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Long Range Planning

33/6 December 2000

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Charles Baden-Fuller Editorial

Looking into Japan

Richard Lamming Japanese Supply Chain Relationships r.c.lamming@bath.ac.uk

    The remarkable nature of Japanīs supply chain relationship has been identified as a significant factor in its industrial success, especially in the automotive and electronics sectors. Yet, Japanese companies do not recognise the term `supply chain managementī. Four four decades Japanīs industrial giants developed sourcing strategies based on highly-pressurised, customer-dominated supply relationships in which subcontractors enjoyed the benefits of the success of their customers at the expense of yielding their autonomy. In 1991, the Japanese economy plunged into deep recession and has yet to recover. Large corporations mow appear vulnerable and almost all Japanīs banks are technically insolvent. This article explains the ways in which recession has affected the supply chain relationships in Japan and the domestic and international sourcing strategies that shape them. Japanese industrial customers are putting increased pressure on their suppliers to provide technical solutions and to develop links with other customers for the first time. The substructures of the keiretsu appear to be giving way to open competition with `parentī firms selling equity in subsidiaries. Profound changes appear to be underway in Japanese industrial sourcing strategies - suppliers can no longer rely on retaining business simply by obedience and hard work. Instead, they face an open, fiercely competitive environment- at home and abroad. In this new order, Japanese suppliers are developing new competitive technical and commercial capabilities, enabling their Japanese industrial customers to concentrate on real-time market-driven configuration of products, without needing to hold stocks in their supply chains and distribution channels. Meanwhile, Japan is seeking to re-establish its position of leading player in East Asia.

Adaptation, Integration and Change: Observe the Past, Reshape the Future

Roland Calori, Charles Baden-Fuller and Brian Hunt Novotel: Back to the Future. calori@em-lyon.com

    Novotel, is one of the worldīs major hotel chains, occupying a leading place in Europe and with locations globally. We interpret Novotelīs change management programme in the late 1990s in three parts. First, we summarise the actions that managers took in terms of strategy and organisation. Second, we consider the sequence and timing of events, and how this resulted in rapid transformation in an organisation employing more than 30,000 people. Third, we emphasise the dialectical nature of the change processes: an element often ignored in the literature that likes to see things as an either-or rather than a both. We observed both deliberation and experimentation; both integration and differentiation. We also observed both preservation and transformation, as noted in our sub-title `Back to the Futureī. Finally, we wrap up with a discussion explaining how our story can add to better thinking about change. We suggest that we can shed new light on some old debates and provide tangible guides for action.

Erkki Laitinen Long Term Success of Adaptation: Evidence from Finland ekla@uwasa.fi

    This study analyses the success of adaptation strategies applied by Finnish companies during the recession in 1989-93. Five different strategies emerged from data gleaned from a questionnaire answered by 750 companies. In the medium term, investment in new product development and marketing and in the acquisition of new customers was the most successful strategy while a strategy heavily based on negotiating finance contracts and restructuring was the most unsuccessful. To evaluate the long-term effects of adopted strategies, financial statements from 644 companies in 1994 and 1997 were analysed. The results supported the meduim-term conclusions. In general, they suggested that in the long-term, active adaptation strategies are most likely to lead to sustained success whereas passive (financial) strategies are associated with a high risk to fail.

K A Weir, A. K. Kochhar, S. A. LeBeau and D. G. Edgeley Strategic Integration in UK Manufacturing Companies. ak.kochhar@aston.ac.uk.

    This paper describes the results of an empirical study of strategic planning practices in a sample of UK manufacturing companies. The results indicate that the importance of aligning marketing and manufacturing strategies, written about by so many, has not been recognised within industry. Consequently, the strategic link between the two is still weak. Where functional integration is achieved, this tends to be by concentrating on infra structural and operational issues such as the use of cross-functional teams, good communication, and formal products development techniques e.g. design for manufacture, rather than integrating functional strategic decisions.

Lloyd C. Harris Getting Professionals to Plan. HarrisLC1@cardiff.ac.uk

    It has long been accepted that professional services gain their business on the basis of their own reputation or through client referral. It was almost an unspoken rule not to market their services, but in todayīs climate there is a need to break from this mould. In order to understand change in professional services, an in-depth survey was conducted covering 25 legal firms and 25 accountancy firms. This survey looked at three aspects: the pressure to conduct strategic marketing planning; the obstacles to such planning; and the tactical responses to these obstacles. The one-to-one interviewing method chosen brought forth genuine and sometimes surprisingly frank responses. The potential benefits of strategic marketing are examined, together with the difficulties of adopting such an initiative. The outcome of this research highlights a series of implications for theorists and practitioners, with suggestions of areas for further study.

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