Strategic management creating competitive 7th mcmanara Strategic management creating competitive 7th mcmanara Strategic management creating competitive 7th mcmanara Strategic management creating competitive 7th mcmanara Strategic management creating competitive 7th mcmanara Strategic management creating competitive 7th mcmanara
CONNECT FEATURES Interactive Applications Interactive Applications offer a variety of automatically graded exercises that require student to apply key concepts Whether the assignment includes a click & drag, video case, or decision generator, these applications provide instant feedback and progress tracking for students and detailed results for the instructor Case Exercises The Connect® Platform also includes case exercises for 12 of the 35 cases in this edition that require students to work through questions based on both favorable and unfavorable Key Symptoms as well as the Underlying Causes that affect Key Symptoms as they are observed in the case Each multiple choice and short answer question number under Key Symptoms corresponds to the same question number under Underlying Causes (e.g., Question under Key Symptoms corresponds to Question under Underlying Causes) There is also a final general question on solutions that should address the causes Intelligent Response Technology Intelligent Response Technology (IRT) is a redesigned student interface for the Financial Analyses that accompany the Case Exercises In addition to a streamlined interface, IRT provides improved answer acceptance to reduce students’ frustration with formatting issues (such as rounding), and, for select questions, provides a tabular format that guides students through the process of case analysis Additional questions have been added to test students’ mastery of the content more fully EASY TO USE Learning Management System Integration Simple Seamless Secure McGraw-Hill Campus is a one-stop teaching and learning experience available to use of any learning management system Campus provides single sign-on to faculty and students for all McGraw-Hill material and technology from within the school website McGraw-Hill Campus also allows instructors instant access to all supplements and teaching materials for all McGraw-Hill products Blackboard users also benefit from McGraw-Hill’s industry-leading integration, providing single sign-on to access all Connect assignments and automatic feeding of assignment results to the Blackboard grade book POWERFUL REPORTING Connect generates comprehensive reports and graphs that provide instructors with an instant view of the performance of individual students, a specific section, or multiple sections Since all content is mapped to learning outcomes, Connect reporting is ideal for accreditation or other administrative documentation Get Connected Today! www.connect.mcgraw-hill.com SEVENTH EDITION strategic management Gregory G Dess University of Texas at Dallas G T Lumpkin Syracuse University Alan B Eisner Pace University Gerry McNamara Michigan State University creating competitive advantages STRATEGIC MANAGEMENT: CREATING COMPETITIVE ADVANTAGES, SEVENTH EDITION Published by McGraw-Hill Education, Penn Plaza, New York, NY 10121 Copyright © 2014 by McGraw-Hill Education All rights reserved Printed in the United States of America Previous editions © 2012, 2010, and 2008 No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of McGraw-Hill Education, including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning Some ancillaries, including electronic and print components, may not be available to customers outside the United States This book is printed on acid-free paper DOW/DOW ISBN 978-0-07-763608-1 MHID 0-07-763608-2 Senior Vice President, Products & Markets: Kurt L Strand Vice President, Content Production & Technology Services: Kimberly Meriwether David Managing Director: Paul Ducham Executive Brand Manager: Michael Ablassmeir Executive Director of Development: Ann Torbert Senior development editor: Laura Griffin Editorial Coordinator: Claire Wood Marketing Manager : Elizabeth Trepkowski Lead Project Manager: Harvey Yep Senior Buyer: Michael R McCormick Design: Matt Diamond Cover Image: Getty Images Senior Content Licensing Specialist: Jeremy Cheshareck Senior Media Project Manager: Susan Lombardi Typeface: 10/12 Times Roman Compositor: Laserwords Private Limited Printer: R R Donnelley All credits appearing on page or at the end of the book are considered to be an extension of the copyright page Library of Congress Cataloging-in-Publication Data Dess, Gregory G Strategic management : creating competitive advantages / Gregory G Dess, University of Texas at Dallas, G T Lumpkin, Syracuse University, Alan B Eisner, Pace University, Gerry McNamara, Michigan State University.—seventh edition pages cm Includes bibliographical references and index ISBN 978-0-07-763608-1 (alk paper)—ISBN 0-07-763608-2 (alk paper) Strategic planning I Title HD30.28.D4746 2014 658.4’012—dc23 2013029305 The Internet addresses listed in the text were accurate at the time of publication The inclusion of a website does not indicate an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill Education does not guarantee the accuracy of the information presented at these sites www.mhhe.com DEDICATION To my family, Margie and Taylor; my parents, Bill and Mary Dess; and Walter Descovich –Greg dedication To my lovely wife, Vicki, and my students and colleagues –Tom To my family, Helaine, Rachel, and Jacob –Alan To my wonderful wife, Gaelen; my children, Megan and AJ; and my parents, Gene and Jane –Gerry v ABOUT THE AUTHORS about the authors Gregory G Dess G T (Tom) Lumpkin is the Andrew R Cecil Endowed Chair in Management at the University of Texas at Dallas His primary research interests are in strategic management, organization–environment relationships, and knowledge management He has published numerous articles on these subjects in both academic and practitioneroriented journals He also serves on the editorial boards of a wide range of practitioner-oriented and academic journals In August 2000, he was inducted into the Academy of Management Journal’s Hall of Fame as one of its charter members Professor Dess has conducted executive programs in the United States, Europe, Africa, Hong Kong, and Australia During 1994 he was a Fulbright Scholar in Oporto, Portugal In 2009, he received an honorary doctorate from the University of Bern (Switzerland) He received his PhD in Business Administration from the University of Washington (Seattle) and a BIE degree from Georgia Tech is the Chris J Witting Chair and Professor of Entrepreneurship at Syracuse University in New York Prior to joining the faculty at Syracuse, Tom was the Kent Hance Regents Endowed Chair and Professor of Entrepreneurship at Texas Tech University His research interests include entrepreneurial orientation, opportunity recognition, strategy-making processes, social entrepreneurship, and innovative forms of organizing work He has published numerous research articles in journals such as Strategic Management Journal, Academy of Management Journal, Academy of Management Review, Journal of