姝 Academy of Management Executive, 2004, Vol. 18, No.

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Strategic flexibility:
Organizational preparedness to
reverse ineffective strategic
decisions
Katsuhiko Shimizu and Michael A. Hitt

Executive Overview
In a highly uncertain and changing environment, managers need to have the strategic
flexibility to respond to problems speedily. Strategic flexibility is the organization’s
capability to identify major changes in the external environment, quickly commit
resources to new courses of action in response to those changes, and recognize and act
promptly when it is time to halt or reverse existing resource commitments. This strategic
flexibility requires managers to find the right balance between committing the resources
necessary to carry out a decision and avoiding investment of good money in bad projects.
This article seeks to help managers understand the importance of and difficulties in
developing strategic flexibility. The challenge in doing this results from the substantial
uncertainties inherent in making these strategic decisions as well as from psychological
and organizational biases that affect the attention, assessments, and actions of decision-
makers in ways that prevent them from recognizing problems and acting in a timely
fashion. Being careful and rational is important but not sufficient if managers are to
recognize when resource commitments should be halted or reversed and act quickly. We
show that managers may become unconsciously trapped in a vicious cycle of
insensitivity, self-serving interpretation, and inaction. We recommend six practical steps
for avoiding such problems. We stress that managers and organizations should be
prepared and proactive to overcome the biases, to avoid becoming trapped in the vicious
cycle of rigidity, and to cope effectively with the uncertainties of a dynamic environment.
........................................................................................................................................................................

Recognizing problems and making changes to cor- The importance of speed in recognizing and re-
rect them often present substantial challenges. For sponding to problems has been dramatically ac-
example, after a firm finally recognizes a problem centuated by the dynamic competitive landscape
that has existed for about a year and initiates in recent years. A former CEO of ABB once re-
actions designed to correct it, another year is often marked that “The cost of delay is greater than the
required to accomplish the change. However, if it cost of an occasional mistake.”2 Similarly, Juergen
takes a firm two years to recognize a mistake, as Schrempp, CEO and chairman of DaimlerChrysler,
long as four years may be necessary to resolve the stated in an interview with a Wall Street Journal
problem.1 This outcome is referred to as the “law of reporter, “My principle always was. . .move as fast
squares” (e.g., 1 ⫻ 1 ⫽ 1; 2 ⫻ 2 ⫽ 4). This “law” as you can and [if] you indeed make mistakes, you
dictates that the longer problems go unrecognized have to correct them. . . . It’s much better to move
or unresolved, the more damage that occurs to the fast, and make mistakes occasionally, than move
firm and the more difficult it is to solve the prob- too slowly.”3
lems. In a highly uncertain environment, firms Although identifying and acting on problems
need the capability to enact major strategic have become increasingly important, commitment
changes to resolve problems in a timely fashion. to initiatives is also necessary for organizations to
44
2004 Shimizu and Hitt 45

be successful. In many cases, new initiatives en- ment that produced ABB’s performance problems.
counter various types of resistance and challenges Juergen Schrempp has also received increasing
in their implementation that must be overcome to criticism for the acquisition of Chrysler. Likewise,
be successful.4 Without strong commitment and many Japanese firms, including Matsushita, that
patience, their potential may never be realized. were once highly regarded for their long-term
There are numerous examples of heroic leaders vision and strong commitment to a long-range
and innovators who achieved their final victories strategy have been experiencing performance
by maintaining a strong commitment to overcom- problems for over a decade. These examples reem-
ing multiple obstacles. For example, it is well- phasize the fact that maintaining strategic flexibil-
known that Corning took more than ten years and ity is one of the most important yet most difficult
$100 million— dealing with high market skepticism tasks of managers and organizations in a dynamic
and middle-management resistance—to launch its environment.
optical fibers business.5 Konosuke Matsushita, the
founder of Matsushita, stated that the primary se-
cret of success is to remain committed until suc- Maintaining strategic flexibility is one of
cess is achieved. A firm that frequently changes its the most important yet most difficult
strategy and course of action may vacillate, waste tasks of managers and organizations in a
resources, and eventually fail.6 Yet, being overly dynamic environment.
committed to an erroneous decision can also be
disastrous.
Strategic flexibility can be defined as an orga- Our primary objectives in this work are (1) to
nization’s capability to identify major changes in help managers understand the importance and dif-
the external environment (e.g., introduction of dis- ficulty of developing strategic flexibility and (2) to
ruptive technologies), to quickly commit resources provide practical recommendations to deal with
to new courses of action in response to change, this challenging task by focusing on structural
and to recognize and act promptly when it is time issues (i.e., contingencies) that contribute to vari-
to halt or reverse such resource commitments. ous biases and traps. Because these biases are
Herein we focus on the ability to recognize prob- frequently unconscious, and uncertainties are in-
lems and reverse resource commitments in a herent in strategic decisions, we suggest that man-
timely fashion when the initial action and resource agers should proactively develop effective organi-
commitments turn out to be unsuccessful (i.e., stra- zational structures and systems rather than
tegic mistakes). Strategic mistakes can result from struggling with the biases and uncertainties reac-
an initial inaccurate evaluation of the environment tively. In the following sections, we first examine
and from maintenance of the status quo despite barriers that hinder strategic flexibility and then
environmental changes. discuss prescriptions to help managers overcome
However, distinguishing strategic mistakes from the barriers and maintain strategic flexibility.
temporal setbacks is difficult. The decision-mak-
ing process involved in maintaining strategic flex- Barriers to Strategic Flexibility
ibility focuses on the use of three capabilities,
each at a different stage: (1) the capability to pay As described, strategic flexibility requires use of
attention to negative feedback (attention stage), (2) three capabilities: maintaining attention, complet-
the capability to collect and assess negative data ing an assessment, and taking action. However,
objectively (assessment stage), and (3) the capabil- several barriers block the development and use of
ity to initiate and complete change in a timely the organizational capabilities necessary for stra-
fashion even in the face of uncertainty (action tegic flexibility. Next we examine the barriers
stage). Correctly balancing commitment and along with the conditions under which an organi-
timely change should produce outcomes that max- zation is more vulnerable to those barriers.
imize potential benefits and minimize losses.
At the same time, achieving the correct balance
Barriers to Attention: Psychological and
is undoubtedly challenging. Abandonment of an
Organizational Insensitivity to Negative
initiative too quickly because of initial problems
Feedback
may result in the loss of a large future potential
benefit, while overly strong commitment to a mon- Organizations need to be sensitive (maintain at-
ey-losing project can only exacerbate problems. tention) to feedback from the market, particularly
While once considered as an exceptional CEO, negative feedback. This sensitivity also requires
Percy Barnevik has been accused of mismanage- organizations to respond to feedback in a timely
46 Academy of Management Executive November

