Managing A Global Strategy - Walter O. Einstein, Ph.D. University of Mass., Dartmouth

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1. COURSE DESCRIPTION

This course analyzes components of formulating a strategic plan, implementing and controlling its execution, and evaluating its success in a global context. The formulation phase includes developing a mission statement in concert with the decision makers' philosophy, environmental scanning, and analyzing the strengths and weaknesses of the firm. The implementation and control phase examines the role of leadership, organizational design, and resource deployment. The evaluation phase compares the results of the plan with issues of competitiveness, ethical performance, and ecological sensitivities.

This course consists of two essential parts - knowing and doing. The "knowing"part involves learning concepts and techniques applicable to strategic management. The readings and lectures are designed to help you understand strategic management concepts.

The "doing" part of the course involves your participation in Capstone®; , a strategic management simulation. This simulation provides you with the opportunity to gain hands-on experience in running a business as a member of a senior management team. Management teams are required to evaluate situations and make decisions, evaluate outcomes, and compete with other management teams for resources, opportunities, and markets. Each team will have the opportunity to set corporate strategies, and apply strategic concepts and techniques within a practical decision-making framework. In this way, you have the opportunity to see how a firm's production, marketing, R&D, HR, and financial operations interact and observe the impact of key decisions on business performance within a competitive market.

2. COURSE OBJECTIVES

This course is designed as a Capstone®; experience for graduate level business students. Attention is given to the integration of separately learned material from the common body of business knowledge and application of it in the world of business. This will be accomplished by lecture and reading to acquire an appreciation of the strategic planning variables and the formulation of a mission plan. A complex web based computer simulation (Capstone®; ) will be used to explore how a business education helps you to make competitive decisions in managing a business over time.

The touchstone statement of this course is, "all problems are human problems." While strategy and policy are tools to help the manager make decisions, the art of effective communication is what turns problems into opportunities. To gain the most from the education that brought you this far, this course is designed to tax your intellectual and interpersonal competencies and enable you:

  1. To develop an understanding of strategic planning and policy formulation processes by a systematic review of the literature and application of these principles through lecture and reading.
  2. To practice strategic planning principles by writing a strategic plan for an existing organization.
  3. To integrate the various common body of knowledge disciplines into a Capstone®; experience by engaging in an interactive computer driven management simulation.

3. COMPETENCIES and CONTACT HOURS

Competencies Hours

The student will be introduced to:
The differing approaches to strategic implementation of strategy;
The language and definitions used in strategic planning & implementation; 3 3
The nature and value of a mission plan;
The strategic planning process, an overview.

Within the context of the simulation

The student will understand:

Defining strategic intent, the company mission plan, and goal setting; 3 6
Assessing the environment, threats, competition, and competitor analysis; 3 9
Resource analysis, capabilities, and core competencies; 3 12
Business level strategy and competitive analysis; 3 15
Implementing a corporate level strategy; 3 18
Structure, control, and process; 3 21
Strategic leadership and innovation 3 24

The student will be able to:
Participate in the preparation of an actual, usable Mission Plan; 6 30
Compete with other students during a semester long interactive simulation 15 45

4. TEXT and Readings:

  1. The Capstone®; booklet, this is required as there is a registration certificate included which is necessary to engage in the simulation.
  2. Managing a Global Strategy, a notebook of presentational slides and readings to augment your note taking and reading requirements.

Readings listed on page 3 of this syllabus are available through the University library electronic resources if you have an e-mail account as a student or, if authored by me, they are included in your notebook.

5. CLASSROOM POLICY:

Class attendance and participation is encouraged and frequently appreciated.

During the simulation you will be divided into two groups with each group having six teams of three students. You will elect one of your numbers "President" for the purposes of communication with me during "formal sessions."

The president has the exclusive right to fire an employee (defined as any other person on the student team). Naturally, reasonable personnel practices must be followed, but because of the time constraints imposed by the simulation, due process will be loosely interpreted. To fire a team member, the President must prepare two memos: (1) Official notification of the decision to fire a team member with effective date to me; (2) Official notification of the decision to fire the team member with effective date to the person involved. I will not enter into the decision unless asked to render an opinion. The president's decision is final, no appeal. The fired student may find employment in any other group at no penalty. Failing to do so, the student will be assigned to me! (That's not good)

Similarly, if 100% of a team, excluding the president, wishes to have the president removed from office, those team members may request a meeting with me and present a case. The professor will make a decision and take necessary action.

