Modern Competitive Strategy 4Th Edition Walker Solutions Manual Full Chapter PDF
Modern Competitive Strategy 4Th Edition Walker Solutions Manual Full Chapter PDF
Modern Competitive Strategy 4Th Edition Walker Solutions Manual Full Chapter PDF
Learning Objectives
LO 05-01. Identify and describe the basic elements of strategy execution.
LO 05-02. Explain the relationships between resources and capabilities.
LO 05-03. Apply the Value Chain and Activity System frameworks.
LO 05-04. Summarize the organizational dimensions of capability development and explain how
they are guided by and determine a firm’s Value minus Cost position.
LO 05-05. Identify the advantages and disadvantages of different types of organizational
structures and how they affect capability development.
LO 05-06. Explain the roles of culture and learning in strategy execution.
1. Overview
This content is essential. It teaches how the firm develops and maintains the resources and
capabilities that determine its value and cost drivers. Students need to understand the
We start with discussing what strategy execution is and what it is not. For instance, strategy
execution is not about strategy development, strategic planning or luck. Strategic planning (see
Ch. 6) articulates a firm’s strategy and the programs to implement it whereas strategy
execution is the day-to-day substance of strategy; it involves developing and maintaining a
firm’s resources and capabilities to support Value, Cost or both.
Since planning is clearly a critical strategic task in many firms and brings together the points
made throughout the book, the subsequent chapter (Ch. 6) presents standard planning tools
and shows how the principles of execution discussed in Ch. 5 are necessary content for an
effective plan. We often assign the planning chapter with the chapter on Execution when
teaching cases on turnaround (e.g., Siemens Medical Solutions).
We begin the execution session by revisiting the differences between resources and
capabilities, highlighting their definitions and characteristics, and arguing that they are
developed and protected differently. Makadok’s model is especially valuable here (see the
sidebar), since his analysis shows how complementary resources, forecasting capabilities and
the link between capabilities and resources have an effect on profitability. Students, who have
typically had a core course or more in finance when they take strategy, can appreciate how
Makadok sets up his arguments and reaches his outcomes.
Next, we use the value chain and activity system concepts to help students gain a stronger
understanding of the differences between resources and capabilities. In our courses, the value
chain concept is used in multiple ways: specifically to show how firms compete differently in
the same industry and how business units within a multi-business firm can share resources and
capabilities. So introducing the framework here is very useful. Activity systems are a more
recent construal of how firms are organized. Siggelkow’s picture of Vanguard’s system is useful
because: 1) it is focused on achieving low costs while providing a targeted kind of value to
customers, and 2) it has a high degree of integration which leads to a later discussion of
consistency and fit. At this point, it is again important to emphasize the link between tasks and
activities and achieving and defending the firm’s market position. Figure 5.3 helps to show how
this bridge is conceived. This figure also makes clear that both resource complementarity (as in
Makadok’s model) and improvement in capabilities through innovation in activities are integral
parts of the strategy execution framework. The resource portfolio of the firm can be modified
as opportunities arise, increasing complementarities and therefore the potential for higher
value or lower cost. Correspondingly, as the firm invests in new processes, capabilities are
enhanced.
At this point, the focus on resources becomes secondary to capabilities. The question arises,
how are capabilities built? How can we understand their development? The four organizational
The discussion of consistency/fit can begin by returning to the Vanguard diagram. There are
almost no links between elements that do not support the firm’s market position. Importantly,
this process could not be effective without John Bogle’s target market position. So, consistent
activity systems contribute to performance only when they lead to higher value at lower cost.
Bogle’s vision emphasized cost reduction.
Moving to control and coordination systems leads to a discussion of the classic forms of
organizing - here restricted to a single business, so the product structure is missing. We employ
Galbraith’s original framework since it synthesizes earlier work and motivates subsequent work.
The chapter repeats and expands Galbraith’s arguments for the advantages and disadvantages
of each organizational form; the slide deck highlights the classic tension between knowledge
specialization and knowledge integration. It is useful to tie these arguments again to the
capabilities that underlie value and cost drivers. An easy example concerns the development of
capabilities in technology development, assuming that technology is an important value driver:
a firm with a functional structure containing centralized R & D would clearly have an advantage
here, given benefits to aggregation in this activity.