Business Venturing, and Entrepreneurship: Theory and Practice He is a member of the editorial review boards of Strategic Entrepreneurship Journal, Entrepreneurship Theory & Practice, and the Journal of Business Venturing He received his PhD in management from the University of Texas at Arlington and MBA from the University of Southern California vi Alan B Eisner Gerry McNamara is Professor of Management and Department Chair, Management and Management Science Department, at the Lubin School of Business, Pace University He received his PhD in management from the Stern School of Business, New York University His primary research interests are in strategic management, technology management, organizational learning, and managerial decision making He has published research articles and cases in journals such as Advances in Strategic Management, International Journal of Electronic Commerce, International Journal of Technology Management, American Business Review, Journal of Behavioral and Applied Management, and Journal of the International Academy for Case Studies He is the former Associate Editor of the Case Association’s peer reviewed journal, The CASE Journal is a Professor of Management at Michigan State University He received his PhD from the Carlson School of Management at the University of Minnesota His research focuses on strategic decision making, organizational risk taking, and mergers and acquisitions His research has been published in numerous journals, including the Academy of Management Journal, Strategic Management Journal, Organization Science, Organizational Behavior and Human Decision Processes, Journal of Management, and Journal of International Business Studies His research on mergers and acquisitions has been abstracted in the New York Times, Bloomberg Businessweek, The Economist, and Financial Week He is currently an Associate Editor for the Academy of Management Journal vii PREFACE Welcome to the Seventh Edition of Strategic Management: Creating Competitive Advantages! preface We are all very pleased with the positive market response to our previous edition Below is some of the encouraging feedback we have received from our reviewers: The text is thorough and all-inclusive I don’t need to refer to another book as a back-up It addresses all aspects of strategic management from the initial inspiration of a vision to the nuts and bolts of putting the plan to work It is well structured; it is clear how each chapter not only builds on the previous ones, but also how analysis, formulation, and implementation are interrelated Lois Shelton, California State University, Northridge I use Strategic Management in a capstone course required of all business majors, and students appreciate the book because it synergizes all their business education into a meaningful and understandable whole My students enjoy the book’s readability and tight organization, as well as the contemporary examples, case studies, discussion questions and exercises William Sannwald, San Diego State University It is very easy for students to read because it presents strategy concepts in a simple but comprehensive manner It covers important developments in the strategic management field that are usually ignored by other textbooks (e.g., concepts like social networks and social capital, the balanced scorecard, and new forms of organizational structure) Moses Acquaah, University of North Carolina at Greensboro Content is current and easy for students to grasp; good graphs and charts to illustrate important points in the chapter Book is well organized around the AFI framework Lise Anne D Slatten, University of Louisiana at Lafayette It is the best written textbook for the undergraduate course that I have come across Application materials tie concepts to real-world practice Justin L Davis, University of West Florida The Dess text takes a practical/easy approach to explain very difficult subject matter It integrates a number of real-life scenarios to aid the student in their comprehension of key concepts The standout of the text is the Reflecting on Career Implications These end-of-chapter questions aid the student in applying their learning to their workplace in a manner that promotes career success Amy Patrick, Wilmington University The Dess book overcomes many of the limitations of the last book I used in many ways: (a) presents content in a very interesting and engrossing manner without compromising the depth and comprehensiveness, (b) inclusion of timely and interesting illustrative examples, and (c) EOC exercises an excellent job of complementing the chapter content Sucheta Nadkami, Drexel University We are always striving to improve our work, and we are most appreciative of the extensive and constructive feedback that many strategy professionals have graciously given us As always, viii we have worked hard to incorporate their ideas into the Seventh Edition—and we acknowledge them by name later in the Preface We believe we have made valuable improvements throughout our many revised editions of Strategic Management At the same time, we strive to be consistent and “true” to our original overriding objective: a book that satisfies three R’s: relevant, rigorous, and readable That is, our tagline (paraphrasing the well-known Secret deodorant commercial) is: “Strong enough for the professor; made for the student.” And we are pleased that we have received feedback (such as the comments on the previous page) that is consistent with what we are trying to accomplish To continue to earn the support of strategy instructors (and students!) we try to use an engaging writing style that minimizes unnecessary jargon and covers all of the traditional bases We also integrate some central themes throughout the book—such as globalization, technology, ethics, environmental sustainability, and entrepreneurship—that are vital in understanding strategic management in today’s global economy We draw on short examples from business practice to bring concepts to life by providing 85 Strategy Spotlights (more detailed examples in sidebars) Unlike other strategy texts, we provide three separate chapters that address timely topics about which business students should have a solid understanding These are the role of intellectual assets in value creation (Chapter 4), entrepreneurial strategy and competitive dynamics (Chapter 8), and fostering entrepreneurship in established organizations (Chapter 12) We also provide an excellent and thorough chapter on how to analyze strategic management cases In developing Strategic Management: Creating Competitive Advantage, we certainly didn’t forget the instructors As we all know, you have a most challenging (but rewarding) job We did our best to help you We provide a variety of supplementary materials that should help you in class preparation and delivery For example, our chapter notes not simply summarize the material in the text Rather (and consistent with the concept of strategy!), we ask ourselves: “How can we add value?” Thus, for each chapter, we provide numerous questions to pose to help guide class discussion, at least 12 boxed examples to supplement chapter