6. EVALUATION POLICY & SPECIAL INSTRUCTIONS ON ASSIGNMENTS:

Grading will be as follows:
Strategic plan (1/4 for first plan, 3/4 for second plan)........ 20%
Bonus questions................................................ 20%
and
Simulation results.............................................. 60%
or
Simulation results.............................................. 30%
Paper as described in the appendix of this syllabus....... 30%
100%

Readings:

  1. Porter, Michael. "What is strategy?" Harvard Business Review, Nov-Dec 1996.
  2. Hamel, Gary & Prahalad, C. K. "Strategic intent" Harvard Business Review, May-Jun 1989.
  3. Einstein, Walter. & Skaggs, Bruce. 1998. "The Mission Plan As a Link Between Corporate Thought and Action." Las Vegas, NV: Proceedings of the American Society for Business & Behavioral Sciences.
  4. Hardaker, Maurice & Ward, Bryan. "Getting things done: How to make a team work" Harvard Business Review, Nov-Dec, 1987.
  5. Bartkus, Barbara, Glassman, Myron, & McAfee, R. Bruce. "Mission Statements: Are They Smoke and Mirrors?" Business Horizons, November-December 2000.
  6. Brodsky, Norm, "Forget Spreadsheets" Inc. November 1997.
  7. Stack, Jack, "A Passion for Forecasting" Inc, November 1997.
  8. Stewart, Jack, "Why Dumb Things Happen to Smart Companies" Fortune, June 23, 1997.
  9. Einstein, Walter. 1996. "The Strategic Advantage Profile" Dartmouth, MA: Walter Einstein Associates working paper.
  10. Prahalad, C.K. & Hamel, Gary. "Core Competence of the Corporation" Harvard Business Review, May-June. 1990.
  11. Hamel, Gary. Strategy as revolution, Harvard Business Review, July-August 1996
  12. Kerr, Steven. 1995. "On the folly of rewarding A, while hoping for B" Academy of Management Executive, 9, 1: 7-13.
  13. Einstein, Walter. 1993. "From project teams to autonomous work teams: The opportunity." Dartmouth, MA: Walter Einstein Associates working paper.
  14. Brandenberger, Adam & Nalehoff, Barry "The right game - Use game theory to shape strategy. Harvard Business Review, July-August 1995
  15. Charan, Ran. "Hawaii Best Company" in Glueck, W. F.1980. Business Policy and Strategic Management. New York: McGraw Hill Book Co. pp. 840-847.

7. CLASS SCHEDULE

1. Thursday Feb 01 INTRODUCTION

  1. Define critical terms: management, strategy, stakeholders, strategic intent, mission, strategic competitiveness, competitive advantage and above-average returns.
  2. Discuss the challenge of strategic management in the 21st century and how it is being shaped by global and technological changes.
  3. Introduce the industrial organization (I/O) model to explain how firms can earn above average returns.
  4. Introduce the resource-based model to explain how firms can earn above average returns.
  5. Explain the steps of the strategic management process.
  6. Introduce the "Capstone®; Simulation."

Assignment:
Read: Begin reading the Capstone®; Team Member's Guide to become familiar with its contents. Become a member of a Strategy team and participate in the selection of a president.

2. Thursday Feb 08 THE CAPSTONE®; SIMULATION

Today you will be instructed in the fine points of the simulation and be afforded the last opportunity to ask questions before Practice Round #1. The bulk of the period will be used to help you organize your team for the most effective approach. We will meet in the library on the ground floor so we will have Internet access. Librarian Kate Randall Haley will provide a refresher on accessing UMass databases so you might recall how to retrieve your reading assignments not included in your notebook. Copyright, you know.

Assignment:
Read: The Capstone®; Student Guide to become intimate with its contents.
Porter, Michael. "What is strategy?" Harvard Business Review, Nov-Dec 1996.
Hamel, Gary & Prahalad, C. K. "Strategic intent" Harvard Business Review, May-Jun 1989.


3. Thursday Feb 15 MISSION PLANNING & GOAL SETTING

  1. The need for an explicit mission statement and mission plan.
  2. Creating the specific mission plan
  3. The three major components of a strategy:
    a. Objectives
    b. Policies
    c. Values

Assignment:

Read: Einstein, W. O. & Skaggs, B. C. 1998. "The Mission Plan As a Link Between Corporate Thought and Action." Las Vegas, NV: Proceedings of the American Society for Business & Behavioral Sciences.
Bartkus, Barbara, Glassman, Myron, & McAfee, R. Bruce. "Mission Statements: Are They Smoke and Mirrors?" Business Horizons, November-December2000.
Hardaker, M. & Ward, B. 1987. "Getting things done: How to make a team work" Harvard Business Review, Nov-Dec. Complete the form, "Turning a Mission into an Agenda." and turn it in at class on Feb 22.
Practice Round # 1 must be posted to the Capstone®; website no later than Tuesday February 13 at 2:00PM.