The next organizational dimension is incentives. The Hall framework is very useful here. His
approach differentiates three types of problem - controllability, alignment and
interdependence – and relates them to two dilemmas – noise and distortion. There is no
perfect system since noise and distortion are substitutes in the sense that any incentive system
makes a tradeoff between them. The piece rate system at Lincoln Electric has developed over
time to overcome this difficulty. However, the rigidity of the solution has caused problems for
the company – a point that we like to make, linking back to the concept of core rigidity in the
Chapter Four. For instructors interested in using very brief video clips in class, a two minute clip
from the “I love Lucy” show where Lucy and Ethel work on a candy factory line might be used to
introduce or illustrate the piece rate concept (see the Video resources section of this
document).
The last organizational dimension is people and culture. The literature on culture is large but its
tie to strategy is weak. Therefore we like to use Kreps’s argument, building on Schelling, that
culture induces common focal points for decision-making. To make the link to strategy
execution, these focal points should be aligned with improving capabilities that in turn improve
the firm’s market position. Most adherents of the value of culture, for example as it has been
applied at Southwest Airlines, tend to make arguments like this. As for people, we emphasize
The chapter includes a callout on the role of social networks in strategy execution. This content
presents an opportunity for illustrating how social forces affect an organization’s culture and
coordination systems.
Last, we use Figure 5.5, Capability Planning and Learning to illustrate how the elements of
strategy execution focused on capabilities are brought together. We find this snapshot provides
a strong, synthetic visual tool for students who want to take away a clear picture of how
planning and execution lead to an improved market position.
We wrap up the session with questions for practice (final .ppt slide).
2. Case Recommendations (all materials available via HBS Online for Educators)
For additional cases, see the Case Chart that maps chapters and topics to cases and simulations.
3. Teaching Tips
Rather than lecture, we use a case-based approach and draw out the lessons of the chapter as
we move through the case discussion. Again, the intent is to have the students put their
knowledge into action -- applying concepts from the chapter to the case. We devote a session
specifically to Strategy Execution however many of the concepts may be reinforced in other
sessions in a core strategy course or multi-session module on strategy. For instance, the
concepts associated with culture and learning may be revisited in the context of acquisition
integration or alliance management; concepts related to organizational structure and
Exercises
B) 7-10 minute application exercise: Ask the students to work in pairs on a brief assignment.
The intent is to get them thinking about how to apply a particular concept as a set up for class
discussion. For example, using the case assigned for the session, ask half of the two person
teams to create value chain diagrams and ask the remaining teams to create activity system
diagrams. Discuss the differences between the two frameworks.
Videos
B) Complementarity
“Strategic Complementarities at Steak”, a brief summary and copy of the video are available at
the Carpenter Strategy Toolbox website (category “Humor”), scroll to the bottom of the page:
http://carpenterstrategytoolbox.com/category/humor/
Feb 5, 1918.
I am enclosing a letter from Helen Parry Eden which should be put
in the autograph-letter file. A good way to keep author’s letters is to
paste special envelopes for them on the inside of the covers of
author’s books. Do not use the original envelopes for this purpose. But
probably this plan is unsafe in a library frequented by wild babies. But
at any rate try to get the stuff stowed away safely and neatly. Bob
Holliday could advise you intelligently as to the proper preservation of
autographed letters.
It is about a week now since I heard from you, and I am eagerly
awaiting to-day’s arrival of mail. I work in the place to which the mail is
brought for assortment, so I get my letters without much delay—that is,
delay after they reach the Regiment. The first delayed batches of mail
are still arriving—I get a November letter one day, a January letter the
next, a December the next.
Send me by all means all the verse you write—I find I enjoy poetry
more these days than I did when I made my living largely by making it
and writing and talking about it. But I wish I could make it as I used to
—I have not been able to write any verse at all except “Militis
Meditatio” which I sent you. I wrote a brief prose sketch which is still in
process of censuring—the censorship regulations may or may not be
so interpreted as to exclude it. I think I’ll be allowed to print it, however,
as it is really not a writing on military subjects, but an introspective
essay written by a sort of soldier. If it gets by, it will go immediately to
George H. Doran to be censored.