fashion. In a dynamic environment, even a seem- shared mind-set toward more narrow perspectives,
ingly good project may suddenly lose its potential resulting in a lower likelihood of incorporating
value. Unfortunately, both research and anecdotal new information.11 Similarly, when organizations
evidence suggest that managers often ignore early become older and larger, the shared perspectives
signs of strategic mistakes.7 and routines are likely to be more institutionalized
Over time managers develop a particular mind- and the interactions across the routines to become
set along with a set of decision rules and heuristics more complicated. In this type of organization,
based on their experiences.8 As successful manag- changing the attention patterns will be difficult,
ers are promoted within an organization and suc- and therefore early signals of strategic mistakes
cessful initiatives are repeated, previous success- are likely to be ignored.
ful experiences control attention to and enactment This appears to be the case with Michael Eisner
of future issues and regulate responses to the en- and Disney. After tremendous success in 1980s and
acted issues. The mind-set and rules are self-rein- 1990s, the Disney Company has performed below
forcing such that successful experience often pre- expectations for some time. The acquisition of
vents managers from being sensitive to important Capital Cities ABC never produced the synergy
new information. This situation nurtures manage- foreseen at the time of the merger. Part of the
rial overconfidence and complacency. Moreover, reason for this outcome is the hubris exhibited by
successful experiences often attract media atten- CEO Eisner. Accustomed to his old business
tion and praise, thus providing support for mana- model, he seemed incapable of recognizing the
gerial hubris. As a result, overconfident managers low probability of turning around the performance
assume that their decisions are unlikely to fail and of ABC and other underperforming business units
unconsciously ignore negative signs regarding within the Disney Company without making major
their decision outcomes.9 changes in the operations or how they were man-
aged. In September 2004, Eisner agreed to retire in
2006 and may be pressured to step down earlier.
Overconfident managers assume that Motorola is another example of a firm haunted
their decisions are unlikely to fail and by its past success.12 In late 1980s and early 1990s,
unconsciously ignore negative signs Motorola was a market leader in the analog cell
regarding their decision outcomes. phone market. As stated by former CEO Robert
Galvin, “We were the unbridled leader in analog
devices around the world.” Because Motorola was
Furthermore, the mind-set and decision rules of so successful and proud of its analog technology, it
top management are often shared, routinized, and dramatically underestimated the effects of digital
taken for granted within the organization. This pro- technology. Motorola responded to customer pleas
cess ensures that the same type of information will for digital phones with contempt: “Remember the
be collected using the same methods and that the old phones in WWII— carried on backs. That is
information collected will be analyzed using tak- what our digital phone will look like. It can’t be
en-for-granted assumptions with routinized ap- done.” The hubris and biases of top management
proaches. Ideas and actions that deviate from the were exacerbated by Motorola’s organizational
current routines will not be considered legitimate. structure. Past success had led Motorola to develop
Such outcomes produce organizational inertia and a decentralized structure, where new information
make it less likely that an organization will con- developed by a division was not shared with oth-
sider (pay attention to) new information (e.g., neg- ers and previously successful division managers
ative feedback from the market). Instead, this type made critical decisions within silos. The estab-
of information will be either ignored or assumed to lished incentive system also promoted sales of an-
be an exception and not analyzed further. alog cell phones and discouraged new investment
Naturally, managers and organizations are more to develop digital phones.
likely to enact barriers to attentiveness when they
have previously experienced success.10 Successful
Barriers to Assessment: Self-Serving
experience contributes to the development of indi-
Interpretation of Negative Feedback
vidual and organizational mind-sets that underes-
timate the negative feedback from the market and Even if managers remain vigilant and recognize a
decision routines that repeat the same procedures, negative signal at an early stage, they do not nec-
even if those procedures are no longer valid in the essarily initiate a response. First, managers are
new environment. Additionally, long tenure among often reluctant to admit that they made a mis-
the top-management team is likely to rigidify its take.13 To justify their decision and avoid admit-
2004 Shimizu and Hitt 47

ting a mistake, they may attribute the poor out- nization’s interests.15 A weak board may not be
comes to external factors (e.g., the economy or able to stop powerful managers from behaving
other uncontrollable events like war in Iraq). Alter- politically or continuing the commitment to mis-
natively, they may reemphasize their commitment takes. It is also notable, however, that managers
to make the initiative a success. Research has may consciously hide negative information even in
shown that people in situations that are likely to cases of strong governance, because disclosing it
produce a loss are more willing to take risky ac- could result in punishment by the board.16 Finally,
tions to create positive returns. An early negative the organizational culture and institutional envi-
signal may be interpreted as the result of insuffi- ronment also influence the strength of the barriers.
cient time or inadequate implementation actions, Leaders who overcome obstacles and eventually
and thus even more resources may be invested. are successful in accomplishing their goals tend to
Therefore, when confronted with undesirable out- be respected. In a culture where success is highly
comes, managers who initially pursued an initia- praised and mistakes are severely punished, man-
tive vigorously may take a risk by making a further agers avoid admitting mistakes.17 Thus, we should
commitment to the project as opposed to taking the not expect managers to give up on an initiative
opportunity to abandon it.14 These managers may easily. Instead, many managers may believe (erro-
continue to invest, hoping for a dramatic turn- neously) that they can overcome the odds and suc-
around of the initiative. In so doing, they sequen- ceed. These managers are unlikely to evaluate
tially over-invest in the business and make it in- negative signals objectively regarding the strate-
creasingly difficult to earn a positive return on the gic initiative.
investment.
The organizational context and political pro-
cesses often play important roles in decisions that In a culture where success is highly
involve reversing previous strategic decisions. praised and mistakes are severely
Such decisions commonly produce a struggle for punished, managers avoid admitting
power in an organization. These potential power mistakes.
struggles and the potential career-limiting effects
of strategic errors contribute to a manager’s un-
willingness to admit mistakes. When the support- A Fortune article entitled “CEOs in Denial” ex-
ers of the original decision have power, they prefer amined a number of former CEOs who were faced
to retain the project and avoid admitting a mistake with problems, either denied them or attributed
in order to maintain the power. Therefore, while them to external environments, and led their firms
poor performance may signal a need for change, to disastrous outcomes.18 For example, Gary DiCa-
organizational politics often prevent an organiza- millo arrived at Polaroid in 1995 and predicted a
tion from interpreting the signals correctly and/or turnaround in three years. After regularly blaming
in a timely fashion. poor performance on external conditions such as
Several contingencies create strong barriers to Russia’s economic problems and global turmoil,
objective assessments. First, when the size of the Polaroid filed for bankruptcy in 2001 and eventu-
initiative is large, both the amount of commitment ally stopped all business operations. Jill Barad, a
to the initiative and the size of damage when the former CEO of Mattel, unwaveringly maintained a
initiative is deemed a mistake are likely to be positive assessment of her $3.5 billion acquisition
large. The likelihood that the managers responsi- of Learning Co. despite its poor performance and
ble for the project will be penalized or will have accounting problems. She later confessed that she
limits placed on their career opportunities is also did not fully grasp the problems in Learning Co.
significant. Accordingly, it is difficult for managers and resigned as CEO in 2000 after repeated recov-
to analyze the information objectively and con- ery promises, none of which materialized. Accord-
sider reversing an initiative in a timely fashion. ing to one analyst, “Because she was so results-
Instead, managers may interpret the negative sig- oriented and never took no for an answer, she
nal as a temporary setback or may underestimate fostered a culture that made it nearly impossible to
the negative information in the hopes of salvaging deliver bad news.”19
their careers. In either case, they are likely to con-
tinue commitment to and investment in the money-
Barriers to Action: Uncertainty and Resistance
losing initiative.
As Michael Eisner’s record suggests, weak gov- Even if managers understand the psychological
ernance mechanisms allow managers to pursue and organizational biases that produce barriers
their personal interests at the expense of an orga- and attempt to be rational, the decision of whether
48 Academy of Management Executive November

