strategic management

Strategic ManagementCreating Value in a Turbulent World

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Strategic ManagementCreating Value in a Turbulent World

PETER FITZROYMonash University

JAMES M. HULBERTColumbia University

JOHN WILEY & SONS, INC.

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In writing this book we have made every attempt to ensure that it reflects the competitiveenvironment in which future strategic managers will work. The fact that we were startinganew, rather than re-writing an earlier text greatly facilitated this effort. We hope this hasresulted in a book that is really current and reflects contemporary business reality.

The book is written for a capstone course in strategic management for MBA andadvanced undergraduate students. We have consequently assumed that readers willhave a sound foundation in marketing, economics, finance, accounting, informationtechnology, and organizational behavior. Therefore the book serves as the basis for acourse that integrates these subjects into an overall perspective on strategic manage-ment of the enterprise.

We have chosen to adopt a strategic management rather than a planning perspec-tive. We view strategic management as the task of creating and maintaining organiza-tions that generate value. Strategic management of a modern firm is a complex task;there are no easy solutions. The problems with which the modern firm is concerned arecomplex, unstructured and non-routine. The process of strategic management mustinvolve a deep understanding of the environment in which the firm operates. Its essenceis about making decisions that ensure not only the survival, but also the success of thefirm. This task is becoming increasingly difficult for several reasons described below.

One characteristic of the world in which we live is that it is global and increasinglyinterconnected. This has implications whether one works for a multinational, a regional,a national, or even a local firm. There is no doubt in our minds that the ongoing processof globalization will profoundly affect the lives of senior managers in firms of any size.We have therefore drawn our examples not only from a wide range of industries, but alsofrom a wide range of countries.

A second characteristic is the increasing rate of change and the increasing turbu-lence of that change. Change can be external to the firm or it may be change introducedto the firm by managers. It may be manifest in the blurring of industry and firm bound-aries, driven by technology, deregulation, or, indeed, globalization itself. As a conse-quence, a vital task for the management of the firm is to create and respond to change.Change management will of necessity become increasingly important, and all managerswill need to become accomplished in the management of change.

A third characteristic is the increased attention given to the performance of the firm.We take a value-based approach, emphasizing the firm as an economic entity. So we dis-cuss how the performance on the firm can be assessed at both the corporate and businessunit level. We also regard it as critical that strategic managers have an informed under-standing of the impact of financial markets on strategy. Not only do financial markets putpressure on the firm for performance, they also facilitate and constrain the strategyadopted by the firm. However, while we are conscious of the importance of shareholders,we also understand that the modern firm has multiple stakeholders with interests in itsperformance. It is also true that environmental and social concerns have affected the oper-ations of many companies. Yet in a competitive world—whether in product markets orcapital markets—the importance of customers and shareholders should be self-evident.

Throughout the book we take a managerial perspective that the task of all managersis to create and manage the resources of the firm. Turbulence implies that managing

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change within the firm is critical and no strategy will last for long in today’s and tomor-row’s world. It is also the case that physical assets are becoming less important for thefirm and are being replaced by intangible assets. It is through these assets that compet-itive advantage and value are created. The value of most firms is increasingly embeddedin their people and processes. With the rise of the knowledge-based economy, the man-aging of intangible assets and the firm's knowledge base has moved inexorably to centerstage, factors reflected in the coverage of our text.

Despite our concern that the firms generate value, the corporate scandals of theearly 21st century have served to underline the importance of ethical behavior on thepart of senior executives. The post-Enron environment is one where senior managerscan expect higher levels of public expectation and more stringent scrutiny. The wholesubject of corporate governance is critically important in an era where countless millionshave become more and more dependent on private savings and pensions. We devote aseparate chapter to the subject.

Perhaps one of the most important distinctions of our book is that we spend a greatdeal of time on the issues of corporate, rather than business, management. Too manystrategic management books make the implicit assumption that the firm is a single-busi-ness entity, but this is clearly not the case for most firms of medium size or above. Thereis a whole set of issues that arise from the task of managing a multi-business entity thatdo not appear on the horizon of a single business firm. These we explore in detail.

