties of social systems.
    • Systems(s) - Reproduced relations between actors or collectivities, organized as regular social practices.
    • Structuration - Conditions governing the continuity or transmutation of structures, and therefore the reproduction of social systems.

    Structure, as recursively organized sets of rules and resources, is out of time and space, save in its instantiations and co-ordination as memory traces, and is marked by an `absence of the subject.’ The social systems in which structure is recursively implicated, on the contrary, comprise the situated activities of human agents, reproduced across space and time. Analyzing the structuration of social systems means studying the modes in which such [social] systems, grounded in the knowledgeable activities of situated actors who draw upon rules and resources in the diversity of action contexts, are produced and reproduced in interactions (bold italic emphasis added).

    All competent members of society are vastly skilled in the practical accomplishments of social activities and are expert 'sociologists'. The knowledge they possess is not incidental to the persistent patterning of social life but is integral to it. This stress is absolutely essential if the mistakes of functionalism and structuralism are to be avoided, mistakes which, suppressing or discounting agents' reasons — the rationalization of action as chronically involved in the structuration of social practices — look for the origins of their activities in phenomena of which these agents are ignorant. But it is equally important to avoid tumbling into the opposing error of hermeneutic approaches and of various versions of phenomenology, which tend to regard society as the plastic creation of human subjects. Each of these is an illegitimate form of reduction, deriving from a failure adequately to conceptualize the duality of structure.

    According to structuration theory, the moment of the production of action is also one of reproduction in the contexts of the day-to-day enactment of social life. This is so even during the most violent upheavals or most radical forms of social change. It is not accurate to see the structural properties of social systems as 'social products' because this tends to imply that pre-constituted actors somehow come together to create them. In reproducing structural properties to repeat a phrase used earlier, agents also reproduce the conditions that make such action possible. Structure has no existence independent of the knowledge that agents have about what they do in their day-to-day activity. Human agents always know what they are doing on the level of discursive consciousness under some description.

  • Gilbert, Clark G., (2005), Unbundling the Structure of Inertia: Resource Versus Routine Rigidity, Academy of Management Journal, Vol. 48, No. 5, 741-763
  • A study identifying two key variables involved in building and sustaining organizational inertia, resource and routine rigidity. These variables do not tend to change in the same way when the organization is threatened in a way that requires that it change, that the organizational inertia be decreased. This calls for managements' attention to managing both factors in different manners.

  • Gilmore, James H. (1997a) & Pine, B. Joseph II, The Four Faces of Mass Customization, Harvard Business Review, Jan-Feb 1997
  • The four approaches to mass customization --
    • Transparent - where the product changes but its representation does not, e.g. personalized offerings of hotels that track guests preferences
    • Collaborative - the product changes as well as its representation, e.g. ordering a Dell computer
    • Adaptive - the product does not change and neither does its representation, e.g. a mattress which adjusts it firmness to the sleeper
    • Cosmetic - the product does not change but its representation does, e.g. the personalization of an otherwise standard product
  • Gilmore, James H. (1997b) & Pine, B. Joseph II, Beyond Goods and Services: Staging experiences and guiding transformations, Strategy & Leadership, May/June 1997
  • A clear distinction of five types of economic offerings is made - commodities, goods, services, experiences, and transformations. This echelon of offerings go from lowest value to highest, and from tangible to intangible.
    These distinctly different offerings have significant strategic implications. Experiences and transformations are distinguished from the others in that they are inherently personal, with transformations changing the individual.
    Any type of offering which is not tailored to the individual will eventually be commoditized. The only means to achieve creating new value and receive commensurate revenues is to pursue experiential and transformational offerings tailored to individuals.

    Given that services and experiences are inherently personal in nature, the notion of a market is obsolete and needs to be replaced with the notion of an individual customer.

  • Gilmore, James H. (2000) & Pine, B. Joseph II, Markets of One, Harvard Business Review Book
  • A compilation of Harvard Business Review articles on systems archtiecture, modularity, and mass customization.

  • Gilmore, James H. (2002) & Pine, B. Joseph II, Customer experience places: the new offering frontier, Strategy & Leadership, 30, 4, pp. 4-11
  • The insight that "the experience is the marketing" is an extension of Drucker's (1993) dictum, "The aim of marketing is to make selling superfluous." to which is added, "the aim of experiences is to make marketing superfluous.

    To lend substance to this claim, not only are many examples given but a full location hierarch model identifies the elements and decisions to be made in establishing a full compliment of experiences which do the marketing.

    There are five physical levels and five corresponding virtual levels --

    • Flagship location and flagship site
    • Experience hubs and experience portals
    • Major venues and major platforms
    • Derivative presence and derivative placement
    • World-wide markets and world-wide web
  • Gilmore, James H., (2007), Pine, B. Joseph II, Authenticity - What Consumers Really Want, Harvard Business School Press
  • This truly is a tour de force that deserves the potent descriptors of "groundbreaking" and "defining a management discipline."

    This may be a challenging read, not due to the writing per se, but because of the newness and depth of the subject. Gilmore and Pine's take on authenticity is novel enough that the reader may not have the mental hooks in their management theory framework to immediately hang the new ideas. But this is exactly what I would expect from the definition of a new management discipline.

    The book builds the case for authenticity as a dominate consumer sensibility. From there, the construct framing the realness and fakeness of economic offerings forms the foundation for all that follows. Rendering authenticity takes authenticity out of the realm of ambiguity and into the realm of explicit definition. This process addresses the essence of business-organization identity and the underpinnings of the value of its offerings. The author's approach to rendering authenticity is a uniquely substantive approach to 1) exploring and defining your identity, what it is "you will be true to", 2) defining your total offering "to be what it says it is," and 3) the possibility of joining these two together for greater synergy, forming a more powerful authentic offering.

    The book culminates with an approach to acting into the future. This approach employs the authenticity framework and the juxtaposition process used to understand and render authenticity, but extends it to explore an unlimited number of dimensions to spur the creation of novel value.

  • Gladwell, Malcolm, (2005), blink, Little, Brown
  • The book contains a wealth of information for improving organization decision making. For example, Gladwell's examination of insight is particularly powerful. Organization leaders are often their own worst enemy. Their demand for justification for new ideas often kills these ideas before they have a chance to mature. "Insight is not a light bulb that goes off inside our heads. It is a flickering candle that can easily be snuffed out." This has strong implications for organizations seeking to nurture new ideas for innovation, especially since creative ideas are typically the result of intuitive insight rather than deductive reasoning.

    Our preconceived notions work against making effective decisions without our slightest awareness. These biases prevent people from objectively seeing what is actually right before their eyes, even when they are sincerely attempting to be objective.

    Frugality in decision making matters. Overloading decision makers with information destroys their ability to intuitively pick up the underlying pattern necessary to make effective decisions.

  • Gladwell, Malcolm, (2000), (2002), The Tipping Point, Little, Brown
  • Gladwell's insights into behavior have significant implications for organization design and development, thus strategy. Gladwell's research indicates the convictions of your heart and the actual contents of your thoughts are less important, in the end, in guiding your actions and the immediate context of your behavior.

    • We are more than sensitive to changes in context, we are exquisitely sensitive to them.
    • The power of context is an environmental argument. Behavior is a function of social context.
    • There are specific situations so powerful that they can overwhelm our inherent predispositions... Behavior can be powerfully affected nearly by changing the details of a person situation.
  • Goold, Michael, (2002), Andrew Campbell, Do You Have a Well Designed Organization?, Mar, 2002, HBR
  • Tests of good organization design

  • Greiner, Larry E., (1972), Evolution and Revolution as Organizations Grow, Jul-Aug, 1972, HBR (revised May-Jun, 1998)
  • Greiner, Larry E., (1998), Evolution and Revolution as Organizations Grow, May-Jun, 1998, HBR (revised from Jul-Aug, 1972)
  • As organizations grow and develop over time they move from one state to another. The movement from one state to the next requires a successful 'revolution' of sorts, or the firm will fail to continue developing and growing. The problem solved by each revolution sows the seeds for the next one.

  • Griffin, Douglass, (2002), The Emergence of Leadership - Linking Self-Organization and Ethics, Routledge
  • See Stacey, 2000, for information on the series this book is part of.

  • Guber, Peter, (2007), The Four Truths of the Storyteller, Harvard Business Review, Dec 2007 52-59
  • Peter Guber notes that storytelling is central to business executives and entrepreneurs. Effective storytelling communicates in a way that inspires people to act. Stories that move and captivate people have four essential characteristics; they are true to the teller, the audience, the moment, and the mission.

    • truth to the teller -- Authenticity is a crucial quality of the storyteller. He must be congruent with his story -- his tongue, feet, and wallet must move in the same direction. When you pitch a story, you are selling yourself. Being true to yourself also involves showing and sharing emotion. The spirit that motivates most great storytellers is "I want you to feel what I feel," and the effective narrative is designed to make this happen. That's how the information is bound to the experience and rendered unforgettable.
    • truth to the audience -- There is an implicit contract between the storyteller and his audience. It includes a promise that the listener's expectations, once aroused, will be fulfilled. Listeners give the storyteller their time with the understanding that he will spend it wisely for them. To meet the terms of this contract -- and ideally even over-deliver on it -- the great storyteller takes time to understand what his listeners know about, care about, and want to hear. Then he crafts the essential elements of the story to so that they elegantly resonate with those needs, starting where the listeners are bringing them along on a satisfying emotional journey.
    • truth to the moment -- A great storyteller never tells a story the same way twice.Instead, he sees what is unique in each storytelling experience and responds fully to what is demanded. The context of the telling is always part of the story.
    • truth to the mission -- A great storyteller is devoted to a cause beyond self. That mission is embodied in his stories, which capture and express values that he believes in and wants others to adopt as their own. The story itself must offer a value proposition worthy of its audience.
  • Gupta, Anil K., Tesluk, Paul E., Taylor, M. Susan, (2007), Innovation At and Across Multiple Levels of Analysis, Organization Science, Vol 18, No. 6, November-December 2007, pp 885-897
  • A robust perspective on the phenomena of innovation in organizations.

  • Hagel, John III and Brown, John Seeley, (2005), The Only Sustainable Edge, Harvard Business School Publishing
  • Hamel, Gary (1989) and Prahalad, C. K., Strategic Intent, Harvard Business Review, May 1989
  • Hamel, Gary, (2000), Leading the Revolution, Harvard Business School Press
  • Hamel, Gary, (2002), Leading the Revolution, Harvard Business School Press
  • Contains an excellent business model / business design construct.