material, and three detailed “teaching tips” to further engage students Also, the author team completed the chapter notes—along with the entire test bank—ourselves That is, unlike many of our rivals, we didn’t simply farm the work out to others Instead, we felt that such efforts help to enhance quality and consistency—as well as demonstrate our personal commitment to provide a topquality total package to strategy instructors With the seventh edition, we also benefited from valued input by our strategy colleagues to further improve our work Let’s now address some of the key substantive changes in the Seventh Edition Then we will cover some of the major features that we have had in previous editions What’s New? Highlights of the Seventh Edition We have endeavored to add new material to the chapters that reflects both the feedback that we have received from our reviewers as well as the challenges that face today’s managers Thus, we all invested an extensive amount of time carefully reviewing a wide variety of books, academic and practitioner journals, and the business press We also worked hard to develop more concise and tightly written chapters Based on feedback from some of the reviewers, we have tightened our writing style, tried to eliminate redundant examples, and focused more directly on what we feel is the most important content in each chapter for our audience The overall result is that we were able to update our material, add valuable new content, and—at the same time—shorten the length of the chapters ix times interest earned, 442 total debt ratio, 442 Long-term solvency ratios, 93 Low profits, 52 M Machine age, 106 Making the Grass Greener on Your Side (Melrose), 360 Management in corporate governance, 14–15 diversion of profits to, 91 incremental vs strategic, innovations in, Management restructuring, 190 Management risk, 223 Management talent development, 294 Manager bargaining power, 91 Managerial conceit, 397 illusion of control, 397–398 irrational escalation of commitment, 398 overconfidence, 397–398 Managerial models, and behavioral control, 288 Managerial motives, 201 Managerial rewards and incentives, 295–296 Managers; see also CEO entries adaptability, 336 and alignment, 336–337 ambidexterity, in ambidextrous organizations, 336–337 assumptions and biases, 35 balanced scorecard use, 95–96 caveats on industry analysis include low-profit industry, 59 static analysis, 59–60 value net, 59–60 zero-sum game assumption, 59 CEO duality, 297 challenge of cultural differences, 223 challenges from globalization and technology, 120 credibility, ego, and sound decisions, 196 erosion of valuation by motives of egotism, 201–202 growth for growth’s sake, 201 examples of self-interest, 291 excessive product-market diversification, 298 golden parachutes, 202 making transformational change, 22 and market for corporate control, 298 monitoring behavior of by board of directors, 292–294 primary means, 291 rewards and incentives, 295–296 shareholder activism, 295 on-the-job consumption, 298 opportunistic behavior, 298 opportunity recognition, 35 reward and evaluation systems, 369–370 shirking, 298 view of control systems, 280 in virtual organizations, 330 Managing change, 378 Manufacturing automated and flexible, 154–155 cost reductions, 199–200 environmentally-friendly, 75 mass customization, 154 offshoring, 223–225 outsourcing, 223–225 reshoring, 226 Manufacturing alliances, 255 Market capitalism, 212 Market commonality, 266 Market dependence, 276 Market diversification, 221 Market for corporate control, 298 Market niche at BMW, 153 in focus strategy, 152 Market power, 185 from related diversification, 182 from unrelated diversification pooled negotiating power, 185–186 vertical integration, 186–189 Market pruning, 169 Market responsiveness, reduced, 225 Market saturation, 165 Market segments entered by mergers and acquisitions, 202 undefined in introduction stage, 164 Market share, 143 Market size, motive for international expansion, 217 Market theme, 385 Market-to-book value/ratio, 93, 446 and intellectual capital, 107–108 in knowledge-intensive corporations, 107 Market value measures market-to-book ratio, 446 price-earnings ratio, 445–446 Marketing and sales activities, 75 to bottom of the pyramid, 212–213 differentiation strategy, 148 increased efforts in, 268 overall cost leadership, 144 prosumer concept, 80–81 unethical or illegal activities, 76 Marketing argument, 118 Marketplace, viability in, 250 Mass customization, 154 enabled by Internet, 161 Massive overwhelming force, 265 Matching approach to hiring, 110–111 Matrix organizational structure, 319 advantages, 320 disadvantages, 320–321 multinational firms, 319–320 organizational chart, 320 worldwide, 313, 322 Maturity stage, 165 aggregate demand softens, 165 strategies breakaway positioning, 166 reverse positioning, 166 underidentification of rivalry, 165–166 Media, as control mechanism, 300–301 Mentoring benefits of, 113–114 by business incubators, 391 compared to sponsoring, 114 Mercosur, 234 Subject Index I-37 Mergers, 193 means of diversification, 193–194 as strategic actions, 268 Mergers and acquisitions; see also Acquisitions and antitakeover tactics, 202 Bank of America and Merrill Lynch, 104–106 and currency fluctuations, 194 versus divestment, 196–199 global value 2000–2012, 194 and government regulation, 194 motives and benefits attaining synergies, 194 industry consolidation, 195 new market segments, 195 obtaining valuable resources, 194 potential limitations cultural differences, 196 imitation by competitors, 196 manager credibility and ego, 196 takeover premium, 195 recent, 193 value perceived by investors, 197 well-know blunders, 180 worldwide volatility, 193–194 M-Form structure, 316 Middle class in China, 11 in emerging economies, 46 emerging in Asia, 217 Millennials attracting, 112 social and environmental impact, 110 Mindguards, 430 Minority shareholders expropriation of, 303 principal-agent conflicts, 302 principal-principal conflicts, 302 Mission, employee relationship with, 116–117 Mission Impossible: Ghost Protocol, 75–76 Mission statement, 25 effective, 25–26 examples, 24 redefined, 26 stakeholder management in, 24 Modular organization, 324, 328 apparel industry, 328 I-38 Subject Index conditions for success, 328–329 outsourcing noncore functions, 328 pros and cons, 330 risks from outsourcing loss of control over suppliers, 329 loss of critical skills, 329 loss of cross-functional skills, 329 Monitoring programs, 114–115 in vertical integration, 188 Mortgage-backed securities, 104 Motivation, 355 Movie industry, international sales, 217 Multidivisional structure, 316 Multidomestic strategy, 230 decentralized decisions, 230 geographic area divisions, 322 international divisions, 322 Procter & Gamble, 231 product names, 230 risks and challenges, 231–232 strengths and limitations, 232 worldwide matrix structure, 322 Multinational firms, 217 modes of international expansion, 234–239 monitored by nongovernmental organizations, 17 options in global strategy, 212 N Nanotechnology, 45 National Aeronautics and Space Administration, 168, 361 National competitiveness; see