The Creative Web

This article was originally published in the May-June, 2000 issue of the Ivey Business Journal. It is being re-published as a tribute to Mr. Larry Tapp, who was Dean of the Richard Ivey School of Business from 1995-2003. Mr. Tapp passed away on January 31, 2011.

The article is an edited excerpt from Chapter 17 of the book, Management 21 C, The Creative Web (Financial Times Prentice Hall, 1999). The book was selected as the Best Business Book of 1999 by

Large corporations are outsourcing a wider variety of components and services, relying on smaller supplier firms.  Large corporations are also placing greater decision-making responsibility on individual units within the firm, flattening the traditional hierarchical pyramid.  The academic literature has begun to address these transformations.1 In the 21st century, we expect to see an increase in the importance of this subject, with more attention devoted to organizational structures that may enhance innovation among the network of interrelated decision-making units.  New analytical frameworks will be needed to address the new types of decisions that management will face.  In the 21st century, managerial success will depend upon the development of a creative web.

In the past, the size of the corporation was largely determined by the transaction costs and transportation costs that would arise if activities were conducted in separate firms.  The telecommunications revolution has reduced transaction costs among corporations, and has facilitated the inter-corporate flow of information.  To an ever-increasing degree, autonomous business units will be able to integrate their planning without the need of a single hierarchical organization.  The transportation revolution has reduced shipment costs, as has the decrease in physical components as a percentage of the final value of a good or service.  The nature of economies of scale has changed as a result of these transformations.  While final assembly and marketing will still leave a key role for large corporations, success will depend on stimulating and coordinating continuous improvement among a wide array of individual business units.

The creative web involves much more than utilization of the Internet; it requires new organizational structures and a new analytical framework.  The simplest traditional value chain was one in which a firm supplied parts to an assembler who then sold to a retailer or an end user. In the twenty-first century, the connection a firm will have with its suppliers, their suppliers and its customers is more like an interconnected web, rather than a sequential chain. A chain implies a unidirectional exchange along a distinct flow, whereas a web suggests the interconnectedness and multidirectional, multilevel relationships that can lead to better and faster innovations.  Innovation today requires that all parties interact on an ongoing, extended basis.  If the initial producer of the components knows the needs of the ultimate user of their products, they can better design for that purpose.  If there is a free exchange of information and communication, all parties benefit from decreased development times, assured market acceptance, and continual, planned future offerings.

Globalization adds a complication to innovation and this creative web.  With current communications and transportation technology, outsourcing can involve any country in the world, and as such, each corporation has a wide selection of alternative potential suppliers.  Here, the creative web becomes a geographical web.  Coordinating this complex network so that it involves an ongoing innovation process has become a key determinant of company success.  To achieve innovation, a corporation can no longer simply accept the components or products it is offered by export agents or distributors from other countries.  Corporations must now create organizational structures that facilitate an ongoing international collaboration focused on the innovation process.  This may require an exchange of personnel among corporations on a regular basis, as well as ongoing dialogue and exchange of research information.

A considerable literature has developed in regard to “clusters” that are geographically concentrated in particular regions.  Some authors have focused on the advantages of geographic proximity.  For example, Mick Carney, in the article “The Competitiveness of Networked Production:  The Role of Trust and Asset Specificity,” has suggested that “proximity fosters norms of trust because there is a greater probability of future interaction among neighbouring businesses and because reputation signals are more reliably transmitted over short distances.”  As we look at the twenty-first century, an important subject will be organizational structures that can achieve such trust without geographical concentration.2

To understand these new organizational structures requires a new analytical framework.  In recent decades, Michael Porter’s “five forces” have been used to analyze industry structure, focusing on the division of the value chain among various suppliers and competitors.  Game theory has presented an alternative analytical framework, resting on the reality that each industry participant’s decisions impact other participants and their decisions.  Each organization must evaluate a chain of reactions in order to determine its best decision path.  Furthermore, various players within an industry may cooperate in such a way that everyone’s economic outcomes are improved.  Analysis of the creative web builds upon these frameworks.