We have organized our book to make it easy for you, the student, to follow, and forinstructors to use the book in a variety of ways. We have adopted a more or less standardapproach to the content of the book’s chapters. Each begins with a definition of learn-ing objectives—what you should get out of the chapter. We then introduce an openingvignette—a short business example that illustrates the relevance and importance of thechapter’s subject matter. Each chapter then presents a theoretical framework typicallyillustrated with several charts and figures emphasizing key points. We have made everyattempt to give you a straightforward structure to follow, with headings and subheadingsclearly identified, and we hope you will find our text easy to read. Each chapter closeswith a summary, a set of review questions, and extensive references to permit a moredetailed follow up if you are interested.

OVERVIEWChapter 1, Managing Strategically, introduces our model of strategic management anddiscusses the distinctions between strategic decisions, strategy, and strategic manage-ment. It focuses on the nature of the firm as an economic entity, measures of success ofthat entity, and the source of success, which we see as a synthesis between external mar-ket characteristics and the internal resources of the firm. We finally discuss some of theinfluences on the development of strategic management.

In Chapter 2, The Fundamentals of Strategic Management, we expand our discus-sion on the distinctions between strategic decisions, strategy, and strategic management.Strategic decisions are those hard-to-reverse major decisions taken by management.Strategy is the theme underlying a set of strategic decisions. Such strategies have severalcharacteristics that are further developed. Strategic management is about creatingorganizations that generate value. A core concept here is change management. Follow-ing a discussion of business models, we address the question of value from the perspec-tive of the firm’s various stakeholders.

Strategic managers need a good understanding of the internal and external contextin which they operate. This is the subject of Chapters 3, 4 and 5.

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In Chapter 3, we cover the understanding of product markets—the broad environ-ment in which the firm’s products and services compete—as well as industry and busi-ness unit environments. It is here that many changes that affect the firm originate. Thesechanges could be the development of a new product technology that threatens to makeobsolete the firm’s existing products. They also can be political or economic change inone of the major global markets of the firm, such as the introduction of the Euro in manyEuropean countries or the rise of China as a source of production and its entry in to theWorld Trade Organization. We address the importance of understanding the dynamicsof the industry in which a particular business unit operates, including identifying whenthe boundaries are changing.

Global firms can be considered to operate in two fundamentally different mar-kets: financial markets for debt and equity and product markets for customers. InChapter 4 we review financial markets and their impact on strategy. Most firms raisesome funds for growth and expansion in the global financial markets either by issuingdebt or equity. The cost and availability of these funds have a significant impact on thefirm’s strategy. We review the characteristics of debt and equity markets and the pres-sure they place on firms for performance. Since financial markets are global, this pres-sure for performance is felt on a global basis. It is hard to hide behind nationalbarriers. Finally, we review the nature and use of newer financial instruments such asderivatives.

While understanding the external world is critical, so is an understanding of theinternal skills of the firm—what we call capabilities or what the firm is good at. Herewe take a balanced view of the firm. Certainly the environment in which the firm oper-ates can influence its performance, but so also do firm-specific resources. Theseresources may be tangible or intangible, and are combined to permit the firm todevelop specific competences that may lead to competitive advantage and drive supe-rior performance. We regard strategy as a synthesis of an “outside in” and an “insideout” approach. In a competitive world, there is an inexorable pressure for cost reduc-tions, so we then address the major cost drivers such as economies of scale and experi-ence curves. The chapter concludes with a discussion of the importance of knowledgeand intellectual capital.

In Chapter 6, we turn our attention to the first step in generating strategy for thefirm—creating a sense of the future of the firm, what it aspires to, and what it hopes tobecome. A firm, in our view, cannot be strategically managed unless senior managementhas a clear idea of where it wants to go. It is critical that senior management develop andcommunicate this vision throughout the firm, so that all staff is aware of and committedto the firm’s aspirations. Management must also establish a set of values that can guideemployee behavior in fulfilling these aspirations. A mission (a specification of the areasin which the firm will operate) and quantitative objectives for the firm and its compo-nents need to be established.

Chapters 7–9 are concerned with strategy. Chapter 7 addresses strategy for an indi-vidual strategic business unit, a unit of the firm that can be considered as relativelyautonomous. Developing strategy at the business unit level requires an understandingof corporate objectives which will usually have a strong effect on the business. In addi-tion, it requires an understanding of the business’s own, specific environment. Strategyis then addressed, including the three major decision areas: where to compete, how tocompete, and growth strategy. The concept of competitive advantage (how this can bedeveloped and utilized) is of central concern in developing business unit strategy suchas is the positioning on the business both vertically and horizontally. This determineswhat activities it undertakes and where it decides to compete.