Diamond of national advantage Natural disasters, 5–6 Negotiating costs, 188 Network lever, 123 Networking by business incubators, 391 innovation skill, 383, 384 for recruiting, 111 Neuroscience, 384 New competitive action, 264 bases of, 264 hardball strategies, 265 reasons for, 263–264 New entrants; see also Threat of new entrants and competitive dynamics choosing not to react, 270 likelihood of competitive reaction, 269–270 motivation and ability to respond, 266–267 new competitive action, 263–264 threat analysis, 264–266 types of actions, 267–269 reactions from competitors, 262–266 New markets entering, 199, 268 search intensified by rivalry, 215 New product introduction, 268 New venture group, 390 New venture groups, WD-40 Company, 391 New ventures; see also Start-ups exit champions, 394–395 factors determining pursuit of, 388–389 idea sources, 392 measures of success, 394 product champions, 394 project definition, 393 project impetus, 393 strategic decisions, 395–396 strategic reasons for undertaking, 394 Niche-differentiation strategy, 152, 153 Nikkei, Nonfinancial rewards, 117 Nongovernmental organizations, monitoring of multinational firms, 17 Non-invented-here barrier, 123 Nonprofit sector, strategic priorities, 285 North American Free Trade Agreement, 46, 234 O Obesity, 44 Observing, 383, 384 Offshoring, 224; see also Outsourcing coordination costs, 225 easily visible savings from, 224–225 hidden costs, 225 from increased inventory, 225 indirect costs, 225 wage inflation, 225 intellectual property rights, 225 recent explosion in volume of, 224 reduced market responsiveness, 225 versus reshoring, 226 by service sector, 224 wage inflation and, 225 Oil spill of 2010, Online brokers, 146–147 Online procurement, 57 Online travel agents, 337–338 On-the-job consumption, 298 Open-sourcing model for talent, 117 Operational effectiveness, Operational efficiency and effectiveness, 285 Operations, 75 differentiation strategy, 148 overall cost leadership, 144 Opportunistic behavior, 298 Opportunities in entrepreneurial cultures, 392 for entrepreneurs, 248–251 recognizing, 35 in retailing from obesity, 44 Opportunity evaluation, 249–250 Opportunity recognition, 249 Options, 395 Oral case presentation, 422 Order processing time, 158 Organizational bases of power, 351 coercive power, 352–353 information power, 353 legitimate power, 351–353 reward power, 352 Organizational boundaries, 14 Organizational buying, 57 Organizational capabilities, 84; see also Capabilities Organizational conflicts, 335 Organizational culture, 281 in boundaryless organizations, 330–333 committed to excellence and ethical behavior, 349–350 culture of dissent, 363–364 entrepreneurial, 392 example, 282 rallies, 282 for risk-taking, 364 role in organizations, 282 self-governing, 280 setting boundaries, 282 storytelling for, 282 studies on, 281 sustaining, 282 wolf culture, 349 Organizational design, 14 in case analysis, 435 leadership task, 348–349 Organizational ethics, 365, 365–366 compliance-based programs, 366–368 integrity-based programs, 366–368 Organizational flexibility argument, 118 Organizational goals and objectives, in case analysis, 432–433 in strategy analysis, 11 Organizational learning, experience curve, 143 Organizational resources, 83, 84 Organizational structure, 312 ambidextrous design, 336–337 boundaryless organizational design, 324–335 Cisco Systems, 179 divisional structure, 313, 316–317, 320 dominant growth patterns, 312–314 effect of globalization, 314n effect of lower transaction costs, 314n functional structure, 313, 314–316 global start-ups, 322–323 holding company structure, 319 influence on strategy formulation, 324 for international markets, 313 international operations, 321–322 matrix structure, 319–321 online travel agents, 337–338 simple structure, 313, 314 strategic business unit structure, 318–319 strategy relationships, 312 types, 313–314 Organizational vision, 23–25 Organizational vs individual rationality, Organization for Economic Cooperation and Development, study on Asian Middle classes, 217 Organizations; see also Corporations; Environmentally aware organizations; Firms barriers to change in, 350–351, 352 core values and performance evaluation, 115 diversity management, 118 hierarchy of goals, 23 integrative view of, 20–22 isolated departments, 315 key stakeholders and claims, 16 shared value concept, 18–19 situational factors in behavioral control, 286–287 social responsibility, 17–18 stakeholder management, 15–17 structural holes, 122 tribal loyalty, 116 triple bottom line, 19–20 Orphan Drug Act of 1983, 228 Outbound logistics, 75 differentiation strategy, 148 overall cost leadership, 144 Outside consultant, 416 Outsourcing, 8, 224; see also Offshoring benefits and challenges, 312 by Boeing, 310–312 by modular organizations noncore functions, 328 strategic risks, 329 recent explosion in volume of, 224 by service sector, 224 Subject Index I-39 Overall cost leadership, 143 bases of, 142 competitive parity, 143–144 effects of Internet, 160–161 examples, 145 experience curve, 143 and five-forces model, 145 integrated with differentiation strategies, 154–157 interrelated tactics, 143 for new ventures, 260 pitfalls to easily imitated, 146–147 increased cost of inputs, 146 lack of parity in differentiation, 147 obsolescence of basis of cost advantage, 147 reduced flexibility, 147 summary, 152 too much focus on too few value-chain activities, 146 and process innovation, 379 Renault, 146 value-chain activities, 144 Vizio, Inc., 261 Overconfidence, 397–398 P Parenting advantage, 189 from unrelated diversification, 182 Patents, battles over, 131 Path dependency, 86 Pension Rights Center, 300 People for the Ethical Treatment of Animals, 301 People lever, 123 Performance appraisals, 112 Performance enhancement, from location of value-chain activities, 218 Performance evaluation balanced scorecard, 94–96 and core values, 115 financial ratio analysis, 92–94 360-degree evaluation and feedback system, 115–116 Performance materials, 78 Permeable internal boundaries, 325–326 Personal agendas, 125–126 I-40 Subject Index Personal bases of power, 353 expert power, 353 referent power, 353 Personal risk taking, 404 Personal time constraints, 351 Physical resources, 83 Physical space, 390 Physical uniqueness of resources, 86 Piecemeal productivity improvements, 169 Pied Piper Effect, 120 Pioneering new entry, 257 disruptive of status quo, 257–258 Pandora, 258 pitfalls, 257 sustaining advantage, 257 Piracy by counterfeiting, 220 of software, 220 Plagiarize, 265 Poison pill, 202, 298 Policies, ethical, 370 Political barriers, 351 Political barriers to change, overcoming, 352 Political/legal segment of the general environment, 43, 44–45 Political/legal trends, 47 Political risk, 220 country risk ratings, 220, 221 examples, 220 managing by identifying key influencers, 221 by market diversification, 221 by stakeholder coalitions, 221 by stakeholders on boards, 221 Ponzi scheme, 365 Pooled negotiating power, 185 potential downside, 186 Population African Americans, 118 aging in United States, 42 Asian Americans, 118 Hispanic Americans, 117–118 of world in 2013, 