The second package of tobacco has arrived. The package
containing it was broken, but in the bottom of the mail bag I found all
ten cans of tobacco. I certainly am glad to get it—after ten years this
kind still seems to me to be the best tobacco in the world.
I am not especially delighted with the circumstances of my work
just at present. I am perfectly comfortable, have good meals and
quarters and my work is not at all hard. But I want to get into more
interesting and important work—perhaps it will be all fixed up by the
time I write to you again. I love you.
Joyce Kilmer.
* * * * *
* * * * *
A. E. F.
Dear Aline:
Sorry to use this absurd paper—but none other is accessible. I’m
in a hospital at present—been here for three days with a strained
muscle. It has been delightful to sleep between sheets again—I have
rested up beautifully, I go back to the regiment to-morrow.
I sent you two batches of copy recently—or three, rather. Hope you
get them—but if you don’t, I’ll write some more—like Caterina, you
know when she was defending her husband’s castle against the
enemy. The enemy took her six children as hostages. “Surrender the
castle, or I’ll kill the children!” said he. “Go ahead, kill ’em!” said
Caterina. “I can make more!”
As to your plan of renting a house at Shirley—wherever that is—for
the Summer, go ahead, if you must—I don’t think there is any chance
of my getting home this Summer. If I do come home, I’ll cable you in
time for you to get back to Larchmont before my arrival. Larchmont is
just about far enough from New York. Not for many a year will I
consent to spend a day in any place more rural. I have had enough of
wildness and rawness and primitiveness—the rest of my life, I hope,
will be spent in the effetest civilization. I don’t want to be more than an
hour’s distance from the Biltmore grill and the Knickerbocker bar. And
God preserve me from farms!
I love you.
Joyce.
* * * * *
* * * * *
April 1, 1918.
Dear Aline:
This letter is written to you from a real town—written, in fact, above
ground. You may be surprised to know that recent letters to you were
not written in these conditions. They were written in a dug-out, but I
was not permitted to tell you so at the time. In a dug-out, also, were
written the verses I sent you some two weeks ago—you may
remember their damp-clayey flavour. I slept and worked (the latter
sometimes for twenty hours at a time) in this dug-out for a month,
except for one week when I was out on special work with the
Regimental Intelligence Section. You don’t begrudge me that week, do
you? I cannot now describe it, but it was a week of wonder—of sights
and sounds essential, I think, to my experience. For there are
obligations of experience—or experiences of obligation—to be
distinguished from what I might call experiences of supererogation or
experiences of perfection—but what rubbish this is! Let us rather
consider my present great luxury, and the marvels of which it is
composed. In the first place, one room (not a cot in a crowded barrack,
not a coffin-like berth in a subterranean chamber) but a real room, with
windows and a large bed and a table and chairs and a practical wash
stand. The bed I share with one L—— D——, an amiable gamin, about
to be made a Corporal. I am a Sergeant—with stripes some five days
old. (It is the height of my ambition, for to be commissioned I’d be sent
to school for three months and then, whether or not I succeeded, be
assigned to another Regiment. And I’d rather be a Sergeant in the 69th
than lieutenant in any other outfit.)
To continue—I also eat from a table excellent meals, with a napkin
on my knees. I have soldiered pretty hard for some months now, taking
everything as it came, and I think I’ve honestly earned my stripes. Now
I’m going to have an easier life—not working less hard, but not seeking
hardships. So I am paying seven francs a day for meals, and six francs
a week for my share in a bed-room. And it’s delightfully refreshing.
Also, I yesterday had a hot shower-bath—very much a novelty!
This morning I received two letters from you, to my great joy. The
pictures of the children are excellent. I am glad to see Deborah’s hair
so long and lovely. Do, by all means, send me pictures of yourself and
Deborah in a leather case, as you promise. I can imagine no possible
gift I’d rather receive. Mail is coming here every day now, so I look
forward to frequent messages from you.
