Issue 4, 1990

Viewpoint What Executives Need to Learn

Peter F. Drucker

Executives who understand their work in terms of a flow of information are still a very small minority. Most of us continue to use computers primarily to do things we have always done - that is, to crunch numbers. Information - which means the right knowledge to take effective action - is still something more talked about than used, partly because one cannot simply convert data into information. Data are just one source of information. [...]

Issue 4, 1990

Alliances for Competitive Advantage: Why, When, and How

John L. Forbis and James A. Finnegan

For better or worse, alliance formation soared during the 1980s as corporations united for competitive advantage. While many alliances have been highly successful, others have ended bitterly, and some should never have been formed in the first place. In today's world, it is important to understand when an alliance is an appropriate investment vehicle and when it is not; it is equally important to understand how to form an alliance properly. [...]

Issue 4, 1990

Redefining the Corporation

Robert M. Tomasko

In recent years, a great many corporations have been reshaping - or at least attempting to reshape - themselves, with varying degrees of success. In North America, at least, the 1980s could easily end up being called the Decade of Downsizing. Reasons for this trend include deregulation, volatile OPEC prices, and intensifying international competition. In addition, the emergence of junk bonds fueled a wave of mergers and acquisitions. Each industry had its own challenges to face. [...]

Issue 4, 1990

Political and Economic Forces Shaping the Business World

Ernest R. May

Historians and social scientists do better looking backward than looking forward. Economists, for example, have predicted seven of the last two recessions. Once something has happened, however, we can usually explain why it was inevitable. [...]

Issue 4, 1990

The New Business Topography

Harland A. Riker, Jr., and Martyn F. Roetter

Once again we are embarked on a period of turbulent change, when it seems that the established order is dissolving, familiar guideposts disappearing, and our traditional frames of reference out of date. The very topography in which business is conducted is shifting beneath our feet. Change of this magnitude creates new opportunities, new challenges, and new imperatives for business managers. [...]

Issue 3, 1990

Viewpoint The Other Germany: An Open Door to Europe and Beyond

W. Tom Sommerlatte

"With German unification apparently imminent, there is a danger that Americans will adopt a passive attitude towards commercial relations with the German Democratic Republic (GDR). European and Japanese firms, however, are not waiting for unification, but are moving quickly and decisively to take advantage of political and economic change in East Germany." This is how the American Chamber of Commerce depicts the current situation in its recent edition of Commerce in Germany. [...]

Issue 3, 1990

The New Production-Sharing Networks

Roberto E. Batres

Production sharing is a strategy for conducting industrial operations in which certain procurement and manufacturing processes are restructured and shared, with firms in a developed country furnishing capital and technology-intensive components, while firms in a developing country furnish labor-intensive energy and other services. Such production-sharing partnerships achieve a variety of strategic benefits, including more flexible manufacturing and lower total costs - typically by 10 to 20 percent. [...]

Issue 3, 1990

Industry/Government Partnering: Toward a New Industrial Policy?

Stanley H. Werlin, Dennis C. Smith, and C. Curtis Holcomb

Confronted with an increasingly competitive business environment at both national and international levels, corporations of all sizes are finding collaboration, teaming, and partnering more and more important, both tactically and strategically. Corporations increasingly recognize that the larger-scale, longer-term business opportunities critical to their continued growth often demand a broader range of talent and expertise than they can offer individually. Firms in a particular business sector that once competed against a well-known set of competitors in a well-understood environment, now face changing market conditions that demand complicated, sometimes unusual partnering arrangements to meet customer needs. In response, many corporations are forming "strategic alliances" - business relationships that are expected to be long-term, mutually beneficial, and compatible with each partner's strategic plan and business objectives, while fostering growth and diversification that is mutually reinforcing. [...]

Issue 3, 1990

Academic/Industry Liaisons

Tamara J. Erickson and Joan B. Pinck

It has been 37 years since Watson and Crick unraveled the genetic mysteries and catapulted molecular biology into the forefront of laboratory sciences. Events in the academic laboratories since then have been nothing short of revolutionary. We have progressed in our fundamental understanding of the life sciences and have acquired the technical skills to accompany our understanding, with revolutionary implications for products and methods in the treatment of disease. To bring these products and methods into use - into the marketplace - requires as never before that industry and academia work together in strong, effective alliances. [...]

Issue 3, 1990

Toward Effective Supplier Management: International Comparisons

Roy D. Shapiro

The purchasing function is acquiring high priority in the eyes of senior management for a number of reasons. First, increasingly global strategies for marketing and manufacturing require equally global approaches to sourcing. The skills and knowledge required for effective worldwide sourcing are quite different from those typically found in a domestic purchasing organization. Furthermore, in a global company, purchasing plays a far greater role in gaining and maintaining competitive advantage, particularly in industries whose products evolve rapidly. [...]

Issue 3, 1990

Collaborating With Potential Competitors: The Profits and the Perils

Gary Hamel and C. K. Prahalad

Many Western managers are becoming wary of joint ventures. They have learned through costly experience that such alliances - particularly with Asian partners - can become a low-cost route through which new competitors acquire technology and market access. However, with the costs of product and market development escalating, avoiding strategic alliances altogether is not an option many firms can afford. The question for Western firms is: Is it really possible to win at collaboration? Our research - a five-year investigation of 15 strategic alliances around the globe - suggests that the answer is "yes." But in order to succeed at the special kind of partnership that we call competitive collaboration, Western firms must become as adept as their Far Eastern counterparts at managing collaboration for competitive gain. [...]