or not to maintain commitment to or change a ity is unclear, it is difficult to deny the potential for
poorly performing initiative is not solely a matter turnaround even if the probability is small.
of economic calculation. This is mainly because of
the uncertainty associated with the future of the
project and its environment. Herein, uncertainty Poor results can come about because of
refers to a lack of information regarding potential the initial strategy, inadequate
outcomes. implementation, or mitigating
To the extent that evaluation of a particular
environmental factors.
project involves assumptions about the environ-
ment and forecasts of the future, it is difficult to
predict the outcome of any one project with confi- Further, uncertainty often creates resistance. In
dence, especially a loss-generating project. The general, people resist change because of familiar-
prospects of the project are often perceived as un- ity with the current conditions and a fear of the
certain because predicting changes in the external unknown. People prefer the status quo because
environment, as well as their effects on the project, change disrupts the established routines and cre-
is difficult. While simple net-present-value calcu- ates uncertainty, thereby involving risks. “Conse-
lations provide seemingly objective assessments, quences of changing are usually less well known
the results are dependent on assumptions such as than the consequences of not changing.”21 Re-
the projected sales growth rate and discount rate, search shows that managers and organizations
which are often derived from extrapolations based tend to maintain the status quo in the face of eco-
on historical data. In fact, many scholars question nomic adversity.22 When performance is weak,
the argument that escalation arises solely from managers often become defensive and try to limit
psychological biases and self-protecting behav- receipt of further information. As a result, explora-
iors. Instead, decisions regarding maintaining or tion of other alternatives is constrained. People
withdrawing commitment are laden with uncer- may ask, “Who moved my cheese?” and come back
tain consequences associated with either choice.20 to the same cheese station every day. “I like it here.
Moreover, it may be difficult to identify the com- It’s comfortable. It’s what I know. Besides, it’s dan-
plex relationships leading to the poor outcomes. gerous out there.”23
Poor results can come about because of the initial The uncertainty in the external environment is a
strategy, inadequate implementation, or mitigat- major cause of managers’ reluctance to reverse
ing environmental factors. Even if the current per- seemingly poor decisions. For example, rapid de-
formance is poor, an initiative may still have po- velopment of new technologies makes it difficult
tential. To the extent that the initial decisions for managers to predict the consequences of such
involve future upside potential and actual causal- environmental changes. Thus, it is challenging to

Table 1
Barriers to Strategic Flexibility

Component of Strategic Conditions That Increase the Risks of the

Flexibility Barriers Problems

Attention ▪ Complacent mind-set/decision rules ▪ Past success experience

(including hubris) ▪ Long tenure of top management
▪ Organizational inertia ▪ High age and size of organization
䡩 Institutionalizing initial decisions by rules
and routines
䡩 Ignoring ideas and actions that deviate
from the routines

Assessment ▪ Self-justification ▪ Large-size projects (that result in large

▪ Framing effects (managers tend to take commitment and loss)
risks in the face of losses) ▪ Weak governance
▪ Organizational politics ▪ Organizational and social culture that is
harsh on mistakes

Action ▪ Perceived uncertainty regarding the ▪ High environmental uncertainty

prospects of the project ▪ Financial resource availability
▪ Resistance to change
2004 Shimizu and Hitt 49

FIGURE 1
Vicious Cycle of Strategic Rigidity

determine the appropriate type and timing of tion, assessment, and action. These barriers, how-
changes needed to initiate a response. Availability ever, rarely have independent effects on strategic
of financial resources also influences the timing of flexibility. Rather, the barriers often interact with
action.24 When an organization has abundant re- each other and create a vicious cycle that makes it
sources, it may be able to take more risk and wait exceedingly difficult for managers and organiza-
for uncertainties to be resolved. Alternatively, re- tions to maintain strategic flexibility, as shown in
source-rich organizations often have multiple al- Figure 1.26 As explained, overconfidence, a com-
ternatives, allowing them to abandon the focal ini- placent mind-set, and organizational inertia often
tiative without material harm. In other words, hinder managers’ attention to early signals of mis-
wealthy organizations enjoy the flexibility to com- takes. With these attention barriers in place, only
mit to a particular initiative or to make changes by
limited negative information may recognized,
reverting to one or more other feasible options.25
making it easier for managers to bias assessments
Alternatively, a resource-poor organization is lim-
of that information. Coupling the limited negative
ited in terms of the alternative actions it can take
information with the assessment biases, negative
in response to the negative outcomes of an initia-
outcomes are particularly likely to be interpreted
tive. This type of organization may either abandon
a potentially valuable initiative at an early stage optimistically, and therefore problems are unlikely
to minimize losses or commit to a loss-generating to be carefully examined. Further, the extent to
project because it does not have other feasible which the assessment of outcomes is positively
options. biased can heighten organizational resistance to
changing the initiative. Also, if blame is deflected
by citing external forces, the assessment of out-
Managers often prefer the status quo as comes may increase or introduce uncertainty. In
the easiest path until the outcomes this case, uncertainty can limit motivation to
become extremely bad. change, and resistance is likely to be strong. Be-
cause change involves risks, it is difficult, even for
Table 1 summarizes the barriers that hinder stra- excellent managers, to initiate a new action. In-
tegic flexibility based on the perspectives of atten- stead, managers often prefer the status quo as the
50 Academy of Management Executive November

