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10.1177/1056492605276648 JOURNAL OFMANAGEMENTINQUIRY / June 2005Wooten et al. /REFLECTION ON C.K. PRAHALAD
C. K. Prahalad’s Passions
Reflections on His Scholarly JourneyAs a Researcher, Teacher, and Management Guru
University of Michigan
Indian School of Business
C. K. Prahalad is a globally known managementeducator and one of the most influential thinkers oncorporate strategy. He is the Harvey C. Fruehauf Pro-fessor of Business Administration and Professor ofCorporate Strategy and International Business at theUniversity of Michigan Business School. His researchandwritingfocusesoncorporatestrategyandtheroleandvalueaddedoftopmanagementinlarge,diversi-fied, multinational corporations. Among Dr.Prahalad’s books is
Competing for the Future
(1994),coauthored with G. Hamel, a visionary work that has been printed in 14 languages and has been a world-wide best seller. He is coauthor, along with Y. Doz, of
TheFutureof Competition: Co Creating Unique Value With Customers
coauthored with V. Ramaswamy based on Dr.Prahalad’slatestresearchonnewsourcesofvaluecre-ationand
TheFortuneattheBottomofthePyramid:Eradi-cating Poverty through Profits
. He has consulted withmanymultinationalfirms,includingEastmanKodak,AT&T, Cargill, Honeywell, Philips, Motorola, Oracle,Colgate-Palmolive, Motorola, TRW, Whirlpool, andAhlstrom.
Recentlywehadtheopportunitytospend2engag-inghoursinterviewingProfessor“CK”Prahalad.Thiswas a privilege for us given CK’s busy schedule ofteachingMBAstudents,consultingtoCEOs,workingon his research, and serving on a special UnitedNations Commission on Private Sector and PovertyAlleviation. Although we have known CK for sometime, listening to him share his extraordinary career journey was fascinating.This interview takes a life history approach andprovides insight on CK’s current and past researchinterests. He also discusses his pedagogical approachto teaching MBA students and shares his managerialwisdom. Throughout the interview, you will beamazedbyCK’spassionforhisresearchandteachingendeavors. This passion is evidentwhetherCKis dis-
♦ ♦ ♦
 JOURNALOF MANAGEMENT INQUIRY, Vol. 14 No. 2, June 2005 168-175DOI: 10.1177/1056492605276648© 2005 Sage Publications
cussingstrategiesforglobalfirms,thebusinessimpli-cations of world poverty or his responsibility as aneducator.While reading the interview, it will become appar-ent to you why CK is considered one of the top man-agementgurusintheworld.ManyofyoumayalreadyknowCKasthecreatorofmanagementconcepts,suchas dominant logic, strategic intent, and core compe-tencies. In this interview, you will learn more aboutthe history of his innovative business ideas and theperson behind the ideas. Moreover, because CK is thequintessential educator, his interview responses notonly inform the
audience but also challenge therecipient of his knowledge to reflect on their owncareer trajectory and its purpose.
