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tation due to population growth and poverty in the developing world.

These are also discussed in this paper and here the concept of bio-diversity is seen as a possible solution. The concept of seeing the environment as a source of capital is studied as a basis of developing an economic framework for environmental policy based on international co-operation. This could be developed from the Pareto principle where society is better off if a change in allocation of inputs or outputs of economic activity leaves a person better off without making someone else worse off. This can be a useful way of measuring, and changing, economic values. The key factors are to protect the ozone layer, protect international water resources, promote bio-diversity and ensure that there is a decrease in harmful emissions. It is good news that with the reduction in the use of CFCs the hole in the ozone layer appears to be stabilizing. Reference is made to the Rio Summit, Kyoto and Agenda 21, but the problem is that what is agreed at these summits is often not implemented by nation states due to political pre-occupations with short term economic advantages. The problem of Third World debt is also studied and there has been some progress here. The paper that considers this issue is one of the most important in this book. In conclusion, as already stated this has not been an easy book to review due to the wide range of subjects. Some papers were relatively easy to review but others were too academic to assess within limited space. The editor took on a challenging task and some of the papers could have been further edited or shortened. Also, no clear view emerges of the impact of e-business on both global and local business. It is likely that this will change the way we work and trade quite signicantly. All the subjects dealt with are interrelated and we need to explore these links by the concept of holistic management and sustainable development. As a starting point a sustainable management approach is a way of linking all these concepts. There is a problem here as there is a ood of books now being published on sustainable management and deciding which of those are important is a major task. One book to use as a benchmark is by Paul Hawken [3]. It is some consolation that many problems in the management and business sectors generate solutions that result in new market opportunities.

References
1. M. Landes, The Unbounded Prometheus. Technology and Industrial Development in Western Europe from 1750 to the Present in Cambridge University Press (1970). 2. K. Ohmae, The Borderless World. Power and Strategy in the Global Market in Harper (1990). 3. P. Hawken, The Ecology of Commerce. A Declaration of Sustainability in Weideneld and Nicolson (1994).

B. Burrows brian.burrows@ntlworld.com

doi:10.1016/S0024-6301(03)00033-5

The Blackwell Handbook of Strategic Management


Michael A. Hitt, R. Edward Freeman and Jeffrey S. Harrison, Oxford Blackwell Business (2001), 716 pp., 60.00

The Handbook of Strategic Management is clearly not intended to provide an objective review of research in the eld. The goal of this text is to provide new ideas and personal perspectives from the top scholars of the eld that stimulate and guide researchers and managers interested in developments in knowledge and applications rather than understanding the state of the art. This approach makes the Handbook of Strategic Management unique and lls in a gap in the literature but requires that readers are aware of other competing or conicting perspectives. The 25 chapters of the handbook are structured in ve main parts: Part I: Origin and process;
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Part II: Theoretical foundations; Part III: Strategy types; Part IV: Human factors; and Part V: Teaching methods. In the spirit of the handbook I will not provide a complete overview but rather make a selection of some of the new ideas and propositions that are developed by the contributors. Part I: Origin and process covers topics dealing with the strategic management process; emerging issues; strategic decision-making; and strategy formulation. Dess and Lumpkin argue that understanding the multidimensional nature of strategy-making processes can advance from both normative and descriptive theory and propose an integrative model that can increase the rigor and relevance of both theory building and empirical research in strategic management. Next, Nutt divides his analysis of strategic decision making into developmental and non-developmental categories and then develops propositions dealing with how decisions are made in organizations, what causes failure, and how to improve performance. Liedtka concludes Part I with a chapter on strategy formulation where she emphasises the centrality of strategic thinking to successful strategic management, reformulates the role and process of planning and concurrently introduces the roles of strategic conversations and design in the strategy formulation process. Part II provides a diversity of new insights into the major theoretical topics of strategic management: strategic exibility; resource-based view; the stakeholder approach; transaction cost theory; agency theory; risk and reputation. Harrigan argues that in old economy mismatches typically develop between competitive success requirements and asset congurations while in new economy settings, intangible assets are increasingly germane, due to the differing success requirements of industry settings that value competition based on speed, specialisation, and customisation. Barney and Arikan analyze the historical roots of resource-based theory and how it differs from other explanations of persistent rm performance. They also identify and discuss unresolved issues such as how resources and strategies are connected; how the rms stakeholders and implementation follows the identication of resources that create appropriate economic rents and sustained competitive advantage. Freeman and McVea review the development of the stakeholder approach and its relevance to strategic management. The handbook proceeds with two intriguing chapters on transaction costs theory (Jones) and agency theory (Lubatkin, Lane and Schulze). What makes these chapters particularly interesting is that the contributors criticize fundamental premises of these theories and then develop alternatives that in some aspects are radically different. For instance, Jones develops a transaction cost theory based on trust and entrepreneurship instead of opportunism and bounded rationality. His analysis shows that the view on human nature is fundamental to strategic management theory and practice, and deserves more attention in future research and theorizing. Part II concludes with an overview of the relevant research on risk and corporate reputation. Fombrun proposes a denition of corporate reputation that recognizes its roots in the perception and interpretations of resource-holders, and explores the socio-cognitive processes through which resource providers judge companies. Part III: Strategy types cover these topics: competitive dynamics research; diversication; mergers and acquisitions; strategic alliances; restructuring strategies and global strategic management. Smith, Ferrier and Ndofor critically review the competitive dynamics literature and identify a number of important issues that must be resolved in future research. Bergh argues that research on diversication has arrived at an important crossroads, discusses different paths for future research contributions and provides arguments as to what each one holds for advancing theory development. Hitt, Ireland and Harrison review the current research literature on factors that explain how to create value through mergers and acquisitions. Inkpen provides a thorough review of the literature on using alliances as a competitive weapon. Key research areas and questions are identied and the major supporting research and associated ndings are discussed. Hoskisson, Johnson, Yiu and Wan suggest that highly diversied rms in developed economies may facilitate transactional functions that are inefcient in developing countries. They conclude that focusing on differing institutional environments might suggest important differences in diversication and restructuring approaches. Stephen Tallman concludes Part III with a chapter on global strategic management. He examines the roots of international strategy and discusses resource and capability-based and
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2003

