Showing papers in "California Management Review in 1991"
TL;DR: In this article, the authors argue that internal resources rather than the market environment should provide the foundation for a firm's strategy, based on an analysis of relationships among resources, capabilities, conpetitive advantage, and profitability.
Abstract: Recent contributions to strategic management and the theory of the firm collectively known as the "resource-based view of the firm" provide illuminating insights into the sources of profitability and the nature of competitive strategy. This article argues that internal resources rather than the market environment should provide the foundation for a firm's strategy. On the basis of an analysis of the relationships among resources, capabilities, conpetitive advantage, and profitability, this article advances a framework for a resource-based approach to strategy formulation.
8,701 citations
TL;DR: In this paper, the authors present a comprehensive, strategic approach that offers managers guidance on decisions about which market segments and individual customer firms to target for close, collaborative relationships, which can gain competitive advantage by augmenting a supplier's product offering for transactional customers.
Abstract: Partnership-building efforts, even when sought by a customer firm, may not be in the best interests of a supplier firm. This article presents a comprehensive, strategic approach that offers managers guidance on decisions about which market segments and individual customer firms to target for close, collaborative relationships. Firms can gain competitive advantage by augmenting a supplier's product offering for transactional customers.
431 citations
TL;DR: In this paper, the authors present a framework for understanding organizational vision, which removes the fuzziness surrounding the topic of vision and preserves the magic of vision while preserving the essential quality of vision.
Abstract: This article presents a framework for understanding organizational vision. "Vision" is a term frequently used by academics and practicing managers, but there has been a scarcity of clear concepts and useful tools—in short, the absence of a coherent conceptual framework. This article develops a framework that removes the fuzziness surrounding the topic of vision yet at the same time preserves the magic—the spark— that is an essential quality of vision.
366 citations
TL;DR: In the past, managers competing on low cost needed to concentrate on "mass production" while managers seeking to differentiate their product needed to focus on "invention", introducing new products and processes, fluid structure, malleable systems as mentioned in this paper.
Abstract: A historic change is occuring in today's competitive environment, one that demands an equally historic response from managers. In the past, managers competing on low cost needed to concentrate on "mass production"—hierarchical structures, specialized process capabilities, stable systems, and meeting the demands of large, growing markets—while managers seeking to differentiate their product needed to focus on "invention"—introducing new products and processes, fluid structure, malleable systems. But today, managers must be positioned to build an organization that combines the best of mass production and invention. They must create a new kind of organization—a "dynamically stable" organization that is capable of serving the widest range of product demands (dynamic) while building on the firm's long-term process capabilities and know-how (stability).
152 citations
TL;DR: In Search of Excess: The Overcompensation of American Executives as discussed by the authors describes the upward spiral of executive compensation, the deceptions involved in determining and reporting compensation packages, and the rationalizations used to justify them.
Abstract: Executive compensation in the United States has gotten out of control. There is no longer a level-playing field when a very well informed seller (the CEO) is combined with uninformed buyers (the shareholders and the compensation committee of the board). In an excerpt from his new book, In Search of Excess: The Overcompensation of American Executives, the author describes the upward spiral of executive compensation, the deceptions involved in determining and reporting compensation packages, and the rationalizations used to justify them. He provides a list of the culprits responsible for creating the problem and allowing it to continue—a list that includes compensation consultants, board compensation committees, the Financial Accounting Standards Board, and the Securities and Exchange Commission.
80 citations
TL;DR: In this article, the feasibility of adopting groups in a manufacturing setting and identifying the potential obstacles to their adoption is discussed. But, the authors do not consider the role of the human resources in the success of a manufacturing company.
Abstract: After many years of controversy and uncertainty, participative management and work design issues are becoming the focus of attention in the 1990s. There is ample evidence to suggest that the success of some foreign and domestic manufacturers may be attributed to the management of their human resources. This article discusses the trends that are encouraging the reassessment of the traditional and widely applied principles of job design, which makes the case for organizing manufacturing jobs into groups. Based on a normative model proposed by Hackman and on the workgroup activities in the United States, Japan, and Sweden, this article evaluates the feasibility of adopting groups in a manufacturing setting and identifies the potential obstacles to their adoption. Many of the conditions required for the success of groups can be created through deliberate managerial decisions.