Wooten: Where and how did your scholarly journeystart?Prahalad:Ithinkit’sreasonablyeasytosaythatmyschol-arlyeffortsstartedlongbeforeIcametoHarvardBusi-nessSchoolformydoctorate.Iwasdoingresearchonmy own looking at health care systems at hospitalsandhowtomakelifeeasyforpoorpeoplewhohavetogototheemergencyward.MostofthiswasinIndia.Iwas just a newly minted MBAfrom India Institute ofManagement, Ahmedabad. I spent every weekendgoing to hospitals studying hospital systems and building simple models on how to organizeworkflowsandmethods.Duringthisprocess,Ibeganthinkingabouttechnologyastheunderlyingrationalefor strategic direction of health care systems. Alot ofdoctors mayormaynotcareaboutmoneyorhowthehospital as a business works. But they certainly caredabout which new technologies get introduced andhow new technology gets implemented.Wooten: Did your early research in India provide thestarting point of your research career?Prahalad: After this, I came to Harvard while they weretrainingmeforaD.B.A.ItbecamecleartomeIhadtodo something different. And I was not necessarilymotivated bydoingthingsyouwouldcharacterizeasmain line of research. After a lot of soul searching, Idecided that thinking about how things happen ismore interesting for me than thinking about what arethe broad patterns and developing generalizations,whichiswhatmostresearchis.Becauseit’shistory!Bythe time you collect a lot of data, things have alreadyhappened, and the research focuses on history ratherthanaskingthequestion,“Howisthefuturebeingcre-ated?” If you want to understand how the future is beingcreated, youhaveto understandhowdecisionsgetmade,howpeopleallocateresources,howchoicesget made. So I got interested in that.Wooten: How did this soul-searching process influenceyour graduate studies?Prahalad: My starting point was to extend Joe Bower’swork because a lot of the research at that time waslookingatresourceallocationincomplexglobalfirms(MNCs) and in a complex technology environment.Whilestudyingachemicalcompany,itstruckmethat Joe Bower’s resource allocation model had veryimportant implications, but it could not explain theproblem I was observing. So I had to invent a newframework. This became the framework that identi-fiedthetensionsbetweenglobalintegrationandlocalresponsiveness.Wooten: What do you view as the contribution of yourframework that combines global integration withlocal responsiveness?Prahalad:Theframeworkbecameadominantparadigm.It looked at the forces of global integration and localresponsiveness as a way to understand the impera-tives of the economic drivers of a business. I used thesame work to understand the drivers of organiza-tional structure and processes. In other words, herewasaframeworkbywhichyoucouldunderstandthenatureofthebusiness’underlyingeconomicsandalsounderstandtherequirementsoftheinternalorganiza-tion.So as I reflect back now,this frameworkwas oneof the firsts in strategy research to integrate industryanalysis with organizational analysis.Wooten: Developing this framework while writing yourdissertationhelpedtolaunchyourcareerinacademia, but your research on global strategies is only a smallsegmentofyourscholarlyjourney.Whatdidyouviewasthesecondmajorphaseofyourscholarlyjourney?Prahalad: I consciously believe that as a researcher onemust push oneself into zones of discomfort, and notcoast along on what one knows. Now I could havecoasted along very comfortably on the back of the
 Multi-National Mission
 bookandtheframework.Ijustconsciouslydecidednotto.Butintheprocessofwalk-ing away from what I knew, something very interest-ingdawnedonme.Whilestudyingverylargecompa-nies in the United States and Europe, I found thatsmallcompaniesinJapanandKoreawerechallengingvery large incumbents. So I got very intrigued by thephenomenon. Gary Hamel was a doctoral student atthe Michigan Business School at that time. Ourresearch led to
Competing for the Future
. Now if youthinkaboutit,thatbodyofworkbrokeseveraldeeplyheld strategy research and practice norms. First, thenotion of “fit” was central to strategy. But entrepre-neurship is not about fit. Strategy must be aboutstretch. Second, this created the notion that aspira-tions must be, by design, outside your resource base.Hence, there are two ways to access resources. Afirmcan leverage resources and manage alliances, whichledtothenotionof“CollaboratingwithYourCompet-itors.Theotheroptionisthatfirmsmustlearnhowtoreuse intellectual resources created, which is the corecompetence idea. The ability to husband yourresources and at the same time get market access isWooten et al. / REFLECTION ON C. K. PRAHALAD 169
called “expeditionary marketing.” How to shape thedirectionoftheindustriesiscalled“strategicarchitec-ture.” So what we were able to build out of that bodyof research was an internally consistent system.Wooten:Atthetime,thiswasgroundbreakingresearchinstrategy. How did it change the practice of manage-ment and strategy in the “real world”?Prahalad:Infact,thiswayofthinkingaboutstrategywasso different from the existing perspectives that
Com- peting for the Future