Limitations of Michael Porter’s Five Forces

Michael Porter developed a framework for analyzing each industry structure, by focusing on five forces within each industry:  rivalry among existing competitors, threat of new entrants, bargaining power of buyers, threat of substitutes, and bargaining power of suppliers.  A certain value is created as the good or service moves from one corporation to another corporation to the ultimate customer along a chain of suppliers.  This perspective concentrates on how the value that is added within the industry will be divided between a particular firm and the other industry participants.  Here one examines the relative “strength” in the relationships in order to determine how the value added by the industry will be allocated.  This perspective draws attention to an existing set of goods and services that are produced in the industry, and so the availability of substitutes is important.  Porter’s framework places in words the elements that underlie the demand and supply relationships that are used in microeconomics analysis.  The following diagram illustrates Porter’s five forces.

Figure 1: Porter’s Five Forces

Figure 1: Porter's Five Forces

We wish to suggest that many organizational structures in the 21st century will rest on cooperation as well as competition.  A set of corporations will work together to expand the value that is added by their group.  In particular, this set of corporations will strive continually to create unique goods and services so that potential substitutes are further removed from the final customer’s purchasing decision.  While the group as a whole faces competition from other groups, the organizational dynamic within each group seeks to improve the outcomes for all participants.  Porter’s five forces are not particularly helpful as an analytical framework for the creative web.

Building on Game Theory

In the latter years of the twentieth century, the concept of game theory came to be applied to business relationships.  It was emphasized that participants within an industry may be able to increase their industry’s added value, or at least the financial profits, by collaborating rather than competing.  In the simplest instance, competitors might collaborate to raise prices.  Business can be viewed as a game in the sense that the actions of one participant will impact the profitability of other participants.  Decisions must be undertaken based upon an evaluation of a series of possible outcomes, where each outcome depends upon the reaction of others in the industry.   Brandenburger and Nalebuff3 have suggested the following diagram as a useful framework for the analysis of an industry:

Figure 2: The Value Net

Figure 2: The Value Net

Participants may alter potential outcomes by changing the industry structure in any one of a variety of ways.  In particular, Brandenburger and Nalebuff suggest that each corporation should use what they refer to as “PARTS as a comprehensive, theory-based set of levers” to help generate strategies.  Each letter in the phrase “PARTS” represents a lever for changing the industry structure.  A corporation may threaten to change the number of players (P) by indicating that it intends to enter an industry.  The mere threat may result in compensation being paid to it, thereby altering the allocation of the value-added among the participants.  A corporation may change the “added values” (A) by lowering the added value of others, as well as by increasing one’s own added value.  A corporation may change the rules (R), for example, by developing new pricing policies.  A corporation may change tactics (T) in ways that alter other player’s perceptions and therefore their decisions.  A corporation may change the scope (S) of the game by severing linkages with other companies or building new alliances.  Unlike Porter’s Five Forces that analyze an existing industry structure, this game theory approach examines ways to change the industry structure.

The analysis of the creative web builds upon the game theory framework, in that it focuses on the ways in which individual corporations may impact the success of each other.  However, it sees this relationship as one where the objective is for all participants to win through innovation that increases the web’s value added, enabling all participants to increase their financial gain.  Furthermore, the analysis of the creative web leads to new managerial issues about decision-making forms and processes, new agreements in regard to in research, development, and marketing; and new arrangements in regard to investments, incentive structures, and allocation of rewards.

New organizational structures:  A new analytical ramework

The creative web presents a new organizational structure, and it may be helpful for management and academics to consider a new framework for its analysis.  A series of attributes deserve consideration:

