Exploring Corporate Strategy Eighth Edition MBA

About This Course

gErry JoHnson KEVan scHolEs ricHarD WHittington
Exploring
corporatE stratEgy
8TH EDITION
EXPLORING CORPORATE STRATEGY
Visit the Exploring Corporate Strategy, eighth edition Companion Website at www.pearsoned.co.uk/ecs. Register to create your own personal account using the access code supplied with this book to find valuable student learning material including:
● Key concepts: audio downloads, video clips, animations and quick tests to reinforce your understanding
● Chapter audio summaries that you can download or listen to online
● Self assessment questions and a personal gradebook so you can test your
learning and track your progress
● Revision flashcards to help you prepare for your exams
● A multi-lingual online glossary to explain key concepts
●l Guidance on how to analyse a case study
● Links to relevant sites on the web so you can explore more about the organisa- tions featured in the case examples and case studies

Gerry Johnson BA, PhD (left) is The Professor Sir Roland Smith Chair of Strategic Management at Lancaster University School of Management and a Senior Fellow of the UK Advanced Institute of Management (AIM) Research.
He is the author of numerous books, has published papers in many of the foremost management research journals in the world and is a regular speaker at the major academic conferences throughout the world. He also serves on the editorial boards of the Academy of Management Journal, the Strategic Management Journal and the Journal of Management Studies. His research
is into strategic management practice, processes of strategy development
and strategic change in organisations. As a consultant he works with senior management teams on issues of strategy development and strategic change where he applies many of the concepts from Exploring Corporate Strategy to help them challenge, question and develop the strategies of their organisations.
Kevan Scholes MA, PhD, DMS, CIMgt, FRSA (centre) is Principal Partner of Scholes Associates – specialising in strategic management. He is also Visiting Professor of Strategic Management and formerly Director of the Sheffield Business School, UK. He has extensive experience of teaching strategy to both undergraduate and postgraduate students at several universities. In addition his corporate management development work includes organisations in manufacturing, many service sectors and a wide range of public service organisations. He has regular commitments outside the UK – including Ireland, Australia and New Zealand. He has also been an advisor on management development to a number of national bodies and is a Companion of The Chartered Management Institute.
Richard Whittington MA, MBA, PhD (right) is Professor of Strategic Management at the Saïd Business School and Millman Fellow at New College, University of Oxford. He is author or co-author of eight books and has published many journal articles. He is a senior editor of Organization Studies and serves on the editorial boards of Organization Science, the Strategic Management Journal and Long Range Planning, amongst others. He has had full or visiting positions at the Harvard Business School, HEC Paris, Imperial College London, the University of Toulouse and the University of Warwick. He is active in executive education and consulting, working with organisations from across Europe, the USA and Asia. His current research is focused on strategy practice and international management.

EIGHTH EDITION
EXPLORING CORPORATE STRATEGY
Gerry Johnson
University of Strathclyde
Kevan Scholes
Sheffield Hallam University
Richard Whittington
Saïd Business School, University of Oxford


Pearson Education Limited
Edinburgh Gate Harlow
Essex CM20 2JE England
and Associated Companies throughout the world
Visit us on the World Wide Web at: www.pearsoned.co.uk
Fifth edition published under the Prentice Hall imprint 1998
Sixth edition published under the Financial Times Prentice Hall imprint 2002 Seventh edition 2005
Eighth edition published 2008
© Simon & Schuster Europe Limited 1998 © Pearson Education Limited 2002, 2008
The rights of Gerry Johnson, Kevan Scholes and Richard Whittington to be identified as authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written permission of the publisher or a licence permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS.
All trademarks used herein are the property of their respective owners. The use of any trademark in this text does not vest in the author or publisher any trademark ownership
rights in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners.
ISBN: 978-0-273-71191-9 (text only) ISBN: 978-0-273-71192-6 (text and cases)
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
10 9 8 7 6 5 4 3 2 1 11 10 09 08 07
Typeset in 9.5/13pt Linoletter by 35
Printed and bound by Rotolito Lombarda, Italy
The publisher’s policy is to use paper manufactured from sustainable forests.