76 citations
TL;DR: In this article, the authors report on ten field studies of the implementation of CAD/CAM in Canadian manufacturing firms of a three-year period, focusing on the implementation efforts of the sponsors (patriarchs) and champions (evangelists).
Abstract: This article reports on ten field studies of the implementation of CAD/CAM in Canadian manufacturing firms of a three-year period, focusing on the implementation efforts of the sponsors (patriarchs) and champions (evangelists) in each case. Although the patriarch appeared critical in the new technology involved, it was the evangelist who stayed with the project throughout its life and whose efforts were critical to its successful implementation and integration. The successful evangelists were those who fulfilled three basic roles (pathfinding, problem solving, and implementing) and who demonstrated faith and persuasion. The authors offer prescriptions for senior management with regard to the selection and management of project champions in the implementation of Advanced Manufacturing Technologies.
67 citations
TL;DR: The authors traces the historical roots of some of our current preoccupations with the ethics of business and argues that many of the contemporary criteria that we use to evaluate the business ethics are not new; rather, they date back several centuries.
Abstract: This article traces the historical roots of some of our current preoccupations with the ethics of business. It argues that many of the contemporary criteria that we use to evaluate the ethics of business are not new; rather, they date back several centuries. This argument is illustrated by comparing historical and contemporary discussions of three sets of issues: the relationship between ethics and profits, the relationship between private gain and the public good, and the tension between the results of capitalism and the intentions of businessmen. The fact that these tensions are inherent in the nature of capitalism, if not human nature itself, does not make our contemporary concerns or standards any less valid. On the contrary, it underlies their significance. Contemporary discussions of business ethics constitute part of an ongoing moral dialogue with both deep secular and religious roots.
67 citations
TL;DR: In this paper, the authors provide a practical framework for managing suppliers of professional services, including advertising, financial services, legal services, management consulting, and others, which can increase efficiency, reduce costs, improve quality, and strengthen bargaining power.
Abstract: Professional services—advertising, financial services, legal services, management consulting, and others—are critical inputs and major corporate expenditures. Yet managers of suppliers of professional services lack a concrete management framework for enhancing value and controlling costs. This article provides a practical framework, based on extensive research, that incorporates four generic strategies for managing suppliers of professional services. These strategies can increase efficiency, reduce costs, improve quality, and strengthen bargaining power. While sole-source strategies often make sense for managing industrial parts suppliers, multiple-source strategies maximize the value of professional services. Corporate managers who resist offers for one-stop shopping and cross-selling—who instead develop credible internal alternatives, link pay and performance, and increase monitoring and auditing—can significantly enhance the value of professional services.
63 citations
TL;DR: In this article, the negotiations for and operations of sixteen Soviet-U.S. joint ventures are investigated, and the pioneers on this new frontier are the pioneers of private international cooperation.
Abstract: The Soviet Union's recent embrace of joint ventures as a form of private international cooperation has attracted enormous attention. Despite all the fanfare, few joint ventures have commenced operations. This article probes the negotiations for and operations of sixteen Soviet-U.S. joint ventures that have persevered and commenced operations. These joint ventures are the pioneers on this new frontier.
57 citations
[...]
TL;DR: The Open Corporation as mentioned in this paper is a non-bureaucratic organization that focuses on identifying entrepreneurially minded engineers and scientists, teaching them how to build businesses that respond to market needs and connecting them to sources and users of innovation.
Abstract: This article describes a corporate structure for fostering and marketing high-technology innovations. This structure occupies a middle ground between large companies and small start-ups. It is the "open corporation," a nonbureaucratic organization that focuses on identifying entrepreneurially minded engineers and scientists, teaching them how to build businesses that respond to market needs and connecting them to sources and users of innovation. The "product" of the open corporation is a continuous stream of new enterprises that have a profoundly different character from those created by venture capital.
TL;DR: In this article, the authors look at some of the reasons why business ethics is currently on the minds of business men and women, including political conservatism, deregulation, moral pluralism, and globalization.
