notes Chapter 1 1 Johnson, G., Strategic Change and the Management Process, Oxford: Blackwells, 1987; “Re-thinking incrementalism,” Strategic Management Journal, 9, 75–91, 1988; “Managing strategic change – strategy, culture and action,” Long Range Planning, 25(1), 28–36, 1992. 2 Leonard–Barton, D., “Core capabilities and core rigidities: a paradox in managing new product development,” Strategic Management Journal, 13, 111–25, 1992. 3 Arthur, W.B., “Competing technologies, increasing returns and lock in by historical events,” Economic Journal, 99, 116–31, 1989. 4 Prahalad, C.K. and Bettis, R., “The dominant logic: a new link between diversity and performance,” Strategic Management Journal, 6(1), 485–501, 1986; Bettis, R. and Prahalad, C.K., “The dominant logic: retrospective and extension,” Strategic Management Journal, 16(1), 5–15, 1995. 5 In The Icarus Paradox (Miller, D., New York: Harper-Collins, 1990), Danny Miller makes a convincing case that organizations’ success leads to a number of potentially pathological tendencies, not least of which are tendencies to inflate the durability of bases of success and to build future strategies relatively uncritically. 6 For a review of these points, see the introduction to Dutton, J., Walton, E. and Abrahamson, E., “Important dimensions of strategic issues: separating the wheat from the chaff,” Journal of Management Studies, 26(4), 380–95, 1989. 7 See Tversky, A. and Kahnemann, D., “Judgements under uncertainty: heuristics and biases,” Science, 185, 1124–31, 1975. 8 Finkelstein, S., “Why smart executives fail: four case histories of how people learn the wrong lessons from history,” Business History, 48(2), 153–70, 2006. 9 See Jarzabkowski, P., Giulietti, M. and Oliveira, B., Building a Strategy Toolkit: Lessons from Business, AIM Executive Briefing, 2009. 10 This quote by André Malroux and the story of the BMW museum were provided by Mary Rose. 11 Holbrook, D., Cohen, W., Hounshell, D. and Klepper, S., “The nature, sources and conse- quences of firm differences in the early history of the semiconductor industry,” Strategic Management Journal, 21(10–11), 1017–42, 2000. 12 Private correspondence with business historian Mary Rose, who suggests that “it links to Schumpeter and his notion of boundary crossing which may be between sectors, between technologies or informing the development and application of old technology with new knowledge.” 13 Klepper, S. and Simons, K.L., “Dominance by birthright: entry of prior radio producers and competitive ramifications in the US television receiver industry,” Strategic Management Journal, 21(10–11), 987–1016, 2000. 14 For a summary paper on dynamic capabilities,see Wang, C.L. and Ahmed, P.K., “Dynamic capabilities: a review and research agenda,” International Journal of Management Reviews, 9(1), 31–52, 2007. 202 Notes 203 15 See D’Aveni, R., Hypercompetition: Managing the Dynamics of Strategic Manoeuvring, New York: Free Press, 1995. 16 See, for example, Coopey, J., “The learning organization, power, politics and ideology,” Management Learning, 26(2), 193–213, 1995. 17 The concept of the organization as a set of social networks is discussed by, for example, Granovetter, M.S., “The strength of weak ties,” American Journal of Sociology, 78(6), 1360– 80, 1973, and Carroll, G.R. and Teo, A.C., “On the social networks of managers,” Academy of Management Journal, 39(2), 421–40, 1996. 18 J.B. Quinn’s research involved the examination of strategic change in companies and was published in Strategies for Change, Irwin, 1980. See also Quinn, J.B., “Strategic change: logical incrementalism,” in Mintzberg, H., Quinn, J.B. and Ghoshal, S. (eds), The Strategy Process (European edition), Prentice Hall, 1995. 19 See Hamel, G. and Valikangas, L., “The quest for resilience,” Harvard Business Review, September, 52–63, 2003. 20 For fuller explanations of the distinction between charismatic and instrumental and trans- actional leadership, see Kets de Vries, M.F.R., “The leadership mystique,” Academy of Management Executive, 8(3), 73–89, 1994. 21 For this evidence, see Waldman, D.A., Ramirez, G.G., House, R.J. and Puranam, P., “Does leadership matter? CEO leadership attributes and profitability under conditions of perceived environmental uncertainty,” Academy of Management Journal, 44(1), 134–43, 2001. 22 For example, see Kotter, J.P., A Force for Change: How Leadership Differs from Management, New York: Free Press, 1990, or Tedlow, R.S., Giants of Enterprise: Seven Business Innovators and their Empires, New York: Harper Business, 2001. 23 See Collins, J. and Porras, J., Built to Last: Successful Habits of Visionary Companies, New York: Harper Business, 2002. 24 The discussion on different approaches of strategic leaders and evidence for the effec- tiveness of the adoption of different approaches can be found in Goleman, D., “Leadership that gets results,” Harvard Business Review, 78(2), 78–90, 2000, and Farkas, C.M. and Wetlaufer, S., “The ways chief executive officers lead,” Harvard Business Review, 74(3), 110–12, 1996. 