Knowledge that Transforms

The traditional framework for strategy formulation in the field of business policy is deliberately broad and generalized, so as to encompass an almost limitless number of potentially influential factors. There is also a need for a more focused view, a means for showing similarities and differences among firms and how these relate to strategy formulation—a framework, in other words, that allows companies to be diagnosed by key situational elements and uses these, in turn, to define the appropriate strategy alternatives. What is proposed is a framework based on three familiar key elements—organizational levels, management styles, and stages of growth—integrated with and related to four basic strategy alternatives.

This paper reports the results of a study directed toward determining: (1) the current pervasiveness of the requirement of a business policy course by AACSB‐accredited undergraduate programmes, (2) the general characteristics of the courses, (3) the organization of the courses, and (4) anticipated future changes in the courses. A questionnaire was mailed to all 208 AACSB‐accredited schools and returns were obtained from 203 of them. The paper presents the results derived from these responses and draws conclusions with regard to the study's objectives.

This paper is concerned with the assessment of effectiveness, despite the problems involved in its determination. The conventional approach to assessment is considered first. This is based upon a determination of the success of the planning in achieving its objectives. However, the problem here is that it does not consider the actual nature of the planning. A multidimensional approach is then considered, which attempts to overcome this problem, by measuring effectiveness within the planning system. The paper concludes that there are two types of effectiveness to be measured. However, although it recognizes the value of the conventional approach, the multidimensional approach is only seen to be useful in being an indicator to certain factors.

There is a growing interest in understanding the way in which firms' marketing and manufacturing policies interact. The studies carried out so far have almost entirely concerned themselves with goods‐producing organizations. However this paper suggests that these studies also provide useful insights into the problems faced by service firms in organizing themselves efficiently. Furthermore it suggests that a distinctive problem faced by such firms is that adaption of their organizations may have a significant effect upon consumers' perceptions of the service they offer. The paper first outlines some investigators' views of the link between marketing and manufacturing and follows this by discussing the concept of ‘production’, ‘delivery’ and ‘consumption’ of services. A brief consideration of the pressures for change which particularly impinge upon service firms precedes a discussion of the problems, and apparent contradictions, whch are linked with the concepts of standardization and personalization of services. The paper concludes with three examples of the issues discussed.

This paper focuses and extends some emerging views on technological evolution and competition. First, that over the evolution of many product‐market segments there is a generalizable pattern, a shift from the investment characteristics of product technology to those of process technology as the primary focus of competition. Eventually, market price falls below production costs, not because firms face U‐shaped cost curves, but because of shifts in demand to the innovative form of the product. To this framework is added a hypothesis on the evolving risk structure of rival investments. The interaction of required and realized returns then provides a stopping rule for technologically‐driven competition which is different from the static case. Because technological change within a segment is non‐controllable but predictable the production functions and organization structures of participating firms must change in generalizable ways which can be used to predict industry structure. For the competing organization, these changes require particular kinds of decisions which are particularly suited to the level of the organization's strategic management.

This study describes a survey of experts chosen from Industry, Labour, and Government in Israel, who ranked and scored three business and four national goals in the context of industrial development. The business goals represented profitability, capital use and growth potential. The national goals involved human resource utilization, added value, foreign exchange conservation, and export of technologically advanced products. The findings support a hypothesis of consensus on goals and goal priorities between different sectors of the Israel economy, despite what might appear to be their divergent special interests. The findings also indicate overall consensus with respect to a balance between business and national goals. The study concludes that this consensus is the result of the need to respond to environmental threats and uncertainties which has created a sense of mutual interdependence among the sectors.

An important element of manufacturing strategy is to decide on the shipping radius and the size of a geographically focused plant. This decision involves a trade‐off between exploiting economies of scale in production by building a large plant and decreasing transportation costs by building a small plant. The paper presents a model for analysing this trade‐off. It is shown that scale economies in transportation facilitate the exploitation of production economies of scale. For an optimal sized plant, the ratio of transportation to production costs does not depend on the absolute cost levels in production and transportation, but only the economies of scale present in production and in transportation.

A method is presented for analysing the stock market's implicit assessment of relative strategic position in an industry. The market's overall perception of strategic position is obtained by comparing the value of future growth potential to that of the existing earnings stream for each company. More detail is extracted by using the quality and quantity of future growth, implicit in the relative value of future growth, as a measure of competitive position and product market outlook respectively. The method is applied to a sample of firms from the computer and data processing industry.