217 Porter’s five-forces model of industry competition; see Five-forces model of industry competition Portfolio management, 190 description and benefits, 190–192 growth/share matrix approach, 190–192 limitations, 192 Portfolio of businesses, 189 Portugal economic crisis, emigration from, Positioning strategies breakaway positioning, 166 reverse positioning, 166 Power, 351 effective uses of, 351–353 organizational bases, 352–353 personal bases, 353 from private information, 124–125 Preannouncements, 403 Preemptive launch, 382 Price comparison, on Internet, 58 Price cutting, 268 automobile industry, 270 Price-earnings ratio, 93, 445–446 Price increases, 268 Price-performance relationship, 53 Price-performance trade-off, 169 Price premium, 148 too high, 151 Primary activities, 72 differentiation strategy, 148 inbound logistics, 74–75 marketing and sales, 75–76 operations, 75 outbound logistics, 75 overall cost leadership, 144 service, 76 in service organizations, 81–82 upstream, 232 Prime Time Live, 300 Principal-agent conflicts, versus principal-principal conflicts, 301–302 Principal-principal conflicts, 301 conditions for, 303 versus principal-agent conflicts, 301–302 Principals, 397 in agency theory, 290–291 Private information, 123 access to diverse skill sets, 124 power from, 124–125 Proactiveness, 401 examples of failure, 401–402 first-mover advantage, 401 pressure on competitors, 401 techniques new product introduction, 402 new service offerings, 402 Problem identification, 418 Problem-solving argument, 118 Procedures, ethical, 370 Process for change, 346 Process innovation, 379 Process loss, 128 Procurement, 76–78 differentiation strategy, 148 at LG Electronics, 79 online, 57 overall cost leadership, 144 Product champion, 393 contrasted with exit champion, 395 Product differentiation, 50 access to distribution channels, 51 capital requirements, 51 cost disadvantages independent of scale, 51 in five-forces model, 50–51 lack of, 54 switching costs, 51 Product division, worldwide, 313 Product growth potential, motive for international expansion, 217–218 Product innovation, 378 Product markets, separate divisions for, 316–317 Product names, 231 Product placement, 75–76 in movies, 153 Product portfolio, change at Porsche, 171 Product pruning, 169 Products in breakaway positioning, 166 commoditized, 58 complementors, 60 counterfeit, 220 in decline stage, 166–169 in reverse positioning, 166 stabilizing demand for, 188 standardized or undifferentiated, 52 unimportant to buyers, 53 unimportant to quality, 52 Production capacity changes, 268 customers included in, 80 lowering unit costs, 228 mass customization, 154 Productivity, piecemeal improvements, 169 Product-line extensions, dilution of brand identity, 151 Profit concentration, 155 Profit margin ratio, 93, 444–445 Profit pool, 155 for combination strategies, 155 in electronics retailing, 156 miscalculating sources of, 157 Profits diverted to top management, 91 and employee bargaining power, 91 and employee exit costs, 91 and employee replacement costs, 91 generation and distribution of, 90–91 low, 52 manager bargaining power, 91 Profit sanctuaries, 265 Profitability of new ventures, 394 underpinnings of, 80–81 Profitability measures profit margin, 444–445 return on assets, 445 return on equity, 445 Profitability ratios, 93 Project definition, 393 Project impetus, 393 Property rights, intellectual vs physical property, 131 Proprietary information systems, 80 Proprietary software, 57 Prosumer concept, 80–81 at Procter & Gamble, 81 Public activists, as control mechanism, 300–301 Public Company Accounting Oversight Board, 299 Public company information, 448 Public information, 123 Purchases, buyer bargaining power and size of, 51 Q Quality, in global strategy, 229 Question marks, 191–192 Questioning, 383, 384 Quick ratio, 93, 441 R Radical innovation, 379, 380 project time line, 385 Radio advertising, 376–378 Rare resources, 85 Ratio analysis asset management measures, 443–444 categories, 440 long-term solvency measures, 442–443 market value measures, 445–446 problems with, 438–440 profitability measures, 444–445 questions about, 440 short-term solvency measures, 440–442 summary of, 446 Rationality, RBV; see Resource-based view of the firm Real estate boom, Spain, Real estate options, 395 Real options analysis, 395 applications to strategic decisions, 395–396 applied to entrepreneurs, 395 at Intel, 397 pitfalls agency theory and back-solver dilemma, 396–397 and managerial conceit, 397–398 wit property, 395 Realized strategy, 11 versus intended strategy, 10–11 Receivables turnover, 93, 444 Recognition programs, 284 Recommendations, in case analysis, 421 Recruiting, 111 Reengineering, successful, 333 Subject Index I-41 Reengineering the Corporation (Hammer & Champy), 333 Referent power, 353 Referrals, 111 Regionalization, 234 versus globalization, 234 Reintermediation, 58 Related and supporting industries, 215 Related diversification, 182 deriving cost savings, 184–185 economies of scope, 182 economies of scope from, 182 enhancing revenue and differentiation, 185 examples of success, 181 leveraging core competencies, 182–184 market power from, 182 pooled negotiating power, 185–186 vertical integration, 186–189 sharing activities, 184–185 value creation by, 181–182 Rents, 90 Repeat purchasers, 165 Replacement cost of employees, 91 Replacement demand, 171 Reputation, 83 of competitors, 270 damaged by competitive aggressiveness, 403 Request for proposals, 386–387 Research and development for innovativeness, 401 for internal development, 200 by Microsoft, 405 Reshoring, 226 Resource acquisition argument, 118 Resource-based view of the firm, 82 erosion of competitive advantage at Dell Inc., 89–90 external analysis, 82 generation and distribution of profits, 90–92 internal analysis, 82 and social capital, 119 for sustainable competitive advantage causal ambiguity, 87 I-42 Subject Index inimitable resources, 86 path dependency, 86 physical uniqueness, 86 rare resources, 85 readily available resources, 87–89 social complexity, 87 valuable resources, 85 types of resources, 83–84 Resource similarity, 266 Resources attributes for comparative advantage, 85 without available substitutes, 87–89 causal ambiguity, 87 of competitors, 270 criteria for assessing sustainability, 85 inimitability, 86 intangible, 84 obtained by mergers and acquisitions, 194 organizational capabilities, 84 path dependency, 86 physical uniqueness, 86 rarity, 85 social complexity, 87 tangible, 83–84 valuable, 85 Responsible Corporate Office Doctrine, 345 Restructuring, 189 asset restructuring, 190 capital restructuring, 190 by Ford Motor Company, 170 Loews Corporation, 190 management restructuring, 190 from unrelated diversification, 182 Retail alliances, 255 Retailing electronics, 156 opportunities from obesity, 44 Retreating to more defensible ground, 168–169 Return on assets ratio, 93, 445 Return on book assets, 445 Return on book equity, 445 Return on equity ratio, 93, 445 Return on investment, 143 Return on sales, historical trends, 94 Revenue enhanced by related diversification, 185 increase in growth stage, 165 miscalculating