  • Hamel, Gary, (2006), The Why, What, and How of Management Innovation, Harvard Business Review, Feb, 2006, pp 72-84
  • Hammer, Michael, (1993, 2001), Champy, James, Reengineering the Corporation - A Manifesto for Business Revolution, Harper Business
  • Hammer and Champy define reengineering, or business reengineering, as "the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed." (2001, pp 35).

    Three "C's" dominate today's business environment -- customers have taken charge, competition intensifies, and change becomes constant. These dominant factors have obsoleted previously successful business structures and operations. Reengineering is called for to rebuild the activities of the firm, focusing those activities on creating and providing more value than ever before while eliminating wasteful activities.

    The most important concept to grasp in reengineering is "process" ... making one's processes the heart of one's organization. (2001, pp 239-240).

    Reengineering creates and organizational environment in which hierarchy is diminished, workers are more skilled, and structures are more flexible. The emphasis in this environment is on work, not on administration. Learning how to work and to manage in such an organization is a critical requirement for harvesting the benefits of reengineering. (2001, pp 245). Following that, change drives reengineering to be a regular activity.

  • Hannan, Michael T. & John Freeman, (1977), The Population Ecology of Organizations, The American Journal of Sociology, Vol. 82, No. 5, (Mar., 1977) pp 929-964
  • A population ecology perspective on organization-environment relations defined. This view comes from the theory that patterns in nature are due to the action of the selection process, therefore patterns of organizations, i.e. organization structure, should primarily be a derivative of the selection process. At the time of this article's publication, most organization literature subscribed to the adaptation view of how organizations come to be defined.

  • Heracleous, Loizos, (2003), Strategy and Organization, Cambridge University Press
  • A great source of knowledge regarding strategic management. Loizos's review of historical approaches and perspectives on strategic management build a strong basis for what he calls the organizational action (OA) perspective. He rightly calls this a framework, rather than a model, as it knits together the complex variables in a logical pattern to define strategic management.

  • Hock, Dee, (1999), Birth of the Chaordic Age, Berrett-Koehler Publishers
  • Joyce, William, Nitin Nohria, Bruce Roberson, (2003), What Really Works: The 4+2 Formula for Sustained Business Success, Harper Collins
  • This work is a report on the Evergreen project, a "statistically rigorous" search for the key to 'evergreen' business success. The findings are that a company that excels in 6 areas will have a better than 90% chance of being a winner. The four areas all companies must excel at are:

    • Strategy -- Devise and maintain a clearly stated, focused strategy
    • Execution -- Develop and maintain flawless operational execution
    • Culture -- Develop and maintain a performance-oriented culture
    • Structure -- Build and maintain a fast, flexible, flat organization

    In addition to the four above, a company must excel at two of the following:

    • talent -- hold on to talented employees and find more
    • leadership -- keep leaders and directors committed to the business
    • innovation -- make innovations that are industry transforming
    • acquisitions and mergers -- make growth happen with mergers and partnerships"

    This research and its conclusions are fraught with difficulties. The authors have not revealed their study methods and their claims are not substantiated by what is presented in the book. Direct requests for that information have been ignored. In addition, the areas of excellence are so broad as to be nearly meaningless.

  • Kaplan, Robert S. and Norton, David P., (2001), The Strategy Focused Organization, Harvard Business School Press
  • Kaplan, Robert S. and Norton, David P., (2004), Strategy Maps, Harvard Business School Publishing Corporation, Boston
  • Kay, John, (1999), Mastering Strategy: Resource Based Strategy, Financial Times, 27Sep1999
  • "The resource based view of strategy has a coherence and integrative role that places it well ahead of other mechanisms of strategic decision making. After thirty years or so, the subject of strategy is genuinely acquiring what can be described as a paradigm - to use the most overworked and abused term in the study of management."

    "The objective of a firm is to increase its economic rent...Economic rent is the measure of the competitive advantage which effective established firms enjoy, and competitive advantage is the only means by which companies in contestable markets can earn economic rents."

    The opportunity for companies to sustain these competitive advantages is determined by their capabilities. The capabilities of a company are of many kinds. For the purposes of strategy the key distinction is between distinctive capabilities and reproducible capabilities.

  • Kay, John, (2004), Culture and Prosperity: The Truth About Markets - Why Some Nations Are Rich but Most Remain Poor, HarperBusiness
  • Kay cites pluralism, true diversity with open debate and decentralized authority as opposed to central planning and homogeneous harmony, as the mechanism that produces economic evolution and growth. The other extremes, strong centralized planning or unrestrained greed and opportunism leads to poor countries, not rich. Kay describes "disciplined pluralism" as the right mechanism.

  • Kay, John, (2006), The Centralized Road to Mediocrity, Financial Times, 28Feb2006
  • "In an uncertain, changing world, most decisions are wrong, and success comes not from the inspired visions of exceptional leaders, or prescience achieved through sophisticated analysis, but through small-scale experimentation that rapidly imitates success and acknowledges failure. This disciplined pluralism is the true genius of the market economy."

  • Kelly, Eamonn, (2006), What's Next? The New Challenges for Business, Business The Ultimate Resource, Basic Books (Ed.), 2nd Edition, 355 - 358
  • A compilation of techniques for thinking, learning, and acting differently in order to build the firm's competitive advantage.

  • Kim, Daniel H. (1994, 2000), Systems Thinking Tools, Pegasus Communications, Inc.
  • This is a booklet describing systems thinking tools such as caual loop diagrams, behavior over time diagrams, and system archetypes.
  • Kim, Daniel H. (1999), Introduction to Systems Thinking, Pegasus Communications, Inc.
  • This is a booklet that provides a good introduction to systems thinking, covering the basics of what a system is, causal loop diagrams, introducing stocks and flows, and a "Levels of Perspective" framework. The perspectives framework is particularily useful to understanding the relationship between the perspectives we have and the actions we take.
  • Knight, Frank H., (1921), Risk, Uncertainty, and Profit, Houghton Mifflin Company
  • Knight distinguished between risk, where outcomes are known and probabilistic, and uncertainty, where the outcomes are not known. "Risk" designates a measurable uncertainty. "Uncertainty" designates an unmeasurable uncertainty. (p 233).

    Risk and uncertainty pose two different challenges to management. Management strives for as much predictability as is reasonably possible, but uncertainty indicates that prediction is futile. This is where rational thinking and methods break down. You cannot plan for scenarios if you don't know the possibilities are, or if you cannot assign a reasonable probability to a possibility.

  • Kotter, John P., (1996), Leading Change, Harvard Business School Press
  • Leadership and management for transforming organizations. An eight stage change process is defined --
    1 - establishing a sense of urgency
    2 - creating a guiding coalition
    3 - developing a vision and strategy
    4 - communicating the change vision
    5 - empowering employees for broad based action
    6 - generate short-term wins
    7 - consolidating gains and producing more change
    8 - anchoring new approaches in culture

  • Kuhn, Thomas S., (1962), The Structure of Scientific Revolutions, University of Chicago Press, 2nd Ed. 1970, 3rd Ed. 1996
  • Kuhn explored social change, how it comes about, using the context of scientific revolutions. He popularized the term paradigm and paradigm shift. Kuhn's book argues that the evolution of scientific theory does not emerge from the straightforward accumulation of facts, but rather from a new metaphor, a new paradigm, that is attractive enough to draw attention away from the established modes of thinking. Change is not linear, not necessarily logical, and rarely from those exposing the dominant discourse of the field of knowledge.

  • Laurel, Brenda, (1993), Computers as Theatre, Addison Wesley
  • A provocative examination of the nature of the human experience with the computer, both what it is and its potential is. The art and structure of drama is proposed as the best analogy for achieving the highest potential of the human-computer interaction. Drama serves as the model for experiences in general and human experiences with computers in particular.

  • Learned, Edmund. P., (1965-1969), Christensen, C. R., Andrews, K. R., and Guth, W. D., Business Policy: Text and Cases (revised edition), Homewood, IL: Irwin
  • Learned et al. echoed Chandler (1962) when they defined strategy as "the pattern of objectives, purposes, or goals and major policies and plans for achieving these goals, stated in such a way as to define what business the company is in, or is to be in and the kind of company it is or is to be" (1965-9:15). They viewed strategy formulation as a process interrelated but practically distinct from strategy implementation, a distinction that has been questioned by strategy scholars, even those aligned with industrial organization economics such as Michael Porter, who has asserted that "there is no meaningful distinction between strategy and implementation, because strategy involves fine-grained choices about how to configure particular activities and the overall value chain" (1999: 25). In formulating strategy, Learned et al. proposed that managers should balance external market opportunity with internal firm competence and resources, managers' personal values and aspirations, and obligations to stakeholders other than the stockholders. Strategy could then be implemented through mobilizing resources, exhibiting leadership, and configuring the appropriate organization structure, incentives, and control system. This broad approach was consistent with that of Chandler (1962), and incorporated Selznick's (1957) concept of "distinctive competence" as well as the idea of an uncertain environment. (From: Heracleous, 2003, pp 4-5).

  • Leslie, Keith J.(1997) & Michaels, Max P., The real power of real options, The McKinsey Quarterly, 1997, Number 3
  • Real options refers to corporate investments that create future opportunities.
    This article explains Net Present Value and Real Options investment valuation techniques side by side.
    "The application of real options steers management toward maximizing opportunity while minimizing obligation" encouraging management to think of each investment opportunity as an initial investment against future possibility. Uncertainty becomes recognizable and useful in decision making rather than something that is unrealistically ignored.
  • Liedtka, Jeanne, (1997), Everything I Need To Know About Strategy I Learned at the National Zoo, The Journal of Business Strategy (Emerald Group Publishing Limited), Vol. 18, 1, January/February, 1997, pp. 8-11
  • Luehrman, Timoth A., (1998a), Investment Opportunities as Real Options, Harvard Business Review, July, 1998
  • This article proposes a method to simplify the calculation of the option pricing associated with an investment decision. The five option variables are combined into two variables which allows for identifying opportunities in a two-dimensional space. The two dimensions are a net present value factor expressed in all positive numeric values greater than zero and a cumulative volatility factor.
    The variables of an investment opportunity are mapped into those of a call option.
    A discussion of how to recognize an option in an investment decision based on the commitments and cash flows is provided.
  • Luehrman, Timoth A., (1998b), Strategy as a Portfolio of Real Options, Harvard Business Review, Sep, 1998
  • Strategies consist of a portfolio of investment options. Many of those options are nested, reflecting the sequence of dependent decisions, where the outcome of one decision will factor into the next.
    Luehrman uses his two dimensional option space (1998a) as the backdrop for a map of investment opportunity characterizations which aid in determining when an investment should be made.
  • Magretta, Joan, (2002), Why Business Models Matter, Harvard Business Review, May 2002
  • Malik, Kenan, (2000), Man, Beast, and Zombie - What Science Can and Cannot Tell Us About Human Nature, Rutgers University Press
  • A masterful work addressing the nature of man. His recap of the history of human nature is comprehensive, even-handed, and highly insightful. This forms the basis for critically examining current theories of human nature, revealing the weaknesses in the predominant thinking with evolutionary theory, sociobiology, evolutionary psychology, and cognitive science.

    Malik reveals the paradox of man as unique, possibly unreachable in understanding through the means of science, which is an invention of man, and man as beast or zombie. The discussion of what science can and cannot explain about human nature is worth the read in and of itself.

    From the back cover: "It deftly interweaves philosophy, science, and history to answer the most fundamental question of all: what is a human being?"

  • March, James G. and Herbert A. Simon, (1958), 2nd Edition 1993, Organizations, Blackwell Publishers
  • March and Simon's book is a seminal book in organization theory. It is a complete management theory. It includes discussions of classical organization theory, decision making, conflict, bureaucracy. Key concepts introduced in this work are:

    1. bounded rationality
    2. satisficing
    3. garbage can model of decision making
    4. uncertainty absorption
    5. problem solving
    6. innovation

    The concepts of this work greatly expanded the notion of what an organization is about and how it functions, well beyond the predominant rational and mechanistic views of organization. Weick and March are associated with moving management theory into the realm of the business/organization as an open system and the people/organization as social, vs. rational, actors.

  • March, James G. and Thiery Weil, (2005), On Leadership, Blackwell Publishing, English Edition, (French Edition, 2003)
  • March, James G., (1991), Exploration and Exploitation in Organizational Learning, Organizational Science, Vol. 2, No. 1, February 1991
  • There are powerful forces which naturally pull organizations towards exploitation of old certainties and away from exploration of new possibilities. Organizations must actively manage to achieve equilibrium between exploration and exploitation to develop and sustain a competitive advantage.

    March's models reveal how organizational learning works - what makes it effective with exogenous turbulence and a varying number of competitors.

    Learning is something to be strategically planned and controlled to enhance the evolutionary capability of the organization. The management of learning produces the returns to knowledge that produce the performance characteristics of the organization that make it competitive in its particular environment and context. For example, in a highly competitive environment, returns to changes in knowledge are greater if it increases the variability of the organizations realized performance than if it increases the expected value (average) of the realized performance.

    Management implications --
    In a turbulent environment with a significant number of competitors, exploration, which brings in an influx of new knowledge from members, new technologies, and cultural diversity all increase the variability of change in knowledge in a positive way, which increases the odds of an organization having a competitive advantage.

  • March, James G., (1994), A Primer on Decision Making - How Decisions Happen, The Free Press
  • A primer of ideas for thinking about how decisions happen. The incisive insights into how decisions actually happen provides a understanding of the extreme difficulty in making intelligent choices. "The idea of decision making give meaning to purpose, to self, to the complexities of social life. It ennobles as it frustrates." (March, 271-212).

  • March, James G., (1996), Continuity and Change in Theories of Organizational Action, Administrative Science Quarterly, 41, 278-287
  • A panoramic overview of organizational action research and theories during the 1900s. This serves to provide an order and perspective useful to those seeking to make sense of the great deal of activity in this arena.

  • March, James G., (1999), The Pursuit of Organizational Intelligence, Blackwell Business
  • A compilation of many of March's past articles and articles of others.

  • March, James G., (2006), Rationality, Foolishness, and Adaptive Intelligence, Strategic Management Journal, 27: 201-214
  • March premise is that business organizations' pursuit of intelligence, the gaining of knowledge, are ordinary tasks. These tasks are in both the exploration and exploitation needed in order for a firm to sustain its competitive advantage. March reflects on the effectiveness of three categories of technology (technology is the application of human knowledge to work. (Drucker, 1985)) in this pursuit of advantage and its renewal.

    Rational technologies --
    There are the well-established rational technologies in common use such as budgeting, planning, TQM, strategic analysis, and management techniques in general. Rational technologies involve three components:

    • abstractions -- models of situations that identify sets of variables, their causal structures, and sets of action alternatives
    • collections of data -- capturing histories of the organization and the world in which it acts
    • decision rules -- that consider alternatives in terms of their expected consequences and select the alternative that has the best expected consequences from the point of view of the organization's values, desires, and time perspectives.

    This technology serves very well as an instrument of exploitation, especially in simple environments, but can be ineffective, even dangerous, applied to exploration or complex problems.

    Feedback-based adaptation technologies --
    These technologies less structured and not as explicitly defined and implemented, but no less common than rational technologies in use in business enterprises. Contemporary theories that emphasize feedback include theories of:

    • experiential learning
    • learning from others (diffusion, imitation)
    • variation/selection

    These theories of feedback-based change over time posit that procedures or attributes associated with successes are more likely to survive or replicate at a more rapid rate than procedures or attributes associated with failures.

    The central requirements of adaptive processes are:

    1. a reproductive process that replicates successes where the attributes associated with survival are reproduced more reliably than the attributes that are not.
    2. that it generate variety that offer opportunities to experiment with new possibilities

    In order to meet these two requirements, adaptive processes engage in activities associated with exploitation - the refinement and implementation of what is known - and exploration - the pursuit of what might come to be known. The character of adaptation is local, contributing to the firm's survival in the short-run but rarely in the long-run. Feedback-based adaptation favors exploitation over exploration, biasing it against risky alternatives. A bias against risk is a bias against exploration.

    Technologies of foolishness --
    Technologies of foolishness are an answer to the need to deliberately induce greater variation in order to supplement exploration beyond what the technologies of rationality and adaptive feedback can provide. These technologies include foolishness, brainstorming, identity-based avoidance of the strictures of consequences, devil's advocacy, conflict, and weak memories.

    Application of the technologies --
    Technologies of rationality are effective instruments of intelligence and exploitation. They work well in situations with simple to moderate complexity. On the other hand, they do not work well for complex problem solving. As a result, unintended exploration produced through the technologies of rationality in complex situations seems to produce more disasters than successful discoveries.

    Adaptation technologies respond to the recorded events of history, not to the underlying distribution of possible events. As a result, they essentially exaggerate the likelihood of what has happened and underestimate the likelihood of what might have happened. Any probabilistic historical process is subject to sampling error in its realizations.

    Rationalist technologies depend on abstract models of reality that reduce the complexity of any particular context to what are believed to be its essential components and relations. The models depend on strong assumptions about the extent to which present knowledge encompasses the causal structure of the world and the preference structures of human actors. Within such abstractions, the forecasts of rational calculation compound so that small errors or oversights multiply into large ones and multiply at an increasing rate as complexity increases. These errors are often costly, even deadly, in their consequences.

    Technologies of rationality are not so much enemies of foolishness and exploration as they are agents of them. The characterization of rationalist technologies as reliable but inhibiting creative imagination probably underestimates the potential contribution of rational technologies to foolishness and radical visions. Besides being seen as simple instruments of exploitation, technologies of rational choice may be seen partly as instruments of exploration where they are dangerous fools, thereby joining the pool of dreamers out of which come great ideas as well as monstrous and idiotic ones.

  • Marcus, Alfred A., (2005), Big Winners and Big Losers: The 4 Secrets of Long-Term Business Success and Failure, Wharton School Publishing
  • This again is a post hoc study of what makes for big winner and big losers in business. Big winners
    1. Occupied sweet spots.
    2. Possessed the ability to move into these spots.
    3. Disciplined themselves to defend their spots.
    4. Exploited and extended their positions.

    Big losers:
    1. Occupied sour spots.
    2. Were rigid.
    3. Could not defend their positions.
    4. Could take advantage of their positions.

    As is typical of this genre of work, it does not address how you make strategy, formulate a competitive advantage, make an effective strategic choice, or explain what a sound choice looks like.

  • McGahan, Anita M. and Michael E. Porter, (1997), How Much Does Industry Matter, Really?, Strategic Management Journal, Vol. 18, Summer Special Issue, 15-30
  • In this study, McGahan and Porter examined the importance of year, industry, corporate-parent, and business specific effects on the profitability of U.S. public corporations, seeking to understand the degree to which each of these factors explain profit variation when industries are defined by the SIC system. This study cover thousands of companies from 1982-1994. The results are as follows --

    • year -- 2 percent, attributable to macroeconomic fluctuations that effect all business segments to the same degree each year
    • industry -- 19 percent, is attributable to stable industry performance
    • corporate-parent -- 4 percent
    • business-specific effects -- 32 percent, attributable to stable the business-segment by SIC code, not business-unit. The authors speculate that the average business segment probably covers many business units. These segment-specific effects encompass all business-segment differences, including diversity in market share, differentiation, heterogeneity in fixed assets, differences in organizational processes, differences in organizational effectiveness, heterogeneity in activity configurations, anomalies in accounting practices, and differences in managerial competence.

    McGahan and Porter concluded that industry did, and still does, really matter --

    • industry accounts for 19 percent of aggregate variation in business-specific profits, and 36 percent of explained variance
    • industry influences the effect of the corporate-parent on business-specific profitability.
    • The absolute and relative influence of industry, corporate-parent, and business-specific effects differs substantially across broad economic sectors in ways which suggest characteristic differences in their industry structural context.
    • (from a related study), they find that industry specific effects are more persistent over time than business-specific or corporate-parent effects
    • In summary, "While organizational differences emphasized by the resource-based view are surely meaningful (and would be included in our estimates of segment-specific differences), it would be misguided to disconnect the influence of organization from the industry and competitive contexts in which firms operate."

    These conclusions are consistent with the strategic need for innovation, finding unique value propositions, and blue-ocean strategies in order to produce economic rents, i.e. outsized returns.

  • McGregor, Douglas, 1960, The Human Side of Enterprise, McGraw-Hill
  • "This volume is an attempt to substantiate the thesis that the human side of enterprise is 'all of a piece' -- that the theoretical assumptions management holds about controlling its human resources determine the whole character of the enterprise." (vi, vii). In contrast to conventional organizational theory of the time, McGregor noted hat authority exists as one of several forms of social influence and control. It is both ambiguous and relative.

    McGregor developed Theory X and Theory Y. Theory X is an assumption of the mediocrity of the masses. It stated that humans dislike work, need to be controlled, and avoid responsibility. Theory Y assumes that humans regard work as play, means other than control guides their efforts, individual rewards align behavior with the purpose of the organization, given the proper learning, humans will seek responsibility, and imagination and ingenuity is wide-spread in humans.

    McGregor's work spawned the human relations school of management, which fell into disrepute, not due to McGregor but his disciples who eschewed the rational model's top-down play and sought a pure bottom-up play. This was a misapplication of McGregor's works, "The assumptions of Theory Y do not deny the appropriateness of authority, but they do deny that it is appropriate for all purposes under all circumstances." (p 56).

  • Mead, George Herbert, (1932), Philosophy of the Present, Prometheus Books, 2002
  • Mead, George Herbert, (1934), Mind, Self, & Society, University of Chicago Press
  • Mead, George Herbert, (1936), Movement of Thought in the Nineteenth Century, University of Chicago Press
  • Mintzberg, Henry, (1981), Organization Design: Fashion or Fit?, Harvard Business Review, Jan - Feb, 1981
  • Defined an organization configuration construct and five particular configurations -- simple structure (entrepreneurial), machine bureaucracy, professional bureaucracy, divisionalized form, and adhocracy. Each has their particular characteristics, strengths and weaknesses. On type should not pretend to be another type, as this incongruity between organization configuration and its function leads to a dysfunctional organization.

    This construct was expanded upon in Henry Mintzberg, 1998, pp 307-309.

  • Mintzberg, Henry, (1987), Crafting Strategy, Harvard Business Review, Jul-Aug, 1987
  • Mintzberg, Henry, (1994), The Rise and Fall of Strategic Planning, Free Press
  • Mintzberg carefully examines the vexing question of how strategy is formed. His clear differentiation between strategy formation and strategic planning are helpful in understanding the actual creation of strategies vs. the planning for those strategies. He contends strategic planning should be called strategic programming based on the fact that it has little if anything to do with the formation of strategy. He clearly delineates the difference between deliberate and emergent strategy formation while explaining the need to respect both methods. His "black box" of strategy creation, where human intuition works in yet unknown ways, provides insights in how to support and improve a process one cannot hope to fully understand.
  • Mintzberg, Henry, (1998), Ahlstrand, Bruce, and Lampel, Joseph, Strategy Safari, The Free Press, New York
  • Mintzberg, Henry, (2005), Ahlstrand, Bruce; and Lampel, Joseph, Strategy Bites Back, Pearson Prentice Hall, Upper Saddle River, New Jersey
  • Mintzberg, Henry, (2007), Tracking Strategies...Towards a General Theory, Oxford University Press
  • Montgomery, Cynthia A. ed., (1995), Resource-Based and Evolutionary Theories of the Firm: Towards a Synthesis, Kluwer Academic Publishers
  • Contents --

    1. An Exploration of Common Ground: Integrating Evolutionary and Strategic Theories of the Firm
      Nicolai J. Foss, Christian Knudsen, Cynthia A. Montgomery
    2. Strategic Management and the Exploration of Diversity
      Daniel A. Levinthal
    3. Competitive Advantage and Industry Capabilities
      Nicolai Juul Foss and Bo Eriksen
    4. Capabilities and Coherence in Firms and Markets
      Richard N. Langlois
    5. Inertia and Transformation
      Richard P. Rumelt
    6. Resource-Based Strategy in a Stochastic Model
      Birger Wernerfelt
    7. Four Rs of Profitability: Rents, Resources, Routines and Replication
      Sidney G. Winter
    8. Theories of the Firm, Strategic Management, and Leadership
      Christian Knudsen
    9. Business Strategy from the Population Level
      John Freeman
    10. Of Diamonds and Rust: A New Look at Resources
      Cynthia A. Montgomery
  • Moore, Geoffrey A., (2005), Strategy and Your Stronger Hand, Harvard Business Review, December, 2005, Vol. 83, No. 12, pp.62-72
  • Morgan, Gareth, (2006), Images of Organization, Sage Publications, (1st Edition, 1986).
  • Morgan shows (a) how different metaphors give rise to different theories of organization and management, (b) how an understanding of the process can help us master the strengths and limitations of different viewpoints, and (c) how we can use this knowledge to become more effective leaders and managers. Morgan presents eight very different metaphorical perspectives on how organization -- drawing out their strengths, limitations, and implications for practice. His aim is to give practical demonstration of the power of metaphor and how it can be sued to generate deep understandings of the nature of organizations and organizational life. (pp. xi). The metaphorical perspectives are --

    • organizations as machines
    • organizations as organisms
    • organizations as brains
    • organizations as cultures
    • organizations as political systems
    • organizations as psychic prisons
    • organization as flux and transformation
  • Mourkogiannis, Nikos, (2006),Purpose, The Starting Point of Great Companies, Palgrave Macmillan, 2006
  • Purpose is the most fundamental factor in the definition and success of a business organization.

  • Nadler, David A. and Michael L. Tushman, (1997), Competing by Design - The Power of Organizational Architecture, Oxford University Press
  • The authors present their view of organizational architecture, strategy, and performance. They present a Congruence Model for diagnosing organizational behavior.

    • The Congruence Hypothesis - the greater the total degree of congruence, of fit, among the various components, the more effective the organization will be. Put another way, the degree to which the strategy, work, people, structure, and culture are smoothly aligned with determine the organization‚Äôs ability to compete and succeed.
    • Concept of congruence - congruence is how well pairs of components fit together. The Congruence Model focuses primarily on the relationships and interactions among the components within the organization and on the ways in which those relationships affect performance and output. The `level of congruence` is the degree to which the needs, demands, goals, objectives, and/or structures of one component are consistent with those of the other.
  • Nag, Rajiv, (2007), Donald C. Hambrick, and Ming-Jer Chen, What Is Strategic Management Really? Inductive Derivation of a Consensus Definition of the Field, Strategic Management Journal, 28, 935-955
  • The authors' conclusion: "The field of strategic management deals with the major intended and emergent initiatives taken by general managers on behalf of owners, involving utilization of resources, to enhance the performance of firms in their external environments."

  • Nelson, Richard R. (1982), Winter, Sidney G., An Evolutionary Theory of Economic Change, Belknap Press of Harvard University Press
  • Nelson and Winter formalized an evolutionary economic theory of the firm. This defined a discipline around the Schumpeterian idea of creative destruction. They construct an evolutionary framework that incorporates innovation (variation, mutation), the firm as a knowledge-bearing entity (heredity), and market selection.

    This theory is a theory of industries with a heavy emphasis on the selection environment and less emphasis on the firm. Some of their later publications became more firm oriented.

  • Newbert, Scott L., (2008), Value, Rareness, Competitive Advantage, and Performance: A Conceptual-Level Empirical Investigation of the Resource-Based View of the Firm, Strategic Management Journal, Vol. 29, No. 7, pp 745-768
  • This work is both a clear expression of the resource-based view of strategy and research that supports the theory. The key findings, in line with the theory, is that it is the combination of resources and capabilities, not either one independently, which leads to a performance advantage. Performance advantage results when valuable and rare combinations of resources and capabilities are applied to reduce costs, exploit market opportunities, and/or neutralize competitive threats. The results did not vary by firm size.

    For the practitioner, this means that even ordinary resources and capabilities combined in unique ways to achieve advantage can result in a performance advantage. This means that opportunities for advantage exist for new firms, old firms, large and small firms.

  • Noebel, David A., (2006), Understanding the Times, Summit Press
  • A comprehensive examination of six major worldviews.

  • O'Connor, Joseph (1997) and McDermott, Ian, The Art of Systems Thinking, Thorsons
  • Joseph O'Connor and Ian McDermott have done a masterful job of making systems thinking accessible. The book is an easy read while it addresses the fundamentals of what systems thinking is and why it is so important for our understanding of the world and essential for effective decision making.

  • O'Reilly III, Charles A. and Michael L. Tushman, (2004), The Ambidextrous Organization, Harvard Business Review, April, 2004
  • Ogilvy, James, (2003), What Strategists Can Learn from Sartre, strategy+business, Winter 2003, pp 2-10
  • Ogilvy provides a construct for an authentic strategy based on existential philosophy.

  • Olson, Matthew S. and Derek Van Bever, (2008), Stall Points, Most Companies Stop Growing -- Yours Doesn't Have To, Yale University Press
  • Olson and Van Bever (2008) studied Fortune 100 size firms, looking at revenue, margin, and market value data from 1950 - 2006. During this time there were 503 companies that met the size criterion and were either U.S based or based outside the U.S but had a trading history in the U.S. Of the 503 firms, 82% were U.S. based, 18% outside the U.S. Eighty-seven percent of the companies suffered growth stall points (436). Seventy-six percent of the total (379) did not return to significant growth, i.e. 6 percent real rate of growth from the period following the stall until the present day. Eleven percent of the total stalled and resumed significant growth (57). Thirteen percent l (57) had continuous significant growth, many of these companies being in their first growth run. (pg16, 20-21, 193-194).

  • Penrose, Edith, (1959), The Theory of the Growth of the Firm, Oxford, revised edition 1995
  • This is credited as the seminal work in the 'resource-based' school of strategy and competitive advantage. Knowledge creation within the company is identified as critical to the ability of a firm to grow.

  • Penrose, Edith, (1995), The Theory of the Growth of the Firm, Oxford, originally published in 1959
  • This is a seminal work characterizing the firm as a collection of productive resources rather than a set of product-market positions. This serves as a foundational work for the resource-based view of the firm and resource-based strategic management. The resource-based school was further enriched by Wernerfelt (1984), Barney, and others. This resource-based view also complements the evolutionary view of the firm, followed by dynamic capability theory.