  1. The focus of the creative web is on innovation and continuous improvement.  A central purpose is to increase the value added within the group by creating new goods and services and/or by devising methods to lower costs and improve efficiency.  The members of the group may still attempt to negotiate a particular share of the total value created by the group, but the success of the group requires that all participants receive compensation that they consider to be satisfactory in return for their contribution to the success of the group as a whole.
  2. The creative web involves dynamic rather than static analysis.  The best “answers” to managerial questions will change over time.  In fact, a purpose of the group is to create change.  While the game theory perspective focused on a particular corporation achieving success vis-à-vis other corporations by changing one or more of the “PARTS”, the creative web focuses on the group as a whole changing the “PARTS.”
  3. There is continual collaboration in regard to the group’s production process.  In terms of the game analogy, all members of the group are on the same side for purposes of increasing innovation.  In this regard, there may even be no obvious competitor in striving to achieve this purpose.  To a greater degree than the game theory analysis, this perspective emphasizes the dependence of each member of the group on the creativity of the group as a whole.  This radically changes the traditional customer-supplier concepts.
  4. The creative web generally has a central organizer.  In this sense, the organizational structure is not “a net.”  There is a concentration of decision-making power in the hands of a single corporation near the centre of the web.  Coordination is necessary for success, and a central question in the creative web is “Who will do the coordinating?”  Often this will be a retailer or a final assembler, each of whom seeks to develop a differentiated set of goods and services that give the coordinator—and hence each web—a unique place from the perspective of the ultimate customer.  Neither the retailer nor the final assembler can achieve success by itself.  Each such coordinator relies upon a web of relationships.
  5. At the end of the web of relationships, there may be individual corporations that have no direct relationship with each other.  In this sense, such corporations are not part of a net but rather are the final threads of a web.  The success of the web must be a shared success, and in this sense there is an ongoing and permanent mutual dependence, even on the part of those farthest removed from the central coordinator.
  6. The nature of the relationships involves much more than a unidirectional flow of components or partially completed materials.  The reverse flow involves decisions concerning the objectives and procedures of R&D&M (research, development, and marketing), and often financial assistance towards achievement of these objectives and procedures.  This reverse flow may be crucial to the success of the creative web.  Hence dependence runs in many directions throughout the web.

Figure 3: The Creative Web

Figure 3: The Creative Web

The Creative Web within a single corporate structure

As the century drew to a close, a substantial body of literature discussed the modification of traditional business hierarchies.4 Many companies have recognized the importance of “employee empowerment” and of new managerial techniques for stimulating the positive involvement of all the employees in the achievement of corporate objectives.  For many years, North American authors pointed to Japan as a nation that pioneered such concepts as “quality circles,” where employees participated actively in discussing how they could modify their procedures to better satisfy the company’s customers.  The incentives of profit sharing and employee ownership of shares, together with the process for creating profit centres within the corporate structure, have become common.  These shifts in organizational structure have resulted in decentralized decision-making units operating with some independence within the overall corporate structure.  For such organizations, strengthening the creative web is an internal challenge.

With the shift of responsibility from a hierarchical corporate structure to separate but related work groups, a central issue is the set of systems that can best foster “intrapreneurship.”

The internationalization of the creative web

For many reasons, the creative web has become international, with participants in a variety of countries.  This adds a complexity that is not present in the Brandenburger game theory model.  The geographic dispersion is an important element of the creative web.  This is far more than Michael Porter’s “cluster theory” where geographical proximity may stimulate creativity among corporations.

Several powerful forces have stimulated the internationalization of corporate strategies, including international agreements that have reduced trade barriers, liberalized foreign direct investment, and protected intellectual property, together with the new technologies that have facilitated this trend.  For much of the twentieth century, corporations were able to succeed on the basis of national strategies with relatively little regard for the political, economic, societal, and technological forces in other countries.  As the twentieth century came to a close, corporations restructured in response to their new global strategies; and the analysis of environmental forces in other countries attained a new significance.

For much of the manufacturing sector, the corporate structure of the multinational corporation (MNC) provides a nearly automatic shift of business activities out of high-wage developed countries to less developed countries with lower wage rates.  The international product cycle literature was developed to explain the growth of the MNC, in which production and trade are linked to innovation and the international diffusion of new technology.  For subsidiaries of MNCs, the development of global mandates for new products and components has become a continual necessity.  While these “rationalized production processes” have been analyzed by academics, the implications for the role of the creative web will attract increasing attention.

