Business Policy in the 1980s

Author(s): Joseph L. Bower

Source: The Academy of Management Review, Vol. 7, No. 4 (Oct., 1982), pp. 630-638
Published by: Academy of Management
Stable URL: http://www.jstor.org/stable/257230 .
Accessed: 21/01/2015 17:36
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .
http://www.jstor.org/page/info/about/policies/terms.jsp

.
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of
content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms
of scholarship. For more information about JSTOR, please contact support@jstor.org.

Academy of Management is collaborating with JSTOR to digitize, preserve and extend access to The Academy
of Management Review.

http://www.jstor.org

This content downloaded from 160.94.140.100 on Wed, 21 Jan 2015 17:36:04 PM

All use subject to JSTOR Terms and Conditions

?Academy of Management Review 1982, Vol. 7, No. 4, 630-638

Business

Policy

in

the

1980s

JOSEPH L. BOWER

HarvardUniversity
The subject of business policy in the 1980s is a challenge for discussion.
There are differences on what the subject is. Is it a course? Or a field of
research? What is its literature? What is itsfuture? Some want to make it a
science. What does that mean? Thispaper addresses these questions, moving forward in phases. The perspective is that of a faculty member of the
Harvard Business School, at which there has been a course called Business
Policy since 1908.
activity in the sense that it requries a testing of the
premises on which the organization is operating.
This challenge is a socially disruptive force. Social
organization resists change, and its study and introduction can interfere with the executive's role as
leader. The reason that Cook's observation is so
telling is that the activities that constitute exploiting
the strength of the organization and those that represent a testing of strength against the opportunities
and risks posed by a changing environment are hard
to distinguish. As in any instance of doing and
learning, they interact in extremely subtle and
idiosyncratic ways. If one seeks to be too systematic, it is easy to focus on a tiny piece of activity that
is obviously strategic and lose the importance of the
whole pattern, the seminal elements of which are
seldom systematic.
Cook was right in another sense, for sometimes
when the policy field is successful in structuring and
defining strategic problems, it comes close to
destroying the field. Some policy researchers lose
sight of the overall problem which is the central
thrust. They focus on the strategic planning activity
or the "means" part of the ends/means dilemma.
Compounding the confusion, colleagues in functional fields who are concerned with problems of
managers, rather than the elegantly procrustean
management science, have adopted strategy as their
concept. Consequently, the basic work in the functions on which policy might seek to build has slowed. There are papers on marketing strategy, but a
topic such as the problem of marketing a vertically
related chain of products goes unstudied. Captial

In 1963, at a conference devoted to business

policy at the Harvard Business School, Paul Cook
argued that the way one determined the subject
matter of policy was to gather together all the
messy, unsolved, and perhaps undefined problems
of importance characterizing business management.
"As soon as a problem was understood," said he,
"it was quickly incorporated as part of the subject
matter of one of the functional disciplines."
Cook was right, although the position he took
was exaggerated. Policy has had its most limited
success when it shied away from understanding the
management processes by which strategy is developed and accomplished and when it devoted too
much of its writing to restatement and repetitive
description of ideas and activities that were well
treated by earlier researchers in the field. In contrast, policy has made considerable progress by
focusing on the difficult problems of formulating
and implementing corporate purpose.
When the field made progress, it did so with
careful intensive field work and by applying structured comparative analysis to the unstructured
problems that had been observed. More specifically, a concept of corporate strategy was used that encompassed ends and means, thereby focusing attention on the fundamental executive function conceptualized by Barnard (1938): the giving of direction
to a social organization, taking advantage of
authority provided by the membership of that
organization.
The basic administrative problem of the general
manager is that strategy formulation is a negative
630