Preface
We are delighted to offer this eighth edition of Exploring Corporate Strategy. With sales of previous editions approaching 800,000, we know that we have many loyal readers. At the same time, the strategy field is constantly changing. For this edition, therefore, we have consulted our users to introduce several new features, while taking care to retain features that have been well proven with many students and tutors from all over the world. Here we will highlight the key innovations of this edition, and then recap some of the classic features of the book.
The principal innovation of the eighth edition is to reorganise existing materials and introduce new materials to create four new chapters. These new chapters reflect advances in academic research, changes in practice and course developments in many universities around the world. These chapters are:
● Chapter 5 Culture and Strategy, incorporating a strong historical theme, with the growing appreciation of phenomena such as path dependency and institu- tionalised patterns of behaviour.
● Chapter8InternationalStrategy,reflectingofcoursethegrowinginternational- isation of business, but also the international ambitions of students in many universities.
● Chapter 9 Innovation and Entrepreneurship, responding to the increasing pace of innovation in many industries and the growing interest amongst many students in establishing their own enterprises.
● Chapter 15 The Practice of Strategy, emerging in part from a new research domain in which two of the authors are active, but also the need for students to have insight into the practical details of who gets involved in strategy, what they do and the methodologies they use.
While adding these chapters, we have been very aware of the need to offer students manageable amounts of reading. Accordingly we have slimmed down the text, so that students now have more, but shorter chapters than in previous editions. Overall, the eighth edition is shorter than the seventh.
A second significant development for this edition is the extension of the strat- egy lenses from three to four. We believe strongly that a strategy textbook should not encourage a narrow orthodoxy with regard to strategic issues. The strategy lenses are one of the ways in which we try to help students see strategy in different ways. As well as the analytically orientated design lens, the gradualist style of the experience lens and the innovative ideas lens, we introduce a dis- course lens. This discourse lens reflects both the growth of academic research on the role of language in strategy and the practical importance of mastering this language in the ‘strategic conversation’ of organisations. At the same time as adding this fourth lens, we have adopted a new format for the lens-inspired

xxiv PREFACE
‘commentaries’ that follow each of the three parts of the book. This format is designed to be concise and user-friendly.
As well as these innovations, the eighth edition builds on established strengths of the book:
● Outstanding pedagogical features. Each chapter has clear learning outcomes, definitions of key concepts in the margins, practical questions associated with real-life illustrations, and concise end-of-chapter case examples through which students can easily apply what they have learnt. The website (www.pearsoned.co.uk/ecs) has a wealth of resources for students and tutors, including audio summaries, flashcards, a glossary, self-assessment questions, assignments, additional cases and PowerPoint slides.
● Up-to-datematerials.Aswellasthenewchapters,wehavethoroughlyrevised the other chapters, updating the references so students and teachers can easily access the latest research. The majority of the 86 illustrations and 15 end-of-chapter case examples are entirely new to this edition. The Text and Cases version has 17 new cases and 19 fully revised ones. We have incor- porated new theoretical perspectives, such as complexity theory, discourse theory and strategy-as-practice.
● Encouragingcriticalthinking.Aswellasthefourstrategylenses,weencourage critical thinking by ending each chapter with a ‘key debate’, introducing students to research evidence and theory on key issues of the chapter and encouraging students to take a view. Our ‘three circles’ model – depicting the overlapping issues of strategic position, strategic choices and strategy in action – challenges a simple linear, sequential view of the strategy process.
● Range of examples. This edition maintains the wide range of examples used in the text, illustrations and cases. We draw from all over the world, and from a wide range of type and size of organisation. An important distinctive feature of Exploring Corporate Strategy is the use of examples from the public and voluntary sectors, where many students will be employed.
● Attractive text layout and design. We continue to use colours and photographic materials to improve clarity and ease of ‘navigation’ through the text. Reading the text should be an enjoyable and straightforward process.
A guide to how to get the most from all the features and learning materials of Exploring Corporate Strategy follows this preface.
Many people have helped us with the development of this new edition. Another innovation for this edition has been the introduction of an Advisory Board of 20 experienced users of the book. Their guidance has been immensely useful as we have undertaken the substantial revisions of this edition, and we hope to be able to develop the Advisory Board and its role in the future. But many other adopters of the book provide more informal advice and suggestions – many of whom we have had the pleasure of meeting at our annual teachers’ workshops. This kind of feedback is invaluable. Also, our students and clients at Sheffield, Strathclyde, Lancaster and Oxford and the many other places where we teach are a constant source of ideas and challenge and it would be im- possible to write a book of this type without this direct feedback. Our own work and contacts have expanded considerably as a result of our book and we now all have important links across the world who have been a source of stimulation to us.

Our contacts in Ireland, The Netherlands, Denmark, Sweden, France, Canada, Australia, New Zealand, Singapore and the USA are especially valued.
We would like to thank those who have contributed directly to the book by providing case studies, and those organisations that have been brave enough to be written up as case studies. The growing popularity of Exploring Corporate Strategy has often presented these case study companies with practical problems in coping with direct enquiries from tutors and students. We hope that those using the book will respect the wishes of the case study companies and not con- tact them directly for further information. There are many colleagues that we need to thank for assisting us in improving our understanding of particular aspects of the subject or related area. Strategy is such a vast domain that this assistance is essential if the book is to remain up to date. So thank you to Julia Balogun, John Barbour, Nic Beech, George Burt, Mark Gilmartin, Stéphane Girod, Royston Greenwood, Paula Jarzabkowski, Phyl Johnson, John Kind, Aidan McQuade, Michael Mayer, Thomas Powell, Ian Sayers, Jill Shepherd, Angela Sutherland, Catherine Walker and Basak Yakis. Special thanks are due to all those who provided and helped develop illustrations and cases – their assistance is acknowledged at the foot of those illustrations. Thanks are also due to Christine Reid at Strathclyde for her valuable assistance with references. Our thanks are also due to those who have had a part in preparing the manuscript for the book, in particular Lorna Carlaw at Strathclyde and Kate Goodman at Oxford.
Gerry Johnson
Kevan Scholes Richard Whittington
November 2007