John Dunning has pointed to two features of twentieth-century hierarchical capitalism that he believes deserve re-examination in the context of internationalization:

The first is that it implicitly assumes that the prosperity of firms depends exclusively on the way in which their management internally organizes the resources and capabilities at their disposal. . . . The external transactions of firms are assumed to be exogenous, rather than endogenous, to their portfolio of assets and skills, and to the way in which these assets and skills are combined with each other to create further valued-added advantages.  The second characteristic of hierarchical capitalism is that firms primarily react to endemic and structural market failure by adopting ‘exit’—rather than ‘voice’-type strategies.5

Dunning suggests that both these features should be questioned, as multinational corporations find success through external relationships and as they attempt to change the industry structure that confronts them, rather than just “exiting” or not entering the country where that particular structure exists.

A vast array of journal articles has examined corporate experiences in regard to international joint ventures and strategic alliances.6 Much research has focused effectively on technical “how to” issues, such as those involving cross-cultural challenges and the development of “trust” in business relationships.  What lies ahead is the need to conduct more effective research in regard to the environmental forces in other countries, as they relate to foreign-owned corporations.  The generalizations about globalization7 need to be focused on particular sectors and particular nations and regions.  The analysis of “country risks” and how to manage “country risks” still has far to go.

New management issues in the Creative Web

The creative web brings with it a series of new management issues.  These include the following:

  1. Each corporation must decide which web to join, and whether it should join more than one.  The joining decision is similar to an investment decision in the sense that there will be a commitment of resources to the success of the new organizational structure.  An important set of issues concern the criteria and terms and conditions for leaving a particular creative web, or for dismissing a member of a particular creative web. The degree to which the creative web should devote resources to research, development, and marketing (R&D&M) is crucial for the success of each member of the group.  A decision to join one group as opposed to another may be impacted by a corporation’s evaluation of the creativity of the web.  Conversely, the web must make decisions about whom to accept into the web, and in this regard an important criterion for acceptance is innovative capability.
  2. For both the sets of decisions described in the above paragraph, the issue of trust is crucial.  This, however, is not the same focus as one finds in much of today’s literature about trust, where the focus is whether one can believe another party’s commitment to fulfill a promise.  Here the concept of trust involves an evaluation of the ability of the various participants to work together in order to achieve effective R&D&M in the long term.  The outcomes are uncertain, and trust concerns the faith that one’s fellow participants will be able to achieve success.  In this sense, the organizational structure drives trust; whereas for many social scientists, such as Fukuyama, the degree of trust drives organizational structure.8 For Fukuyama, organizational structures differ among countries because the degree of trust differs among societies.  Our perspective suggests that the creative web will become a common organizational structure throughout the world in the twenty-first century.  It is not that people are more comfortable with the creative web than with Porter’s five forces or Brandenburger’s value net, it is simply that the creative web promises them much more success than either of these traditional models.
  3. Of central concern will be the nature of financial relationships in the context of substantial R&D commitments with uncertain outcomes, or the need for effective marketing in order to maximize these outcomes.  Incentives for successful innovation must be offered to each member of the web.  It is in the interest of all members that each member should feel appropriately compensated.  How should the success of a particular member be evaluated in the context of group success?  It is likely that derivatives will be used to gear compensation at one moment in time to outcomes that will occur later in time.
  4. For some corporations, entry into a creative web may require the initiation of new subsidiaries that do not carry the baggage of the past.  The creative web requires a mindset very different from that of the traditional hierarchical corporation, and it may simply be impossible to include the latter in the former.

