Management Gurus: Hamel and Prahalad TU Industrial Business Relations and Networks Group 10 Kimmo Jaakkola and Jari Ruokolainen

C.K. Prahalad and G. Hamel in a Nutshell Coimbatore Krishnarao Prahalad (Usually just C.K. Prahalad) Coimbatore Krishnarao Prahalad (Usually just C.K. Prahalad) Short personal history: Short personal history: –Doctorate from Harvard Business School –Professorships in University of Michigan, INSEAD, and IIM –Co-founder of Praja Inc., where he tried his wings as an entrepreneur Gary Hamel Gary Hamel Short personal history: Short personal history: –Doctorate from the University of Michigan –Professorship in London School of Economics –Founder and president of Strategos, an international management consultancy

C.K. Prahalad and G. Hamel Working Together The two met in 1977 in Michigan The two met in 1977 in Michigan –Hamel as a student, C.K. as an associate professor In mid 1980’s started to publish together. In mid 1980’s started to publish together. Their main works (in Harvard Business Review, which has been their forum of preference): Their main works (in Harvard Business Review, which has been their forum of preference): –Strategic Intent (1989) –Collaborate with your Competetitors and Win (1989) (authoring also Y.L. Doz) –The Core Competence of the Corporation (1990) –Competing for the Future (1994) Also published as a book by Harvard Business School Press in 1994 Also published as a book by Harvard Business School Press in 1994

Central Questions & Ideas Evolving in Their Work (1/2) ”Strategic fit” versus ”Leveraging Resources” – the two main strategy schools according to C.K.P & G.H ”Strategic fit” versus ”Leveraging Resources” – the two main strategy schools according to C.K.P & G.H –”Maintaining strategic the fit” approach: Trimming ambitions to match resources, search of sustainable advantages, financial goals Trimming ambitions to match resources, search of sustainable advantages, financial goals –”Levaraging resources” approach: develop resources towards ambitions, emphasis on learning, developing core competencies – the approach preferred by the authors develop resources towards ambitions, emphasis on learning, developing core competencies – the approach preferred by the authors Incrementalisms versus Revolution Incrementalisms versus Revolution –C.K.P&G.H argue that playing the same game better is no way to success. Innovation and building on core competencies is the key! Centralization versus Decentralization Centralization versus Decentralization –The authors claim that SBU thinking (decentralization) is fundamentally against developing core competencies effectively

Central Questions & Ideas Evolving in Their Work (2/2) The importance of ”strategic architecture” The importance of ”strategic architecture” –top-level strategy for developing new core competencies, new functions, or evolving the existing competencies –Heavy future-orientation, though actions need to start now! Core Competencies are the key to everything Core Competencies are the key to everything –Clarifying the core competencies, building on them, and ”cultivating” a culture of core competencies

Critique towards C.K. Prahalad and G. Hamel Empirical evidence shows that ”leading the revolution”, or developing the core competencies first, does not necessarily lead to success Empirical evidence shows that ”leading the revolution”, or developing the core competencies first, does not necessarily lead to success –Competition can build competencies later and via incremental innovation win the game Hamel&Prahalad are not clear, or even present contrading views, about the role of top management Hamel&Prahalad are not clear, or even present contrading views, about the role of top management –Occasional emphasis on bottom-up, emergent views, even work place democracy, but at the same time heavy reliance on top management vision Is ”strategic architecture” just a new name for ”strategic plan”? Is ”strategic architecture” just a new name for ”strategic plan”?

C.K.Prahalad and G.Hamel and Industrial Business Networks Competencies reach over company bounders Competencies reach over company bounders Collaboration in interaction among the companies is emphasized Collaboration in interaction among the companies is emphasized –especially from the learning perspective, on building core competencies –emphasis on learning on lower level of interaction (individual approch), not top-management Network approach, both internally and between companies Network approach, both internally and between companies –”..excellence is a complex web of... integration with suppliers, value engineering... It is difficult to exctract such a subtle competence... but in a piecemeal fashion”

Concluding & Summarizing the Presentation C.K. Prahalad and G. Hamel, influential thinkers in the field of strategy in 1990’s C.K. Prahalad and G. Hamel, influential thinkers in the field of strategy in 1990’s Main contributions to the discipline: Main contributions to the discipline: –The development of the concept of core competency Both within the corporation and in a network of firms Both within the corporation and in a network of firms –The emphasis on long-term strategic architecture –Opposition to short term cost-cutting and incremental business development