4. Thursday Feb 22 "THE ENVIRONMENT"

  1. Explain the importance of studying and understanding the remote environment.
  2. Be able to analyze the four components of a Competitor's Analysis.
  3. The Strategic Advantage Profile, an internal environmental analysis:
    a. The value chain analysis,
    b. The Company capability profile,
    c. The Strategic Position and Action Evaluation.

Assignment:

Read: Einstein, W. 1996. "The Strategic Advantage Profile" Dartmouth, MA: Walter Einstein Associates working paper.
Brodsky, Norm, "Forget Spreadsheets" Inc. November 1997.
Stack, Jack, "A Passion for Forecasting" Inc, November 1997.
Stewart, Jack, "Why Dumb Things Happen to Smart Companies" Fortune, June 23, 1997.
Practice Round # 2 must be posted to the Capstone®; website no later than Tuesday February 20 at 2:00PM.

Thursday Mar 01

No Class, I will be presenting a paper at the South Western Academy of Management. Use the class period to prepare your strategy for Round 1 of the Capstone®; Simulation. This week is available for you to work on the first rendition of your Strategic Plan. You will be expected to turn in a "finished" product up to and including the timeline. Your first Strategic Plan covering Years 1-4 is due on Thursday Mar 8.

5. Thursday Mar 08 COMPETITOR ANALYSIS

  1. Understand Competitor analysis and inter-firm rivalry.
    a. Drivers of competitive behavior,
    b. Likelihood of attack and response,
    c. Types of competitive action.
  2. Understand how to analyze competitive market types.
    a. Slow, standard, and fast cycle markets,
    b. Relative size, speed, innovation, and quality.

Assignment:

Read: Prahalad, C.K. & Hamael, G. 1990. "Core Competence of the Corporation" Harvard Business Review, May-June.
Hamal, G. "Strategy as revolution," Harvard Business Review, July-August 1996.
Round # 1 must be posted to the Capstone®; website no later than Tuesday March 6 at 2:00PM

6. Thursday Mar 15 BUSINESS LEVEL STRATEGIES

  1. Describe the relationship between customers and business level strategies.
  2. Understand the issues firms consider when evaluating customers in terms of who, what, & how.
  3. Understand the capabilities necessary to achieve a competitive advantage through:
  4. a. Cost leadership,
    b. Product differentiation,
    c. Focused low cost,
    d. Focused differentiation, and
    e. Integrated business level strategies.

Assignment:

Read: Kerr, Steven. "On the folly of rewarding A, while hoping for B" Harvard Business Review, July-August 1996.
Round # 2 must be posted to the Capstone®; website no later than Tuesday March 13 at 2:00PM.

Thursday Mar 22

Spring Break. No Classes. No decision. This is a good week to rest for the final pull. Do not encumber your week's rest with work you should have completed earlier.

7. Thursday Mar 29 STRATEGY FORMULATION

  1. Define and understand the layout of the various corporate grand strategies in terms of the firm's strengths, weaknesses, opportunities, and threats.
  2. Discuss the various grand strategies and their implications.
  3. A. Expansion
    a. Related diversification, Merger, Acquisition, Takeover, and Joint Venture
    b. Unrelated diversification, Vertical Integration, and Horizontal Integration
    B. Stability
    Development
    C. Retrenchment
    Investment, Turnaround, Divestment, Liquidation

Assignment:

Read: Brandenberger, A. & Nalebuff, B. "The right game - Use game theory to shape strategy," Harvard Business Review, July-August 1995.
Round # 3 must be posted to the Capstone®; website no later than Tuesday March 27 at 2:00PM.


8. Thursday April 05 STRATEGIC CONTROL AND PROCESS

  1. Understand the elements of control:
    a. qualitative methods,
    b. quantitative methods.
  2. Understand the components of administrative processes:
    a. functional strategy implementation,
    b. resource allocation,
    c. structural analysis.

Assignment:

Read: Charan, R. "Hawaii Best Company" in Glueck, W. F.1980. Business Policy and Strategic Management. New York:McGraw Hill Book Co.
Round # 4 must be posted to the Capstone®; website no later than Tuesday April 3 at 2:00PM.