Abstract: History tells us that business ethics is a subject that comes and goes. So the interesting question is: Why are the ethics of business discussed in one era and not another? Based on conversations with business people and academics from Japan, Europe, and Latin America, this article looks at some of the reasons why ethics is currently on the minds of business men and women. Political conservatism, deregulation, moral pluralism, and globalization emerge as themes that underlie the recent interest in ethics.
TL;DR: In this article, the authors define the achievements of enfranchisement and explore the conditions under which en-franchise is likely to be effective, as well as define the conditions in which en franchisements are likely to work well.
Abstract: Enfranchisement is achieved through an integration of empowerment with methods of pay-for-performance. Such combinations have the potential for producing extraordinary service, unusually high rewards for employees, and higher levels of profitability for the service firms that employ these methods. Through the analysis of firms that have had enfranchised service workers for many years, along with firms that have recently embarked on the effort, the authors define the achievements of enfranchisement and explore the conditions under which enfranchisement is likely to be effective.
TL;DR: In this paper, the authors argue that business schools mistakenly assume that students can be taught all the skills they need through the curriculum, and they need to expand their understanding of the nature of business education to include the conscious socialization of students.
Abstract: This article examines an extremely important but too often neglected dimension of management education, namely the way MBA programs socialize future business managers. It argues that business schools mistakenly assume that students can be taught all the skills they need through the curriculum. MBA programs need to expand their understanding of the nature of business education to include the conscious socialization of students. Specifically, they need to devise creative ways of teaching students both how to think independently and how to interact constructively with others.
TL;DR: The first annual Business Enterprise Trust Awards as discussed by the authors was designed to "shine a spotlight on courageous and principled acts of business responsibility" and was met with skepticism by some members of the business community.
Abstract: In March 1991, the Business Enterprise Trust presented its first annual awards for acts of "courage, integrity and social vision" in business. The stated purpose of the awards is to honor those "who know there9s more to good business than next year9s bottom line." Predictably, an effort designed to "shine a spotlight on courageous and principled acts of business responsibility" would be met with skepticism by some members of the business community. And, even before the award winners were announced, Fortune cynically questioned the motives not only of the Trust but, by extension, of all business executives who claim to do good. This article explores both the validity of the Trust9s efforts to reward business "virtue" and the arguments of those who claim that doing good is bad business.
TL;DR: In their eagerness to capitalize on the tremendous opportunities there, American businesses are venturing into the Soviet Union with little or no knowledge of Soviet culture or negotiation processes and style as mentioned in this paper.
Abstract: In their eagerness to capitalize on the tremendous opportunities there, American businesses are venturing into the Soviet Union with little or no knowledge of Soviet culture or negotiation processes and style. In addition to encouraging unrealistic expectations, this lack of awareness not only increases the frustrations of negotiating with officials from a non-market economy such as the Soviet Union, but also severely impedes decisions about doing business there. It is imperative that U.S. business executives understand Soviet commercial negotiation processes and style if they are to be successful in garnering the huge potential of the Soviet market.
TL;DR: The race to become the dominant international equity market place will be decided by entrepreneurs responding to these powerful new competitive forces as mentioned in this paper, which will depend on a threshold volume of after-hours trading, the listing of global companies in electronic markets, access for all brokers and dealers, vastly improved clearing and settlement procedures, effective dissemination of trading information, and the international adoption of appropriate rules and regulations.
Abstract: People-intensive physical floors for trading listed stocks are on their way out as financial markets become more institutional and computerized. So far, the NYSE has been the premier international equities market, but its position is being jeopardized by aggressive competitiors. Someday, there will be around-the-clock, around-the-world automated stock trading. But the simple assumption that such trading lurks around the corner ignores a number of complicating factors. The emerging market configuration will depend on a threshold volume of after-hours trading, the listing of global companies in electronic markets, access for all brokers and dealers, vastly improved clearing and settlement procedures, the effective dissemination of trading information, and the international adoption of appropriate rules and regulations. The race to become the dominant international equity market place will be decided by entrepreneurs responding to these powerful new competitive forces.
TL;DR: Singapore has acquired strong expertise in several essential services and it is in the provision of such services to countries in Southeast Asia that further growth can be generated for the Singapore economy in the future as mentioned in this paper.