easiest path until the outcomes become extremely teristics of the situation serving as catalysts for
bad. change.
When no action is taken, the existing mind-set
and current routines are further reinforced. Un-
certainty and resistance may also lead even ef- Triggers for and Barriers to Change: Research
fective managers to unconsciously place a lower Results
priority on resolving problems with major In the previous section, we explained the barriers
changes. Some have referred to this inaction as at each stage of organizational strategic flexibil-
“the ostrich effect” because ostriches stick their ity. Because cognitive biases and organizational
heads in the sand assuming that those who pose inertia can disrupt top managers’ attention to the
a threat cannot see them. In this case, uncer- focal decision, they may not recognize potential
tainty is seemingly “controlled” by ignoring it.27 problems in a timely fashion. Even if they do, ad-
When these conditions occur, any negative infor- mitting a mistake may be difficult, so they choose
mation may be overlooked. This cycle gradually instead to continue investing in the losing project.
becomes institutionalized as suggested in Fig- Finally, uncertainty still remains even without the
ure 1. attention and escalation problems, because
Even in legitimate decision-making processes, changing or withdrawing a particular initiative
the cycle shown in Figure 1 can occur. An example may result in the loss of future value.
of this complex situation existed in AOL Time
Warner. The merger of the Internet portal AOL with
the media company Time Warner has been highly Because cognitive biases and
unsuccessful. The lack of success is partly because organizational inertia can disrupt top
of the excessive premium that was paid for the managers’ attention to the focal decision,
merger, partly because of the crash of inflated In- they may not recognize potential
ternet company valuations, and partly because as-
sumed synergies between the two companies
problems in a timely fashion.
failed to materialize. However, because of the hu-
bris developed from past successes, AOL Time Because most organizations face these chal-
Warner continued to deny its problems and lenges, particularly in a dynamic environment, the
stressed the upbeat performance forecast. In spite results of our research provide important insights.
of its insistence on an optimistic future, the com- Our arguments in this article are based on two
pany’s market capitalization decreased by $223 bil- separate but related studies. The first exploratory
lion in the first two years following the merger. The study examined 18 cases to identify how and when
merged company was initially dominated by the changes were made in a previous strategic deci-
former AOL managers (based on the past success sion based on interviews with 17 managers in 11
of AOL), and they were unwilling to admit prob- organizations.29 The second study, drawing on the
lems and to make needed changes in the strug- findings from the first study, examined the barriers
gling company. In 2004 the new CEO, Richard Par- to change and the situational characteristics that
sons, considered spinning off AOL as an triggered change, using a sample of acquisitions
independent business. Although this seems to be that were later divested.30
an appropriate action, delays in such a decision A key finding from the first study is that change
continue, which suggests that the complacent in an initial decision is often triggered by “unre-
mind-set still prevails. Thus, even with the change lated” events within an organization. Although
in CEO, there is reluctance to admit an error, fully poor outcomes may be a necessary condition for
assess the situation, and take the necessary action initiating a change, it is rarely a sufficient condi-
to stem the weak performance.28 AOL Time Warner tion alone. Many firms that we studied needed
(now called Time Warner) seems to have been more than a year (sometimes several years) to ini-
trapped in the vicious cycle. tiate a change after the poor outcomes were ini-
The arguments presented above suggest that tially reported. Even highly intelligent managers
barriers interact and are self-reinforcing, struggle with the decision of whether to commit
thereby severely limiting strategic flexibility. It further or withdraw the investment after acknowl-
is thus important for an organization to avoid edging poor outcomes. In this context, an organi-
being trapped in the vicious cycle. We discuss zation often needs external events to overcome the
various actions for this purpose in the following vicious cycle as described in Figure 1 and to stim-
sections. We begin with a discussion of our re- ulate and increase momentum for change. To illus-
search results that highlight actions and charac- trate, two example cases are briefly described be-
2004 Shimizu and Hitt 51

low. The first case exemplifies lack of attention For example, Business Week reported that of the
and assessment, and the second one is an example largest M&A deals in 1998-2000, 61 per cent de-
of delayed action due to uncertainty. stroyed shareholder wealth and only 17 per cent
One manager in a firm we studied described created positive returns.31 Thus, top managers
how his organization remained committed to its often ponder what should be done when an ac-
initial marketing strategy in Europe for more quired business produces unexpectedly poor re-
than five years, despite its poor outcomes during sults. Should they remain committed to the ac-
this time. Top management attributed the poor quired business or sell it?
performance to the immaturity of the market. The Triggers that counter barriers include factors
firm had achieved success in the US with a sim- such as a large decline in acquired unit perfor-
ilar marketing strategy, so the executives were mance, arrival of a new CEO from outside of the
comfortable with it. As a result, they did not firm, or arrival of a new outside director. These
adequately attend to the business environment triggers serve as a catalyst to accelerate the dives-
and competitive practices in Europe. When a titure of a poorly performing acquired unit.32 Our
new manager was appointed, he reviewed the research showed that divestiture of such a unit is
entire European market to understand it and the over 100 times more likely when a new outside
firm’s current position in the market. He then CEO is hired compared to when the current CEO
provided a summary presentation at a meeting remains in the position. A large decline in the
of other top managers. While the information in performance of the formerly acquired unit in-
his presentation had been reported piece by creases the pressure on managers to take action.
piece previously, his presentation became a Although less influential than a new external
“wake-up call.” Only then did the top managers CEO, a new outside board member also increases
pay attention to the information and its implica- the pressure for action. Our research showed that
tions for the firm’s marketing practices. The firm divestiture is two times more likely when an orga-
changed its marketing strategy in Europe. nization has a new outside board member. Such a
In another firm studied, top management member is more likely to break the chains of iner-
changed its organizational structure after three tia and redirect the attention patterns of top man-
consecutive years of losses. For top managers, it agement. A new board member can also infuse the
was difficult to assess whether the poor out- other directors with a fresh perspective by bring-
comes arose from fundamental problems in the ing a different experience base to the firm.
organizational structure or something transitory,
and thus they were hesitant to initiate a change.
Recommendations for Maintaining Strategic
A failure of a strategic project, however, pro-
Flexibility
duced the momentum to examine every major
problem within the organization, deny any Because managers are subject to various psycho-
“wishful” assumptions, and initiate necessary logical and organizational biases when evaluat-
changes. According to a director, “Why did it ing previous strategic decisions, especially when
take three years? Yes, we should have done it the outcomes of those decisions are undesirable, it
earlier, but it was hard to evaluate the decision is difficult to maintain strategic flexibility. The un-
in a short period.” certainty exacerbates the challenges in making
decisions about whether to continue commitment
to previous strategic decisions or to change them.
Top managers often ponder what should Yet, there are steps that organizations can imple-
be done when an acquired business ment to reduce these problems and avoid the vi-
produces unexpectedly poor results. cious cycle described earlier.
Should they remain committed to the Extending our research on 18 cases where
changes in decisions were needed and on 140 ac-
acquired business or sell it?
quisitions, we propose the following six principles
to build organizational preparedness that allow
To extend our understanding from the first managers and organizations to effectively main-
study, we also examined the effects of barriers tain attention to negative signs, evaluate and an-
and trigger events on strategic flexibility in the alyze outcomes objectively, and initiate actions
context of mergers and acquisitions, an increas- that reverse, where necessary, previous strategic
ingly important strategy used globally. In con- decisions. The key is being proactive and focusing
trast to the popularity of acquisitions, the results on structural issues (i.e., contingencies) that con-
of an acquisition strategy are often not positive. tribute to the various biases and barriers. These
52 Academy of Management Executive November

