Kay, J., 1995, Foundations of Corporate Success, Oxford University Press, Oxford
- Author : Kay, J.
- Year : 1995
- Title English : Foundations of Corporate Success
- Publisher : Oxford University Press
- Publisher's Location : Oxford
- ISBN : 0-19-828988-X
- Pages : 416
- Edition : Paperback Edition
- Abstract : Preface p. vii-viii “…I formed the view that the achievement of any company is measured by its ability to add value – to create an output which is worth more than the cost of the inputs which it uses.” “...I came to see that it was the match between the capabilities of an organisation and the challenges it faced which was the most important issue in understanding corporate success and corporate failure. That perception led directly to the primary themes of this book. These begin from a recognition that there are no recipes and generic strategies for corporate success. There cannot be, because if there were their general adoption would eliminate any competitive advantage which might be derived. The foundations of corporate success are unique to each successful company. The uniqueness is a product of the firm’s set of contracts and relationships. I see the firm as a set of relationships between its various stakeholders – employees, customers, investors, shareholders. The successful firm is one which creates a distinctive character in these relationships and which operates in an environment which maximises the value of that distinctiveness. The rest of this book is concerned with the nature of these relationships, the ways in which they achieve distinctiveness, and how effective companies select and manage their environment in the light of these capabilities. I am convinced that description of that process illuminates the origins of success in firms and national economies.” Ch. 12 Appropriability p. 181 “Adding value is not an objective only for profit-making institutions. The purpose of a university, or a tennis club, is to add value, just as the object of IBM or Sony is to add value. They seek to create an output which is more valuable than the cost of the inputs. The test of the effectiveness of all these organisations is whether they have made better use of these resources than would have been the case if the same resources had been deployed elsewhere by another organisation.” … “But it is not only the objective of adding value which is common to every activity which yields useful output – commercial or non-commercial. The structure of strategy is not so different for non-profit organisations. The university and the tennis club should define their distinctive capabilities, identify the markets in which these are most effectively applied, and review their positioning in relation to their competitive advantages and those of their competitors. The pitfalls of wish-driven strategy are as real, and as prevalent, for non-commercial organisations as they are for companies. But there is a critical difference between the corporation and other organisations. For a successful company, the appropriability of the added value it creates is a key issue for the management. The success of the corporation depends on its ability to retain a substantial part of the added value it creates and to prevent it from being dissipated among its workers, suppliers, and customers. But the university or tennis club have responsibilities to a very different group of stakeholders. The successful university is one which distributes its added value to its customers – its students – and it is truly successful allows added value to spill over into the wider community. The appropriation of added value is wholly antithetical to its purpose.
- Outline : Introduction Part I: Corporate Success 1. The Structure of Strategy 2. Adding Value Part II: Business Relationships Introduction 3. Cooperation and Coordination; 4. Relationships and Contracts Part III: Distinctive Capabilities Introduction 5. Architecture 6. Reputation 7. Innovation 8. Strategic Assets Part IV: From Distinctive Capbilities to Competitive Advantage Introduction 9. Markets 10. Mergers 11. Sustainability 12. Appropriability 13. The Value of Competitive Advantage Appendix Added Value Statements Part V: Competitive Strategies Introduction 14. Pricing and Positioning 1 15. Pricing and Positioning 2 16. Advertising and Branding 17. Vertical Relationships Part VI: The Strategic Audit Introduction 18. The Industry 19. The Firm 20. The Nation Part VII: The Future of Strategy Introduction 21. A Brief History of Business Strategy 22. Conclusions Glossary Bibliographic notes