HAVING READ HAWAII BEST AND BEING PREPARED TO SELECT A PART TO PLAY, WE WILL SELECT THE CAST FOR NEXT WEEK.
The second Strategic Plan, for Rounds 4 - 8, is due on Thursday, April 19 at 6:30PM.. Plans delivered later will be reduced one (1) full letter grade for every day late!!!!

9. Thursday Apr 12 STRATEGIC LEADERSHIP AND INNOVATION

  1. Understand the importance of exerting strategic leadership.
  2. Understand approaches to produce and manage innovation and organizational change through teamwork.
  3. Explore the McKensey 7-S framework.

Assignment:

Read: Einstein,W. 1993. "From project teams to autonomous work teams: The opportunity." Dartmouth, MA: Walter Einstein Associates working paper.
Round # 5 must be posted to the Capstone®; website no later than Tuesday April 10 at 2:00PM..
Charan, R. "Hawaii Best Company" in Glueck, W. F.1980. Business Policy and Strategic Management. New York:McGraw Hill Book Co.

10. Thursday April 19 CASE: HAWAII BEST

This case has interesting overtones of an ethical dilemma facing several of the members of the board. Read the case and be prepared to play a part starting from the end of the text to a satisfactory solution. The cast of characters include [1]A. Simon, Chairman of the Board;
[2]J. Lind, President; [3]T. Johnson, V.P. Finance; [4] G. Harris, V.P. Marketing;
[5] J. Wyle, V.P. Industrial Relations; [6] C. Carson, V.P. & General Manager, Island Division; [7] J. Fields and [8] R. North, both prominent board members.

Assignment:

Read: Charan, R. "Hawaii Best Company" in Glueck, W. F.1980. Business Policy and Strategic Management. New York:McGraw Hill Book Co.
Round # 6 must be posted to the Capstone®; website no later than Tuesday April 17 at 2:00PM.

Those who do not have a part will be required to answer three (3) written questions: What would you do if you were: 1. Lind, 2. Simon, 3. Carson?

Thursday April 26 INDEPENDENT STUDY DAY

If my intuition is correct, you will have plenty of work on your plate to keep you entertained this week. If you wish to discuss class issues with me, I will be available all evening by appointment.

Assignment:

Round # 7 must be posted to the Capstone®; website no later than Tuesday April 24 at 2:00PM.

Thursday May 03 SLACK VARIABLE DAY

This day will be used to make up any lost time due to delays that were unforeseen at this writing. Typically weather is a common cause. As you know, the University closes if a few snowflakes fall. If the makeup day is not required it will be another independent study day; if you wish to discuss class issues with me, I will be available all evening by appointment.

Assignment:

Round # 8 must be posted to the Capstone®; website no later than Tuesday May 1 at 2:00PM.

Thursday May 10 CRITIQUE OF THE SIMULATION

Today we will critique group 1 of the simulation. The two teams having the highest score to date and the two teams with the lowest score at this point in the simulation are invited to make formal presentations to the class. Final results of the simulation will be announced next week.

Thursday May 17 FINAL EXAM

Today we will critique group 2 of the simulation. The two teams having the highest score to date and the two teams with the lowest score at this point in the simulation are invited to make formal presentations to the class. Final results of the simulation will be announced in class. Strategy thought papers are expected today; or a written contract when, this summer, it will be completed. You will receive a grade of "incomplete" until your contract is fulfilled.

Appendix

To stay current industry leaders and academics interact to think up new ideas about strategy and to help each group with its unique problems and opportunities. Those of you who wish a challenging assignment and/or are interested in earning the highest possible grade are hereby challenged to respond to one of the themes below. You can do that by preparing a short (~ 10-15 page) paper of your own thinking. Naturally, having read the assignments in your notebook (and from the library) you will have a good picture of where current thinking lies. Use one of the themes following the brief description of the challenge, consult with me about your topic, and proceed. YOU MUST COMMIT TO THIS ASSIGNMENT BEFORE SPRING BREAK.

The most striking feature of business life at the turn of this millennium is the rapid, often unanticipated rise of new winners. Across a wide range of industries, we see these new businesses seizing on one or more of the forces roiling through world markets and riding them to leadership. Among others, these forces include rapid technological obsolescence, increased complexity, high volatility, rapidly changing industry settings and value drivers, lowered political barriers, open product offerings, the emergence of new market spaces and positive-return markets (including network markets), and the shift from resource-based competition to information-based competition. This increased turbulence and unpredictability seem likely to continue indefinitely, and even intensify, making change into the only "steady state."