In the context of allocating global mandates and evaluating the success of profit centres, “value management” approaches to the decentralized corporate structure received increasing attention in the 1990s. A trap some companies have fallen into is:  in order to achieve higher growth, management has chosen to concentrate blindly on size and market share to the detriment of return on capital.  A value management approach which has come to the forefront of the business community is Economic Value Added (EVA), the registered trademark of Stern Stewart & Company.9 EVA creates a common language to be used within an organization as well as with external stakeholders.  EVA integrates financial planning, capital budgeting, performance measurement, compensation levels and goal setting.  This one measurement tool attempts to account accurately for all the complexities involved in creating value for the shareholders.  The failure of managers to account properly for the cost of capital in their decisions, and hence the difficulty in holding managers accountable for those decisions, can be avoided through the use of this financial tool.  EVA permits managers to concentrate on the importance of generating incremental earnings above the capital costs thereby creating economic profits.  A lynch pin to a successful comprehensive EVA financial management system is in the proper execution of the incentive compensation program.  The compensation system is designed to encourage managers to act as though they are owners of the company.  To ensure that management is creating value, they are evaluated and compensated in accordance with their EVA performance.

While the concept of EVA has been developed for use within a single corporate structure, an important question is whether evaluation systems such as EVA can be applied to the creative web.  It is clear that new concepts must be instituted in regard to success criteria and incentive systems for individual organizations that have developed internal creative webs.  The inter-firm creative web introduces a second related objective to the maximization of shareholder value within each firm:  adding all web shareholders to the organization’s group of shareholders as a focus of value maximization.

Analyses and examples of the Creative Web

As the twentieth century drew to a close, academics began to discuss various aspects of the decomposition and decentralization of the corporation.  Figure 4 illustrates a continuum involving the degree of hierarchy and cooperation.  We suggest that as the twenty-first century advances, corporations will be shifting from a lower left quadrant towards the upper right quadrant, from A to B.

Figure 4: The Shift in Organizational Structure

Figure 4: The Shift in Organizational Structure

In his book Blueprint Digital Economy:  Creating Wealth in the Era of E-Business, Don Tapscott et al. have provided an extensive set of references to corporations that have changed their structure in response to new communication technologies.  Business sectors where such transformations have been common include banking, publishing, pictures, and education.  Tapscott et al. have emphasized the issue of innovation in these new relationships.

As competition intensifies, innovation cannot be attained solely within the integrated industrial enterprise, or even the so-called virtual corporation.  Rather, companies must work together to create online networks of customers, suppliers, and value-added processes.  The result is what we call the e-business community, or EBC.10

In the software industry, the leading EBCs are Wintel (led by Microsoft and Intel) and Java (led by Sun, IBM, Oracle, and Netscape).  Often, a single company is a member of two or more competing EBCs; Microsoft and Intel, for better or worse, are involved in the Java community.  Meanwhile, IBM, Oracle, and Netscape are active players in the Wintel EBC.  The term “competition” best describes these dynamics.11

In a Harvard Business Review article entitled “When Is Virtual Virtuous?” Henry W. Chesbrough and David J. Teece point to the literature about virtual corporations:  “Champions of virtual corporations are urging managers to subcontract anything and everything.  All over the world, companies are jumping on the bandwagon, decentralizing, downsizing, and forging alliances to pursue innovation.”12 The authors raise a concern in their article about the relationship between such organizations and the capacity to innovate.  They suggest that different types of innovation call for different types of organization, and so choosing the right organizational design is important.  “Because so many important innovations are systemic, decentralization without strategic leverage and coordination is exactly the wrong organization strategy.”13 Some authors have expressed the view that innovation within a web of corporations poses much more severe difficulties than does innovation within a single corporation.  “Knowledge-based arguments suggest that organization knowledge provides a synergistic advantage not replicable in the marketplace.”14 These authors have raised several new management issues that are important in the design and implementation of a creative web, particularly a web that involves a number of corporations.  Resolution of these issues will form an important subject in twenty-first century business literature.