sources of, 157 Reverse innovation, 218 in developing countries, 219 examples, 219 from international expansion, 218–219 motivation and implications, 219 products for emerging markets, 218–219 Reverse positioning, 166 Commerce Bank, 167 Reward and compensation agreements, 291 Reward power, 352 Reward system, 283 and behavioral control, 287, 288 characteristics for effectiveness, 283–284 as control mechanism, 283 financial and nonfinancial, 117 for innovation, 387 potential downsides, 283 problems across organizational units, 283 Risk minimization, 404 Risk reduction goal of diversification, 192–193 from location of value-chain activities, 218 Risk sharing, and agency theory, 291 Risk taking, 403 potential pitfalls, 404 techniques from other domains, 404 research and assessment, 404 types of, 404 Risk-taking culture, 364 Risks in exporting, 236 in global economy, 46 in international expansion currency risk, 222–223 economic risk, 220–222 management risks, 223 political risk, 220–222 in joint ventures, 237–238 in licensing and franchising, 236–237 in strategic alliances, 236–237 in wholly owned subsidiaries, 238 Rivalry, 215 intensifying in maturity stage, 165–166 Role models, 368 Role playing, in case analysis, 415–418 Romantic view of leadership, Rule of law, 220 S Sales and leaseback, 169 Sales commission, 132 Sarbanes-Oxley Act, 45 and boards of directors, 294 on corporate governance, 300 protection of whistle-blowers, 370 Scenario analysis, 40 context for, 40–41 at PPG, 41 Scent of Mystery, 257 Search barrier, 123 Search costs, 160 in vertical integration, 188 Search engines, 452 Securities and Exchange Commission Bank of America fine, 104 as control mechanism, 299–300 on crowdfunding, 253 EDGAR database, 449 filings, 449–450 Seeds vs weeds, 382 Self-awareness, 354 Self-censorship, 428 Self-governing culture, 280 Self-regulation, 354–355 Sellers, perception of differentiation, 151 Sell-offs, 197n Semiconductor business, 397 Separation of ownership and management, 290–291 Service organizations offshoring by, 224 value chain applied to, 81–82 Services, 76 differentiation strategy, 148 overall cost leadership, 144 Setting a direction, 347–348 Shared value concept, 18–19 Shareholder activism, 291, 295 institutional investors, 295 Shareholders, in corporate governance, 14, 15 Shareholder value, destroyed by acquisitions, 197 from diversification, 181 generating, 15–16 Sharing activities, 184 attained by mergers and acquisitions, 195 differentiation by means of, 185 synergies from, 184–185 Shirking, 298 Shopping bots, 58 Shopping infomediaries, 58 Short-term objectives and action plans, 285 Short-term perspective, 8–9 Short-term solvency/liquidity measures, 440–442 cash ratio, 442 current ratio, 441 quick/acid-test ratio, 441 Short-term solvency ratios, 93 Silos, 122, 315 Simple organizational structure, 313, 314 advantages, 313 disadvantages, 313 Situational factors in organizational control, 286–287 Skilled human resource pool, 214 Skills lost in outsourcing, 329 training for, 111 Skill sets, access to, 124 Skunkworks, 399, 400 Skyfall, 217 Slow industry growth, 54 Small Business Administration, 255 Small Business Development Center, 255 Social capital, 108 attracting and retaining talent, 120 boundaryless organizations, 335 entrepreneurial resource, 254 example, 119 generated by electronic teams, 126 implications for career success, 122 interdependence among group members, 121 overcoming barriers to collaboration, 123 Pied Piper Effect, 120 potential downsides cost of socialization process, 125 dysfunctional human resource practices, 125 groupthink, 125 not enough closure relationship, 126 pursuit of personal agendas, 125–126 and resource-based view of the firm, 119 social networks for, 120–125 tying knowledge workers to firms, 118–119 value creation through, 130 Social complexity, 87 Social media imitation, 246–247 LinkedIn, 152 Social network analysis, 121 bridging relationships, 121–122 closure relationships, 121–122 communication patterns, 121 Social networks analysis of, 121–122 brokers, 124–125 connectors, 120–121 implications for career success, 123 network traps wrong behavior, 125 wrong relationships, 125 wrong structure, 125 public vs private information, 123–125 for sharing information, 126 structural holes, 122 Subject Index I-43 Social responsibility, 17–18; see also Corporate social responsibility demand for, 18 shared value concept, 18–19 triple bottom line, 19–20 Social skills, 356–357 Socialization process, costs of, 125 Socially complex processes, 108 Socially responsible investing, 20 Sociocultural segment of the general environment, 42–44 Sociocultural trends, 47 Soft power, 353 Soft trends, 37 example, 37 Software piracy, 220 South Korea, business groups, 303 Spain, economic crisis, Spin-offs, 197n Split-ups, 197n Sponsoring, advice on, 114 Staffing to capture value from innovation, 386 for innovation success, 387 internal vs external, 382 Stakeholder coalitions, 221 Stakeholder management, 15 generating shareholder value, 15–16 key groups and claims, 16 in mission statements, 26 zero-sum vs symbiosis, 16–17 Stakeholders, and balanced scorecard, 94–96 benefits from antitakeover tactics, 203 on board of directors, 221 in boundaryless organizations, 333–335 and corporate governance, 288n in decision making, impact of vertical integration, 188 key groups, 16 in Procter & Gamble, 17 retention of profits, 92 source of new venture ideas, 391 in Walmart, 16 Standard and Poor’s 500 index, 20 Standard financial statements, 437 I-44 Subject Index Standardization, 226–227 Standardized products, 52 Stars, 191–192 Start-ups; see also Corporate Entrepreneurship; Entrepreneurs; New ventures capital sources, 252 criteria for viability, 250 crowdfunding, 253–254 emigration of talent for form, 120 entry strategies, 257–260 financial resources, 251–254 generic strategies, 260–262 global, 322–323 government contracting, 255 government support, 255 human capital, 254 leadership in, 255–256 in mature industries, 262 opportunity evaluation, 249–250 social capital, 254–255 sources of opportunities, 248–249 strategic thinking for, 247–248 threat of retaliation by incumbents, 257 Static analysis, 59 Status quo challenging, 363–364 dissatisfaction with, 346 questioning, 358–359 vested interests in, 350 Stereotyping, 428 Stock analysts, as control mechanism, 299 Stock market, 43 performance of financial stocks, 15 Stock options, 296, 395 Stock price, decline after acquisition notice, 195 Stockholders, 290 Storage costs, 54 Stove pipes, 122, 315 Strategic actions, 267 types of, 268 Strategic alliances, 199 benefits, 237 crowdsourcing in, 199 to develop and diffuse technologies, 200 to enter new markets, 199 means of diversification, 193, 199–200 potential downsides, 200 to reduce value chain costs, 199–200 risks and limitations, 237–238 for start-ups, 254–255 manufacturing, 255 pitfalls, 255 retailing, 255 technology, 255 as strategic actions, 268 Strategic analysis, 11, 419 information resources, 450–452 Strategic business units in growth/share matrix cash cows, 191–192 dogs, 191–192 question marks, 191–192 stars, 191–192 Strategic business unit structure, 314, 318 advantages, 319 disadvantages, 319 Strategic control, 278 alternative approaches, 287 aspects of behavioral control, 278, 279 corporate governance, 278 informational control, 278, 279 attaining behavioral control, 281–288 based on feedback loop, 278 in case analysis, 435 contemporary approach, 279–280 ensuring informational control, 278–280 problems at Hewlett-Packard, 276–277 role of corporate governance, 288–303 traditional approach, 278–279 types of, 14 views of managers and employees, 280 Strategic decision makers, 415 Strategic decisions applications of real options analysis, 395–396 embedded options, 396 at Johnson Controls, 396 tollgates, 396 Strategic direction creating sense of mission, 22–23 hierarchy of goals, 23 mission statements, 25–26 strategic objectives, 26–27 vision, 23–25 Strategic envelope, 384–385 Strategic groups, 61 automobile industry, 62–63 charting future strategies, 62 classifying, 61–62 identifying barriers to mobility, 62 identifying competitive position, 62 implications of each industry, 62 Strategic management, corporate governance, 14–15 to create competitive advantage, 7–8 decision dilemma, 28 ensuring coherence in direction, 22–27 hierarchy of goals, 23 mission statement, 25–26 strategic objectives, 26–27 vision, 23–25 integrative view of organization, 20–22 key attributes efficiency-effectiveness tradeoff, goals and objectives, short-term or long-term perspective, 8–9 stakeholders in decision making, shared value concept, 18–19 social responsibility, 17–18 stakeholder management, 15–17 triple bottom line, 19–20 Strategic management process, analyses, decisions, and actions, intended vs realized strategy, 10–11 ongoing, strategy analysis, 11–13 strategy formulation, 13–14 Strategic objectives, 26 Strategic partnering, 387 Strategic plan, in virtual organizations, 331 Strategic priorities, 284–285 Strategic resources, 84 Strategic thinking, 162 for start-ups, 247–248 Strategic vs financial goals, 394 Strategically equivalent valuable resources, 87 Strategy analysis, 11–13 Strategy formulation, 13 effect of organizational structure, 324 summary of steps, 13 Strategy implementation, 13 summary of steps, 13–14 Strategy objectives criteria for appropriate, 27 measurable, 27 realistic, 27 specific, 27 timely, 27 financial, 26–27 lack of focus from too many, 27 nonfinancial, 26–27 Strategy/Strategies, charting future direction of, 61 cross-selling, 105 failure at Borders, 3–4 going astray, 36 intended vs realized, 10–11 overemphasis on single dimension of, 73 reasons for failure, 10–11 requiring multiple types of resources, 85 sources of implementation problems, 348–349 too easily imitated, 146–147 for turnaround at Ford, 170 value of inexperience, 22 Strikes, United Food and Commercial Workers, 28 Structural holes, 122 Structure of Corporation Law (Eisenberg), 290 Stuck-in-the-middle problem, 142, 156 Subprime mortgage market, 371 Subsidiaries and corporate parenting, 189 wholly owned, 238 Substitute products and services, 53 Substitutes available for resources, 86–88 threat of, 53 Succession planning, 293 and duality of command, 297 Super Bowl TV commercials, 77 Superficial networks, 125 Supplier base, 215 India, 216 Suppliers; see also Bargaining power of suppliers disintermediation by, 58 for General Motors, 59 long-term relationships with, 59 loss of control over, 329 problems for Boeing, 311 web-based purchasing arrangements, 57 Support activities, 72 differentiation strategy, 148 general administration, 79 human resource management, 78 overall cost leadership, 144 procurement, 76–78 technological development, 78 Sustainable competitive advantage, 8; see also Competitive advantage criteria for, 89 no longer possible, 347 resources for, 85–89 Sustainable global economy, 19 Sustaining competitive advantage, innovation for, 381 Sustaining innovation, 380 Switching costs, 51 barrier to entry, 51 built up for buyers, 53 and buyer bargaining power, 52 and intensity of rivalry, 58 lack of, 54 on web businesses, 56 SWOT analysis, 41, 85 and competitive aggressiveness, 402 limitations one-shot view of moving target, 73 Subject Index I-45 SWOT analysis—Cont overemphasis on single dimension of strategy, 73 strengths not leading to competitive advantage, 73 too narrow a focus on external environment, 73 not primary basis for internal analysis, 72 for strategy, 42 unpopularity of, 42 Symbiosis, role of stakeholders, 16–17 Synergies, 181 core competencies as basis for, 183 deriving cost savings, 184–185 financial, 182 imitated by competitors, 196 main sources of, 189 obtained by mergers and acquisitions, 195 from sharing activities, 184–185 Systemic barriers, 351 T Tacit knowledge, 108, 128 Tactical actions, 267 for overall cost leadership, 143 types of, 268 Takeover constraint, 298 Takeover premium, 195 Talent attracted and retained by social capital, 119 attracting, 106, 110–112 emigration to form start-ups, 120 open-sourcing model for, 117 role of empathy in retailing, 356 Tangible resources, 83 Dell Inc., 90 types of, 83 Teams autonomous, 399 autonomous work groups, 390 in barrier-free organizations, 325–326 in boundaryless organizations, 324, 332 for case analysis, 429–430 cross-functional, 336 I-46 Subject Index electronic vs traditional, 127–128 good vs mediocre, 326 Technological resources, 83 Technological segment of the general environment, 43, 45 Technological trends, 47 Technology contribution to decline stage, 168 developed and diffused by strategic alliances, 200 focus for innovation, 385 for hiring prepuces, 111 investment in, 401 for leveraging human capital and knowledge codifying knowledge, 128–129 electronic teams, 127–128 social networks, 126 as source of new ideas, 378 value creation through, 130 Technology alliances, 255 Technology development, 78 differentiation strategy, 148 overall cost leadership, 144 Teleconferencing, 53 Television commercials, Super Bowl, 77 Television industry, 381 Terrorist attack of 2001, 18 Theory of the business, 36 Threat analysis, 264, 264–266 market commonality, 266 resource similarity, 266 strength of response based on, 266 Threat of new entrants, 50, 56 in five-forces model, 50 impact of Internet, 55 by start-ups, 256–257 Threat of retaliation for start-ups, 257 Threat of substitute products and services, 53, 56 in five-forces model, 53 impact of Internet, 58 360-degree evaluation and feedback system, 115 at General Electric, 115 at HCL, 116 Time horizon in industry analysis, 60–61 Time pacing for innovation, 385–386 Times interest earned ratio, 93, 442 Tipping Point (Gladwell), 120 Tollgates, strategic decision makers, 396 Top-level executives, 21 Total asset turnover, 93, 444 Total debt ratio, 93, 442 Total performance indicators, 96 Total quality management, Total wage costs, 225 Tourism, decline in European Union, Trade-offs efficiency-effectiveness, price-performance, 169 Trading blocs, 46, 234, 234 Traditional approach to strategic control, 277–279, 278 Training and behavioral control, 288 for skill, 111 and technology changes, 113 Transaction cost perspective, 188 Transaction costs, 334 effects on organizational structure, 314n lowered by