Strategizing, Disequilibrium, and Profit [Paperback]

This book starts from the proposition that frameworks used in business strategy lack realism because they are built on equilibrium-based foundations carried over from the domain of neoclassical economics. Mathews proposes instead a conceptual framework consistent with the turbulence found in real economies, and brings strategizing into conformity with such phenomena as innovation and technological change, network formation, capture of substitution effects in modular systems, and many other interesting features of modern economies that are passed over by mainstream equilibrium-based analysis. This new framework is based on the way firms assemble resources into a distinctive bundle, then build activities out of these resources to generate revenue, and link the resources to the activities through routines created and administered by management.John A. Mathews is Professor of Strategy and Management at Macquarie Graduate School of Management, Sydney. He is the author of many studies of strategy emanating from emerging markets, includingDragon Multinational: A New Model of Global Growth(2002) andTiger Technology: The Creation of a Semiconductor Industry in East Asia(2000). There has been a growing rebellion, both among economists and analysts of business strategy, against the static view of the competitive process contained in neoclassical economics, and movement towards the very different picture of the competitive environment within which firms operate put forth by Joseph Schumpeter and developed in modern economic evolutionary theory. This fine book places firms squarely within an environment marked by Schumpeterian competition, and develops the implications regarding business strategies that can work in such a context. This reorientation of theorizing about business strategy is much needed, and very well done. Unlike most books on the theory of the firm, this one takes reality into account. Mathews has researched the semiconductor and other leading-edgl“+