Posted by Yogesh Malhotra on December 18, 1997 at 18:23:10:

In Reply to: Re: Knowledge Focus: Internal vs. External posted by Mezei on December 18, 1997 at 15:18:27:

Don,

You raise an interesting point. Howevever, it is important to distinguish between the two phenomena, and understand the significance of the difference.

Specifically, most organizations do not have the wherewithal to align the external theories of the business, i.e., the interactive systemic and dynamic forces created by the interactions between the various entities (stakeholders, suppliers, competitors, regulators, boundary-spanners, etc.). