Vision,Goals,and Objectives 1
Chapter 1 An Introduction to Corporate Strategy 1
The Need for Corporate Strategy 1
CHAPTER 1: AN INTRODUCTION TO CORPORATE STRATEGY 1
Brief Contents 1
The Pressure to Change 2
The Story Today: No There,There 4
What Is Corporate Strategy? 5
PRINCIPLES 5
Vision 7
PRACTICE 7
A Framework for Corporate Strategy 7
Goals and Objectives 8
Resources 9
Businesses 10
Structure, Systems, and Processes 10
Corporate Advantage 11
Enduring Logic 12
The Road Ahead 13
Recommended Readings 14
The Concept of Corporate Strategy 15
Appendix A: Past Approaches to Corporate Strategy 15
APPENDIX A: PAST APPROACHES TO CORPORATE STRATEGY 15
Portfolio Planning 17
Organization Structure and Diversification 17
Value-Based Strategy 19
Generic Corporate Strategies 21
Resource-Based View 22
Chapter 2 Resources and Rents 25
Resources 25
Introduction 25
CHAPTER 2: RESOURCES AND RENTS 25
Business-Unit Strategy 26
PRINCIPLES 26
Stocks and Flows 27
Resources 28
What Are Resources? 28
What Makes Resources Valuable? 30
Intrinsic Properties of Resources 36
Economic Rent 38
The Sting of Schumpeterian Competition 39
Resource-Based Strategy 41
Identification of Valuable Resources 41
PRACTICE 41
Investing in Resources 43
Upgrading Resources 45
Leveraging Resources 46
Recommended Readings 47
APPENDIX B: BUSINESS STRATEGY AND INDUSTRY ANALYSIS 48
Strategy Identification 48
Appendix B: Business Strategy and Industry Analysis 48
Industry Analysis 49
The Degree of Rivalry 50
The Threat of Entry 51
Buyer Power 53
The Threats of Substitutes 53
Generic Strategies 54
Summary 54
Supplier Power 54
Chapter 3 Scale and Scope within an Industry 57
Businesses 57
Introduction 57
CHAPTER 3: SCALE AND SCOPE WITHIN AN INDUSTRY 57
Dimensions of Scope 58
PRINCIPLES 58
Expansion within an Industry 60
Economies of Scale 61
Experience Curve 63
Limits to Scale and Experience 64
Economies of Scope 65
Obstacles to Exploiting Scale and Scope 67
PRACTICE 68
The Search for Scale and Scope Effects 68
Identifying Scale and Scope Effects 69
Scale and Scope Along the Value Chain 70
Conclusion 73
Recommended Readings 73
Chapter 4 Diversified Expansion 75
Guiding Growth 75
Introduction 75
CHAPTER 4: DIVERSIFIED EXPANSION 75
PRINCIPLES 76
Why Do Firms Diversify? 76
Choice of Businesses 78
Matching Resources and Businesses 78
A Sequence of Steps 79
Resources as a Springboard 81
Diversification and Firm Performance 84
Performance Implication 85
The Importance of the Industry Effect 87
Summary 88
PRACTICE: MODE OF EXPANSION 89
Mergers and Acquisitions 89
Benefits 90
Drawbacks 91
Internal Development 93
Drawbacks 94
Benefits 94
Alliances 95
Benefits 95
Drawbacks 95
Recommended Readings 96
Chapter 5 Organizational Limits to Firm Scope 99
Structure,Systems,and Processes 99
CHAPTER 5: ORGANIZATIONAL LIMITS TO FIRM SCOPE 99
Introduction 99
PRINCIPLES 100
Scope of the Firm: Resources and Competitive Advantage 100
Scope of the Firm: Market or Hierarchy 100
The Market 103
Benefits of the Market 103
Costs of the Market: Transaction Costs and Market Failure 104
Other Sources of Market Failure 107
Summary 108
The Hierarchy 108
Benefits of the Hierarchy 108
Costs of the Hierarchy 109
Summary 113
Conclusion: The Choice between Market and Hierarchy 113
Intermediate Forms of Organization 114
PRACTICE 115
Choosing the Scope of the Firm 115
Bias to the Market 116
A Decision Process 116
Step 1: Disaggregate the Industry Value Chain 116
Step 2: Competitive Advantage 117
Step 3: Market Failure 119
Step 4: Need for Coordination 120
Step 5: Importance of Incentives 121
Summary 123
Recommended Readings 124
Chapter 6 Managing the Multibusiness Corporation 127
CHAPTER 6: MANAGING THE MULTIBUSINESS CORPORATION 127
Introduction 127
PRINCIPLES 128
The Administrative Context 128
Designing the Context 128
Form and Function 129
Applying Organizational Economics 131
Organization Structure 133
Systems and Processes 136
Control 136
Coherence 139
Summary: Linking Administrative Context to Purpose 142
PRACTICE 142
Roles of the Corporate Office 142
Set Strategy 143
Resource Guardian 143
General Overhead Functions 144
Setting the Administrative Context 145
Control 146
Coherence 148
Summary: The Size of the Corporate Office 150