  • Peters, Thomas J., (1982) and Waterman, Robert H. Jr., In Search of Excellence, Harper & Row
  • Likely the most influential business book of the 1980s. Peters and Waterman (1982) sought to anecdotally identify what makes firms excellent. Their selection process resulted in 43 firms they identified as excellent. They identified eight key attributes that distinguished these firms as excellent and `validated' this excellence through long-term superior performance of these firms -- "enviable records of growth, innovation, and consequent wealth" (p 200). The eight attributes are identified as:

    1. A bias for action - an action orientation. Spontaneous interactive communication of the parties with an interest in the topic of discussion.
    2. Close to the customer - companies driven by their customer-oriented obsession more, if only slightly more, than an obsession with cost or technology.
    3. Autonomy and entrepreneurship - the ability to be big and act small at the same time. Excellent companies encourage the entrepreneurial spirit among their people, pushing autonomy remarkably far down in the organization.
    4. Productivity through people - the one key to a people orientation is trust. Treat people as adults, with respect, with dignity, and treat them as the primary source of productivity gains. Treat your workers as your most valuable asset.
    5. Hands-on, value driven - pay explicit attention to values, what is important to the firm and what it stands for. Take the process of value shaping seriously.
    6. Stick to the knitting - organizations that do branch out, but stick very close to their current competencies, outperform the others.
    7. Simple form, lean staff - size brings complexity, success requires an understandable organization. Stability and simplicity in organization brings clarity, focus, and purpose to the members of the organization. The three prime needs of an organization are efficiency, innovation, and responsiveness to threats. The three pillars of organizing mirror these requirements. Stability -- a simple, consistent, underlying form and enduring values-- is associated with efficiency. Entrepreneurial, "small is beautiful," is associated with adaptiveness and innovation. Habit-breaking brings regular reorganization to tackle challenge in a new way, including temporary thrusts.
    8. Simultaneous loose-tight properties - a synthesis of the above attributes. Many of the above traits focus on the positive, trying things out in a slightly disorderly (loose) fashion. The tightness comes from the culture, values, and beneficial habits that are a form of tight control.

    The implication is that these attributes sustain the high level of performance of these excellent firms. Though these attributes are very likely "right," they do not have good performance prediction value. The technique Peters and Waterman used is poor science, as has been borne out by the lack of success, and often outright failure or disappearance, of many of the excellent firms within a few years of publishing their book. More than half of the excellent firms underperformed the market in the 5 and 10 year periods after the study. Thirty of them had profit decreases in the five years following the study.

    On the other hand, In Search of Excellence has great insights into organizations, organization theory and management theory.

  • Pettigrew, Andrew M., (1987), Context and Action in the Transformation of the Firm, Journal of Management Studies, 24:6 November 1987
  • The approach in this article, therefore, is to conceptualize major transformations of the firm in terms of linkages between the content of change and its context and process and to regard leadership behaviour as a central ingredient but only one of the ingredients, in a complex analytical, political, and cultural process of challenging and changing the core beliefs, structure, and strategy of the firm. (Pettigrew, 1987, pp 650)

    "There is no pretence to see strategic change as a rational analytical process of analysing environments, resources, and gaps, revealing and assessing strategic alternatives, and choosing and implementing carefully analysed and well thought through outcomes (Andrews, 1971; King and Cleland, 1978). Rather, in the manner of Bower (1970), Mintzberg (1978) and Burgelman (1983) the transformation of the firm is seen as an iterative, multilevel process, with outcomes emerging not merely as a product of rational or boundedly rational debates, but also shaped by the interests and commitments of individuals and groups, the forces of bureaucratic momentum, gross changes in the environment, and the manipulation of the structured context around decisions. Taking this view the focus of attention is on seeing change as a multilevel and continuous process in context, where leadership is expressed through understanding and tactical skill as well as the purposive force of mobilizing often imprecise and inarticulate visions, which are used to challenge dominating beliefs and institutional arrangements." (Pettigrew, 1987, pp 658).

  • Pettigrew, Andrew M., (1987), Context and Action in the Transformation of the Firm, Journal of Management Studies, 24:6, November, 1987, pp 649-670
  • The subject of this work is the leadership involved in translating executive intentions into realized change. Pettigrew is critical of much of the published literature on leadership leadership, explaining how it lacks the rigor to make legitimate claims about leadership.

    Context is critical to the interpretation of organizational change. The context of the times, the firm, the leader, the observer doing the research, etc. All of these factors enter into the transformation before even considering the actions of the leader leading the transformation. "The approach in this article, therefore, is to conceptualize major transformations of the firm in terms of linkages between the content of change and its context and process and to regard leadership behaviour as a central ingredient but only one of the ingredients, in a complex analytical, political, and cultural process of challenging and changing the core beliefs, structure, and strategy of the firm." Understanding the "richness" of the factors involved in transformation quickly makes on skeptical of the works claiming to have identified the critical elements of transformational leadership.

    This is one of those articles any student of management should read in order to further develop their discernment regarding those who claim to have answers for such subjects as leadership, organization, advantage, and transformation.

  • Pine, B. Joseph II, (1993), Mass Customization, Harvard Business School Press
  • Pine, B. Joseph II, (1998), and Gilmore, James H., Welcome to the Experience Economy, Harvard Business Review, July, 1998
  • Experiences are defined as a distinctly different economic offering than services.

    The characteristics of experiences are defined by the Four Realms of Experience model, which defines experiences based on active or passive participation and connection, or the environmental relationship, that unites the customer with the event or performance, absorption or immersion. Using these two dimensions, the following four types of experiences are defined: 1- education is active participation and absorptive, 2- Entertainment is absorptive and passive participation, 3- Esthetic is immersive and passive, and 4- Escapist is immersive and active.

    The design of experiences becomes as critical to a business as any other sort of product design. Five key principles for designing experiences are -- theme the experience, harmonize impressions with positive cues, eliminate negative cues, mix in memorabilia, and engage all five senses.

  • Pine, B. Joseph II, (1999), and Gilmore, James H., The Experience Economy, Harvard Business School Press
  • The Experience Economy is truly a work of art. It is one of those rare books that provide insight, perspective, illumination, and rich content together in a unified framework. The book thoroughly explains the nature of an experience offering, clearly differentiating it from a service. Understanding your business as an experience provider can radically shift your thinking about the value of your economic offering... and your understanding of what your customers value.

    Work is theatre. Every time an employee is in front of a customer they are acting...whether they know it or not.

    As the higher value economic offerings of experiences and transformations come to dominate the economy, the understanding of experiential and transformational offerings becomes more critical. As individual buyer's needs are targeted by company offerings, the notion of a market of fictional average people gets replaced by individual buyers. The elimination of customer sacrifice requires the customizing of each offering to a specific customer's needs. Customizing goods turns goods into services, customizing services turns them into experiences, and customizing experiences turns them into transformations.

    Though the book focuses on "experiences" as a distinctive economic offering, it also provides a comprehensive framework for understanding all economic offerings. The insights from the progression of economic value and the characteristics of each offering provide a frame of reference for assessing your current business and stimulating strategic discussion of what it might be.

    Pine and Gilmore take great care in defining the five economic offerings -

    • Commodities
    • Goods
    • Services
    • Experiences
    • Transformations
    Each level is of greater value than the prior level. Tailoring offerings to reduce customer sacrifice adds value and moves the offering up the progression of value. At the same time, offerings are continually commoditized to bring greater value going the other direction.

    The distinguishing factors of each offering are explicitly defined and reinforced throughout the text. These offerings are a progression. They build upon one another. For example, at the transformation level where the customer is the offering, guiding transformations can be explained in three basic steps:

    1. diagnosing aspirations, with characteristics of a service,
    2. staging experiences, to bring about the transformation, and
    3. follow-through, to sustain the transformation.

    Towards the end a terrific thought provoker -- "Who or what does your business glorify?" What a thought provoker!

  • Pine, B. Joseph II, (2000), and Gilmore, James H., Satisfaction, sacrifice, surprise: three small steps create one giant leap into the experience economy, Strategy & Leadership, 28, 1, pp 18-23
  • Pontin, Jason, (2006), 10 Ways to Think about Innovation - What successful young technologists know, Technology Review, Sept/Oct 2006, pp 10
  • A brief editor's note about 10 distinguishing attributes of innovators.

  • Pontin, Jason, (2008), The Geography of Innovation, Technology Review, Jan/Feb 2008, pp 10
  • A brief editor's note on the definition of innovation. Innovation as a discomforting novelty employed in processes or offerings which disrupts our way of doing things, possibly creating entirely new ways of doing things. Innovation is cited as expanding human possibilities and it the single most important cause of economic growth.

  • Porter, Michael E., (1980), Competitive Strategy, Techniques for Analyzing Industries and Competitors, The Free Press
  • Porter adapted concepts from a type of industrial organization economics to the analysis of threats and opportunities in a firm's competitive environment. Before Porter, the analysis of a firm's competitive environment was not well structured and involved generating long idiosyncratic lists of threats and opportunities facing the firm. (From: Barney, Jay B., (2007), Gaining and Sustaining Competitive Advantage, 3rd Edition, Pearson Education, pp xi).

    Barney attributes this book and Rumelt's Strategy, Structure, and Economic Performance (1974) as signaling the beginning of the evolution of the field of strategic management from its pre-academic stage to a modern, discipline-based research field.

    Porter also introduced three generic strategies as the means to achieve competitive advantage -- in fact, as the only means. These strategies are two industry-strategies of differentiation, providing uniqueness to customers, and overall cost leadership, a low cost position. In addition, there was a third generic strategy that only applies to particular market segments called focus, with that focus being either differentiation or cost leadership. Porter advocates that a firm can only pursue on generic strategy, otherwise they will get "caught in the middle", and not be able to perform any one of them as well as a firm that focuses on one.

  • Porter, Michael E., (1985), Competitive Advantage, Creating and Sustaining Superior Performance, The Free Press
  • Porter provides his ground-breaking value-chain framework as a means to assess and design competitive advantage. This is one of the books greatly contributing to the discipline of strategic management. The value chain is both a framework and tool for understanding and analyzing a firm's internal activities, as opposed to the firm's external environment in Competitive Strategy (Porter, 1980). This framework enabled the representation of the flow of activities that produce value in the customer offering. The effectiveness and configuration of the value adding competencies in the firm's activities is a key to competitive advantage. Though Porter is generally associated with the positional view of strategy, as part of industrial organization economics, this work clearly delves into the resource-based view of organizational economics.

  • Porter, Michael E., (1987), From Competitive Advantage to Corporate Strategy, Harvard Business Review, May-Jun, 1987
  • Porter, Michael E., (1991), Towards a dynamic theory of strategy, Strategic Management Journal, Vol 12, 95-117
  • A review of the progress-to-date towards developing a truly dynamic theory of strategy.

    Some highlights -- Porter provides four basic issues that a theory of strategy needs to deal with in order to be legitimate, an insightful view of approaches to strategy theory formation based on either models or frameworks, and a discussion of competitive advantage.

  • Porter, Michael E., (1996), What is Strategy?, Harvard Business Review, Nov-Dec, 1996
  • Prahalad, C.K., (1990), and Hamel, Gary, The Core Competence of the Corporation, Harvard Business Review, May-June, 1990
  • This is a groundbreaking article on the source of competitive advantage from a organizational economics, resource-based view, of strategy. Prahalad and Hamel's view of the corporation as a portfolio of core competencies as opposed to a portfolio of businesses was radical at the time. This view greatly bolstered the resource-based view of the firm (Wernerfelt, 1984) as part of organizational economics. Successful organizations are those that reinvent industries and create new opportunities, rather than fighting over pieces of existing opportunities.

