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of business. In the practical context of the bookthis is
entirely defensible, although the atten-tive reader is sometimes
left speculating abouthow the ideas relate to those of other
authors.What is important, really, is that there is con-siderable
intellectual weight behind OHareswriting, which is belied by the
simplicity of thepresentation. The exception to the lack of
rela-tion to other authors is in the extensive use ofMichael
Porters value chain concept. Thevalue chain is used intelligently
to illustratehow firms can look for opportunities to in-novate not
only within their own system, butwithin the context of their links
with both sup-pliers and customers.
Having defined innovation in broadlystrategic terms, OHare goes
on to offer com-ment on the process of innovation, and its
posi-tion in the structural and behavioural contextof the firm. In
addition to discussion of thesearch for opportunities to innovate,
he alsostresses that much can be made of externaldiscontinuities in
market or competitive activity.Other issues relating to the process
are evalua-tion of opportunities, customer involvement,cultural
barriers to innovation, the idea thatless can be more ~unbundIing
of complex offer-ings may provide new customer value),
andorganizing for innovation.
Among these, the section on evaluating theopportunity deserves
mention, as it is an in-teresting treatment of a somewhat
overlookedtopic. OHare identifies two broad forms ofevaluation:
tight financial and people-led,observing that companies tend to
base theirevaluation either on comprehensive projectionsof
cash-flows and profits, or on the trackrecords of managers. Both
these methods havetheir advantages; however both have
severelimitations in strategic terms, especially as thesame type of
investment appraisal is often usedto evaluate widely differing
types of project.In recommending a better way, the author sug-gests
that the important features of evaluationshould be: strategic focus
on how customervalue is delivered; positive feedback into
strategy development; a reflection of the in-herent uncertainty
of many innovations; the~exibility to cope with significant change
inthe concept between initiation and realization;financial
appraisal. The recognition of the im-portance of adopting an
appropriate evalua-tion mechanism for truly innovative activity
isan important step forward.
In his analysis of the structural andbehavioural aspects of
innovation. OHare usesthe concepts of adaptive and
repetitivebehaviour and conceptual maps. He stressesthat the
development of new conceptual mapsis critical to successful
innovation, andhighlights the problems confronting matureand
growing companies in this regard. Ofadaptive and repetitive
behaviour, he suggeststhat aithough business cycles call for
balancebetween the two, there is a natural tendency forcompanies to
act in one way only. Abehavioural review is recommended to
helpestablish a balance according to the strategic re-quirements
faced by the company.Even if it does nothing more than make
youthink about the nature, means and ends of in-novation, this book
is worth reading. It is tothe authors credit that the book is
concise,well argued and practical in nature. The subjectmatter, and
the line of thinking are sufficientlyimportant though, to warrant
further and moredetailed attention by management authors
andresearchers.
Damian Brown
Managing Across Borders: The Trans-national Solutionby
Christopher A. Bartlett and SumantraGhoshat, Harvard Business
Books, 1989,Hardback, 265 pages, lSBN 0 09174 1181.
The 1980s had no shortage of individualbusiness heroes. fn the
1990s the heroes, thewinners, wilI be entire companies that
havedeveloped cultures that instead of fearing the
282 Technovation Volume 10 No 4
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pace of change relish it. This is the view ofJohn Welch, CEO of
General Electric, and itechoes the central theme of Managing
AcrossBorders.
Today the international business environ-ment is being
transformed by a new era ofglobal competition. More and more
managersare being forced to re-evaluate worldwide stra-tegic
approaches and the development of orga-nizational capability. The
book proposes thatin order to cope with these demands,
successfulfirms are moving towards a new kind of organi-zation
called the transnational. In the bookBartlett and Ghoshal provide
an analytic frame-work for managers for rising to the challengesof
the 1990s. Although the authors question thevalidity of much
accepted management practice,they provide managers with practical
guidelinesfor what they call the transnational solution.
Three main themes are pursued, linking en-vironmental
complexity, strategic demands andorganizational capabilities. The
first considerswhy transnational management has become animperative
in the 1990s. Historically, mostworldwide companies have employed a
uni-dimensional strategy. Strategy was either biasedtowards
achieving efficiencies of scale (a globalstrategy), responsiveness
to the local needs ofhost countries (a multinational strategy)
ordevelopment and transfer of knowledge to opera-tions worldwide
(an international strategy).
The authors show that a companys prefer-red strategy stems from
its administrativeheritage, which in turn is a legacy of
leadership,country of origin and the era of internationalexpansion.
Each of the nine companies investi-gated in the book found that a
unidimensionalstrategy is no longer sufficient. The companiesare
from diverse industries-branded packagedgoods (Unilever, Procter
& Gamble and Kao),consumer electronics (Matsushita, Philips
andGeneral Electric) and telecommunication switch-ing (Ericsson,
ITT and NEC). The authorsargue that, in response to increased
complexityin the worldwide competitive environment,companies will
have to develop global com-
petitiveness, multinational flexibility and inter-national
knowledge transfer simultaneously.Together these abilities
represent the means forcompeting across national borders.
The second theme of the book is to describethe characteristics
of transnational operations.The authors argue that while there is
no singletransnational blueprint, companies should seekto build on
existing capabilities in developingan integrated network of
dispersed assets andinterdependent specialized operations.
Na-tional subsidiaries should become strategicpartners with
differentiated roles and respon-sibilities, depending on their
capabilities, tasks,resources and strategic importance.
Import-antly, companies should not try to manage dif-ferent
functions in different countries in thesame way. The key to success
in worldwidecompanies lies in interdependence of sub-sidiaries with
differentiated capabilities.
The third and most important theme of thebook is to illustrate
how transnationalcapabilities can be developed and managed.Bartlett
and Ghoshal found that even thoughmanagement may recognize the need
fortransnational operations, they are very difficultto develop and
manage. The authors offer apractical solution, clearly illustrated
with ex-amples. In creating a transnational organiza-tion the task
is not to build a sophisticatedmatrix structure, but to create a
matrix in theminds of managers. This means that ratherthan change
the organization by changing theformal structure, the attitudes and
mentalitiesof individuals should first be changed, followedby
changes in interpersonal relationships, com-munication flows and
decision-making processes.Only in a final stage can change be
consolidatedand confirmed in structural re-alignment.
Central to the transnational solution is thecreation of a
managerial mentality that pro-motes co-option, rather than
enforcement of anew unknown organizational structure. In thisway
internalization of organizational processesensures that
organizational heritage forms anintegral part of the transnational
solution.
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Managing Across Borders provides relevant panys ability to
develop a transnationaland stimulating reading. It is an important
organizational capability is likely to be a keybook not only for
managers of worIdwide com- factor in separating winners from mere
sur-panies, but for all managers, because none can vivors in more
and more industries.escape global competition. In the future a com-
Leon Vermaak
284 Technovation Volume 10 No 4