In their 1993 Harvard Business Review article, Richard Normann and Rafael Ramirez discuss what they refer to as “a new logic of value.”15 They point to IKEA as a corporation that has transformed an existing set of activities along a value chain into a new configuration that has improved outcomes for both customers and itself.  They also refer to Danish pharmacies that have altered their retailing operations to involve private customers and healthcare institutions in new relationships and offerings.  They suggest that a new challenge of value constellations is to integrate knowledge and relationships, and French corporations Compagnie Generale des Eaux and Lyonnaise des Eaux Dumez, have achieved this.  A series of commentaries on the Normann-Ramirez article have offered additional perspectives on these new organizational structures.16

In their 1997 Sloan Management Review article entitled “Value Networks:  The Future of the U.S. Electric Utility Industry,” Michael Weiner et al. discuss the impact on the structure of the electricity industry of three sets of forces driving change:  deregulation, a variety of market forces, and technological forces.  As a result of these, “Electric utility companies will have to reinvent themselves to change from vertical to ‘virtual’ integration based on value networks segmented into six areas:  generation, transmission, distribution, energy services, power markets, and IT products and services.”17 This shift will pose radically different challenges to the electricity industry in regard to arrangements within the new value network.

In their 1995 California Management Review article entitled “Creating a Strategic Center to Manage a Web of Partners,” Gianni Lorenzoni and Charles Baden-Fuller discuss the role of a strategic centre in creating value:

Typically each of these partnerships extends beyond a simple subcontracting relationship.  Strategic centers expect their partners to do more than follow the rules, they expect them to be creative.  For example, Apple worked with Canon and Adobe to design and create a laser jet printer which then gave Apple an important position in its industry.  In all the cases we studied, the strategic centre looked to the partners to be creative in solving problems and being proactive in the relationships.  They demanded more—and obtained more—from their partners than did their less effective counterparts that used traditional subcontracting.18

Gianni Lorenzoni and Charles Baden-Fuller present a series of suggestions through which the strategic centre may be able to improve its effectiveness in strengthening the creative web.  They emphasize the need for new structures as well as new strategies.  A 1998 article entitled “Innovative Infrastructure for Agile Manufacturers” by John D. Kasarda and Dennis A. Rondinelli points to the need for new infrastructure support systems and knowledge centres to stimulate innovation by providing a reliable source of personnel capable of achieving such success.19

A good example of the creative web is found in the automobile industry.  Changes in consumer demands, government regulations, and competitive pressures from Japan have combined to create an innovation revolution in North American automobile production.  Innovation has achieved reduced vehicle weight, increased fuel efficiency, improved safety and enhanced durability and performance.  Some of these have involved the substitution of aluminum and plastics for steel, the creation of smaller and more efficient engines, the use of computers to control vehicle systems and the creation of new approaches to instrumentation.  How many of these innovations can be credited solely to the large assemblers?  It is clear that numerous supplier firms have played key roles in this innovation revolution.

Often it is the so-called “tier one” firms supplying the assemblers with components that have made the innovations that give the entire creative web a competitive advantage.  And often the “tier two” firms that supply the tier one firms are also intimately involved in the innovation process, usually basing their product modifications on R&D from tier one level firms.  The development of these innovations has come from ongoing relationships with the assemblers and the end users.  At times, a parts producer may look directly to the end users, skipping over the assemblers to see what the market wants, and adjust its products accordingly.  The assembler may encourage this kind of interaction, as it facilitates innovation.

Creative webs are widening to include suppliers to the suppliers.  More and more, responsibility for research, design, development and testing is being pushed out along the branches of the web, so that every firm within the web is looking for new ways to innovate, lower costs, and meet the needs of their direct customers and the ultimate consumer.  Tier one suppliers are becoming systems integrators that combine the innovations of their tier two and tier three suppliers into product offerings that take into account the needs of the entire web.  Even small service firms are relying increasingly on other firms for their ongoing innovation.  As the twentieth century drew to a close, the large-scale manufacturing sectors of Western economies are ceasing to be the main contributors to GDP.   The service sector of the economy is now the main employer, and most of the new jobs created are in firms with fewer than 100 employees.  In many cases it is the interconnectedness of small-scale creative webs, allowing for more creative innovations in their offerings, that increases their appeal to the final customer.

For a retailer, the creative web has also become a key to success.  The retailing process today involves extensive dialogue with manufacturers on customer needs and product modifications, requiring that the retailer become knowledgeable about potential innovations and continually encouraged manufacturers to make improvements in product construction and upgrades.  The retailer’s personnel travel regularly to manufacturers around the world.