This content downloaded from 160.94.140.100 on Wed, 21 Jan 2015 17:36:04 PM

All use subject to JSTOR Terms and Conditions

asset pricing theory has written off as nonexistent

most problems of corporate financial managements.
At the same time, for business managements,
corporate strategy has become a common rubric
covering a wide range of activities from planning,
to budgeting, to blue sky ruminating about the state
of the world. There are vice presidents for strategic
planning, and Business Week runs two or three
pieces each week on "corporate strategy." Perhaps
most important, a number of consulting firms have
elaborated the concept of strategy and converted it
into products that can be produced by bright but inexperienced analysts. These products then are sold
at a high price to managements seeking a "quick
fix" answer to their problem of dealing with the
economically inhospitable climate of the 1970s and
1980s. Surely that product is not the subject matter
here.
As one colleague put it, "strategy has metastasized." Many have used the word strategy with an
unending series of prefixes. This is part of the problem with the work of Ansoff in the last several
years. Strategy is more powerful if it is not used in
what Ansoff (1979) calls the "general sense to mean
'interior solution-guiding heuristic.' " In Ansoff's
formulation, strategy per se loses all meaning.
A related conceptual problem is raised by Hofer
and Schendel (1978). They have chosen to separate
goals from strategy and reject the call of several
authors to recognize the importance of the social
process that makes goals and strategy administratively inseparable. The problem is that "what
management should be" is not independent of
"what management can be" or "what management
wants to be." Policy research should have taught
that the selection of ends turns critically on which
means a management is capable of pursuing. In
turn, a selection of means turns critically on the
skills of the management coalition that shaped corporate goals.
This raises a second problem with the promiscuous use of the word strategy. When policy
researchers become extremely analytic, the
language created to talk about many different
categories of strategy tends to be treated as if it had
some life of its own. If these categories are spoken
of as actually existing in the territory of the general
manager's problem, then the essence of the general
management dilemma is missed. For a general man-

ager, the substantive, the organizational, and the

interpersonal dilemmas faced are interdependent
when action is taken.
This is one of the special problems that develops
when one abandons Kenneth Andrews' exposition
of corporate strategy. It is striking how many
papers at the 1978 Pittsburgh conference on business policy did not acknowledge the existence of
Andrews (Learned, Christensen, Andrews, & Guth,
1965). Andrew's text for the Business Policy
casebook and its later monograph version deals
with business policy and the problem of corporate
strategy. Andrews argues, importantly, that the
separation of strategy formulation and strategy implementation is of pedagogic value only. In fact, the
separation can be misleading. One could argue that
the great value of the casebook is that it gives rich
examples of the interdependence of the formulation
and implementation problems at the same time that
managers are asked to develop an understanding of
the total general management task by focusing on
parts.
A problem also exists with a concept of a hierarchy of strategies as proposed by Hofer/Schendel
(1978, 1979) and others. The point is that every
manager has bosses and every manager faces a partwhole problem. Depending on the issues managers
are facing, they are all Roethlisberger's foreman-caught in the middle. If one chooses to focus
on the so-called business unit and help the manager
of that unit develop a strategy, then it turns out that
the problem has exactly the same form as that facing the corporate chief executive. In other words, if
one wants to be normative, a consistent plea of virtually all the authors who want goals left out of
strategy, then one must have a client. The problem
of purpose must be viewed from the perspective of a
manager. When one chooses his/her client manager, then a symmetry emerges in the problem
he/she is facing, regardless of the level of that
manager.
Put another way, even the way in which a function is carried out may not be subordinate or secondary in the concept of the enterprise. The way
Marks & Spencer does its pricing is central to the
concept of the firm, historically and strategically.
The way Polaroid carries out research is fundamental to the strategy of the firm and to why it is different from Kodak. The way Digital Equipment is
organized to manage its affairs is fundamental to its
631

This content downloaded from 160.94.140.100 on Wed, 21 Jan 2015 17:36:04 PM

All use subject to JSTOR Terms and Conditions

organization and procedures can accommodate

these new demands. These problems must be considered in addition to traditional questions such as
whether evolutions in technology or task will render
key products or processes obsolete. Business policy
will remain a vital field in any business school as
long as it addresses these contemporary problems of
great scope and concern with scholarly care, and
with an understanding of the particularly demanding character these problems take on when experienced in an administrative, rather than an intellectual, context.
If there is agreement on the proper focus of the
field, then the framework of strategic analysis can
be used to argue how the business policy field can
succeed by using its resources to exploit the tremendous opportunity posed by the radical challenges to
management in the 1980s.