In such an environment, conventional approaches to strategy development and implementation lose traction. Traditional, orderly strategic planning, monitoring and control simply cannot accommodate the greater uncertainty and complexity, and firms cannot seize new opportunities quickly enough - as several onetime leaders in their markets have learned, often too late.

Instead, this turbulence requires a more entrepreneurial, discovery-driven approach capable of identifying a range of potential futures, thus positioning the firm to create new opportunities and seize opportunities as they emerge. Therefore, the value of a position can lie as much (or more) in the options it creates for the future as in the earnings stream it currently generates. Conversely, the most fruitful positions seldom emerge ready-made, successful firms develop them by adaptive execution, learning by doing, and adjusting as they go along.

This all requires new business models, more flexible and adaptable and better attuned to sensing market shifts. Such business models are likely to require the acquisition of new, valuable capabilities while shedding old ones. And that calls for entrepreneurial, strategic leadership that is willing and able to conceive and build such businesses.

(A) INDUSTRY STRUCTURE: ANALYSIS AND EVOLUTION

In the emerging world of continuous structural change, the analysis of industry disequilibria will become ever more central. In the future, will an industry's economic profits flow during the transition to equilibrium, before return: subside? And how far will the industry's specific path to equilibrium (path dependence) govern long-run returns?

The turbulence will not be confined within traditional industry boundaries. To the contrary, new-to-the-world industries emerge; industries merge and fracture; and even when an industry continues, its boundaries often shift dramatically. In this environment, will the firm's economic performance depend on choosing the "right" industry to participate in at the "right" time, rather than on building/renewing competitive advantage within an industry? Alternatively, will a firm's performance depend on management's ability to redefine the industry it plays in? What are industries? How do strategists identify the current domain of competition (e.g., where does the domain of the photography industry end and the domain of digital imaging begin?) As well, how will the strategies of the entrepreneurial and innovative new winners affect the evolution of industries?

(B) BUSINESS STRATEGY AND COMPETITIVE RIVALRY

In the emerging new competitive landscape, competitors will rely on new sources of advantage. New, nontraditional actors will enter many markets, competing with new business models using emerging technologies to displace incumbents. How does one identify what new business models seem most likely to provide advantage? Leading possibilities include knowledge-based businesses and business models that find nontraditional ways of capturing rents for the value provided. How will a firm's ability to turn its capabilities/competencies into a distinctive business model, well-adapted to a new market, provide advantage? In particular, will firms increasingly link their competitive positions to build competencies that can carry them into new/emerging markets successfully? In what way is the traditional distinction between business and corporate strategy still a useful one?

(C) CORPORATE STRATEGY CHOICES AND GOVERNANCE

The corporation's role comes under increasing scrutiny. From one side, shareholders are becoming more demanding around the world (even when the shareholder is a government, perhaps intent on privatization). This pressure again raises the issue of diversification and performance and potentially shifts the balance among a corporation 's stakeholders. It also renews the question of the role of the corporate head office; and, more generally, of resource allocation and decision-making in a multi-business corporation. This, in turn, leads to a range of questions about the internal governance mechanisms of the corporation (e.g., is there a growing role for internal quasi-markets or partial outside ownership?) From the other side, the corporation's traditional boundaries continue to blur. Has the rich mix of new forms of contracting that has recently emerged - mergers, strategic alliances, joint ventures, licensing, outsourcing, etc. - enabled corporations to respond more effectively to rapidly-evolving markets?

(D) ORGANIZATION: STRUCTURE, LEADERSHIP, AND CHANGE

Continuous structural change calls for more strategic leadership (as opposed to management). On one hand, how can leaders, already beset by an ever faster-paced operational environment, provide the higher intensity of strategic thinking required by an environment of continuous innovation? On the other hand, how can they lead organizations to the new levels of flexibility now required?

More operationally, the new information technologies redirect resources to higher value work. How do they change the number and skill-mix of the people that a business needs? How do these people reorganize themselves? How do they communicate, etc.? And how does the resulting denser flow of information make businesses more transparent, both to those within and to those outside? To what extent is this greater transparency an opportunity or a threat?

Taking this together, we can ask whether/how organizational design affects firm performance. If so, what is the design dimension of successful organizations in the new environment? And how will the answer differ with the firm's circumstances?