For an increasing number of companies, innovation now includes university-level research, and many research parks have been created to strengthen corporate-university research linkages.  Firms often find there is more value earned for their investment by outsourcing their R&D since they avoid the additional costs of owning their own facility.  While academics have pointed to the success of university corporate research parks, much remains to be written about the procedures that can enhance the effectiveness of these relationships.  The analysis of this subject will no doubt form an important component of business school research for the twenty-first century, and prescriptions will no doubt differ among regions and business sectors.  Furthermore, it appears that business schools have rarely played a key role in such research parks, and we might expect that such a role will be explored and expanded in the years ahead.

For business schools, it has become increasingly important to develop their own creative webs, enhancing the effectiveness of various types of corporate linkages.  Here as well creative webs are likely to involve international alliances in order to enhance learning experiences.  In order to create executive development programs tailored to the needs of each corporation, semi-permanent relationships have become necessary.  While business schools have traditionally used case studies as a mechanism for bringing reality into the classroom, one may expect a proliferation of new kinds of communication flows, with corporations playing a greater funding and advisory role.

There is a paradox that small size facilitates the specialization, expertise and creative flexibility that underlie the innovation process.  Yet, at the same time, innovation requires ongoing coordination among all the points throughout the creative web, no matter how big that web may be.  Resolving this paradox will continue to be a central focus for corporations.  Success in the new millennium will come to the corporation that can stimulate innovation not only within its own organization, but also throughout the overall creative web of which it is a member.