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Chapter 8 addresses strategy in the multi-divisional firm—the common situation forlarger firms. Key decisions include which businesses should comprise the firm and howthe combination of businesses create value. In multidivisional firms, a major task for cor-porate management is to allocate resources across the business units. Tools to identifywhich businesses should be supported are developed. This discussion is complementedwith a discussion of the value of diversification. We then address a limited number ofessentially financial decisions that are also the responsibility of senior management, suchas establishing appropriate debt levels and dividends. The chapter concludes with a dis-cussion of the risk profile of the firm.

In Chapter 9 we consider innovation within the firm. We cover opportunities for thefirm to restructure its industry, innovate organizationally or change its mission. Success-ful firms must re-invent themselves and their mix of businesses, either through internaldevelopment or through mergers and acquisitions. Both means are discussed in somedetail. We also address how firms can reduce their activities through divestments orspinouts.

Chapter 10 is concerned with managing change within the firm. In the text, we haveplaced considerable emphasis on the fact that change is an on-going feature of organi-zational life, and that change management must be a core competence for the firm. Wedevelop a process model of change management and emphasize the role of leadership.

Chapter 11 continues the discussion of strategy implementation and is concernedwith the design of some of the internal features of the firm, what we call organizationalarchitecture. We look at several of the principles of designing organizational structureand some of the choices available to the global firm. With the increasing importance ofprocess management, we review process improvement, information technology infra-structure and knowledge management systems. Finally we explore human resource con-cerns such as reward and appraisal systems and their alignment with its strategy.

Chapter 12 is new for most strategy books. It looks at organizational performancefrom the perspective of the entire firm, as well as from the perspective of a componentof the firm. While financial measures of performance, in particular economic profit, arehighlighted, so are nonfinancial measures. This reflects the increasing importance ofintangible assets. The chapter includes examples of performance measurement systemsadopted by two firms.

Chapter 13 covers governance which includes the concerns of the board. The boardhas a number of legal and statutory responsibilities that must be met. While senior man-agers are responsible for developing strategy, the board is the group that is legallyresponsible for firm performance, and is accountable to shareholders. We examine therole, composition and structure of the board as well as board processes. We contrast gov-ernance procedures in different regions of the world, all with a view to ensuring that thefirm acts to generate value in an ethical manner.

Chapter 14 is a short summary and review. It considers how strategic managementmay develop in the future. The chapter emphasizes the fact that both theory and prac-tice are in constant evolution with new ideas, new theories, new practices, and new chal-lenges constantly arising. As a would-be strategic manager, you, our readers, will face alifetime of learning and change. You will certainly be living in interesting times!

SUPPORT MATERIALA comprehensive instructor’s manual is available that details suggested teaching timeta-bles, teaching notes and presentation slides. Suggested case studies for each chapter andguides on the end of chapter review questions are also available.

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ACKNOWLEDGEMENTSMany individuals and organizations have contributed to the publication of this text.Although anonymous, we are very grateful to the large numbers of MBA students in theUnited States, Australia, Europe, and Asia who have used some or all of the material asit was in preparation. We also owe a debt of gratitude to the anonymous reviewers whoprovided us with such useful feedback on our earlier drafts.

In addition, we would like to express our thanks formally to colleagues in severalcountries for their support and assistance. These include Neil Abromavage, GraemeAddison, Mohamed Ariff, Chris Ballenden, David Beim, Pierre Berthon, Walter Borghi,Wido Bosch, Noel Capon, Paul Coughlin, Graham Edward, Jean Noel Ezingëard, Gra-ham Hubbard, Kevin Jagiello, Nell Kimberley, Mike Knowles, Roger Love, GordonMandry, Nigel Morkel-Kingsbury, Mark Nicholson, Chandana Perara, Eli Raskin, JamesSarros, Bill Schroder, On Kit Tam, Bernard Taylor, Dianne Waddell and Greg Whitwell.

We would also like to express our appreciation to several individuals and organiza-tions for providing data used in the book. This includes Arnaud Humblot of Dealogic,Stuart Westmore of L.E.K. Consulting, Rory Manchee of Standard and Poor’s, andDerry Pickford of Smithers and Co. We also express our thanks to several organizationsfor the use of material from their web pages. This includes BHPBilliton, Canon, Celemi,Ciba Specialty Chemicals, CitiGroup, Harley-Davidson, LG, News Corporation, Petro-bras, Philips, Proctor & Gamble, Siemens and Unilever.