(E) MANAGING IN A GLOBAL ECONOMY

The global trade regime both shapes and responds to the emerging world of continuous structural change. How is the global economy and its trade regime(s) likely to develop? For example, will trading blocs become more or less important? What effects will countervailing ("anti-dumping') duties have on trade outcomes and on multinationals' strategies? More broadly, what effects will the emerging trade regime have on large and small national economies? For example, how will foreign direct investment affect labor markets in the home and host countries? On another front, is a global regulatory regime likely to emerge that can ameliorate tensions on environmental issues such as genetically-modified foods, "greenhouse" gases, etc.?

Turning to companies' response to the regime, what approaches are/should rapidly-growing firms be taking to global expansion? Are the traditional models adequate? In particular, do they face different issues in entering markets and/or locating facilities internationally?

Broadly, how will the Pacific Rim economies respond to the new business requirements of the entrepreneurial millennium? In particular, how will they make the transition from low-cost manufacturing to high value-added goods and services? And how will they respond to a world of continuous structural change that seems to demand new business models and new organizational forms, at a time when their traditional organizational forms are already under heavy pressure? What are the determinants of "plant" location by multinationals, or more generally, of foreign direct investment?

(F) MANAGING KNOWLEDGE: LEARNING, TECHNOLOGYY, AND INNOVATION

It seems likely that new business models will rest heavily on knowledge in the future, and that raises several issues. On one hand, if knowledge becomes a (the?) primary source of competitive advantage, then how will firms and industries organize themselves to create and use knowledge? For example, will the creation of knowledge become increasingly unbundled from its use? What are the principal implications for business strategy's development and implementation?

On the other hand, how will a firm manage itself in a knowledge-based industry? How will it preserve and extend its core knowledge? And how will it mobilize its knowledge for entrepreneurial initiatives?

Will pools of knowledge and learning continue to favor the geographic concentration of industries? If so, can individual areas (e.g., developing countries) act to increase the likelihood of becoming a center for the rapid growth of a new industry?

(G) STRATEGIC THINKING: DECISION-MAKING AND THE STRATEGY PROCESS

If traditional approaches to strategic management lose traction in a world of continuous structural change, then what. new approaches are available, and how will they fare? In particular, how effective are newer planning and analysis tools like complex adaptive systems modeling, valuation of flexibility by treating investments as "real" options, and applied game theory in decision making? Or, more realistically, where are they most likely to prove useful? Moreover, are there new insights in the analyses of risk, belief formation, scenario development, innovation and creativity that are relevant to strategy in the entrepreneurial millennium?

Looking beyond the current repertoire, what can we learn from other disciplines about the causes of good/bad decision-making by individuals and small groups? To what extent are those findings relevant to business?

(H) E-BUSINESSES

E-businesses provide leading examples of emerging winners based on new business models. What drives their ability to create value? Where/how will they reshape (or displace) traditional industries? Are there noteworthy limits to their likely impact/range? What are strategy issues facing e-businesses? In particular, to what extent are they complements, rather than substitutes, for the existing structures? How will e-business affect the traditional activity-centered value chain? What new management tools are needed to operate in the new electronic market space? What are valuation techniques for e-businesses? What public policy issues are raised by the emergence of e-commerce?

(I) ENTREPRENEURIAL LEADERSHIP

As industries become more unpredictable, there emerges an increasing need for firms to call upon the entire organization to be alert for, position for, and pounce upon opportunities that manifest themselves. The focus moves toward firms that are led by management teams which encourage a constant search for new opportunities to create and exploit competitive advantage. This involves the conversion of firms from a traditional management style to one in which the entire organization is able to redirect itself with speed and self-confidence. Radically different ways of planning and monitoring the activities of the firm need to be introduced. This gives rise to a number of questions: How does management define new areas in which to pursue potential opportunity? What selection processes will be put in place to indicate areas of appropriate opportunity? How does one change the culture to one in which opportunistic pursuit of advantage is encouraged? What new methods of planning and control need to be introduced and how is the change to these new methodologies orchestrated? How do the evaluation, reward and sanction systems need to be changed to introduce such radical change in culture and in managerial routines or the organization?

Finally, what does the changed role of individuals in organizations imply for how human capital is managed? When what matters is the one individual with best in the world capabilities rather than a group of people with very good capabilities, how can an established organization enmeshed in everyday routines hope to be able to provide the level of compensation and reward that a new company, complete with equity reward structure, can provide? How will existing firms capture, develop and reward the best talent? What does it imply for the robustness of an economy if its very brightest people are not interested in working for its established organizations? And what should strategists and educators emphasize?

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