  1. See, for example, the following publications: Sergio Arzeni and Jean-Pierre Pellegrin, “Entrepreneurship and Local Development,” Organisation for Economic Cooperation and Development, The OECD Observer, no. 204 (February/March 1997):  27-29;  David L. Birch, Job Creation in America:  How Our Smallest Companies Put the Most People to Work (New York: Free Press, 1987); Don Tapscott, Alex Lowy, and David Ticoll, eds., Blueprint to the Digital Economy:  Creating Wealth in the Era of E-Business (New York: McGraw-Hill, 1998); Oliver E. Williamson and Sidney G. Winter, eds., The Nature of the Firm:  Origins, Evolution, and Development (New York: Oxford University Press, 1991); Mick Carney, “The Competitiveness of Networked Production:  The Role of Trust and Asset Specificity,” Journal of Management Studies 35, no. 4 (July 1998):  457-479; Philip P. Andrews and Jerome Hahn, “Transforming Supply Chains into Value Webs,” Strategy & Leadership (July 1, 1998):  6-11; Richard Normann and Rafael Ramirez, “From Value Chain to Value Constellation:  Designing Interactive Strategy,” Harvard Business Review (July/August 1993):  65-77; Gianni Lorenzoni and Charles Baden-Fuller, “Creating a Strategic Centre to Manage a Web of Partners,” California Management Review 37, no. 3 (Spring 1995):  146-163; Michael Weiner, Nitin Nohria, Amanda Hickman, and Huard Smith, “Value Networks:  The Future of the US Electric Utility Industry,” Sloan Management Review 38, no. 4 (Summer 1997):  21-34; and John D. Kasarda and Dennis A. Rondinelli, “Innovative Infrastructure for Agile Manufacturers,” Sloan Management Review 39, no. 2 (Winter 1998):  73-82.
  2. Mick Carney, “The Competitiveness of Networked Production:  The Role of Trust and Asset Specificity,” Journal of Management Studies 35, no. 4 (July 1998):  460.
  3. Adam M. Brandenburger and Barry J. Nalebuff, “The Right Game:  Use Game Theory to Shape Strategy,” Harvard Business Review (July/August 1995): 57-71.
  4. See, for example, the following publications in regard to the flattening of reporting and accountability structures: Rob Goffee and Gareth Jones, The Character of a Corporation:  How Your Company’s Culture Can Make or Break Your Business (New York: HarperCollins, 1998); Jeremy Hope and Robin Fraser, “Measuring Performance in the New Organisational Model,” Management Accounting (British) 76, no. 6 (June 1998):  22-23; Jim Clemmer, “Liberated Performance,” Executive Excellence 15, no. 9 (September 1998):  17; Abraham Seidmann and Arun Sundararajan, “Competing in Information-Intensive Services:  Analysing the Impact of Task Consolidation and Employee Empowerment,” Journal of Management Information Systems 14, no. 2 (Fall 1997):  33-56; James R. Zetka, “The Technological Foundations of Task-Coordinating Structures in New Work Organizations,” Work and Occupations 25, no. 3 (August 1998):  356-379; and JoAnn Greco, “Designing for the 21st Century,” Journal of Business Strategy 19, no. 6 (November/December 1998):  34-37.
  5. John H. Dunning, “Reappraising the Eclectic Paradigm in an Age of Alliance Capitalism,” Journal of International Business Studies 26, no. 3 (Third Quarter 1995):  464.
  6. See, for example, the following publications in regard to strategic alliances and joint ventures:  Erin Anderson and Hubert Gatignon, “Modes of Foreign Entry:  A Transaction Cost Analysis and Propositions,” Journal of International Business Studies 17, no. 3 (Fall 1986):  1-26; Paul W. Beamish, “Joint Ventures in LDCs:  Partner Selection and Performance,” Management International Review 27, no. 1 (1987): 23-37; Paul W. Beamish and John C. Banks, “Equity Joint Ventures and the Theory of the Multinational Enterprise,” Journal of International Business Studies 18, no. 2 (Summer 1987):  1-16; W. H. Davidson and D. G. McFetridge, “Key Characteristics in the Choice of International Technology Transfer Mode,” Journal of International Business Studies 16, no. 2 (Summer 1985):  5-21; and B. Kogut, “Foreign Direct Investment as a Sequential Process,” in The Multinational Corporation in the 1980’s, ed. Charles Kindleberger and Donald Audretsch (Cambridge, MA: MIT Press, 1983);
  7. George S. Yip and George A. Coundouriotis, “Diagnosing Global Strategy Potential:  The World Chocolate Confectionery Industry,” Planning Review 19, no. 1 (January/February 1991):  4-14.
  8. See, for example, Francis Fukuyama, Trust:  The Social Virtues and the Creation of Prosperity (New York: Free Press, 1995).
  9. See
  10. Don Tapscott, Alex Lowy, and David Ticoll, eds., Blueprint to the Digital Economy:  Creating Wealth in the Era of E-Business (New York: McGraw-Hill, 1998), 19.
  11. Don Tapscott, Alex Lowy, and David Ticoll, eds., Blueprint to the Digital Economy:  Creating Wealth in the Era of E-Business (New York: McGraw-Hill, 1998), 23.
  12. Henry W. Chesbrough and David J. Teece, “When Is Virtual Virtuous?  Organizing for Innovation,” Harvard Business Review (January/February 1996):  65.
  13. Henry W. Chesbrough and David J Teece, “When Is Virtual Virtuous?  Organizing for Innovation,” Harvard Business Review (January/February 1996):  73.
  14. John Seely Brown and Paul Duguid, “Organizing Knowledge,” California Management Review 40, no. 3 (Spring 1998):  90.
  15. Richard Normann and Rafael Ramirez, “From Value Chain to Value Constellation:  Designing Interactive Strategy,” Harvard Business Review (July/August 1993):  65-77.
  16. See “Strategy and the Art of Reinventing Value,” Harvard Business Review (September/October 1993):  39-51.
  17. Michael Weiner, Nitin Nohria, Amanda Hickman, and Huard Smith, “Value Networks:  The Future of the U.S. Electric Utility Industry,” Sloan Management Review 38, no. 4 (Summer 1997):  21.
  18. Gianni Lorenzoni and Charles Baden-Fuller, “Creating a Strategic Center to Manage a Web of Partners,” California Management Review 37, no. 3 (Spring 1995):  149.
  19. John D. Kasarda and Dennis A. Rondinelli, “Innovative Infrastructure for Agile Manufacturers,” Sloan Management Review 39, no. 2 (Winter 1998):  73-82.