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The rapidly changing nature of the modern
industrial world has helped spark a radical rethinking of
the design of corporations, changes no less revolutionary
than the wave of innovations associated with the names of
Frederick Taylor and Henry Ford in the dawn of this century.
In Redesigning the Firm, nineteen experts from one
of the nation's premier business schools, the Wharton School
at the University of Pennsylvania, take an informed look
based on their own research at various aspects of this revolution,
offering managers a host of insights and powerful tools
for orchestrating change in their firm.
Redesigning the Firm illuminates
many of the challenges that confront the executive, approaching
the issue from a wide variety of perspectives. The book
considers, for instance, whether the firm's stockholders,
directors, and managers should reevaluate how they distribute
power and share information, and it explores why external
board members often fail to exercise a strong voice in governance.
It looks at the changing boundary of the firm, as partnerships
and alliances have become more important, examining this
new development in three types of market: emerging markets
such as Eastern Europe, markets where economies of scale
provide a critical advantage, and dynamic markets where
speed is essential. It examines the use of suppliers in
Japanese, American, and European firms, and finds the first
to be most efficient. Some of the essays are quite eye-opening.
For instance, one chapter demonstrates that firms can increase
product variety at no extra cost, revealing how a study
of the automotive industry shows that investing in training,
in flexible manufacturing processes, and in better operations
management will increase variety without compromising productivity
or lowering quality. And one chapter sounds a strong note
of dissent, contending that the design of organizations
matters little to a global competitor -- what matters is
how managers think about the world, and how the operating
procedures they use guide decision-making and behavior.
In the final section, editors Bowman and Kogut reflect on
two outstanding issues concerning the design of the firm:
how much of what managers used to believe was critical to
their success can they place outside their ownership boundaries;
and how to deal with the complex challenges that modular
design presents. The editors apply their conclusions to
the Wharton School itself, making the book particularly
valuable for anyone concerned with the quality and future
of business education in America.
Here then is the best thinking by leading
experts in corporate design, who examine the best ways to
generate speed, variety, and flexibility, to expand the
firm over time and over national boundaries, and to prepare
a corporation for the next century.
Edward H. Bowman is Reginald H. Jones
Professor of Corporate Management and Co-Director of the
Reginald H. Jones Center of the Wharton School, at the University
of Pennsylvania. Bruce Kogut is Professor of Management
at the Wharton School and CO-Director of the Reginald H.
Jones Center.
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