Knowledge that Transforms

Japan's ‘miracle’ is an ongoing, evolving one. Along with the explosive rise of Japan's economic fortunes the number of theories about the business strategy of Japan's most successful firms, her Kaisha, is also exploding. The focus here is not on individual building‐block strategic patterns but on: (1) linkages between the patterns, and (2) how (and why) some patterns may be combined to create even greater advantage. At the level of the firm a few basic themes are discussed and roughly modeled as a sequence, a ‘pattern of patterns’. It is argued that (in retrospect) several patterns of Japanese strategy have been (to differing degrees in different firms) parts of a larger, synergistic, internally logical, and powerful synthesis. The point is that additional strategic advantages can emerge for firms which think about how to link together strategic patterns. Evidence is offered illustrating these arguments and demonstrating one way Japanese patterns combine to form an integrated strategy.

The PIMS data base and the FTC Line‐of‐business data base have both been widely used in industrial organization research and business strategy research. However, both data bases have been criticized because of their sample compositions, their measurement methodologies, and the underlying data structures. This study was designed to explore the issues that have been raised about the two data sets by comparing findings produced by them. Since criticism of the two data sets are dissimilar, it is highly unlikely that comparable results would be obtained if the quality of either or both data sets was deficient. This study shows that the data sets generally produce highly comparable descriptive and relational results. However, a number of disagreements do arise, and these are traced to idiosyncratic causes, rather than to the kinds of systematic shortcomings suggested by critics.

Hrebiniak and Joyce (1985) present a model of organizational adaptation in which environmental determinism and strategic choice are orthogonal. Lawless and Finch (1989) find empirical support for Hrebiniak and Joyce's four choice‐determinism combinations, and mixed support for propositions concerning strategies that perform best in each. The note, ‘Choice and determinism: A comment,’ relates social learning theory to the Hrebiniak and Joyce framework, based on the position that this theory is a useful way to describe the process of organizational adaptation. Fundamentally, the comment puts two arguments on the table. In order of importance they are: The adaptation process is only broadly defined by Hrebiniak and Joyce or by Lawless and Finch. Yet it is important to understand the choice—determinism interaction. The comment recommends social learning theory (Wood and Bandura, 1989) as an elaboration. The process of adaptation is interactive, and ought to be studied longitudinally. These two arguments are discussed in turn as a possible contribution to choice‐determinism research.

Firms that obtain orders through frequent competitive bidding often fail to realize that the analysis required for making strategic marketing decisions is quite different from that for firms where competitive bidding is absent. This article presents a conceptual framework, the bidding pyramid, for understanding the interrelationships between the six major internal variables that management should adjust if optimal performance is to be achieved. The framework has been derived as the result of research undertaken in the U.K. construction industry.

In a study of the interrelationships between firm diversification, market power, and performance, Montgomery (1985) presents empirical evidence in support of the hypotheses that highly diversified firms will have lower market shares in their respective markets than less diversified firms and that the strategy of diversification does not contribute to firm profitability. The present paper re‐examines these results with attention to the special characteristics of the open Canadian economy in a sample of Canadian manufacturing firms. The authors report evidence in support of the hypothesis that diversification in technologically related activities results in economies of scope and greater firm performance.

This note comments on Lawless and Finch's (1989) empirical test of Hrebiniak and Joyce's (1985) framework of business‐environment relations. In doing so it extends Lawless and Finch's reasoning through the explicit incorporation of an interactionist perspective. A model is presented that amplifies the prevailing organizational adaptation logic by assigning a role to organizational learning and by suggesting how organizations act on environmental information vis‐à‐vis symbolic processes and environmental management strategies.

This paper reanalyzes Miller and Friesen's (1984a) life cycle dana by statistically assessing their conclusions regarding the life cycle imperative. Three separate models were tested: a three‐phase model, a four‐phase model and a five‐phase model. Using the del procedure for the prediction analysis of cross‐classification tables, a sensitivity analysis showed that there is support for the life cycle progression hypothesis, but only when firms that stay in the same phase are not treated as errors. When firms that stay the same are increasingly weighted as errors, del values drop significantly. In general, the three‐ and four‐phase models show better support for the life cycle hypothesis than the five‐phase model originally used by Miller and Friesen.

The study of networks is attracting considerable attention. One of the difficulties of such studies is that techniques of analysis, concepts, and models developed in a variety of disciplines are used. The dangers of using the work of other disciplines are illustrated by considering the way in which the concept of transaction costs has been used.

This paper presents results from a study of the contribution of formal strategic planning to 1087 decisions made by 129 of the Fortune 500 companies during the years 1982–86. Multivariate analysis of covariance revealed that the characteristics of decisions account for over 15 percent of the variance in data and should therefore be regarded as important determinants of the contribution planning makes to decision‐making. The planning systems studied contributed more to decisions that were considered important and risky, and also to those that were either global in nature or related to divestments.