We also wish to acknowledge the help we received from the secretarial and librarystaff at Monash and Columbia, as well as the constant encouragement of our partnersMargaret and Madge.

The staff at Wiley have been consistent and sympathetic advisors. We could nothave hoped for a better publisher. Our thanks to Jessica Bartelt, Johanna Barto, SteveHardman, Jeff Marshal, Steve Hardman, and Anna Rowe.

ABOUT THE AUTHORSPeter FitzRoy is a Professor in the MBA Program at Monash University in Melbourne, Aus-tralia where he has taught Strategic Management for several years. He has held appoint-ments at a number of institutions including Columbia University, the University of Illinois,the Manchester Business School, the Wharton school of the University of Pennsylvania,the University of Waterloo, and Purdue University. He also has extensive experience inlecturing on management development programs in Asia, Australia, the United Kingdomand the United States. He is actively involved in the Strategic Management Society, andhas served for many years on the editorial board of the Strategic Management Journal.

James (Mac) Hulbert is the R. C. Kopf Professor at the Graduate School of Business,Columbia University. He has taught or held visiting positions at the Fundacao Joao Pin-heiro (Brazil), Henley Management College, the London Business School, Peking Uni-versity, and UCLA among others. He has also taught on executive developmentprograms in Europe, South America, North America, the Middle East, Africa, and Asia.He has worked as a consultant with numerous global companies including Monsanto,3M, IBM, General Electric, Chase Manhattan Bank, BASF, Ericsson, BHP Billiton,ICI, Unilever, and Visa International. His research interests are strategy and planning,which have resulted in several published books and numerous articles in the StrategicManagement Journal, Sloan Management Review, California Management Review,European Management Journal among others.

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� CHAPTER 1

Managing Strategically 1

� CHAPTER 2

The Fundamentals of Strategic Management 27

� CHAPTER 3

The Competitive Environment 56

� CHAPTER 4

Financial Markets 89

� CHAPTER 5

Internal Analysis: Managing Competences, Costs and Knowledge 123

� CHAPTER 6

Creating Future Direction 153

� CHAPTER 7

Business Level Strategy 179

� CHAPTER 8

Corporate Level Strategy 216

� CHAPTER 9

Managing Innovation and the Dynamic Scope of the Firm 259

� CHAPTER 10

Leading Organizational Change 293

� CHAPTER 11

Designing Organizational Architecture 315

� CHAPTER 12

Measuring Organizational Performance 351

� CHAPTER 13

Corporate Governance 389

� CHAPTER 14

Strategic Management in Transition 411

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Preface v

� CHAPTER 1

Managing Strategically 1

1.1 Introduction 3Definition of Strategic Management Terms 5

1.2 Firm Success 7What Do We Mean by Success? 7What Determines Success? 8Sustainability of Success 11

1.3 The Concept of the Firm 14Managerial Implications 15

1.4 Dynamics of Change 161.5 Strategic Management Process 17

Context 17Strategy 18Implementation 19Performance 20

1.6 Who “Does” Strategy? 201.7 Changes Affecting Strategic

Management 21Globalization 21Increased Competition 22Technological Change 23Knowledge Intensity 23De-regulation and Privatization 24

1.8 Summary 24Review Questions 25Endnotes 25

� CHAPTER 2

The Fundamentals of StrategicManagement 27

2.1 Introduction 272.2 Characteristics of Strategic Decisions 28

Create Value 29Major Resource Commitment 29Difficult to Reverse 30Long Term Commitment 30

2.3 Characteristics of Strategy 31Incremental or Revolutionary Strategy 31Strategy at the Corporate and Business-UnitLevels 37

Strategy as Building Competences 38Strategy as Resolving Paradox 38Other Characteristics of Strategy 40

2.4 Characteristics of Strategic Management 41Creating the Organization 42Creating and Managing Change 42

Creating Value 43Ethics 44

2.5 Business Models 44Components of a Business Model 45

2.6 The Strategy Development Process—AManagement Perspective 46

Impediments to the Strategy Process 472.7 Stakeholders and Organizational Value 50

