One of my first teaching experiences involved an evening MBA class. At least half of the students were older than I was and all had more real-world experience. We were discussing organization design and the choice to centralize or decentralize. It’s a choice with profound implications for the structure of incentives, communication patterns, and […]
Make or Buy: How to Create the Greatest Value
Make it or buy it? This strategic decision remains notoriously difficult for businesses. Sustained value creation requires the constant expansion and modification of a firm, and many of the assets and activities connected to its corporate theory belong to others. So to compose the value that your theory reveals demands you make sound decisions about […]
Who Should Set Strategic Direction?
In September 2009, Kraft, a company perhaps best known for its macaroni and cheese, made an unsolicited offer for Cadbury, the creator of the iconic Cadbury Easter Egg. Cadbury’s board of directors gave the offer a direct cut, and the U.K. public also proved very resistant to the idea of a U.S. firm buying a […]
Matching Markets: Maximizing Your Total Value
Brilliant managers are bargain shoppers. As they shop for skills and knowledge in labor markets, parts, services, and other inputs in supply markets, and technology in patent and licensing markets, they seek to secure assets at prices below their value in an envisioned future use. A corporate theory guides this bargain hunter, revealing unique and […]
Navigating the Rocky Trail of Corporate Strategy
Steve Jobs described the design process as “keeping five thousand things in your brain … and fitting them all together … in new and different ways to get what you want.” A capacity for such mental simulation marks great corporate strategists. They possess an ability to assemble assets and opportunities into valuable strategies. Key to […]