concept of how to deal with the information processing revolution. This is what Prahalad (1976)
means when he says that for a multinational corporation "structure is strategy." This is what Ansoff (1979) means when he says that "concepts of
'strategy of structure' now need to be developed."
There is, moreover, a special cost in adopting
other than a holistic framework. Once the problem
of corporate strategy is conceived as consisting of
separate parts-goal formation, strategy formation, strategy implementation-then one may be
trapped into studying one of these parts as if it existed in the firm as a separate activity. The most extreme example of this is the attention now given to
strategic planning.
Contemporary systems of strategic planning can
be shown to be fundamentally no different in their
relationship to corporate strategy than present
value analysis, capital budgeting, or any of the very
important tools of administration that have been invented over the years to help a chief executive with
the problem of managing the firm. When researchers observe the activities of strategic planning, they
can see that they are not the same thing as strategy
formulation (Haspeslagh, 1981; White, 1981). The
danger to policy of strategic planning is that it is so
much more easily studied. It is tempting to think
that business policy is about to succeed by becoming "academically respectable." Worse, by focusing on the functions associated with strategic planning, some are able to find questions that are approachable with large sample research methods.
But then these researchers fall into Cook's trap and
cease to study the problem of business policy.
The present writer's view is quite different. He
continues to believe that the charter of business
policy is to focus on the life and death issues of central interest to the top managements of the firms.
The field makes its contribution when it helps top
management deal with these issues effectively, profitably, and morally. Today, major firms must consider a number of aspects: whether they will survive
as privately owned enterprises; whether the makeup
of the management coalition will shift to include
labor or government; whether the private capital
markets will supply their needs for funds given their
lack of profitability and/or their rapid growth;
whether protectionism in various forms will limit
markets, freedom of data transfer, freedom in staffing, or freedom to invest; and whether existing

Analysis
Any strategic analysis of where an organization
should go must take account of where it is. In 1980
business policy as a field is a group of faculty
primarily engaged in teaching both undergraduate
and graduate courses in business administration
programs. Only some of the faculty who teach the
policy course regard policy as their field, and only
some of the faculty have studied policy and its
literature in a systematic way. Rarely does the
group teaching policy at a particular school include
more than two or three full time committed faculty.
Yet, ever since the Gordon and Howell (1959) report recognized that there should be at least one integrated, administratively oriented, "capstone" experience, the policy course has spread. Today there
are several hundred.
Two other features have complicated the problem
of policy. First, until very recently there was no
journal devoted to business policy. Even today
there is no single journal that is widely accepted as
the place to publish. Consequently, it is hard to
communicate. Colloquims are used. Second, the
Harvard Business School's policy group is so large
and involved in the strategy of the overall school
that its members have been preoccupied with internal communication. The principal roles Harvard
has played, therefore, have been: (1) development
of the policy course both conceptually and with
research and casewriting, and (2) development of
632

This content downloaded from 160.94.140.100 on Wed, 21 Jan 2015 17:36:04 PM

All use subject to JSTOR Terms and Conditions

tegist's problem, it makes its specification more

precise.
Generally speaking, the attempts to be more
structured and systematic have tended to focus attention on economic analysis of well defined industries. The inventing of markets and the building
of institutions remain understudied activities.
One could argue that portfolio theory represents
an exception. To begin, praise should be given
where it is due. The idea of the Boston Consulting
Group (BCG) that a diversified business might be
conceived as a portfolio of cash flows-present and
future-was a major step forward in providing a
financial dimension to the work on managing complex firms that went on in the late 1960s (Aharoni,
1966; Berg, 1965; Bower, 1970; Rumelt 1974). But
it did not solve the problem of managing a diversified firm; it did not help explain what competence
was transferable from one unit to another; and it
did not help understanding of how corporate
strategy for diversified firms could be differentiated. Worse, as Hayes and Abernathy (1980)
pointed out, it may have diverted focus from proactive activity. Research reveals that it did help
managements to understand the limits to growth
imposed by a portfolio of cash requirements and it
helped to legitimate the withdrawal of resources
from business units in the face of promises of
profitability at a time in history when many firms
were capital short (Hamermesh, 1979; Haspeslagh,
1981).