Issue 2, 1990

Corporate Management of a Major Crisis

Ashok S. Kalelkar and John F. Magee

The way a company manages a major crisis can literally spell the difference between life and death - both for the immediate victims of the crisis and for the company itself. Over the past decade, several major crises have had severe environmental, health, and safety consequences, as well as drastic implications for the companies involved. [...]

Issue 2, 1990

The New Environmental Stewardship

J. Ladd Greeno, Ronald A. N. McLean and Frank Annighofer

Heads of corporations have long been fluent in the languages of competition, finance, shareholder value, and - more recently - manufacturing strategies and global information networks. But for many, environmental management was an issue to be looked after elsewhere in the organisation. [...]

Issue 2, 1990

Planning for Chaos: A Scenario Approach to the Oil Market

Christopher E. H. Ross

No one can forecast oil prices. Yet a sharp change in oil prices can radically alter business conditions for a very large number of companies. In the early 1980s, automobile companies, iron and steel companies, airlines, marine transportation companies, and ultimately financial institutions all suffered whiplash from steep increases in oil prices. Since prices collapsed in 1986, we have enjoyed a period of relative calm, but the possibility of further turbulence remains with us. That possibility, although not forecastable, is nonetheless critical to business planning. [...]

Issue 2, 1990

How the Japanese Manage Risk

Bennett Harrison

Americans hear so much about Japan as the success story of the international economy, they sometimes forget that the Japanese have economic problems of their own. Japan has its declining industries such as steel and its low-wage competitors such as South Korea and Taiwan. And in an era of fast-paced economic change - exemplified by the recent loss of advantage in international markets caused by the high yen - it also has its problems of social adjustment. But what is so remarkable about the Japanese economy is its capacity to address such difficulties and adapt to change while remaining productive. On a recent trip to Japan, I came to the conclusion that if there is any one secret to this success, it lies in the way Japanese manufacturers manage risk. [...]

Issue 2, 1990

From Uncertainty to Risk: Reducing the Guesswork in R&D

Philip A. Roussel

The R&D imperative for industry has never been more compelling. Virtually all of industry has felt the impact of increased competition, much of it technically based, as well as the accelerated pace of technological challenge and change. The cumulative R&D expenditures and output of competition grows apace. No single company can grow its R&D investment at a rate commensurate with the sum of the international R&D forces growing in competition with it. The answer to the imperative cannot therefore be simply to invest more in R&D. "More" can never be enough. Instead, the answer for a growing number of companies is to deploy R&D investments more effectively, i.e., more strategically. [...]

Issue 1, 1990

Viewpoint Beyond Tiananmen: Is There a Future for Foreign Business in China?

Denis Fred Simon

The recent events in China's Tiananmen Square sent a deep shudder through the boardrooms of many firms in the United States, Western Europe, and Japan. While most foreign companies doing business in the People's Republic of China (PRC) have felt somewhat uneasy about making significant commitments of resources to China, their confidence had been increasing with each passing year of China's "open door" policy. This confidence had been reinforced by efforts at all levels of the Chinese leadership to improve the investment climate. Much of this growing confidence, however, was shattered by the actions of the Chinese leadership on June 4, 1989. Today the future of foreign investment in China is uncertain, as many foreign companies once active in China adopt a wait-and-see attitude. [...]

Issue 1, 1990

Telecommunications: Fueling Asia Pacific Growth?

Arthur Owen

If information is the oxygen of modern economic development, then telecommunications provides the essential circulatory system. A health check on the state of Asia Pacific telecommunications today would reveal both bad news and good news. [...]

Issue 1, 1990

Japan's Changing Management Style

Kazuo Sumii

In response to the rapidly changing world markets in which they compete, Japanese firms are facing the need for significant changes in the way they manage themselves. While some changes are already under way, more drastic changes may be expected. Specifically, Japanese firms are moving toward a strategic management approach and are exploring revisions in both organisational structure and policy to implement their new strategies. In this article we review a number of management-related issues and suggest the likely directions of change. [...]

Issue 1, 1990

Proprietary Technology: The Next Challenge for the NICs

S. M. Raja Bose

The future economic success of the Asia Pacific region is predicated on developing and sustaining a successful manufacturing sector. This must include not only primary processing and secondary manufacturing, in which the region has considerable experience, but the development of proprietary products and technologies. This latter endeavor is proving a challenging undertaking for the newly industrialised countries (NICs) of the region, Hong Kong, South Korea, Singapore, and Taiwan. [...]

Issue 1, 1990

Strategic Alliances in High-Tech Industries

William Reinfeld and Demosthenes Menegakis

As the next century approaches, significant trends now emerging in global economics and technology will have major implications for corporate international strategies. While Europe and North America are forming stronger regional trading blocs, Western firms are also pursuing increasingly attractive opportunities outside their regions, particularly in the fast-growing economies of the Asia Pacific region. Firms in the Asia Pacific region, meanwhile, are seeking to play larger roles in worldwide high-technology markets. To fully exploit the opportunities emerging worldwide, companies are increasingly considering strategic alliances with partners outside their regions. [...]

Issue 1, 1990

Asia Pacific: The Next Regional Trading Bloc?

Peter J. Connell

If Lester Thurow is right in suggesting that GATT is "dead," how will international trading relationships develop during the rest of this century? In an era of improving communications and rapid economic development, companies' investment, marketing, and sourcing strategies are becoming increasingly global rather than national or even regional. The international trading system is therefore of central interest not only to governments but also to companies - if it were to become unpredictable, it could wreak havoc with much of their strategic planning. [...]

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About Prism

Twice a year, Arthur D. Little covers the latest cutting-edge thinking on strategy, technology and innovation in its corporate magazine Prism. For over 20 years Prism has continually set the standards in innovative thinking and groundbreaking concepts in the world of business and management.

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