Knowledge that Transforms

Various methods are in use for the ‘top down’ assessment and comparison of the future profitabilities of businesses. The most advanced is the PAR equation of the PIMS programme, which combines quantitative evaluations of the average effect of various business characteristics on profitability. However it is not a true model in the OR sense being essentially a linear regression equation. The proposed new approach is a first attempt to combine the characteristics in a way which models the bargaining of customers with suppliers who are in competition for the supply of a bulk product. All the constants in the resulting non‐linear equation (called 5C) are meaningful in marketing or production terms. The model is in a preliminary non‐optimized state, but seems to offer opportunities for ongoing development. It is in this spirit that it is offered for discussion.

This paper reports and discusses empirical results of a study which examines why some firms are attacked via unfriendly tender offers and other firms are not. The evidence indicates that target firms' managers ineffectively plan and/or implement business strategy, thus increasing their vulnerability to takeovers.

This work is original research which is based on data gathered from annual reports and accounts. It covers some 267 businesses which had the largest annual turnovers for manufacturing companies, within Britain, in 1971 and were still in existence in 1979. The data have been subjected to analysis to reveal preferred product‐market postures, movements in posture, effects of annual turnover size on strategies, and the effects of being located within specific industries. In comparison with the work of D. F. Channon for the preceding twenty years it can be seen that, on the whole, the trend towards diversification has continued throughout the broad spectrum of British Industry.

One of the requirements for a strategy to be successful is the use of the proper management system to implement it. The purpose of this paper is to report on an empirical investigation dealing with this issue. Specifically the research attempts to answer the following general questions: Do successful firms use a different type of match between their strategy and their management system than unsuccessful ones (description)? If so, for a given strategy, what are the best ‘organizational arrangements’ (management system) which are likely to lead to a firm's success? Do firms using the prescribed fit or match between strategy and management system get better overall results (prediction)? Management system or design is here defined as the processes of organizing, planning and controlling, staffing and directing in a company.

If an oligopoly is modelled as a non‐zero‐sum game, then the market shares associated with an equilibrium solution can be interpreted as measuring the competitive strength of the firms. By comparing afirm's equilibrium market share with its actual market share, one can conclude whether the firm has positive or negative growth potential in terms of market share, which has some implications for its investment strategy.