policy faculty in the doctoral program. But the size

of Harvard, as well as its commitment to the course
development, has meant that the Harvard group
has not often communicated extensively with other
faculties outside of Harvard except through its
casebooks, and other groups have felt a dual need
to differentiate themselves. They had to address
their traditionally oriented academic colleagues and
also "do something different from Harvard." The
Wall Street Journal's attempt to do a Howard Cosell on the differences among academic strategies
has not helped matters.
This relative disarray is one piece of the bad
news. Another misfortune is the loss of the field's
language to the functional areas, especially marketing. Having discovered that the problem of
formulating product policy seemed well described
by the format of economic strategy, marketing has
simply adopted the framework as its own. The
Profit Impact of Marketing Strategy (PIMS) project, designed to explore the contribution to business
unit profit of functional policies, is now sometimes
described as the solution to the corporate strategic
planners' problem. It is sometimes hard to get colleagues to recognize the existence of the corporate
strategic problem:
What businessis the corporationin?
How does it define its markets?
Whatis its distinctivecompetenceand how is this competencetransferable?
How can the corporationinventa creativeapproachto
its situation?
How can it organizeto take full advantageof its resources?
And how shouldit conductitself so as to be responsible
as well as technicallyand economicallyeffective?
Too many researchers are not addressing these
questions.
The good news is that the competition is basically
acting out Paul Cook's law. There is no doubt that
contemporary approaches to the product policy are
more powerful now that they are tied directly to
business unit economic strategy. But there is more
to the problem of corporate strategy than product
positioning. In the economic dimension, Michael
Porter's (1980) structural analysis of industry has
provided a more systematic language for analyzing
competitive position. Porter points out that the
competitive challenge is to invent or create a way
past the dilemmas posed by "barriers to mobility."
The elaborated language does not solve the stra-

The Opportunities
The point can be argued further but the present
purpose is not a bibliographic dialysis. Rather, it is
enough to recognize that if one accepts Andrews'
(Learned et al., 1964) definition of the field, then
most of it remains for study. He said,
Policy is the study of the functions and responsibilitiesof general managementand the problems
which affect the characterand success of the total
enterprise.The problemsof policy in business,like
those of policy in publicaffairs, have to do with the
choice of purposes, the molding of organizational
character,the definitionof what needs to be done,
and the mobilizationof resourcesfor the attainment
of the goals in the face of competitionor adversecircumstances(1965, p. 3).
It is the responsibility for the totality of the enterprise that gives the top management job its special
character. The specification of goals and character,
633

This content downloaded from 160.94.140.100 on Wed, 21 Jan 2015 17:36:04 PM

All use subject to JSTOR Terms and Conditions

in effect, determines the boundary between the firm

and its environment.
The economic, social, and political consequences
of those choices givethe job its special significance.
Consider two examples.
Everyone could recognize that there was a certain
market for instant photography. Land's genius as
an entrepreneur-as opposed to an inventor-was
in recognizing that there was something profound
and valuable to most people in being able to capture
and hold an image virtually in the moment that the
image was created.
Recently, a CEO lectured his subordinates on the
strategic consequences they were about to face
when for the first time an entire factory would be
devoted to one new product. At stake were not
merely dollars-the firm had enough of those-but
a concept of labor relations. If the product did not
succeed, layoffs would be necessitated-or, because
these violated company policy, a rather dramatic
and creative effort at utilizing a dedicated labor
force.
Managing fundamental relationships across the
boundary of the system and its environment is the
critical job of the corporate leader. The two examples above illustrate the perception of key relationships across the boundary: one with customers,
one with workers perceived as a constituency rather
than an input factor. Policy theory back to Barnard
(1938) says that this executive function is spread out
over multiple levels of the firm. And it is known
that much of the work involved must be carried out
in the context of an operating organization's time
horizons and rewards. Managing the definition of
boundaries under such circumstances is a social and
political process (Allison, 1971; Bower & Doz,
1979; Miles & Snow, 1978; Quinn, 1980; Rhenman,
1973).
Here again are examples of Cook's law. The relation of structure to strategy in complex organizations has emerged as a topic of study in organizational behavior. Indeed, there has been fruitful collaboration between business policy (BP) and organizational behavior (OB) at several schools. Here
again, the focus has narrowed toward the traditionally researchable questions.
It is Prahalad (1976), Hamermesh (1979, 1981),
Doz (1979, in press), and Bartlett (1979) working in
the field, with small samples, who have made the
basic observations on the role of structure in shap-

