Bibliography
The research that created this Bibliography was instrumental in creating regenerative managing. Follow the link here to find out more about it:
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The comments provided with the references highlight particular points relevant to strategic management. They are not meant to be full reviews of these works.
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A compilation of Harvard Business Review articles on systems archtiecture, modularity, and mass customization. |
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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 -- |
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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. |
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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. |
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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. |
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Tests of good organization design |
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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. |
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See Stacey, 2000, for information on the series this book is part of. |
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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. |
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A robust perspective on the phenomena of innovation in organizations. |
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Contains an excellent business model / business design construct. |
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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. |
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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. |
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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. |
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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: In addition to the four above, a company must excel at two of the following: 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. |
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"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. |
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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. |
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"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." |
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A compilation of techniques for thinking, learning, and acting differently in order to build the firm's competitive advantage. |
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This is a booklet describing systems thinking tools such as caual loop diagrams, behavior over time diagrams, and system archetypes. |
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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. |
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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. |
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Leadership and management for transforming organizations. An eight stage change process is defined -- |
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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. |
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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. |
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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). |
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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. |
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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. |
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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. |
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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?" |
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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: 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. |
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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 -- |
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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). |
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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. |
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A compilation of many of March's past articles and articles of others. |
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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 -- 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 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: 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 -- Application of the technologies -- 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. |
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This again is a post hoc study of what makes for big winner and big losers in business. Big winners 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. |
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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 -- McGahan and Porter concluded that industry did, and still does, really matter -- 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. |
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"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). |
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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. |
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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. |
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Contents -- |
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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 -- |
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Purpose is the most fundamental factor in the definition and success of a business organization. |
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The authors present their view of organizational architecture, strategy, and performance. They present a Congruence Model for diagnosing organizational behavior. |
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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." |
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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. |
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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. |
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A comprehensive examination of six major worldviews. |
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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. |
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Ogilvy provides a construct for an authentic strategy based on existential philosophy. |
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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). |
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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. |
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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. |
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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: 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. |
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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). |
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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. |
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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. |
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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 - 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: Towards the end a terrific thought provoker -- "Who or what does your business glorify?" What a thought provoker! |
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A brief editor's note about 10 distinguishing attributes of innovators. |
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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. |
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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. |
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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. |
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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. |
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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). |
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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. |
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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. |
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An excellent compilation of knowledge regarding strategy and organization. Organization design factors are clearly and comprehensively covered. |
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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. |
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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. |
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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. |
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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. |
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"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. |
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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). |
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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.