disintermediation, 160 types of, 188 Transaction-specific investments, 188, 189 Transfer barrier, 123 Transformational change, 22 Transnational strategy, 232 by Asea Brown Boveri, 232–233 enhanced adaptation, 232 location decisions for value chain, 232 risks and limitations, 233 strengths and limitations, 233 value-chain activities, 232 Trend analysis, 36–38 Trends emerging, 36–37 in general environment, 47 hard, 37–38 key, 36 return on sales, 94 Tribal loyalty, 116 Triple bottom line, 19 and environmental revolution, 19 environmental sustainability, 19–20 T-shaped management, 123 Turnaround strategy, 169 asset and cost surgery, 169 external analysis for, 169 at Ford Motor Company, 170 internal analysis for, 169 at Intuit, 169–170 piecemeal productivity improvements, 169 product and market pruning, 169 and replacement demand, 171 rescuing pockets of profit, 171 Turnover measures, 443–444 Turnover ratios, 93 U Uncertainty, underestimating, 40 Undifferentiated products, and buyer bargaining power, 52 Unemployment, in Spain, Unethical behavior, 365 in housing market, 371 intensified by competition, 369–370 minimizing, 286 Unification lever, 123 Uniqueness not valuable, 150 Unit costs, lowering, 228 United Auto Workers, 170 United Food and Commercial Workers, 28 United States aging population, 42 number of franchisers, 236 United States Bureau of Statistics, 42 Unity of command, 297 Universities, as innovation partners, 387 Unrelated diversification, 189 corporate parenting, 189 Delta Air Lines, 203–204 failure at Cisco Systems, 178–180 hierarchical relationships, 189 portfolio management, 190–192 restructuring, 189–190 risk reduction by, 192 synergies from, 189 value creation by, 181–182 Unsupported teams, 336 Upstream activities, 232 U.S News & World Report, 369 USA Today, 379 USA Today Super Bowl Ad Meter, 77 Using the new to improve the old, 169 Utility companies, greenwashing, 366 V Valuable resources, 85 Value captured from innovation, 386 definition, 72 Value chain, 72 cost reductions, 199–200 extended, 155 global dispersal of, 223–225 global dispersion of decline in transportation costs, 224 example, 224 offshoring, 224–225 outsourcing, 224–225 by service sector, 224 integration at multiple points along, 149 and reintermediation, 58 Value-chain activities at Campbell Soup, 75 in decline stage, 168 differentiation strategy, 148 for firms to consider primary activities, 74 support activities, 76 location in transnational strategy, 232 optimizing location of, 218 outsourced, 187 overall cost leadership, 144 primary, 72, 74–76 source of competitive advantage, 392 support, 72, 76–79 too much focus on few, 146 underestimating challenges, 156 Value-chain analysis, 72 interrelationships among, 79–80 primary activities, 72, 74–76 prosumer concept, 80–81 for service organizations, 81–82 support activities, 72, 76–79 Value-creating activities, 72 Value creation from core competencies, 183 from human capital, 130 from intellectual processes, 106 by internal development, 20 from opportunities, 250 from related diversification, 181–182 from social capital, 130 from technology, 130 from unrelated diversification, 181–182, 189–190 Value net, 59–60 Value of the firm in financial statements, 107 market-to-book value, 107–108 Values in boundaryless organizations, 330–333 decision dilemma, 28 Variance, estimation of, 396 Venture capital, 253 Venture capitalists, 253 for start-ups, 252–253 Vertical boundaries, 325 Vertical integration, 185, 186 administrative costs, 188–189 benefits and risks, 186–188 issues to consider, 186–188 market power, 186–189 at Shaw Industries, 187 transaction cost perspective, 188–189 Vested interest in the status quo, 350 Video rental business decline, 168 Vietnam, Procter & Gamble in, 231 Virtual organization, 324, 329, 329–331 challenges and risks, 330–331 collaboration in, 330, 331 compared to modular type, 330 pros and cons, 332 Visas for high-tech workers, 45 Subject Index I-47 Vision, 23, 346 anchored in reality, 24–25 developed by leaders, 23 downside, 24 of entrepreneurs, 256 of environmental sustainability, 348 examples, 24 idealistic, 24 irrelevant, 24 setting a direction, 347–348 sloganeering campaign, 24 sources of implementation problems, 348–349 Vision statements, 24, 26 W Wage inflation, 225 Wall Street Journal, 38, 120, 196, 266, 300 Water purification system, 387 I-48 Subject Index Watson supercomputer, 184 Websites business, 450 for competitive intelligence, 38–39 crowdfunding, 253 Wholly owned subsidiary, 238 benefits, 238, 239 risks and limitations, 238 Wisdom of Teams (Smith), 332 Wolf culture, 349 Women driving force in economy, 44 educational attainments, 44 in workforce, 42–44 Work, challenging, 117 Workforce aging population of, 42 diversity in, 117–118 millennials in, 112 women in, 42–44 Working Knowledge, 369 Working with Emotional Intelligence (Goleman), 354 Workplace, stimulating environment, 117 Worldwide functional divisions, 313 Worldwide functional structure, 322 Worldwide matrix structure, 313, 322 Worldwide product division, 313 Worldwide product division structure, 322 Written case analysis, 425 Z Zero-sum game, 59, 317 Zero-sum role of stakeholders, 16–17 THE WORLD’S LEADING BUSINESS STRATEGY SIMULATIONS The Business Strategy Game & GLO-BUS Both BSG & GLO-BUS empower students to design a strategy aimed at winning a competitive advantage for their company in head-to-head competition against companies run by their classmates Students apply textbook and lecture concepts while battling for market share and industry leadership Both simulations are global in nature and have conceptually-strong Assurance of Learning Reports that can be used to support 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Introducing McGraw-Hill Create™–a new, self-service website that allows you to quickly and easily create After completing your Create project, request an eBook review copy and receive a free PDF sample in minutes! custom course materials by drawing upon McGraw-Hill’s comprehensive, cross disciplinary content and other third party resources Print review copies are also available and arrive in just a few days tSelect, then arrange the content in a way materials you’ve always wanted Imagine that tCombine material from different sources begin creating now: www.mcgrawhillcreate.com Finally–a way to quickly and easily create the course that makes the most sense for your course and even upload your own content tChoose the best format for your students– print or eBook tEdit and update your course materials as often as you’d like ... in strategic management, technology management, organizational learning, and managerial decision making He has published research articles and cases in journals such as Advances in Strategic Management, ... currently an Associate Editor for the Academy of Management Journal vii PREFACE Welcome to the Seventh Edition of Strategic Management: Creating Competitive Advantages! preface We are all very... as all student resources BRIEF CONTENTS Preface vi brief contents part Strategic Analysis Strategic Management: Creating Competitive Advantages 2 Analyzing the External Environment of the Firm