Abstract: Four recently emerged trends have accounted for the rapid economic expansion in the ASEAN region—accelerating investment flows from Japan and the Asian NIEs, rising intra-Asia trade, increasing diversification from commodity-based to manufacturing-based economies, and gathering pace of deregulation and privatization of these Southeast Asian economies. Over the years, Singapore has acquired strong expertise in several essential services and it is in the provision of such services to countries in Southeast Asia that further growth can be generated for the Singapore economy in the future. These are, specifically: transport services, financial services, and regional headquarters services to multinationals operating in the ASEAN region. As a small city-state connected to a vast hinterland, Singapore cannot expect to thrive if the regional economies perform sluggishly. Singapore's economic plans for the future must be predicated on helping its Southeast Asian neighbors to maintain their high growth momentum.
TL;DR: In this paper, the authors examined the impact of the cost of capital on managerial decision-making in four capital-intensive industries and interviewed senior executives from four different companies in the US.
Abstract: This article examines the impact of the cost of capital on managerial decision making. Senior executives from four capital-intensive industries were interviewed. One group of executives (Group 1) argued that the cost of capital has a major impact on their ability to compete and directly constrains their investments in capital equipment and/or R&D. A second group (Group 2) expressed a roughly opposite view, arguing that the cost of capital is not one of the primary factors in their decision making. Two factors appear to account for this difference: Group 2 firms tend to be in better financial condition than Group 1, and Group 2 firms are technology leaders in their respective markets, whereas Group 1 firms are not.
TL;DR: In this paper, the authors look at four common cases of ethical misunderstandings, each of which yields a particular type of issue: family exclusivity, gray areas, loyalty, and commitment.
Abstract: Ethical differences between U.S. and Japanese corporations and individuals often emerge during the course of normal business transactions and are a source of considerable mutual tension. This article looks at four common cases of ethical misunderstandings, each of which yields a particular type of issue: family exclusivity, gray areas, loyalty, and commitment. It then evaluates the standard dualistic interpretations for such ethical differences—for example, American individualism versus Japanese group orientation—and presents a more dynamic and interactive model based on the linked ideals of the "Entrepreneur" and the "Elite Course" to explain both persistent ethical differences and a variety of countertrends.
TL;DR: The decade of the 1980s saw many industries encounter very hostile markets, where too many competitors seek too few customers as discussed by the authors. Margins fall under the pressure of predatory price discounting.
Abstract: The decade of the 1980s saw many industries encounter very hostile markets, where too many competitors seek too few customers. Margins fall under the pressure of predatory price discounting. Market shares shift, at first quickly due to price differences and slower later due to other factors. Companies respond by proliferating products and services. Some companies weaken themselves with ill-advised cost reduction programs. The industry undergoes several waves of consolidation that, ironically, intensify rather than ease the industry's plight. After a period of years, the industry emerges from tough times, often due to a notable pick up in demand. Few companies do well in such a hostile environment. Those that do prosper in these markets follow policies that acknowledge this evolutionary pattern with management policies that attract customers and that discourage competitors.
TL;DR: Cheit9s address as mentioned in this paper is based on the keynote address presented at the Annual Research Workshop on the Social Issues Division of the Academy of Management, San Francisco, California, August 12, 1990, and CMR invited three other leading scholars in the field (Lee Preston of the University of Maryland, James Post of Boston University, and Karen Paul of the Rochester Institute of Technology) to offer their comments on Cheit9's address.
Abstract: When it was a new, lively field of study, Business and Society quickly gained an important place in the curriculum by addressing issues largely ignored in business education. Today, that growth is slowing down, not because the issues are less important, but because many of them are being addressed by the functional fields of business. The future of the field will be importantly determined by its ability to become part of the evolving changes shaping the business curriculum. This article is based on the keynote address presented at the Annual Research Workshop on the Social Issues Division of the Academy of Management, San Francisco, California, August 12, 1990. CMR invited three other leading scholars in the field—Lee Preston of the University of Maryland, James Post of Boston University, and Karen Paul of the Rochester Institute of Technology—to offer their comments on Cheit9s address. Their responses follow the article.