Shareholders 50Customers 51Employees 51Other Stakeholders 52

2.8 Getting Strategy Implemented 522.9 Summary 53

Review Questions 53Endnotes 54

� CHAPTER 3

The Competitive Environment 56

3.1 Introduction 57Select Key Variables 58Forecast Changes 58Estimate the Impact of the Change 58

3.2 The Remote Environment 61Political 61Economic 64Socio-Cultural 65Technological 67Legal 70Environmental 71

3.3 The Industry Environment 73Industry Value Chain 76Limitations of the Industry Model 77

3.4 The Business-Unit Environment 79Customer Analysis 80Analyzing Competitors 83

3.5 Multi-Industry Competition 84Network Competition 84Corporate Level Competition 86


� CHAPTER 4

Financial Markets 89

4.1 Introduction 894.2 The Two Markets in Which Firms

Compete 91Firm Value 93

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Shareholder Value 93Risk Types 93

4.3 Financial Markets 94Major Participants in Financial Markets 96Global Nature of Financial Markets 97Current Concerns with Financial Markets 100

4.4 Equity Markets 100Types of Investors 101The Cost of Equity Capital 102Trends in Equity Markets 103

4.5 Debt Markets 104Types of Debt 104Ratings Agencies 106Islamic Banking 107

4.6 Cost of Capital and Firm Valuation 108Firm Valuation 108Accounting Measures of Profitability 111

4.7 Risk Management and Derivatives 112Forward Contracts 113Options 114Swaps 115

4.8 Summary 116Review Questions 117Appendix: Interest-Rate Swap 117Endnoteses 120

� CHAPTER 5

Internal Analysis: Managing Competences,Costs, and Knowledge 123

5.1 Introduction 1245.2 Resources 127

Tangible Resources 127Intangible Resources 128Classifying Resources 128

5.3 Resources and Competences 1325.4 Competences and Competitive

Advantage 134Valuable 134Scarce 135Nonimitiable 135Sustainable 136Appropriable 136

5.5 Dynamic Competences 1365.6 The Value Chain 1385.7 Cost Drivers 139

Economies of Scale 139Learning 142Value Drivers 143

5.8 Knowledge and Intellectual Capital 143Types of Knowledge 145Characteristics of Knowledge Products 147


� CHAPTER 6

Creating Future Direction 153

6.1 Introduction 154Vision 155Values 156Mission 156Objectives 156

6.2 Vision 156The Vision Statement 157Characteristics of Vision Statements 158Creating a Vision Statement 159

6.3 Values 160Values as a Source of Problems 162

6.4 Mission 163Corporate Versus Business-Unit MissionStatements 165

Characteristics of Mission Statements 166Creating and Changing a MissionStatement 166

Bases for Mission Definition 1666.5 Objectives 168

Corporate and Business-Unit Objectives 168Financial and Nonfinancial Objectives 170Setting Objectives 171Categories of Objectives 171Level of Objectives 172Problems in Setting Objectives 173Unintended Consequences 174Synthesizing the Concepts 174

6.6 An Integrative Example 1756.7 Summary 176


� CHAPTER 7

Business-Level Strategy 179

7.1 Introduction 180Corporate and Business-UnitRelationships 181

Strategic Management of the Business 182Business Vision and Objectives 183

7.2 Context 184Remote Environment 184Industry 185Competitor Analysis 187

7.3 Analysis for Developing Strategy 187The Business Value Chain 187Business-Unit Analysis 192

7.4 Developing Business-Level Strategy 192A Strategic Decision Framework 193

7.5 Where to Compete 194Vertical Positioning 194Horizontal Positioning 198

7.6 How to Compete 201

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Competitive Business Strategies 201Dynamics of Competitive Advantage 204Dynamics and Strategy 205Competences and Architecture 208

7.7 Business Growth 208Product/Market Growth Alternatives 209Innovation and Sources of Value 210

7.8 Illustrative Business Strategy 2137.9 Summary 213


� CHAPTER 8

Corporate-Level Strategy 216

8.1 Introduction 217Understanding Corporate Structures 218Creating Value 220

8.2 Elements of Corporate Strategy 222Creating Future Direction 222Style of the Center 222Resource Allocation 223Diversification and Relatedness amongBusiness Units 224

Financial Decisions 2248.3 Creating Future Direction 2258.4 Style of the Center 225

