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Long Range Planning

38/1 February 2005



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Charles Baden-Fuller Editorial

The Board and Reviewers
I am very pleased to welcome sixteen new board members from seven different countries who all share an interest in promoting LRP: Long Range Planning. Our current board has been a wonderful support over the last five years: they have helped upgrade quality, maintain the focus on strategic management and assisted in getting the balance right between accessibility to practitioners and academic rigour. With a greatly expanded board we can do more, drawing in more contributions, more special issues and broadening the agenda into new areas of importance.

I want to give special thanks to our retiring assistant editors: Peter McNamara, Philip Stiles and Simon Peck. They have undertaken wonderful service over the years at the journal looking at manuscripts and encouraging new authors to submit. I take this opportunity to welcome Dr Jing Zhang and Dr Simone Ferriani as new Assistant Editors to join Dr Siah Hwee Ang; all are young scholars who have already gained international exposure.

Finally, the journal would not survive without the willing and conscientious work of all the reviewers, some of whom have served for several years and others who have only just joined our ranks. Reviewers are drawn widely and have typically published in LRP: Long Range Planning or have shown themselves appreciative of our focus and willing to contribute to ensuring a high standard of articles through constructive criticisms. We list their names in this issue.

Japanese management of ideas
The opening two articles identify how Japanese management practices can give us new insights into the way in which ideas are nurtured and developed. In the first piece, Elizabeth Rose and Kiyohiko Ito examine how Japanese corporations approach their spin-offs. Unlike Western counterparts, the Japanese are not focused on the core versus non-core debate; instead Japanese senior managers appear to think of spin-offs as entities that can grow up and become a support for the parent company, providing a source of ideas and resources. The implications are that companies should take a longer term strategic view of the spin-off process and ensure that the businesses they spin-off have the potential to give back in later years. Rose and Ito use data from 91 parent-child relationships to support their argument and explain some of the dynamics of the Japanese spin-off growing-up process.

What can Japanese companies tell us about how to integrate the technologies of broadband networking, computers and software with multi-media? Mitsuru Kodama returns to our pages to explain how Fujitsu went about this challenge and why their approach led to success in comparison to other firms trying to realise the same goals. It has long been recognised (in part by pieces in these pages) that network structures assist the innovation process where these structures work within and across organisational boundaries. Kodama delves into the details of how Fujitsu forms and re-forms teams that run within the company and across its partner firms. He explains how these networks need to be dynamic, and hence chooses the words strategic community to capture the dynamics of the knowledge integration process that takes place. He points out that it is the fluidity of the arrangements and the appropriateness of leadership style, balanced with an eye to the strategic goals, that are critical to success. The paper is also valuable for academics as it explains in some detail the dynamics of network formation and knowledge flows, enriching our knowledge of theory with practical examples.

Strategic renewal
We have two articles that look at two quite different dimensions of strategic renewal. Davide Ravasi and Gabriella Lojacono explore the inter-relationship between good design and corporate revitalisation. Effective management has always relied on recognising the critical role of creativity and discipline, creativity being needed for the exploration of the new and discipline being necessary to the exploitation of what we already have. Like renewal, good design is the balancing of these two forces; yet few have made deliberate connections between design and renewal. When faced with the challenge of transformation, the tendency is to put design on one side or relegate it to a specialist group, but this just does not work, as these authors show. They explore how good design has been the core of many effective renewal processes and how managers (and researchers) need to integrate design processes with renewal processes if companies are to achieve their potential.

How does one modernise a politicised state corporation? Harry Tsoukas and Demetrios Papoulias suggest that there is much to learn from the story of the Public Power Corporation in Greece. This state-owned and state-run monopoly underwent a political, economic and managerial transformation that started in the 1980s but only gained significant momentum in the past 5 years. They describe how the momentum was created and how it moved the organisation forward. They demonstrate how the seemingly impossible transformation can be achieved quite quickly if the time is ripe, the players are skilled and there is a dose of luck as well. The lessons will be valuable to students and managers alike.