What a cheerless place the States must be these days! Don’t send
me American papers (except the Times Book Review) for they depress
me, showing me what a dismal land you live in. This meatless,
wheatless day business is very wearying. It can do no earthly good—it
is merely giving comfort to the enemy, who undoubtedly know all about
it. I wish—aside from the obvious greatest reasons—that you were
here in France—you’d like everything, but especially the gentle, kind,
jovial, deeply pious people. Time enough—to resume—for wheatless
days when the enemy takes your wheat. Until then, carpe diem!—that
is, eat buckwheat cakes with plenty of syrup.
I am disgusted with all I read in the American Magazines about the
Americans in France. It is all so hysterical and all so untrue. It isn’t
jealousy that makes me say this—I have no desire to compete with
newspaper-correspondents—but it annoys me to see the army to
which I belong and the country on and for whose soil we are fighting so
stupidly misrepresented.
I hope you received “Rouge Bouquet”—if you did receive it I know
you liked it. General —— (I forgot, I mustn’t name generals lower in
rank than Major-Generals) had twelve copies of it made. I sent it to you
two weeks ago—you should be receiving it now. The newspapers by
now have re-revealed its meaning to you, if any explanation was
needed. It was read at an evening entertainment at one of our camps
at the front. Father Duffy read it, and taps was played on the cornet
before and after. I couldn’t get down to hear it—I was further front, at
work in the dug-out that night.
I think most of my war book will be in verse. I prefer to write verse,
and I can say in verse things not permitted to me in prose. You
remember—no, probably you don’t—Coventry Patmore and his
confessor. The confessor objected to the passionate explicitness of
some of Coventry’s devotional poems—they dealt with things esoteric,
he said, and should be set forth in Latin, not in the profane tongue.
And Coventry replied that for most people poetry was an
incomprehensible language, more hidden than Latin—or more hiding.
And speaking of Coventry Patmore, the best way to fry potatoes is
to have deep oil or butter violently boiling in a great pot, to slip the
slices of potatoes into it and stir them persistently, never letting them
touch the pot’s bottom, to lift them out (when they are golden brown)
by means of a small sieve, and to place them on paper so that the
grease may be absorbed.
The best news I’ve had since I reached France is about Kenton’s
medal. I’m going to write to-day and tell him so.
I love you,
Joyce.
* * * * *
* * * * *
* * * * *
The above is rather stern and brusque, isn’t it? Well I wrote it in
rather stirring times—now only memories. I am resting now, in a
beautiful place—on a high hilltop covered with pine and fir trees. I
never saw any mountain-place in America I thought better to look at or
from. I sleep on a couch made soft with deftly laid young spruce
boughs and eat at a table set under good, kind trees. A great
improvement on living in a dug-out and even (to my mind) an
improvement on a room with a bed in a village. I am not on a furlough,
I am working, but my work is of a light and interesting kind and fills only
six out of twenty-four hours. So I have plenty of time for writing, and
have started a prose-sketch (based on an exciting and colourful
experience of the last month) which I will send you soon. Everything I
write, I think, in prose or verse, should be submitted to Doran first.
I wish I could tell you more about my work, but at present I cannot.
But there are advertised in the American magazines many books
about the Intelligence Service—get one of them and you’ll find why I
like my job. The work Douglas is doing is not allied to mine. Only I
suppose he’ll have a commission. I won’t work for one, because I don’t
want to leave this outfit. I love you more than ever, and long for the
pictures you promise me. You will be amused by the postcards I
enclose.
Joyce.
Say, the stuff about your not appreciating “Rouge Bouquet” was
written before I got your delightful letter of April 18, admirable critic!
* * * * *
Dear Aline:
I have just received your letters of April 1st and April 5th.
“Moonlight” is noble, like its author. As to being worried about you
because it expresses pain, why, I’d be worried only if you did not
sometimes feel and express pain. Spiritual pain (sometimes physical
pain) is beautiful and wholesome and in our soul we love it, whatever
our lips say. Do you not, in turn, worry because of my foolish letter to
you from the hospital. At that time I was just an office hack—now I am
a soldier, in the most fascinating branch of the service there is—you’d
love it! It is sheer romance, night and day—especially night! And I am
now therefore saner than when I wrote to you from the hospital. I’ve
had only a week of this work—but I’m already a much nicer person.