ing diversified and multinational corporate strategies. It is Doz (1979), especially, who in his work on
salient industries has pointed the way to the frontier
that BP can explore in the 1980s. As the conduct
and performance of more and more business becomes salient, as more governments respond to the
slow growth of the 1980s by seeking to manage their
industrial activities, and companies respond
strategically, the task of chief executive will change.
It is likely that the changes will be as formidable as
those accompanying the replacement of families by
a professional management in the running of American corporations.
Why? Because the consequences of boundary setting decisions involve product policy, investments,
plant location, and choice of technology. The business policy framework deals with abstractions such
as distinctive competence on the one hand and environmental opportunity on the other. But the outcome of the process of formulating strategy,
building and managing organization, and selecting
and training key managers is physical and economic. The macro consequences of those outcomes
are economic growth, employment, and the regional distribution of both the balance of payments, and rates of inflation. Governments regard
these macro issues as their central business, and
they more or less quickly seek influence over the
micro decisions that give rise to the national pattern.
Governments affect business as taxers, regulators, customers, partners, and bankers. When, as in
France or Japan, an attempt is made to weave these
various sources of influence together in a cohesive
pattern, the effect can be dramatic and traumatic.
(Whether the intervention produces the intended
consequences is a different matter.)
All the evidence is that the tendency to plan and
intervene will increase. The world shakeout in
heavy industry is likely to continue as the growth of
the industrial West meets the limits imposed by the
scarcity of energy and capital on the one hand, and
the expanded capacity of the newly industrialized
nations of Latin America, the Middle East, and the
Pacific, on the other. In other words, one should
expect more Chryslers with concomitant political
involvement, both in the United States and overseas.
As sophistication grows in ministries of industry
or finance, it often is apparent that ownership is not
634

This content downloaded from 160.94.140.100 on Wed, 21 Jan 2015 17:36:04 PM

All use subject to JSTOR Terms and Conditions

response to what is, after all, a fundamental shift in

power.
Another way of arguing the organizational point
is to draw on Rhenman (1973). He argues that strategic dominance arises when the internal variety of
the system exceeds that of its environment. What
does that tell about the management of firms that
will live in an environment with active government
and union involvement? To say as some do that the
CEO will spend more than half his time in Washington, is merely to say that the problem is so badly
understood that the firm can neither organize nor
delegate to handle the tasks. For example, for years
IBM was proud of its nonunion policies. When it
confronted AT&T in a fight for the future of the
automatic office, it discovered the Communication
Workers of America were a powerful force weighed
in on the other side of the battle in Congress.
Business policy must rise to the challenge. At
Harvard, Bruce Scott and George Lodge have
shown that the concepts of strategy and ideology
used together can help greatly to describe and interpret the behavior of governments (Scott & Rosenblum, 1980). Doz (in press) has shown that the
country strategy, corporate strategy, and structural
analysis of industries can reveal quite clearly the administrative problems facing the involved firms.
The next step in the business policy course has been
the study of a global industry. Malcolm Salter,
working with Mark Fuller, has produced a massive
block of material on the world auto industry (Salter
& Fuller, 1981). Richard Hamermesh, with Lyn
Christiansen, has examined International Harvester's internal process of adaptation to competition in
mature worldwide industries after their competitive
position has eroded (Hamermesh, 1981). Admittedly, these are still first steps, but they are steps taken
in the right direction.