25 See Collins, J. and Porras, J., Note 22. 26 For a summary of such research, see Kellermanns, F.W., Walter, J., Lechner, C. and Floyd, S.W., “The lack of consensus about strategic consensus: advancing theory and research,” Journal of Management, 31(5), 719–37, 2005. 27 Amason, A., “Distinguishing the effects of functional and dysfunctional conflict on strategic decision making: resolving a paradox for top management teams,” Academy of Management Journal, 39(1), 123–48, 1996. 28 Personal correspondence with Steve Floyd. 29 Burgelman, R. and Grove, A., “Strategic dissonance,” California Management Review, 38(2), 8–28, 1996. 30 Beckman, C.M., “The influence of founding team company affiliations on firm behavior,” Academy of Management Journal, 49(4), 741–58, 2006. 31 de Geus, A., The Living Company, Cambridge, MA: Harvard Business School Press, 2002. 32 Tushman, M.L., and O’Reilly, C.A., “Ambidextrous organizations: managing evolutionary and revolutionary change,” California Management Review, 38(4), 8–30, 1996. 204 Notes 33 Duncan, R., “The ambidextrous organization: designing dual structures for innovation,” in Killman, R.H., Pondy, L.R., and Sleven, D. (eds), The Management of Organization, 1, pp. 167–88, New York: North Holland, 1976. 34 Brown, S.L. and Eisenhardt, K.M., “The art of continuous change: linking complexity theory and time-paced evolution in relentlessly shifting organizations,” Administrative Science Quarterly, 42(1), 1–34, 1997. 35 See Brown and Eisenhardt, Note 34. 36 See McKelvey, B., “Simple rules for improving corporate IQ: basic lessons from complexity science,” in Andriani, P. and Passiante, G. (eds), Complexity, Theory and the Management of Networks, Imperial College Press, 2004. 37 See Brown and Eisenhardt, Note 34. 38 See McKelvey, Note 36. 39 See Eisenhardt, K.M. and Sull, D.N., “Strategy as simple rules,” Harvard Business Review, January, 106–16, 2001. 40 For a summary of our study and findings, see Johnson, G., Yip, G. and Hensmans, M., “Achieving successful strategic transformation,” MIT Sloan Management Review, 53(3), 25–32, 2012. Chapter 2 1 See, for example, Rappaport, A., Creating Shareholder Value: The New Standard for Business Performance, New York: Free Press, 1986, and Danielson, M.G. and Press, E., “Accounting returns revisited: evidence of their usefulness in estimating economic returns,” Review of Accounting Studies, 8, 493–530, 2003. 2 For a review of the extensive literature on the differences between the Anglo-Saxon, Continental and Japanese business systems, see Dore, R., Stock Market Capitalism: Welfare Capitalism. Japan and Germany versus Anglo-Saxons, New York: Oxford University Press, 2000, and Aoki, M., Towards a Comparative Institutional Analysis, Cambridge, MA: MIT Press, 2001. 3 See Bond, S.R. and Cummins, J.G., “The stock market and investment in the new economy: some tangible facts and intangible fictions,” Brookings Papers on Economic Activity, 1, 61–108, 2000, and Day, G., Fein, A.J. and Ruppersberger, G., “Shakeouts in digital markets: lessons from B2B exchanges,” California Management Review, 45(2), 131–50, 2003. 4 This statistical analysis using the frontier technique was conducted by Professor Timothy Devinney of the Australian Graduate School of Management with the help of Pierre Richard, PhD candidate at the AGSM. For the conceptual basis of our approach to using frontier analysis to measure financial performance, see Richard, P.J., Devinney, T.M., Yip, G.S. and Johnson, G., “Measuring organizational performance as a dependent variable: towards methodological best practice, Journal of Management, 35(3), 718–804, 2009. For details of how we identified the 28 superior performing companies and the eight SSTs, see Devinney, T.M., Yip, G.S. and Johnson, G., “Using frontier analysis to evaluate company performance,” British Journal of Management, 21(4), 921–38, 2010. For details on all the industries analyzed and more on the British companies researched, see Devinney, T.M., Yip, G.S. and Johnson, G., “Measuring long term superior perform- ance: the UK’s long-term superior performers 1984–2003,” Long Range Planning, 43(3), 390–413, 2009. Notes 205 5 The point being made here is that, without evidence that one firm outperforms another firm on all of the performance dimensions considered, or on a linear combination of those measures, we state that it defines the frontier. 6 Data for the average of 2001–2003. See Yip, G.S., Rugman, A.M. and Kudina, A., “International success of British companies,” Long Range Planning, 39(3), 241–64, 2006. 7 The 38 companies included plus 43 excluded = 81, which is slightly below the total number of 89 industries in the Osiris database because of some aggregations we made. 8 Porter, M.E. Competitive Strategy: Techniques for Analyzing Industries and Competitors, New York: Free Press, 1980. 9 Barney, J.B., “Firm resources and sustained competitive advantages,” Journal of Management, 17, 99–120, 1991. 10 Morgan Stanley, The Competitive Edge, New York: Morgan Stanley, 1998.