TL;DR: The East Asian experience in joint ventures, capital market development, and legal and infrastructural development offers lessons which should not be lost on Eastern Europe as mentioned in this paper, nor should they be lost to U. S. corporate leaders who are assessing opportunities in Eastern Europe.
Abstract: As Eastern Europe emerges from communism and seeks to develop democracy and a private sector economy, it looks to Western Europe for models. Yet in many ways, East Asia offers more useful guideposts. The East Asian experience in joint ventures, capital market development, and legal and infrastructural development offers lessons which should not be lost on Eastern Europe. Nor should they be lost on U. S. corporate leaders who are assessing opportunities in Eastern Europe.
TL;DR: This paper summarized the events around the October 19, 1987, Japanese stock market decline and showed that Tokyo did not experience the same "panic" as New York, primarily because Tokyo had a more consistent institutional and regulatory structure and could rely on more patient investors.
Abstract: This article summarizes the events around the October 19, 1987, Japanese stock market decline. Although Tokyo suffered a "crash," it did not experience the same "panic" as New York, primarily because Tokyo had a more consistent institutional and regulatory structure and could rely on more patient investors. Tokyo can, with certain limitations, be taken as an example of how the "Brady Report" proposals would work in practice. Since Tokyo suffered a crash, if the Brady proposals are designed to prevent a crash, the Japanese experience proves that this cannot be done. On the other hand, if the Brady proposals are not meant to prevent a crash, but rather to help a quick return to an "orderly market," Tokyo can serve as evidence that the Brady proposals are a step in the right direction.
TL;DR: In this paper, a newly rich Japan has agreed to send help to Eastern Europe, but its involvement will go much further than the simple aid the Western nations envisage, because Eastern Europe suddenly presents a golden, longterm opportunity to the Japanese, whose strategic political focus has already moved from America to the unified European markets of 1992.
Abstract: Faced with the mounting problems of Eastern Europe's sick economies and their urgent need for capital, America and the EC nations have importuned a newly rich Japan to send help. Tokyo has agreed—but its involvement will go much further than the simple aid the Western nations envisage. That is because Eastern Europe suddenly presents a golden, long-term opportunity to the Japanese, whose strategic political focus has already moved from America to the unified European markets of 1992.
TL;DR: This paper examined the future development of a market for corporate control in Japan and found that the market will assume a distinctively Japanese character, one that reenforces rather than undermines the firm's long-term trading relationships.
Abstract: This article, drawn from the recently published book Japanese Takeovers: The Global Contest for Corporate Control, examines the future development of a market for corporate control in Japan. The challenge for the Japanese system of corporate governance is to find a substitute for the lessening of capital market discipline caused by the decline in the dependence of firms on bank lending. A market for corporate control will emerge in Japan: managers will be replaced and capital will be reallocated. But this market will assume a distinctively Japanese character, one that reenforces rather than undermines the firm's long-term trading relationships.
TL;DR: In this paper, case studies of the efforts of Motorola and Cray Supercomputer to sell their products in Japan reveal the varied structural impediments limiting foreign access to the Japanese marketplace.
Abstract: Case studies of the efforts of Motorola and Cray Supercomputer to sell their products in Japan and reveal the varied structural impediments limiting foreign access to the Japanese marketplace. In both of these cases, U.S. trade policy was used to improve market access with limited but largely beneficial results. The case studies demonstrate that in the presence of the unique structural features of Japanese business and goverment organization, something akin to "managing trade" is sometimes required to achieve something akin to a competitive outcome.
TL;DR: The U.S. and Canada signed a Free Trade Agreement (FTA) on October 4, 1987 as discussed by the authors, which was not "free" trade and had consequences well beyond the theater of commerce.
Abstract: The U.S. and Canada purportedly signed a Free Trade Agreement on October 4, 1987. The agreement, however, was not "free" trade and had consequences well beyond the theater of commerce. The agreement embraces energy, investment, capital markets, supply-management of agriculture, and cultural identity. Canada9s continuing struggle for economic independence and for coherent nationhood has been made immeasurably more difficult by the Trade Agreement.