the primary issue. What is important are (1) access

to the expertise organized by business firms to generate options-the substance of plans-and (2) an
understanding of the tradeoffs to be made as power
is balanced in the inner councils of the firm. It is in
the access to the staff and the making of these internal political judgments that up to now, in the
United States, the professional CEO has reigned
supreme-even over the board (Hafsi & Hamermesh, 1980; Taylor, 1978). But it is precisely
around these key substantive and administrative
judgments that studies of state owned enterprise
and salient private foreign firms suggest that governments felt free to lean on management (Doz,
1979).
Labor unions represent another force of equivalent importance. Historically, labor has been
treated as an input factor with a cost. In well run
firms it is regarded as an asset. Unions of workers
alter the character of labor. Unions too are interested in the extent and location of employment-and in choice of technology. At a minimum,
they may, through vested rights to jobs rather than
employment, become a powerful hindrance to
change. Through positions on the board of directors they may acquire more ready access to power
through information on issues and timing. How this
power is used will vary considerably.
In countries outside the United States, unions are
a political as well as an economic force, using their
role in a particular firm not so much to aid the
workers in that firm as to alter the political configuration of the host nation. The Maoists at British
Leyland and the CGT (the communist dominated
union) at Renault have played this role. People in
the United States are used to the idea that the Committee On Political Education (COPE) supports political candidates favorable to labor, but they are
not used to the idea that the AFL-CIO might try to
bring down a large company in order to generate a
consititution changing crisis.
Whatever the particular shape of U. S. management's future, it is sure to involve unions as a
political force both within and outside the firm. It is
not easy to guess what organizational shape the
management response will take. VP Industrial Relations is an even more primitive response to the
dilemma sketched above than the typical VP Government Relations is to the business government
problem. Neither seems likely to be a satisfactory

A Collaborative Approach
For the 1980s, business policy researchers need to
adopt or modify the concept of corporate strategy
so as to include managerially active governments
and unions. Researchers and practitioners must:
(1) Learn how to devise strategies that exploit, or
hedge, radically different alternative futures. Improving scenario analysis can help with this effort,
stimulating more wide-ranging strategy formulation.
635

This content downloaded from 160.94.140.100 on Wed, 21 Jan 2015 17:36:04 PM

All use subject to JSTOR Terms and Conditions

needed for discussions in depth of new work so that

accomplishment can be shared and recognition provided. Under such circumstances, it then would
make sense for individual schools to specialize in
one or a small group of industries for a period of
years. For example:
(1) Denver is a rapidly growing business center.
The governor is encouraging this economic development but is aware of its impact on the ecologically
fragile east slope of the Rockies. The Western
governors also have banded together to try to deal
with Washington on a variety of economic, land
use, and water questions. There is, in short, a
microcosm of growth management to be studied.
Why don't the Colorado schools take the lead here?
(2) In contrast, Pittsburgh is the center of an industry that has been liquidating itself for several
decades. Why don't Pitt, Penn, Carnegie, and
Wharton study management problems associated
with the transformation of the economic base of a
declining region?
(3) There is a class of problems that requires
regional studies. Has anyone studied the problems
facing managements of the major firms on Lake
Erie?
(4) Large complex firms have been studied for
many years. But the work that actually deals with
top management of such firms is limited to the efforts of a very few researchers, principally the
economic historians such as Chandler (1962), and
case writers such as Scott and Rosenblum (1980),
Berg (1965), Bower (1970, 1979), Learned and Christensen (1965), Hamermesh (1979, 1981), and Mintzberg (1973).
(5) What does portfolio management mean for
such companies? Why do CEOs introduce such systems? What are the administrative aspects of complex strategy-or how does the work of a Geneen
differ from that of a Clark Kramer?
(6) What is happening to small business? To begin, is its distribution by industry known? What is
the difference between the little fish in the big
pond-e.g., the "ma and pa" grocer-and the little
fish in the little pond? There is some evidence that
the small process equipment suppliers have played a
major role in the vitality of the semiconductor industry. Can anything be said about the mix of large
and small firms from a business policy perspective
that can contribute to the public policy debate?
Each of these questions represents a fertile field