actions need to be taken before managers become ject to various biases and inertia. The problem is
victims of the vicious cycle shown in Figure 1. not so much the existence of the biases as
Once in this cycle, exiting from it is difficult be- the fact that these managers are unaware of
cause the biases are subconscious, and managers them.
often become unknowingly trapped. Ignoring mistakes is common when alternative
viewpoints are not considered. Incorporating and
1. Measure and Monitor Decision Outcomes. evaluating new ideas often help firms to adjust
their initial decisions flexibly. Team-based deci-
If managers are unaware of the specific outcomes
sion-making enhances the opportunity to incorpo-
of a decision, it is unlikely that they will attend to
rate different perspectives into decisions. Team-
it or that they will change the decision. Therefore,
based decision-making processes also create
managers must ensure that decision outcomes are
means for a check-and-balance to the CEO’s opin-
measured and monitored. While this recommenda-
tion seems obvious, the reality may not be so. ions. However, using a team to make decisions is
When managers have experienced previous suc- not always effective. For example, teams are sub-
cesses, they can become overconfident. Praise ject to groupthink whereby team members focus on
from others and routinized “success patterns” con- a single perspective and reinforce each other even
tribute to managers’ beliefs that their decisions are though that perspective is inaccurate. Accordingly,
unlikely to fail. As a result, they make decisions team decision-making processes need to be care-
and then move on to the next initiative without fully designed to avoid this problem and to
considering the outcomes of the earlier decisions. achieve maximum effectiveness. One useful team-
For example, a manager in a company that grew based design is the devil’s advocacy approach be-
through several M&As was asked if all of the ac- cause it can forestall a biased diagnosis of the
quisitions had been successful. She stopped and original strategic decision and thus help to avoid
pondered: “Well, the interesting thing is, I don’t groupthink.34
know. . . . I don’t know if the president would know The value of a team-based approach can be best
how the acquired firms are performing. Because derived from the diversity of the members’ per-
what generally happens is that those businesses spectives and experiences.35 This diversity is for-
are integrated with other businesses in the re- mally emphasized when a member of the top man-
gions.” Thus, in this case, no one was clearly mea- agement team is designated as a devil’s advocate.
suring the performance of the businesses ac- The role of the devil’s advocate is to question the
quired, and therefore the managers were neither assumptions and alternatives presented. In this
attentive to the outcomes nor able to assess them. way, alternative solutions are analyzed more com-
pletely and from many different vantage points.
Managers must ensure that decision Such an approach can be particularly effective
outcomes are measured and monitored. when managers are complacent, a decision-mak-
While this recommendation seems ing team is relatively homogenous or even rigid in
its approach to decision-making, or organizational
obvious, the reality may not be so.
inertia is high.
However, the CEO must be prepared to receive
Managers have many competing demands for challenges to his or her position in this process.
their attention every day; if managers have been The CEO should build a nurturing organizational
successful, they may regard decisions as end culture that encourages open communications.
points even though in reality, decisions need to be
Disclosing and sharing bad information is im-
implemented and adjusted or terminated. There-
portant to develop the necessary momentum to
fore, our recommendation to measure the outcomes
overcome problems.36 Without such an approach,
of decisions is an important first step in maintain-
managers may unknowingly enter the detri-
ing attention to critical strategic issues. As Jack
Welch states, “What you measure is what you mental cycle described earlier, which is diffi-
get.”33 cult to break. GM provides a classic example.
The culture of GM under Roger Smith was once
described as follows: “If you raised a problem,
2. Stimulate Decision-Making Processes by you got labeled as ‘negative,’ not a team player.
Incorporating a Devil’s Advocate Approach.
If you wanted to rise in the company, you kept
As discussed in the previous sections, managers your mouth shut and said ‘yes’ to every-
embedded in organizational contexts are sub- thing.”37
2004 Shimizu and Hitt 53