    Barney states that this is the all-time best selling reprint at Harvard Business Review. (Barney, Jay B., (2007), Gaining and Sustaining Competitive Advantage, 3rd Edition, Pearson Education, pp xii).

  • Raynor, Michael E., (2007), Solving the strategy paradox: how to reach for the fruit without going out on a limb, Strategy & Leadership, Vol. 35, No. 4, pp 4-10
  • The paradox of strategy is that "vigorous pursuit of a bold vision and hard-to-reverse commitments to specific strategic postures connected to identifiable core competencies" in pursuit of high returns are associated with higher rates of failure. Focused, or pure, strategies are not as robust in terms of firm survival, as strategies with multiple focuses, or hybrid, strategies. This fits with the notion that investments producing higher returns also have higher risk.

    The solution to this paradox is to separate the levels of the hierarchy of the by time horizons associated with decisions made at that level. This idea is from Elliot Jaques, a Canadian organizational psychologist.

    The paradox solution is then an organizational design principle, called Requisite Uncertainty, that separates the process of making strategic commitments form managing the risk created by those commitments. This frees up the business unit manager to focus on the business itself, achieving higher performance, while managing the risk of pursuing that business rests at the corporate and board level. The strategic options managed at the highest level create value by reducing risk. The strategic commitments at the business unit level create value by besting competitors and delivering on plan to generate the cash that keeps the organization going.

  • Richmond, Barry (2000), The "Thinking" in Systems Thinking, Pegasus Communications, Inc.
  • This is a booklet that provides a comprehensive overview of seven systems thinking skills. These skills include the thinking types of dynamic, system-as-cause, forest, operational, closed loop, quantitative, and scientific.
  • Roberts, John, (2004), The Modern Firm - Organizational Design for Performance and Growth, Oxford University Press
  • An excellent compilation of knowledge regarding strategy and organization. Organization design factors are clearly and comprehensively covered.

  • Romer, Paul M., (1990), Endogenous Technological Change, Journal of Political Economy, vol. 98, no. 5 pt.2, S71-S102
  • Economic growth results from technological change. The technological changes are due to people (entrepreneurs?) responding to market incentives. Knowledge becomes more valuable the more knowledge there is. Knowledge has increasing returns, not diminishing returns. Incentives to innovate result in more knowledge, technological change, and economic growth.
  • Romer, Paul M., (1994), The Origins of Endogenous Growth, The Journal of Economic Perspective, Vol. 8, Issue 1, Winter 1994, 3-22
  • Monopoly profits motivate discovery...motivate innovation. Technology advances from things people do -- thus the aggregate rate of discovery in an economy is endogenous. This article lends support for Schumpeter's emphasis of the importance of temporary monopoly power as a motivating force in the innovation process.
  • Rosenzweig, Phil, (2007), The Halo Effect, Free Press
  • Rosenzweig brings to light where our natural thinking tendencies fail us in developing truthful understanding of phenomena and make us suckers for narratives and blind to the facts. The Halo Effect is the tendency to make inferences about specific traits on the basis of a general impression. It is difficult for most people to independently measure separate features. This effect is the result of our strong tendency towards inductive thinking. The halo effect is a way for the mind to create a coherent & consistent picture . We tend to take what appears to be objective and make attributions about other features that are more vague and ambiguous.

    Including the Halo Effect, Rosenzweig defines nine delusions that deceive managers. This keeps them in the dark, but because of the delusions, they are confident of what they believe. The other delusions include correlation and cause and causality, single explanations, connecting the winning dots, rigorous research, lasting success, absolute performance, wrong end of the stick, and organizational physics.

    These effects are embedded in business blockbuster books that purport to convey truth about how organizations should pursue and sustain advantage. At the same time, these delusions go largely unrecognized by managers due to their lack of training, discernment, and critical thinking. These same managers are then also suckers for good narrative stories, because they simplify (over simplify) the complex, creating an easily remembered pattern. Stories appeal to our intuition, our need to act in complex and ambiguous environments, and help us make sense of our lives and experiences in the world.

    Strategic thinking -- anyone serious about developing their strategic thinking skills needs to understand these delusions, work to eliminate them from their own perceptions, and recognize them in those who purport to offer advise or prescriptions regarding strategy, leadership, and management.

    Related works -- This book is complemented by Denrell's Random Walks and Sustained Competitive Advantage and Wiggins & Ruefli's, Sustained Competitive Advantage... and Schumpeter's Ghost.... It also ties in with understanding how humans tend to think, and their difficulty with probabilistic events, as revealed in Talib's The Black Swan and Douglas's Trading in the Zone.

  • Rumelt, Richard P. (1974), Strategy, Structure, and Economic Performance, Harvard University Press
  • Rumelt took ideas that had been explored by business historians and scholars to develop a theory of explaining conditions under which corporate diversification strategies could add economic value to the firm, as well as a model describing organizational structure firms would need to realize the potential value of a diversification effort. Before Rumelt, discussions of corporate strategy were mired in not very rigorous discussions of synergy and the appropriate level of centralization and decentralization. After Rumelt, the kind of product relatedness needed to achieve economies of scope was described and the specific organizational structure needed to realize these economies was detailed. Rumelt had begun to provide a theoretical structure for analyzing some critical components of he corporate-level strategy formulation and implementation problem. (From: Barney, Jay B., (2007), Gaining and Sustaining Competitive Advantage, 3rd Edition, Pearson Education, pp xi).

    Barney attributes this book and Porter's Competitive Strategy (1980) as signaling the beginning of the evolution of the field of strategic management from its pre-academic stage to a modern, discipline-based research field.

  • Rumelt, Richard P., (1981), Towards a Strategic Theory of the Firm. In Competitive Strategic Management, Lamb, Robert Boyden (ed.), (1984), Prentice-Hall, 556-570
  • "By viewing strategy as entrepreneurship that both depends upon and creates interfirm heterogeneity, I have generated a number of propositions concerning the behavior of populations of firms. I have also drawn implications for normative theory."

    Rumelt has a Schumpeterian view of business economics. He empirically identifies those aspects of general management that have material effects on the survival and success of business enterprises based on field studies of business firms and the historical analysis of the evolution of business enterprises. With his theory of uncertain imitability and causal ambiguity, he finds entrepreneurship generates firm heterogeneity as an outcome rather than as a given. There are several implications of this. One is related to the size of the firm, as entrepreneurs seek to enter and create new markets, rather than diversifying to reduce the risk of bankruptcy. (Korn - firms that play to win win-out over firms that play to not lose).


    Rumelt identifies sources of potential rents and the mechanisms that isolate those sources from potential competitors. Lastly, he identifies the normative implications of his theory.

  • Rumelt, Richard P., Dan E. Schendel, and David J. Teece, Editors, (1994), Fundamental Issues in Strategy - A Research Agenda, Harvard Business School Press
  • A compilation of twenty-two of the most influential strategy thinkers that provides a comprehensive look at the "intellectual backbone" of the field. Out of this look comes a research agenda for then next 10 years (1994 - 2004).

  • Sanchez , Ron and Mahoney, Joseph T., (2003), Modularity, Flexibility, and Knowledge Management in Product and Organizational Design - Commentary, in Raghu Garud, Arun Kumaraswamy, and Richard N. Langlois, Eds, Managing in the Modular Age, Blackwell Publishing, 2003
  • Sanchez, Ron and Mahoney, Joseph T., (1996), Modularity, Flexibility, and Knowledge Management in Product and Organizational Design, Strategic Management Journal, 17, pp. 63-76
  • Sandberg, Kirsten D., (2002), Is It Time to Trade In Your Business Model?, Harvard Management Update, Jan, 2002 Vol. 7, No. 1
  • Schilling, Melissa A., (2000), Toward a General Systems Theory and Its Application to Interfirm Product Modularity, Academy of Management Review, 25:2, pp. 312-34
  • Schneider, Benjamin, (2003), Paul J. Hanges, D. Brent Smith, and Amy Nicole Salvaggio, Which Comes First: Employee Attitudes or Organizational Financial and Market Performance?, Journal of Applied Psychology, Vol. 88, No. 5, 836-851
  • This is a longitudinal study of 35 companies over 8 years. From this approach, legitimate indications of cause-and-effect can be surmised. This study found that overall job satisfaction and satisfaction with security were predicted by return-on-assets and earnings-per-share more strongly than the reverse.

    This finding points out the invalid conclusions and erroneous cause-and-effect assumptions made from cross-sectional and ex post facto studies where these type of factors are often cited as the reason for outstanding performance, rather that the result.

    Rather than seeking to produce the culture that produces results, maybe managers should focus on producing the results that produce the culture.

  • Schoemaker, Paul J. H., (1995), Scenario Planning: A Tool for Strategic Thinking, Sloan Management Review, Winter, 1995, pp. 25 - 40
  • Schoemaker shows how scenario planning produces strategic insights from identifying trends and uncertainties and rigorously constructing scenarios. This process helps to improve decision making, especially avoiding the decision making problems of tunnel vision and overconfidence.

  • Schrey√∂gg, Georg, (1987), and Horst Steinmann, Strategic Control: A New Perspective, Academy of Management Review, Vol 12, No. 1, Jan 1987, pp 91-103
  • Schrey√∂gg, Georg, (2007), and Martina Kliesch-Eberl, How Dynamic Can Organizational Capabilities Be? Towards a Dual-Process Model of Capability Dynamization, Strategic Management Journal, Vol 28, No. 9, Sep 2007, pp 913-933
  • The authors address a key strategic management issue. In the resource-based view organizational capabilities have been identified as one major source for the generation and development of sustainable competitive advantages (emphasis added). With the consideration of volatile markets, environmental uncertainty, and change, the reliance on a specific set of nurturing capabilities has been called into question. This question has been answered with some form of dynamic capabilities, where the capability itself is dynamic, adapting to take advantage of the changing environment, thereby renewing organizational capabilities.

    Capabilities described --
    In this discussion, capability does no represent a single resource in concert with other resources such as financial asset, technology, or manpower, but rather a distinctive and superior way of allocating resources. The complex processes that form organizational capabilities are conceived as collective and socially embedded in nature, representing a collectively shared 'way of problem solving' (Cyert and March, 1963).

    the primary characteristics of capabilities are --

    • Capabilities are conceptualized in the context of collective organizational problem-solving. These capabilities are attributed to outstanding skills that have proved to solve extraordinary problems. Theses problems are described as complex. Complexity refers to the characteristics of problem situations and decision making under uncertainty, addressing ambiguous, ill structured tasks.
    • Capabilities are close to action; conceptually they cannot be separated from acting or practicing
    • A capability must work in a reliable manner. Capabilities represent a reliable pattern: a problem-solving architecture composed of a complex set of approved linking or combining rules -- proved to be successful across various situations.