(2) Learn how to organize and manage a strategy

formulation process that deals with new issues and
may include new players.
(3) Learn how the implementation of politically
sensitive programs can be carried out so as to permit learning-and hence change-while reflecting
commitments made to new sources of power. (It
will not only be bankers who impose covenants,
terms and conditions.)
(4) Learn how to teach about a complex world
that will tax the limits of classroom pedagogy.
(5) Keep teaching in an administrative context.
Administrative realities are no less constraining
than are economic or political realities.
The competition in this endeavor probably will be
rather limited. At least until some conceptual structure on the new problems is imposed at the boundary, the academic competition may talk about
these messy problems but will leave them to business policy and not work on them with anything like
the appropriate methodology. Painstaking description based on historical inquiry or clinical observation is required. In the end, action research may be
necessary in order to get access to the most central
relationships. This sort of work has never attracted
traditional academics.
The difficulty in BP is the other half of the
strategic dilemma. When the opportunities are
unlimited but resources are constrained, how can
objectives be limited to a set that can be pursued
successfully by the collective business policy
faculties?
The answer has several parts involving (1) the
specific areas explored, (2) how resources are
organized, (3) how communication is made, and
(4) how the system of measures and rewards is influenced. To begin, business policy should stake out
its interest. The working interface of business and
government is a general management problem,
whose perspective is strategic. This is business
policy's turf. Second, it should be recognized that
most of the important problems to be faced are
multinational-because the competition, and/or
the markets, and/or the macro context is multinational.
The next step is to develop a program of research
that takes advantage of individual strengths. Studies of global industries are resource consuming, as
are intensive case studies of multinationals dealing
with their government counterparts. Forums are
636

This content downloaded from 160.94.140.100 on Wed, 21 Jan 2015 17:36:04 PM

All use subject to JSTOR Terms and Conditions

The point is that refining language to talk about

well described problems is a marginal contribution.
Estimating R2s on relationships that have been
recognized to be true since biblical times is not a
contribution. The companies and the consultants,
using more time and resources, often do this sort of
work better than do academicians. But identifying
new problems and describing them in an orderly
way provides a chance for the whole field to move
forward.
Large samples are not needed. The Hawthorne
experiment involved one small group of women.
What is needed is prepared minds to ask important
questions and to recognize when nature by its own
experiments provides unusual answers. The great
fortune in business policy is the interesting problems of present times. If one focuses on the
elephants and not the ants, and if one remembers to
do careful scholarly work, the decade can be productive and rewarding.

for inquiry, and no one else is out there working.

No school could really afford to specialize if the efforts of all schools weren't readily available and aggressively shared. If schools will work together,
then specialization can pay off.
This in turn raises the question of rewards. How
can one fight for funds? How do our people get
promoted? Case studies are not yet rewarded in
many places. Action research is even more suspect.
The answer to the problem is likely to remain
negative unless the field elevates the sights of its
methodology to deal with a fundamentally and intellectually exciting agenda. The 23rd case study of
a local manufacturing company may not interest
anyone who does not teach business policy. The
first careful study of any of the questions raised
above will
1. Be publishablein importance.
2. Be the basis for testimonyin the publicdebate.
3. Provide the visibility that is often required to
establishcredibilityoutsidethe narrowdefinitionof
businesspolicy.

References
Aharoni, Y. Theforeign investment decision process. Cambridge,
Mass.: Harvard University Press, 1966.

Gordon, R. A., & Howell, J. E. Higher Education for Business.

New York: Columbia University Press, 1959.

Allison, G. T. Essence of decision: Explaining the Cuban missile

crisis. Boston: Little, Brown and Co., 1971.

Hafsi, T., & Hamermesh, R. G. Management succession and

board membership. Harvard Business School Case Services,
No. 9-380-132, 1980.

Ansoff, H. I. The changing state of the strategic problem. In C.