evolutionary models of multinational enterprises. Particular attention is given to the role of the national subsidiary in global strategies. The fourth part deals with human factors in strategic management. Eight topics are discussed: strategic judgement; organizational structure; corporate governance; ethics; business and public policy; strategy implementation; human resource strategy; and strategy and entrepreneurship. Priem and Cycyota argue that the infrequently studied subject of judgement of strategic leaders is essential to determining how mental processes are manifest in the strategies they develop and how these processes and strategies affect rm performance. They explain research methods and argue that that this topic should receive additional research attention. Keats and ONeill examine the research of organization theory that may contribute to strategic management research and the research that follows from it. Chatterjee and Harrison provide a foundation of corporate governance and use this foundation to argue that the inuence of governance is particularly important during periods of organizational crises. They call for research on corporate governance in times of crises and normal times. Part IV proceeds with two chapters from the Business and Society eld. Gilbert discusses the relationship between corporate strategy and ethics, and reviews ethical criticism of the concept of corporate strategy. Keim argues that political strategy should be an active part of the rms strategy and then discusses the role of rm capabilities to implement various political strategies. He concludes with a brief overview of how different institutional settings can effect opportunities for businesses to bring about change in laws, regulations or politics. Hrebiniak and Joyce review the improvement of the eld of strategy implementation since their publication of their book Implementing Strategy (1984). They conclude that implementation studies have not received even a modest share of the literature. They argue that improved knowledge of t is particularly important for the development of implementation theory. Snell, Shadur and Wright discuss in their chapter on human resource strategy and the main features and trends in HR. They argue that despite lip service to the statement people are the most important assets, competitive strategies have not typically been based on the skills, capabilities and behaviours of employees - rather executives try to take human resources out of the strategy equation. They draw on inferences from emerging work to identify the shape of an emerging HR strategy paradigm. Venkataraman and Sarasvathy conclude Part IV with a discussion of strategy and entrepreneurship. They argue that the two elds have much to learn from each other and are, in a sense, two sides of the same coin: the coin of value creation and capture. Part V concludes the handbook with a chapter by Kesner on teaching methods for strategic management. She describes the effective use of a variety of teaching tools and techniques in the context of a strategic management course. Without exception, the chapters of the handbook are well written, and there is little redundancy between chapters, so students can read the handbook from cover to cover without getting bored by repetition which makes it particularly appealing for a Ph.D. course. Even in a sizeable handbook editors must make a selection of subjects and one can hardly expect that all topics be well covered. However, one might argue that the handbook has some imbalances in its design. First, all contributors are from one side of the Ocean giving the book in some aspects an American focus, which is particularly inconvenient in the discussion of social and institutional topics. Second, some topics that are central to strategic management such as vertical integration, the impact of technology and analytical tools, deserve more discussion in a handbook on strategic management. Overall, the handbook is a comprehensive collection of articles that is challenging to scholars, a must read for Ph.D. students and relevant for managers that want to understand and rethink the basic topics of strategic management. Ernst Verwaal Erasmus University, Rotterdam, Netherlands
doi:10.1016/S0024-6301(03)00034-7

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