Appendix C: Mechanisms for Achieving Control and Coherence 150
Recommended Readings 152
APPENDIX C: MECHANISMS FOR ACHIEVING CORPORATE COHERENCE 154
Transferring Resources and Skills 154
Coordination of Activities 159
Coordinating Strategies 162
Coordinating Market Position 162
Coordinating Multimarket Competition 163
Chapter 7 Creating Corporate Advantage 167
Putting It All Together 167
CHAPTER 7: CREATING CORPORATE ADVANTAGE 167
Introduction 167
PRINCIPLES 167
A System of Value Creation 167
Consistency between Resources and Businesses 168
Consistency between Businesses and Organizational Structure, Systems ,and Processes 169
Consistency between Organizational Structure, Systems,and Processes and Resources 170
A Continuum of Effective Corporate Strategies 170
Evaluating Corporate Strategy 173
Vision 173
PRACTICE 173
Internal Consistency 174
External Consistency 174
Feasibility 175
Corporate Advantage 176
Summary 177
CHAPTER 8: CORPORATE GOVERNANCE 179
Introduction 179
Chapter 8 Corporate Governance 179
PRINCIPLES 180
Why Governance Fails 180
Agency Problems and Self-Interest 180
Contextual Factors 182
Evidence of Failures in Governance 183
Managerial Indulgences 184
Empire Building 185
PRACTICE 186
Modern Corporate Governance 186
The Market for Corporate Control 187
Institutional Investors 188
Relationship Investing 191
Disengaged Directors 192
The Role of the Corporate Board 192
The Structure of Good Governance 193
Limitations on the Board s Ability to Govern 195
Creating Corporate Advantage 196
Role of the CEO 196
Recommended Readings 197
CASE1-1: THE WALT DISNEY COMPANY（A） 199
Case 1-1 The Walt Disney Company（A）: Corporate Strategy 199
Case 1-2 The Walt Disney Company（B）: Sustaining Growth 223
CASE1-2: THE WALT DISNEY COMPANY（B）: SUSTAINING GROWTH 223
Case 1-3 Portfolio Planning at Ciba-Geigy and the Newport Investment Proposal 245
CASE1-2: PORTFOLIO PLANNING AT CIBA-GEIGY AND THE NEWPORT INVESTMENT PROPOSAL 245
Case 2-1 Marks and Spencer,Ltd.（A） 259
CASE2-1: MARKS AND SPENCER,LTD.（A） 259
Case 2-2 Berkshire Partners 282
CASE2-2: BERKSHIRE PARTNERS 282
Case 2-3 Saturn Corporation s Module ll Decision 301
CASE2-3: SATURN CORPORATION S MODULE II DECISION 301
CASE3-1: BANC ONE CORPORATION,1989 319
Case 3-1 Bane One Corporation, 1989 319
Case 3-2 Masco Corporation（A） 343
CASE3-2: MASCO CORPORATION（A） 343
Case 3-3 The Household Fumiture Industry in 1986 356
CASE3-3: THE HOUSEHOLD FURNITURE INDUSTRY IN 1986 356
CASE3-4: CAT FIGHT IN THE PET FOOD INDUSTRY（A） 369
Case 3-4 Cat Fight in the Pet Food Industry （A） 369
CASE4-1: ENCLEAN: MALCOLM WADDELL S STORY（A） 383
Case 4-1 EnClean: Malcolm Waddell s Story（A） 383
CASE4-2: COOPER INDUSTRIES CORPORATE STRATEGY 407
Case 4-2 Cooper Industries Corporate Strategy 407
Case 4-3 Asahi Glass Company: Diversification Strategy 434
CASE4-3: ASAHI GLASS COMPANY: DIVERSIFICATION STRATEGY 434
Case 5-1 VisiCorp 1978-1984 458
CASE5-1: VISICORP 1978-1984 458
Case 5-2 Birds Eye and the U.K.Frozen Food Industry （A） 479
CASE5-2: BIRDS EYE AND THE U.K.FROZEN FOOD INDUSTRY（A） 479
Case 5-3 Crown Equipment Corporation: Design Services Strategy 499
CASE5-3:CROWN EQUIPMENT CORPORATION: DESIGN SERVICES STRATEGY 499
Case 5-4 Habitat for Humanity International 518
CASE5-4: HABITAT FOR HUMANITY INTERNATIONAL 518
Case 6-1 Textron,Inc. 543
CASE6-1: TEXTRON,INC. 543
CASE6-2: PEPSICO S RESTAURANTS 569
Case 6-2 Pepsico s Restaurants 569
CASE6-3: CODMAN SHURTLEFF,INC.: 597
Case 6-3 Codman Shurtleff,Inc.: Planning and Control System 597
Case 6-4 Newell Company: Acquisition Strategy 613
CASE6-4: NEWELL COMPANY: ACQUISITION STRATEGY 613
Case 6-5 Sharp Corporation: Technology Strategy 635
CASE6-5: SHARP CORPORATION: TECHNOLOGY STRATEGY 635
CASE6-6: SMASHING THE CUBE: CORPORATE TRANSFORMATION AT CIBA-GEIGY,LTD. 662
Case 6-6 Smashing the Cube: Corporate Transformation at Ciba-Geigy,Ltd. 663
Case 7-1 Beatrice Companies-1985 684
CASE7-1: BEATRICE COMPANIES-1985 684
CASE8-1: ICI AND HANSON（A） 701
Case 8-1 ICI and Hanson（A） 701
Case 8-2 The General Mills Board and Strategic Planning 731
CASE8-2: THE GENERAL MILLS BOARD AND STRATEGIC PLANNING 731
CASE8-3: LUKENS INC.: THE MELTERS COMMITTEE（A） 741
Index 741
Case 8-3 Lukens Inc.: The Melters Committee（A） 741