W. Hofer & D. E. Schendel (Eds.), Strategic management.
Boston: Little, Brown and Co., 1979, 30-44.

Hamermesh, R. G. Administrative issues posed by contemporary approaches to strategic planning (Working Paper No.
79-53). Boston: Division of Research, Harvard University
Graduate School of Business Administration, 1979.

Barnard, C. I. The functions of the executive. Cambridge,

Mass.: Harvard University Press, 1938.
Bartlett, C. A. Multinational structural evolution: The changing
decision environment in international divisions. DBA dissertation, Harvard University Graduate School of Business Administration, 1979.

Hamermesh, R. G. International Harvester case series. Boston:

Harvard Business School Case Services. International
Harvester (A) No. 9-381-052, International Harvester (B1)
No. 9-381-053, International Harvester (B2) No. 9-381-054,
International Harvester (B3) No. 9-381-055, International
Harvester (B4) No. 9-381-056, International Harvester (C) No.
9-381-057, 1981.

Berg, N. A. Strategic planning in conglomerate companies. Harvard Business Review, 1965, 43 (3), 79-92.
Bower, J. L. Managing the resource allocation process. Cambridge, Mass.: Harvard University Press, 1970.
Bower, J. L., & Doz, Y. L. Strategy formulation as a social and
political process. In C. W. Hofer & D. E. Schendel (Eds.),
Strategic management. Boston: Little, Brown and Co., 1979,
152-166.

Haspeslagh, P. Formal portfolio planning as a strategic management tool in diversified industrial companies. DBA dissertation, Harvard University Graduate School of Business Administration, 1981.
Hayes, R., & Abernathy, W. Managing our way to economic
decline. Harvard Business Review, 1980, 58 (4), 67-77.

Chandler, C. L. Strategy and Structure. Cambridge, Mass.: MIT

Press, 1962

Hofer, C. W., & Schendel, D. E. Strategy formulation: analytical concepts. St. Paul, Minn.: West Publishing, 1978.

Doz, Y. L. Government control and multinational strategic

management. New York: Praeger, 1979.

Learned, E. P., Christensen, C. R., Andrews, K. R., & Guth, W.

D. Business policy-text and cases. Homewood, Ill.: Richard
D. Irwin, Inc., 1965.

Doz, Y, L. Multinational strategic management. Forthcoming.

637

This content downloaded from 160.94.140.100 on Wed, 21 Jan 2015 17:36:04 PM

All use subject to JSTOR Terms and Conditions

Miles, R. E., & Snow, C. S. Organizational strategy, structure,

and process. New York: McGraw-Hill, 1978.
Mintzberg, H. The nature of managerial work. New York:
Harper and Row, 1973.

Salter, M. S., & Fuller, M. B. Note on the world auto industry in

transition; Note on the auto sector policies of major producing
countries; Ford (A); Ford (B). Boston: Harvard Business
School, 1981.

Porter, M. E. Competitive strategy. New York: The Free Press,

1980.

Schendel, D. E., & Hofer, C. W. Strategic management. Boston:

Little, Brown & Co., 1979.

Prahalad, C. K. Strategic choices in diversified MNCs. Harvard

Business Review, 1976, 54 (4), 67-78.

Scott, B., & Rosenblum, J. Course module-case studies in

political economy: Japan 1954-1977. Boston: Harvard
Business School Case Services, No. 9-980-003, 1980.

Quinn, J. B. Strategies for change. Homewood, Ill.: Richard D.

Irwin, Inc., 1980.

Taylor, N. Management succession under conditions of crisis.

DBA dissertation, Harvard University Graduate School of
Business Administration, 1978.

Rhenman, E. Organization theory for long range planning. London: John Wiley & Sons, 1973.

White, R. E. Structural context, strategy andperformance. DBA

dissertation, Harvard University Graduate School of Business
Administration, 1981.

Rumelt, R. Strategy, structure and economic performance.

Cambridge, Mass.: Harvard University Press, 1974.

Joseph L. Bower is Professor of Business Administration

at Harvard University.

638

This content downloaded from 160.94.140.100 on Wed, 21 Jan 2015 17:36:04 PM

All use subject to JSTOR Terms and Conditions