3. Create Dynamic Mechanisms to Gain New a. Limit the Tenure of Top Executives
Ideas and Perspectives from Outside of the Firm,
In support of past and continuing research,39 our
Before Problems Appear.
study found that appointing a new CEO from out-
Conventional wisdom suggests “Don’t fix some- side of the firm dramatically increases the proba-
thing if it is not broken.” However, such an ap- bility of divesting an acquired business that is
proach is highly risky. As explained previously, performing poorly. A new outside CEO brings per-
poor results may be interpreted as temporary, ei- spectives developed from different experiences
ther intentionally or unintentionally, with no ac- and different settings that may redirect an organi-
tions taken. When managers finally recognize or zation’s strategic intent, policies, and assump-
admit that the outcomes are “really” bad and that tions. Arrival of a new outside CEO provides an
something is broken, it may be late and very costly opportunity for an organization to revisit obsolete
to create a turnaround or to make needed changes assumptions and correct mistakes in past strategic
(refer to the law of squares). decisions.
We recognize that hiring a new CEO from out-
side the firm is not feasible in all succession
When managers finally recognize or events and, indeed, such an action could have
admit that the outcomes are “really” bad negative effects on the motivation of internal
and that something is broken, it may be managers. However, turnover in the top-manage-
late and very costly to create a ment team, especially when a team approach is
turnaround or to make needed changes. used to make strategic decisions, can be healthy.
Furthermore, limiting the tenure of top managers
provides the opportunity to infuse the firm with
Following a careful process is important but un-
new leadership and new perspectives, thereby
likely to be sufficient to avoid being trapped in the
reducing path dependence in the thinking and
potentially debilitating cycle. Instead, it is impor-
learning process of the firm. Such changes may
tant to be proactive; don’t wait for something to
well enrich the capacity of the team to learn and
break. For example, establishing an organiza-
to develop new strategic approaches. Often,
tional system that regularly receives new ideas
CEOs are replaced only when the performance of
and infuses new perspectives from outside the firm
the firm deteriorates, in which case it takes more
can provide a “wake-up call” to managers. These
time to recover (refer to the law of squares). How-
outside ideas help managers avoid being trapped
ever, precedent exists for building in regular
by path dependence.38 By exposing themselves to
turnover in the top management team. Both
external ideas, managers can evaluate the firm’s
Toyota and Honda change their CEOs every four
past strategic actions, its current strategy, and the
to five years, regardless of their performance. In
outcomes achieved through the lens of external
contrast, Michael Eisner has been Disney’s CEO
standards. This approach is similar to informal
since 1984.
benchmarking. Exposure to external ideas pro-
Although there are companies that have infre-
vides perspectives that are unbiased by internal
quent top-management changes and maintain
political processes or by involvement in the initial
high performance (e.g., GE), those companies are
strategic decision. Thus, an external perspective
becoming more rare (e.g., see Coca-Cola). Given
helps managers to be more sensitive to negative
the importance of maintaining strategic flexibility,
feedback by questioning assumptions regarding
companies should seriously consider and evaluate
previous successful experiences. Managers can
the pros and cons of limiting the tenure of top
then change the group dynamics within the top
executives. This point is also applicable to the
management team and stimulate the development
following two recommendations.
of new routines.
An external perspective also helps an organi-
zation to make a more realistic and effective
b. Routinely Appoint New Outside Directors
assessment of the negative information by nur-
turing a culture of learning from mistakes and Interestingly, our research showed that appoint-
creating a new dynamic that “refreshes” the re- ment of new outside directors also increases the
lationship between top management and the probability of divesting an acquired business that
board of directors. Based on our research results, is performing poorly. The rationale here is similar
we suggest several ways that firms can inject to that for new CEOs but with an additional twist.
new ideas and external perspectives into the New outside directors also bring different experi-
decision-making processes. ences and potentially fresh perspectives to the
54 Academy of Management Executive November

firm. To learn about the firm, these new directors ing change are important advantages of manage-
are likely to pay special attention to important rial rotation, particularly to those organizations
strategic issues, some of which may have been with complacency, rigidity, and/or inertia. Japa-
taken for granted by incumbent directors. They nese companies such as Toyota and Honda take
also may change the power balance between the advantage of rotation to provide broader views of
CEO and the board. Thus, while a change in the the organization to managers and prevent them
top-management team, especially in the CEO po- from being entrenched in excessively narrow and
sition, brings new leadership, a new director can rigid functional perspectives. Jack Welch’s experi-
potentially infuse new perspectives into the gover- ence is also consistent with this idea. When he
nance process. As a result, the director’s new ideas offered critical comments to managers of the prob-
have the potential to unlock the cognitive inertia in lematic nuclear business in 1981, they argued,
the firm that reinforces past actions and serves as “Jack, you really don’t understand the business.”
a barrier to changing previous strategic decisions. Based on his objective assessment of the situation,
New outside directors also add a new dynamic in he commented. “That was probably true, but I had
the relationship between top management and the the benefit of a pair of fresh eyes. I hadn’t invested
board of directors with the potential to prevent my life in this business. I loved their passion, even
directors from becoming entrenched and ineffec- though I felt it was misdirected.”41
tive. There are also some risks and disadvantages in
a regular rotation of managers. A major risk is that
new managers may change effective strategic ac-
Our research showed that appointment of tivities in order to put their own “stamp” on the job,
new outside directors also increases the when no change is warranted. Also, while regular
probability of divesting an acquired rotation is desirable, adequate time in a position is
business that is performing poorly. necessary to evaluate and create new directions,
as well as to implement and nurture them. Thus,
balancing the advantages and disadvantages of
Although excessive turnover of directors can be rotation is critical to the program’s success.
dysfunctional because of the need for continuity
(e.g., for organizational memory) and the time re-
quired for new directors to learn about the industry d. Exploit Alliances with Other Firms as a Way to
and the firm, these concerns must be balanced Incorporate New Ideas
with the importance of injecting new perspec- Alliances with other firms through joint ventures or
tives.40 long-term contracts have become highly popular
strategic moves. In fact, they are probably the most
common global strategic action taken by large and
c. Rotate Managers in Key Positions Routinely
small, established and new firms.42 Strategic alli-
Accumulation of experience and expertise along ances provide a valuable source of new ideas.
with maintaining an organizational memory are While firms can gain from the complementary re-
important for an organization. However, creating a sources provided by partners, perhaps a longer-
closed circle in a management team can also pro- term advantage is learning new capabilities and
duce an inertial mindset (as shown in the case of technologies.43 Strategic alliances provide a useful
Motorola). Regular rotation of managers in key po- source of new perspectives as well.44 Experience in
sitions ensures that fresh perspectives will be con- managing the integration of two or more different
sidered in each area important to the company corporate cultures and mind-sets should help to
over time. Also, new managers are more likely to promote the creation and communication of new
evaluate previous strategic actions taken in the ideas inside the firm. The experience may also
area because their performance will be appraised provide an opportunity for managers to recognize
based on the unit’s outcomes, some of which will that their own internal standards or perspectives,
be due to prior decisions made by their predeces- which they thought were absolute, may not be ad-
sors. Further, when lower-level managers observe equate for gaining and/or sustaining a competitive
their superiors asking questions, they may become advantage. In other words, alliances can provide a
more open to share their ideas, ask additional means of benchmarking the standards used within
questions, and possibly even communicate mis- a firm.
takes. While alliances are often developed for strategic
The merits of proactively providing a stimulus purposes, their potential value extends beyond
for attention to and assessment of problems requir- these initial purposes. In particular, exposing
2004 Shimizu and Hitt 55