Elizabeth Rose and Kiyohiko Ito Widening the Family Circle: Spinoffs in the Japanese Service Sector k.ito@hawaii.edu

Japanese companies have prospered in both the domestic and the global market by creating offspring that are spun off but still controlled in some measure by the parent. In some cases of these large family groupings the spin-off companies become more successful than their parents. This paper clarifies the nature of the management of Japanese spin-offs and provides evidence for a path for enhancing overall corporate performance. It studies 91 parent-subsidiary pairs operating in the service sector, analysing performance in the decade following the subsidiary’s listing and finds that, on sales growth, the subsidiaries tend to show stronger advances than their parents. Diversification provides the key to profitability: subsidiaries that operate in the same sector as their parent tend to underperform the parent while those that enter a different industry tend to outperform their parent. The management implications of spin-offs are set out to demonstrate the balance that can be struck between spinning off a subsidiary while still retaining some measure of control.

Mitsuru Kodama Knowledge Creation through Networked Strategic Communities: Case Studies on New Product Development in Japanese Companies kodama@bus.nihon-u.ac.jp

This article tells the story of how Fujitsu Ltd., faced with the challenge of merging and integrating the different technologies of broadband networking, computers and software, and multimedia processing by structured strategic communities which transcended its normal business divisions, extended them to include customers and equipment manufacturers, and then networked them together under a leadership group to exploit an exciting range of market opportunities afforded by latest developments in video streaming, 3G mobile phone protocols and new-generation MPEG-4 live video cameras. The author shows how deep collaborative involvement, a sense of shared values and the swift establishment of embedded communities allowed these communities to bring Fujitsu’s new product development to market while others’ lagged behind.
He extends his examination to show how the dialectical leadership style of the Leader Group, mixing participative with directive control, gave it the synthesizing capability to balance paradoxes in the networked SCs and lead a dynamic innovative processes through which core technologies were first integrated and then further improved as the communities aimed for their essential desired output – the creation of completely new knowledge.


Haridimos Tsoukas and Demetrios B. Papoulias Managing Third-Order Change: The Case of the Public Power Corporation (Greece) htsoukas@alba.edu.gr

How does one best manage change to modernise large ‘state-political corporations’ when changing a company can entail changing the country? Against a detailed historical background, this article tells the story of how a fresh top management team, armoured with the support of a modernising government, exploited the external trigger for change of liberalising EU directives to take the Greek monopoly utility Public Power Corporation to the stock market, freed executive appointments from internal promotion and political patronage, and exploited the discursive potential typical of third-order change to disrupt self-referentiality and lead the company to face the ‘brute facts’ of the market. Organisational restructuring and the discipline of a well-thought-out business plan enabled the company to exceed all initial business targets, under the now-watchful eye of market forces The momentum for change thus created allowed the firm to become both the focus of change and a medium for broader cultural change, and these insights into the way effective change management forced PPC to open up and engage with the outside world of competitors, investors, and customers can be of relevance to other state-political firms worldwide.


Davide Ravasi and Gabriella Lojacono Managing Design and Designers for Strategic Renewal davide.ravasi@unibocconi.it

For producers of traditional or high-tech consumer durables seeking to differentiate themselves from their competitors, the role of the product designer is increasingly taking a central role, and can even drive strategic renewal. This paper builds on a study of innovators in the design of traditional and high-tech consumer durables to describe the design-driven renewal process. With extensive references to companies such as Apple, Alessi and Bang & Olufsen, the authors describe such design-driven renewal as a four phase process: the generation of new ideas, which includes establishing the strategic relevance of design; the evaluation and selection of ideas, such as implementing a coherent product policy; the revision of design principles, which may include responding to feedback or questioning current beliefs; and the diffusion of new design principles. The role of managers in each phase is discussed and the most common pitfalls are outlined.



This issue is available in full on-line at www.sciencedirect.com

Long Range Planning - International Journal of Strategic Management
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