Synergy 227Interfacing with Business Units 228

8.5 Resource Allocation 228Resource Allocation—Current and FuturePortfolio 230

Tools for Allocating Resources 2318.6 Diversification 244

Related Diversification 246Unrelated Diversification 246

8.7 Financial Decisions 247Capital Structure 247Dividend Policy 249Share Repurchases 250Management Incentive Options 250

8.8 Managing Strategic Risk 252Assessing Strategy 252Strategic Risk Profile 253Managing Risk 254


� CHAPTER 9

Managing Innovation and the Dynamic Scopeof the Firm 259

9.1 Introduction 2609.2 Features of Organizational Innovation 261

Organizing for innovation 263Types of Innovation 264

9.3 A Framework for Managing the DynamicScope of a Firm 266

Means for Changing Scope 2699.4 Managing the Changing Scope—Internal

Development 270Technological Innovation 271

9.5 Managing the Change of Scope—Mergersand Acquisitions 275

Drivers of Mergers and Acquisitions 278Success of Mergers and Acquisitions 278Process Model of Mergers andAcquisitions 279

9.6 Managing the Changing Scope—HybridApproaches 286

Stategic Alliances 286Licensing and Technology Purchase 287Equity Investment 287Consortia 288Option Buying 288

9.7 Managing the Changing Scope—Divestments,Spinoffs and Restructuring 289

Divestments and Spinoffs 289Restructuring 290


� CHAPTER 10

Leading Organizational Change 293

10.1 Introduction 295Drivers of Change 295Changes in the Firm 295

10.2 Characteristics of OrganizationalChange 298

Change and the Environment 298Change and the Firm 299

10.3 The Change Process 305Initiating Change 306Managing Change 308Sustaining Change: The Organization of theFuture 310

10.4 Leadership 311Leader versus Manager 311Competences and Behaviors of Leaders 311


� CHAPTER 11

Designing Organizational Architecture 315

11.1 Introduction 316What is Organizational Architecture? 317Need for Innovation in AllCharacteristics 317

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11.2 Structure 319The Nature of Structure 320Principles of Structural Design 320Types of Organizational Structures 324

11.3 Processes and Process Management 334Key Process Management Activities 335Business Process Reengineering 336Information Technology Infrastructure 337Major IT Initiatives 338Knowledge Management Systems 339

11.4 Human Resources 342Managing Resources and Competences 343Succession Planning 343Managing Human Resource Policies 344


� CHAPTER 12

Measuring Organizational Performance 351

12.1 Introduction 35212.2 Performance Measures 352

Shareholder Value and Firm Value 353Variables and Measures 353Diagnostic Use 355Financial and Non-financial Measures 355Benchmarking 356Need for a Set of Measures 356

12.3 Developing a Performance MeasurementSystem 356

Identifying and Designing PerformanceMeasures 357

12.4 Measuring Business-LevelPerformance 359

Customer Measures 360Internal Measures 362Innovation and Learning Measures 362Financial Measures 363

12.5 Corporate Performance Measures 366Product/Market Performance and ExternalStakeholders 367

Internal Measures and InternalStakeholders 369

Innovation and Change Management 372Financial Measures and Stakeholders 373Company Examples 376

12.6 Summary 379Review Questions 380Appendix A: Measures of Relatedness 380Appendix B: Financial Measures ofPerformance 381

Financial Ratio Analysis 383Value-Based Management 384

Problems with Accounting Numbers 384Endnotes 387

� CHAPTER 13

Corporate Governance 389

13.1 Introduction 390What is Corporate Governance? 390Global Issues in Corporate Governance 391

13.2 The Modern Corporation 392Global Institutional Arrangements 392

13.3 The Governance Model 39513.4 Shareholders and Boards 39513.5 Management and Boards 39613.6 The Role of Directors and the Board 398

Responsibilities of Directors 398Composition of the Board 399Competences of Directors 401Compensation of Directors 401

13.7 Board Operations 401Board Processes 401Board Tasks 402Board Committees 404

13.8 Global Governance Approaches 405Europe 406Asia 406


� CHAPTER 14

Strategic Management in Transition 411

14.1 Introduction 41114.2 Context 412

Globalization 413Competition 413Technology and Innovation 413

14.3 Strategy 414Managing Paradoxes 414Changing Boundaries 414Scale, Efficiency, and Flexibility 414Ethics and Transparency 415

14.4 Implementation 415Leadership in the Organization of theFuture 415

Intangible Assets 416Change 416Competences and Opportunities 417

14.5 Performance 417Creating Value 417Non-financial Criteria 417

Glossary 419Index 000

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