managers to new cultures and ideas is an oppor- make strategic decisions. As a result, there should
tunity that should be exploited when available. be some processes to ensure regular turnover on
These ideas provide a source of and a catalyst for the board and, importantly, actions should then be
developing a culture of learning and needed taken to ensure that new members infuse the
changes.45 board with new ideas and different perspectives.
Thus, incorporating a more dynamic view of board
membership and processes can improve gover-
4. Recognize the Limitations of Static Governance nance effectiveness and rejuvenate the assertive-
Systems. ness of boards of directors.
Strong corporate governance should ensure that
executives examine appropriate alternatives and
opportunities when they exist. One element of a 5. Do Not Narrowly Focus on One Decision.
governance system touted for many years is a ma- Consider Decision Portfolios.
jority of outside directors. However, research has
produced mixed results regarding the effects of If an organization has only one project and is ded-
board composition or leadership structure on firm icated to the project, it may be natural to continue
performance.46 And, as we have learned from re- commitment to the project despite warning signs of
cent major scandals such as Enron, unethical top negative outcomes. In reality, most organizations
executives may be able to work around the gover- have various functions and projects. Resources
nance system unless careful safeguards are in must be allocated across such functions as re-
place. search and development, operations, and market-
ing, and multiple projects may be simultaneously
active in each function. If the top managers ignore
Unethical top executives may be able to the existence of multiple projects within an orga-
work around the governance system nization and focus only on a particular project,
unless careful safeguards are in place. they may not only risk escalating commitment to a
losing project but risk underfunding more promis-
ing projects. Alternatively, if top managers con-
Recent proposals for a lead director and assur-
sider projects as a portfolio of options, it is easier to
ances of an independent audit committee on the
compare multiple projects and prioritize them,
board are correct steps. The separation between
while independently assessing a single project’s
the CEO and board chair positions is also impor-
potential and risks under uncertainty is much more
tant. However, we recommend further actions to
difficult.48 Even if a focal project seems to have
infuse additional dynamics into the board decision
processes as well. First, as stated above, routinely potential, a decision to allocate resources to a
appointing new outside directors can be benefi- more promising project will be easier using a port-
cial. While static conditions in the board composi- folio approach. Meanwhile, if the focal project is
tion may be useful for monitoring and forestalling truly more promising than other projects, manag-
opportunistic behaviors of managers, long tenure ers can decide to maintain commitment and con-
can also result in a homogenization of perspec- sider the next steps.49
tives, cognitive inertia, and entrenchment of the While using a broader view may be difficult for
board. In fact, our research implies that relatively middle managers because they are often dedi-
static monitoring by outside directors and inves- cated to one project, top management should
tors has less influence on decisions to divest maintain a portfolio view of multiple decisions to
poorly performing units than do the arrivals of new effectively assess decision outcomes and allocate
key leaders and board members (i.e., CEO, outside resources accordingly.50 Although it is difficult for
director). Supporting this argument, finance re- small or less-resourceful organizations to have
searchers found that “appointment of an outside multiple alternatives, using small trials as an ex-
director is accompanied by significant positive periment will allow those organizations to enjoy
returns, even on boards which are numerically the similar benefits of having multiple alterna-
dominated by outsiders before the appoint- tives.51 Comparing multiple alternatives can also
ment.”47 produce new ideas by, for example, integrating
Second, we recommend that processes be estab- those alternatives. Thus, examining multiple alter-
lished to ensure that a devil’s advocacy approach natives can contribute to nurturing an organiza-
be used in board decision processes similar to the tional culture that encourages learning and knowl-
processes used by the top-management team to edge sharing.
56 Academy of Management Executive November

FIGURE 2
Creating the Capability to Maintain Strategic Flexibility*

6. Analyze and Measure Learning That Can Be tion but that they need more experience with inte-
Used in the Next Step. gration to better understand what went wrong or
how to improve the integration, they may delay
A real-options approach also suggests that a deci-
making major changes (such as divesting the busi-
sion can be positioned to provide a base for the
ness) until adequate learning is obtained. Al-
next step.52 Because organizations are ongoing,
though measuring the knowledge learned is diffi-
one decision rarely determines their long-term suc-
cult, the organizational process of building
cess, especially under conditions of uncertainty.
knowledge has become critical to gaining and sus-
Instead of gambling on one or a few decisions in
taining competitive advantages.53 In fact, various
the short run, it is important to learn from decision
strategic initiatives such as alliances and new
outcomes and use the learning for subsequent
business development include learning as one of
strategic decisions or in the next steps of the focal
the key objectives.54 Moreover, vigorously analyz-
initiative. Our research also suggests that past
ing learning can facilitate the development of an
experience helps an organization to understand
organizational culture that encourages sharing in-
and initiate strategic changes such as divestitures.
formation and ideas including past strategic er-
As discussed, it is difficult to clearly predict fu-
rors.55
ture potential and risks and make major decisions
under conditions of uncertainty. However, assess-
ing the return on investment by incorporating the
Although measuring the knowledge
investment’s learning and value can provide man-
agers with a new perspective to help making dif- learned is difficult, the organizational
ficult decisions. For example, when managers are process of building knowledge has
faced with the unsatisfactory performance of an become critical to gaining and
acquisition, considering the benefits of learning sustaining competitive advantages.
from the experience will help in making the diffi-
cult decision. If the organization has learned well
from poor acquisition experience (i.e., they know While Cisco Systems has experienced some
the reason for the failure), this knowledge can be problems over time, a substantial amount of its
utilized in future acquisitions and the business can growth has come through acquisitions, and a rea-
be sold. Alternatively, when managers think that sonable amount of its success is due to the capa-
poor performance results from ineffective integra- bilities and learning it captured in these acquisi-
2004 Shimizu and Hitt 57