    Time is a basic dimension of capabilities. Capabilities development takes time and the specific way in which time has taken is relevant for the gestalt of a capability -- its configuration or pattern having specific properties that cannot be derived from the summation of the component parts.

  • Schumpeter, Joseph A., (1942), Capitalism, Socialism, and Democracy, Harper Perennial, 1976
  • Schumpeter theorized that profit motivates the innovation which is the precursor to creative destruction that is the key to his theories. Profit is "the premium put upon successful innovation in a capitalist society and is temporary by nature: it will vanish with subsequent process of competition and adaptation."

    Schumpeter's key points --

    • evolutionary economics -- "...in dealing with capitalism we are dealing with an evolutionary process." (pp 82)
    • fundamental economic impulse -- "The fundamental impulse that sets and keeps the capitalist engine in motion comes form the new consumers' goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates." (pp 83)
    • creative destruction -- "...industrial mutation...incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process or Creative Destruction is the essential fact about capitalism." (pp 83)
    • essential problem for economics -- "...the problem that is usually being visualized is how capitalism administers existing structures, whereas the relevant problem is how it creates and destroys them." (pp 84)
    • business organization optimization -- "A system - any system, economic or other - that at every given point of time fully utilizes its possibilities to the best advantage may yet in the long run be inferior to a system that does so at no given point of time, because the latter's failure to do so may be a condition for the level or speed of long-run performance." (pp 83)
  • Scott, W. Richard and Gerald F. Davis, (2007), Organizations and Organizing - Rational, Natural, and Open Systems Perspectives, Pearson
  • Selznick, Philip, (1957), Leadership in Administration - A Sociological Interpretation, Harper & Row, California Paperback Edition, 1984
  • Selznick's concepts include distinctive competency and mission as essential elements of successful organizations. Organizations are organic and leadership transcends mere efficiency. Selznick's distinctive competence became a central concept of the resource-based view of the firm (Wernerfelt, 1984), a key development within organizational economics.

  • Semler, Ricardo, (1993), Maverick, Warner Books
  • Semler, Ricardo, (2003, 2004), The Seven-Day Weekend, Portfolio
  • A radically innovative way to manage a company for flexibility and performance in highly competitive industries.
  • Senge, Peter M., (1990), The Fifth Discipline, The Art & Practice of The Learning Organization, Doubleday
  • Effective inquiry is essential for organizational teams to confront complex issues. These issues may be embarrassing or threatening, thus the discipline of team learning must be explicitly developed and exercised. Managers may find collective inquiry threatening because it brings out the thinking, facts, and rationale behind the opinions and calls for action by managers. This is process of revealing thought is necessary for the collective and individual learning. Inquiry is often not rewarded, whereas advocacy, the ability to debate forcefully and influence others is regularly rewarded, thus encouraged. Where advocacy prevails, learning does not. As managers rise to higher-level positions, they must deal with problems that are more complex. They need to learn. They need to tap into the insights of others. Since advocacy closes off learning from one another, the very skill that got the manager to where they are at becomes counterproductive in dealing with the complex problems they are now facing.

    Senge identifies systems thinking as essential to addressing complex problems.

  • Shaw, Patricia, (2002), Changing Conversations in Organizations - A Complexity Approach to Change, Routledge
  • See Stacey, 2000, for information on the series this book is part of.

  • Sidhu, Jatinder S., Harry R. Commandeur, Henk W. Volberda, (2007), The Multifaceted Nature of Exploration and Exploitation: Value of Supply, Demand, and Spatial Search for Innovation, Organization Science, Vol. 18, No. 1, January-February 2007, pp. 20-38
  • An explanation of three dimensions of exploration and exploitation and their innovation payback under low and high dynamic contexts.

  • Simon, Herbert A., (1957), Models of Man - Social and Rational, New York: Wiley
  • Singer, E. A. Jr., (1959), Experience and Reflection, C.W. Churchman, ed., University of Pennsylvania Press
  • Systems and organizations that use metrics practice Singerian inquiry. Accounting systems are perhaps the sine qua non of measurement, as every enterprise must have one. However, accounting systems measure only the financial health of the firm. To understand and explain the organization fully, it is necessary to "sweep in" variables from a wide variety of sources both inside and outside organizational boundaries. Managers in a Singerian organization should develop measurement standards, continuously compare organizational performance to those standards, and modify models of performance as is required to achieve the standards.

    The Singerian organization has the purpose of creating knowledge for choosing the right means for one's end. Knowledge must be connected to measurable improvements. Measures of performance are judged not only by organizational standards, but also by what is good for all society. Inconsistent measurement results of a system brings up the issue of the issue of what to do about it. There are three possibilities: 1) revise the hypothesis by adding new variables, or changing the functional form of the hypothesis, 2) revise the procedure of adjusting the readings, or 3) tolerate the inconsistency until more evidence is available. The first possibility changes the measurement system's view of the world. Singer described a "sweeping in" process consisting of bringing variables and their laws to a catalog of opportunities with the intention that a Singerian inquiring system must encompass the whole breadth of inquiry in its attempt to authorize and control its procedures.

  • Skarzynski, Peter and Rowan Gibson, (2008), Innovation to the Core, A Blueprint for Transforming the Way Your Company Innovates, Harvard Business Press
  • Skarzynski and Gibson wrote this book in collaboration with Gary Hamel. It tackles how to embed innovation in the DNA of the organization -- making innovation a core competency of the corporation. See Innovation to the Core for an introduction to the book.

  • Sloan, Alfred P., (1963), My Years with General Motors, New York, Doubleday
  • Alfred Sloan was the chief executive of General Motors. Along with Chester Barnard of AT&T in 1938, he was one of the first executives to draw attention to the need for strategy in the context of business.

  • Slywotzky, Adrian J. & Morrison, David J. & Moser, Ted & Mundt, Kevin A. & Quella, James A., (1999), Profit Patterns, Times Books/Random House
  • Smircich, Linda, and Stubbart, Charles, (1985), Strategic Management in an Enacted World, Academy of Management Review, Vol. 10, No. 4, 724 - 736
  • Three views of environment, objective, perceived, and enacted are described and the implication of these views for the practice of strategic management.

  • Sowell, Thomas, (2007), Basic Economics, A Common Sense Guide to the Economy, Third Edition, Basic Books
  • Stacey, Ralph D., (2000), Griffin, Douglas, and Shaw, Patricia, Complexity and Management - Fad or Radical Challenge to Systems Thinking, Routledge
  • First, this is the first book in a series edited by edited by Stacey, Griffin, and Patricia Shaw from the Complexity and Management Centre, University of Hertfordshire

    • Complexity and Management - Fad or Radical Challenge to Systems Thinking (2000) - Stacey, Griffin, Shaw
    • Complex Responsive Processes in Organizations - Learning and Knowledge Creation (2001) - Stacey
    • Changing Conversations in Organizations: A Complexity Approach to Change (2002) - Shaw
    • The Emergence of Leadership (2002) - Griffin
    • Complexity and Innovation in Organizations (2002) - Fonseca
    • The Paradox of Control in Organizations (2001) - Streatfield

    The series intention is to develop thinking about organizations as Complex Processes of relating vs. as systems. In doing this, the authors clearly expose the failure of mainstream management thinking to explain strategic and organizational phenomena. In place of systemic (mainstream) thinking, are insights gained from complexity science that have been developed into the complex responsive process perspective. This perspective does descriptively address strategic and organizational phenomena and serves as a basis for prescriptive actions.

    Second, this is not a book to be "read", it is a book to be "studied." It addresses the basis for management thought and action in regard to strategy and organizational change. The book is descriptive, not prescriptive. The most fundamental question it seeks to answer is "how does an organization become what it is?"

    In answering this question, natural and social science bases for mainstream management thinking are identified and their implications examined. The conclusion is that mainstream management thinking, based on the systems perspective, cannot explain the creation of novelty, whereas the complex responsive process thinking identified as the alternative to systems thinking does explain novelty.

    Given the premise that "there is nothing more important than the way managers think about the nature of their organization, particularly about how it comes to be what it is" - the book provides a comprehensive and insightful framework from which management can actually put into perspective and assess the management tools and techniques they use or are considering using.

    Organization leaders seeking to develop sustainable competitive advantage will greatly benefit from the deep insights into what creates the novelty required for ongoing innovation and why mainstream thinking does not have an answer to novelty. The natural and social science bases for both the systemic and complex responsive process perspectives are comprehensively explained.

    The content, issues addressed, the perspectives developed are worthy of more than a five star rating. Given the newness and challenging nature of the content, the repetition, or repetitive summaries, throughout the book were welcome. The reason for rating it four stars is due to the need to study it so intently in order to gain the understanding of what the authors have to tell us. More and better frameworks could have been provided for the information delivered. Given my intense interest in the subject, I developed several of my own frameworks to organize the content in order to gain greater benefit from the information provided.

  • Stacey, Ralph D., (2001), Complex Responsive Processes in Organizations - Learning and Knowledge Creation, Routledge
  • First, this is the second book in a series edited by edited by Stacey, Griffin, and Patricia Shaw from the Complexity and Management Centre, University of Hertfordshire

    • Complexity and Management - Fad or Radical Challenge to Systems Thinking (2000) - Stacey, Griffin, Shaw
    • Complex Responsive Processes in Organizations - Learning and Knowledge Creation (2001) - Stacey
    • Changing Conversations in Organizations: A Complexity Approach to Change (2002) - Shaw
    • The Emergence of Leadership (2002) - Griffin
    • Complexity and Innovation in Organizations (2002) - Fonseca
    • The Paradox of Control in Organizations (2001) - Streatfield

    The series intention is to develop thinking about organizations as Complex Processes of relating vs. as systems. In doing this, the authors clearly expose the failure of mainstream management thinking to explain strategic and organizational phenomena. In place of systemic (mainstream) thinking, are insights gained from complexity science that have been developed into the complex responsive process perspective. This perspective does descriptively address strategic and organizational phenomena and serves as a basis for prescriptive actions. See Complexity and Management.

    Second, as with the first book in the series, this is not a book to be "read", it is a book to be "studied." It delves deeply into learning and knowledge creation, the creation of knowledge being the creation of novelty. The radically different views of knowledge between cognitive and behavioral psychology is illuminating.