and its conceptual contributionstotally changed the way we think about strategy, andithadasignificant impactonpractice.TodayIcannotthink of a single large company that has not playedaround with the idea of core competence or that ofstrategy as stretch. An additional interesting findingof this research is that you don’t have to have all theresources to be a world leader. You can createresources; you can leverage resources. Therefore, itwas about hope and about entrepreneurship andabout regeneration of tired companies.Wooten:Howdidyoumovefromtheconceptofstrategyas stretch to the bottom of the pyramid?Prahalad: I decided I’m going to search for what is thenext big issue. Five billion people were trying to jointhe market economies of the world, they’re gettingfreeofsocialism,they’refreeofalltheconstraintsthatgovernmentshadimposed,andIaskedmyselfafairlysimple question, “What is the meaning of develop-ment and freedom?” Are five billion people so disen-franchised that we have no answers to that problem?We know that development aid has totally failed tosolve the problem of poverty. Developmental aidmighthavemadeveryfewpeopleinthosedevelopingcountries very rich because of corruption. In fact, Ithink,mostofthedevelopmentaidhasbeenaprocessof taking taxes from poor people in the developedworld and helping the very rich ones in the develop-ingworld.Isaidtomyselfthisdoesn’tmakesense.Wehave to do something different. So I basically started by saying we need to have a strategy that mustaddress the question of how to deal with these five billion people.Parmigiani: Why now?Prahalad: You can ask why didn’t we think about it 20years ago. Poverty is not new to human experience.Twenty years ago poverty existed. However, therewasnowayforustointerveneinthatprocessbecausethe governments did not allow you to. Markets wereclosed. Since markets opened, we must find a way tointervene.Inthepast5yearsIhavebeensearchingforan internally consistent, fairly simple way to thinkabout how to solve the problems of the poor. Andthat’s what led to some articles, student projects, andnow, a book.Wooten: What are your underlying assumptions andframework for developing economies?Prahalad:Mybasicargumentisthatdevelopmentaidcannever be a substitute for mobilization of resourceslocally. More important, we need to understand howto build legal systems that enable large companies,multinational companies, small and medium enter-prises, and individual entrepreneurs to survive andgrow. For example, Amway and building a millionentrepreneursinAsia. Avonwithits Avonladies is asmuchaboutbuildinganentrepreneurialclimateinthecountry of individuals, large companies, and smallcompanies so that all their lives can be improved.Finally—the most important thing for me—youshouldnotplayGodorbeelitist.Alotofdevelopmentpeopledecidewhatpoorpeopleshouldorshouldnothave.Wesimplyhavenorighttotellpoorpeoplewhatthey should have. Give them the same choice youwant given to you. Let them decide. Will they makesome bad decisions? Yes. Do we makebad decisions?Yes.Sotherichhaveasmuchlibertytomakebaddeci-sionsasthepoor.Butgivethemtheinformation;don’tdecide for them.Wooten: How do you bring these ideas to life? How canmanagers and economists implement these ideas?Prahalad: The amazing thing for me is to start thinkingabout how to do it; I’ve come to four simple conclu-sions.One,youmustusethemostinnovativetechnol-ogies to solve the problems of the poor. This is notabouthandouts.Second,youmustbefocusedonsus-tainable development. You cannot help 2.2 billionpeople in China and India if you don’t worry aboutsustainable development. Third, it must be totallyscalable. Though nongovernment organizations(NGOs) do phenomenally interesting work in someareas, none of them worry about scale. Scale is animportant part. Fourth, you must totally rethink theprice/performance relationship. It’s not reducing thepriceby5%or10%,butthinkingabout1/20thofwhatthingsareavailable.Ifyouthinkaboutthosefourasasandbox, my attitude is I can play any game inside, but I will not violate these four constraints. Themoment you come to that conclusion, you start tothinkatthebottomofthepyramidasasourceofinno-vations. To me, it’s as big a departure conceptuallyfrom developmental economics, aid, public policyand also private policy and private strategy of multi-national companies as you can imagine. That is whatI’m in the process of pulling together, not just articles but a book-length piece with very detailed cases thatdescribeshowtodoit,givesconfidencetopeoplethatthiscanbedone.Becauseitissonewthatmostpeopledon’t believe it can be done. This is not only a docu-mentaboutpoorpeopleinBrazilorinIndia.Wehavethe same problem in downtown Detroit. We have thesame problem in East Palo Alto, California.Wooten: What drives your passion behind the bottom ofthe pyramid?Prahalad:It’saverysimplemotivationformyresearch.Ithink we are probably the most fortunate people. IknowthatI’mfortunateandsoareallthepeoplewhoInormally meet. We were born in this country, or welive in this country, and we enjoy the benefits of free-domandenjoythebenefitsofaffluence.Wecomplain170 JOURNALOF MANAGEMENT INQUIRY / June 2005

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