tions. Cisco Systems uses an elaborate process to “habits of the mind.” He suggests that it is often
integrate the acquired firm quickly into its opera- difficult for top management to develop a vision for
tions. Furthermore, Cisco Systems takes great the firm that departs from its current trajectory.58
pains to avoid the departure of key personnel from His observations match well with the arguments
the acquired firm because of the knowledge it presented herein. Psychological and organiza-
could lose if they leave.56 Often, however, learning tional biases often affect managerial attention, as-
is not easy to achieve. The Interpublic Group (IPG) sessments, and actions in ways that prevent man-
made over 300 acquisitions in the span of five agers from recognizing and acting on a failing
years (1997–2002). The expected synergies did not course of initiative in a timely fashion. Moreover,
materialize from the acquisitions, and the firm now inherent uncertainty regarding the future potential
has substantial debt. The performance of the firm of strategic initiatives often makes even effective
is suffering. In this case, the firm was so focused on managers hesitant to initiate a change quickly.
making acquisitions that it failed to evaluate their This uncertainty suggests that it is difficult to
performance and learn from them.57 So, IPG failed make effective strategic decisions even when man-
to use our first and sixth recommendations. agers use an appropriate process to do so. Our
Can a large, difficult-to-reverse investment such recommendations should help to avoid or to heal
as a major acquisition be justified by the potential the executive malady “habits of the mind” and
learning from it? The answer is probably “no.” help to reduce some of the uncertainty inherent in
From the perspective of strategic flexibility, large strategic decisions.
and difficult-to-reverse investments are particu- Given that new ideas are often a result of a
larly risky. For example, such investment deci- recombination of well-known elements, this article
sions are often affected by hubris, organizational provides new and practical implications to re-
politics, and significant uncertainty. This type of searchers and managers. These include:
investment can be justified only when an organi- (1) We provide a comprehensive set of chal-
zation has accumulated enough knowledge from lenges that managers encounter in maintaining
its past experiences. Although a large acquisition strategic flexibility from the perspective of atten-
is often characterized as a “once-in-a-lifetime op- tion, assessment, and action. While research often
portunity,” its potential is unlikely to be realized focuses on the irrationality of decision-making, in-
unless an organization is fully prepared. In this cluding psychological biases (e.g., escalation of
sense, managerial styles/approaches and an orga- commitment) and inertia, we go beyond the con-
nizational culture that encourage learning from ventional boundaries, focusing additional atten-
the initiatives are important not only for managing tion on future uncertainty in reversing a strategic
a focal investment but also for managing a portfo- decision.59
lio of strategic decisions over time. (2) We explain that managers may be uncon-
sciously trapped by various barriers to strategic
flexibility at multiple stages. Corresponding to
Can a large, difficult-to-reverse barriers in each stage, specific contingencies are
investment such as a major acquisition presented for which managers need to be pre-
be justified by the potential learning pared.
from it? The answer is probably “no.” (3) We present six recommendations as summa-
rized in Figure 2. However the difficulty of main-
taining strategic flexibility must be acknowl-
The key linkages of our recommendations to the
edged; there is no panacea. Accordingly, rather
contingencies in the three processes of attention,
than discussing “easy-to-state but difficult-to-ac-
assessment, and action are depicted in Figure 2.
complish” solutions, we explain the importance of
being proactive and the risk of taking for granted
The Managerial Dilemma: Final Thoughts
the outcomes of prior decisions, offering specific
We examined the managerial dilemma of balanc- actions that managers can take. We emphasize the
ing the need for change to minimize loss with the importance of attacking structural issues that con-
need for commitment to ensure that a strategic tribute to problems, rather than reacting to each
action is given adequate opportunity to be suc- problem on a case-by-case basis. The recommended
cessful. It should be noted that the lack of change actions can serve as a “wake-up call” for many man-
by top executives is not always because of oppor- agers by helping them to revisit their taken-for-
tunistic reasons. Steve Usselman, a professor at granted assumptions, examine their current orga-
the Georgia Institute of Technology, argues that nizational structures and processes, and increase
many executives suffer from a common malady: their preparedness to make effective decisions.
58 Academy of Management Executive November

Endnotes mental-choice process. Academy of Management Review, 18 (4):

760 –782; McGrath, op. cit.
26
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27
in the new competitive landscape: Building strategic flexibility Hitt, M. 2000. The new frontier: Transformation of manage-
and competitive advantage in the 21st century. The Academy of ment for the new millennium. Organizational Dynamics, 28 (1):
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Wall Street Journal, 24 September 1999. management: Competitiveness and globalization. Cincinnati,
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In relation to our next point, an article published in the
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Clearing House Collection. view, 29(1): 2004.

Katsuhiko Shimizu is an assis-

tant professor of strategic man- Michael A. Hitt is a Distin-
agement at the University of guished Professor and holds
Texas, San Antonio. He re- the Joe B. Foster Chair in Busi-
ceived his Ph.D. from Texas ness Leadership and the C. W.
A&M University. Prior to his ac- and Dorothy Conn Chair in New
ademic career, he engaged in Ventures in the Mays Business
strategy consulting for start-up School at Texas A&M Univer-
and large multinational corpo- sity. He received his Ph.D. from
rations located in Japan and the University of Colorado. His
other countries. His current re- research focuses on interna-
search centers on managerial tional strategy, the manage-
challenges under uncertainty, ment of firm resources, corpo-
including strategy implementa- rate governance, and strategic
tion and reactions to mistakes. entrepreneurship. Contact:
Contact: kshimizu@utsa.edu. MHitt@cgsb.tamu.edu.

New from 2 THE EMPLOYMENT

RELATIONSHIP
ORGANIZATIONAL IDENTITY
A Reader
Edited by MARY JO HATCH, University of Virginia, and
Examining Psychological and Contextual Perspectives
SURVIVING Edited by JACQUELINE A.-M. COYLE-SHAPIRO, London School of
MAJKEN SCHULTZ, Copenhagen Business School
This book presents the classic works on organizational
TRANSFORMATION Economics, LYNN M. SHORE, Georgia State University,
M. SUSAN TAYLOR, University of Maryland at College Park, and identity alongside more current thinking on the issues.
Lessons from GM’s Surprising Turnaround
LOIS E. TETRICK, George Mason University The readings in this volume address the key issues of
VINCENT P. BARABBA
This volume draws on social exchange, economics, industrial organizational identity, and show how these issues have
Surviving Transformation describes how General Motors
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reversed a dangerous decline and repositioned itself for
understanding of the employment relationship. Bringing study as sociology, psychology, management studies and
success in the 21st Century. Readers will come away from
together these different perspectives provides greater clarity, cultural studies.
the book with insightful examples and powerful tools to
synthesis and understanding of the employment relationship. (Oxford Management Readers)
rethink their enterprise strategies as they prepare for a 2004 600 pp.; 13 line illus.
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2004 280 pp.; 38 halftones & line illus.
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THE ALLURE OF TOXIC
THE MISMANAGEMENT LOST KNOWLEDGE LEADERS
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Employability and Jobs in the Knowledge Economy DAVID W. DELONG, Babson College Politicians—and How We Can Survive Them
PHILIP BROWN, Cardiff University, and ANTHONY HESKETH, As seen in the September 5, 2004 Sunday New York Times, JEAN LIPMAN-BLUMEN, Claremont Graduate University
Lancaster University this solution-oriented book addresses one of the most “A remarkably comprehensive yet penetrating analysis that
This book examines whether employability policies are pressing management problems of the coming years: How sees bad leadership both as morally wrong and psychologi-
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rise of mass higher education has arguably done little to the door? It outlines the broad issues and provides tools for lowership as well as leadership.” —James MacGregor Burns
increase the employability of students for tough-entry jobs. developing a knowledge-retention strategy and function. 2004 320 pp.
2004 250 pp.; tables & figures 2004 272 pp.; 21 line illus. 0-19-516634-5 $30.00
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