    Stacey offers philosophical, neuroscience, and social science support for the legitimacy of the complex responsive process perspective over the mainstream management thinking. The book is, for the most part, descriptive. There is a comprehensive comparison of the systems thinking and complex responsive process perspectives in the ninth chapter based on what's in the first two books in the series. The tenth and last chapter outlines what the prescriptions might look like. These prescriptions are in the next four books in the series.

    The core of this book hones in on learning and knowledge creation, knowledge creation being essential to organization innovation and evolution. The first section deals with the systems thinking perspective. There is a strong case made for the inability of that perspective to explain knowledge creation as well as some insidious aspects of management based on this perspective. The next section provides a comprehensive and robust explanation of the emergence of knowledge from the complex responsive processes of relating.

    As in the first book, the content, issues addressed, the perspectives developed are worthy of more than a five star rating. And again, given the newness and challenging nature of the content, the repetition, or repetitive summaries, throughout the book were welcome. The reason for rating it four stars is due to the need to study it so intently in order to gain the understanding of what the author has to tell us. As in the first book in the series, more and better frameworks could have been provided for the information delivered. Given my intense interest in the subject, I developed several of my own frameworks to organize the content in order to gain greater benefit from the information provided.

  • Stacey, Ralph D., (2003), Strategic Management and Organisational Dynamics - The Challenge of Complexity, Fourth Edition, Pearson Education, Prentice Hall - Financial Times
  • Stacey, Ralph D., (2007), Strategic Management and Organisational Dynamics - The Challenge of Complexity, Fifth Edition, Pearson Education, Prentice Hall - Financial Times
  • Stern, Erik, (2004), Hutchinson, Mike, The Value Mindset - Returning to the First Principles of Capitalist Enterprise, John Wiley & Sons
  • Stearn Steward & Co.'s Economic Value Add (EVA) measure applied to corporate management to guide the firm towards value creation and away from value destruction. EVA is equivalent to economic rent or profit.

  • Streatfield, Philip J., (2001), The Paradox of Control In Organizations, Routledge
  • See Stacey, 2000, for information on the series this book is part of.

  • Taleb, Nassim Nicholas, (2007), The Black Swan, The Impact of the Highly Improbable, Random House
  • Nassim has produced an eye-opening work on uncertainty. He reveals how most truly significant events are what he calls "Black Swan" events, events with the following attributes --

    • rarity -- it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility
    • extreme impact -- it carries an extreme impact
    • retrospective (though not prospective) predictability -- in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making is explainable and predictable.

    The reasons that these significant events in history are not seen to be as unpredictable as they are is due to our human tendency towards induction -- rapidly arriving at simplified rational explanations for these events after the fact. This tends to draw out attention away from how truly unpredictable the event was prior to its occurrence. Thus we tend to disregard that there will be other Black Swan events in the future.

    Some considerations to deal with the negative effects of our tendencies to over simplify, our lack of innate understanding of probability and uncertainty, and our general abhorrence of the abstract --

    • Avoid narrative accounts of the events of the day, week, year, etc. Narratives are inherently oversimplified accounts of the past. This is the reason history always seems to make so much more sense with hindsight than as it is being made in the present.
    • Develop your reasoning abilities to control your decisions -- downplay experiential and intuitive decision making while developing more cogitative and thinking skills.
    • Train yourself to spot the difference between the sensational and the empirical
    • Bear in mind how shallow we are with probability, the mother of all abstract notions
    • Avoid "tunneling" -- focusing on a few well-defined sources of uncertainty, including some Black Swans, at the expense of others that do not easily come to mind
    • Avoid focus, it makes you a sucker
    • Keep in mind at all times that it is prediction, not narration, that is the real test of understanding the world

    Area of benefit -- the key benefit of this knowledge is to improve one's strategic thinking capabilities.

    Related works -- there are other works that complement The Black Swan. They reveal what strategic thinkers need to understand about our thought processes -- both their strengths and weaknesses -- and how this understanding can make us better thinkers, thus decision makers --

    • Rosenzweig, Phil, (2007), The Halo Effect
    • Douglas, Mark, (2000), Trading in the Zone
    • Denrell, Jerker, (2004), Random Walks and Sustained Competitive Advantage
    • Malik, Kenan, (2000), Man, Beast, and Zombie
  • Teece, David J. and Pisano, Gary and Shuen, Amy, (1997), Dynamic Capabilities and Strategic Management, Strategic Management Journal, Vol. 18:7, pp 509-533
  • A firm's dynamic capabilities are the firm's ability to integrate, build and reconfigure internal and external competencies to address rapidly changing environments.

  • Teece, David J., (2007), Explicating Dynamic Capabilities: The Nature and Microfoundations of (Sustainable) Enterprise Performance, Strategic Management Journal, 28: 1319-1350
  • Teece presents a framework for understanding the foundations of long-run enterprise success and how to sustain advantage.

  • Tharp, Twyla, (2008), Creativity Step by Step, Harvard Business Review, April 2008, 47-51
  • An interview with Twyla Tharp. Cogent insights into creativity, how to bring it about and how to 'stay fresh.'

  • Toy, Philip, (2005), Why Six Sigma Programs So Often Disappoint, Mercer Management Journal, Number 19, 2005
  • Treacy, Michael and Wiersema, Fred (1995), The Discipline of Market Leaders, Perseus Books, Cambridge
  • Ulrich, Karl, (1995), The Role of Product Architecture in the Manufacturing Firm, Research Policy, 24, ppp.419-40
  • van Putten, Alexander B. (2004) & MacMIllan, Ian C., Making Real Options Really Work, Harvard Business Review, Dec 2004
  • There are bias problems with both the net present value (NPV) and options valuation of investments for strategic decisions. NPV can lead management to overlook what are otherwise very lucrative investment opportunities. Options valuation can cause overinvestment in projects with great uncertainty, the more uncertainty the greater the option value.
    The techniques recommended deal with the biases and weaknesses of both methods to provide a more realistic measure. This measure is called total project value (TPV). It is the sum of net present value, adjusted option value, plus abandonment value. The adjusted option value properly accounts for both revenue and cost volatility.
  • Weber, Max; Edward Shils, Henry A. Finch, (1949), The Methodology of the Social Sciences, Free Press, translation 1949
  • Weber is considered one of the founders of the modern study of sociology and public administration. He spoke of domain assumptions, what later were labeled as paradigms, on how they guide thought and action, then over time they fail to be function reliably in the interpretation of reality, and are eventually replaced with new conceptual schemes.

  • Weick, Karl E., (1979), The Social Psychology of Organizing, McGraw-Hill, 2nd Edition, (1st Edition, 1969)
  • Weick includes cogent statements that get to the essence of his purpose in writing this book. As Weick says, this book is about organizational theorizing, not organizational theory -- its concern is with ways to talk about organizations and with what these ways of talking indicate for closer attention. (Weick, 26). "One of the aims of this book is to equip you with lots of beliefs so that you'll see some of what is talked about here, or at least you'll see enough that you'll be able to amend mistakes that inevitably must litter attempts to understand human beings." (Weick, 135). And a key provocative theme, "The basic theme for the entire organizing model is found in the following recipe for sense-making: 'How can I know what I think until I see what I say?'" (Weick, 133) faithfully unites the topics throughout the book.

    This book is phenomenally well written, superbly referenced, unpretentious, and eminently readable.

  • Wernerfelt, Birger, (1984), A Resource-based View of the Firm, Strategic Management Journal, Vol 5, 171 - 180
  • One of the foundational articles bringing definition to the resource-based view of the firm and strategy, in contrast to the product, or positional, view. Until this article, there had been little examination of the broader resources of the firm since the seminal work of Penrose (1959). The resource-based view of the firm builds up organizational economics in contrast to industrial organization economics.

    Wernerfelt defined resources as "anything that could be thought of as a strength or weakness of a given firm." More formally, resources are the intangible and tangible assets which are tied semipermanently to the firm. Examples include brand names, in-house knowledge of technology, skilled personnel, trade contracts, efficient procedures, capital, machinery, etc.

    "Resources and products are really two-sides of the same coin. Most products require the services of several resources and most resources can be used in several products."

  • Wernerfelt, Birger, (1995), The Resource-Based View of the Firm: Ten Years After, Strategic Management Journal, Vol 16, 171-174
  • An historical perspective on the roots, development of, and popularization of the resource-based view of strategic management.

  • Wheatley, Margaret J., (2005), Finding Our Way, Leadership For an Uncertain Time, Berrett-Koehler, 2005
  • Recognizing that organizations are not machines, but complex self-organizing systems, Wheatley identifies principles and methods for managing, leading, and changing them.

  • Wiggins, Robert R. & Ruefli, Timothy W., (2002), Sustained Competitive Advantage: Temporal Dynamics and the Incidence and Persistence of Superior Economic Performance, Organizational Science/Vol. 13, No. 1, Jan-Feb 2002
  • A study of 6,772 firms in 40 industries over 25 years. Superior economic performance does exist for 10 years or more, though it is rare. Conclusions include:

    (1) sustainable competitive advantage does exist,

    ( 2) very long term superior performance may be due to the strategic management process, not the strategy per se,

    (3) over 70% of very long-term superior performers are single business firms,

    (4) support for the resource-based view of the firm, with the concept of rare and valuable resources which lead to sustained competitive advantage,

    (5) superior economic performance derives from strategies that are skillfully implemented and adapted over long periods of time, thus it is unlikely that imitation or adoption of knowledge available in the market will serve as a path to sustained superior performance,

    (6) the possibility that below average performance may be occasionally necessary to achieving generally superior performance.

  • Wiggins, Robert R. & Ruefli, Timothy W., (2005), Schumpeter's Ghost: Is Hypercompetition Making the Best of Times Shorter?, Strategic Management Journal, 26:887-911
  • In line with Joseph Schumpeter's theory of creative destruction, Wiggins and Ruefli found that the periods of sustained competitive advantage have been getting shorter over time. This change is not restricted too any subset of industries. There is evidence that managers have responded to this hypercompetitive environment by seeking not a single competitive advantage, but rather a series of short advantages that collectively form an advantage over time.

    For a dramatic finding on sustained advantage see Jerker Denrell's Random Walks and Sustained Competitive Advantage

  • Zollo, Maurizio, (2002), Winter, Sidney G., Deliberate Learning and Evolution of Dynamic Capabilities, Organization Science, 2002, 13: 339-351
  • A dynamic capability is a learned and stable pattern of collective activity through which the organization systematically generates and modifies its operating routines in pursuit of improved effectiveness.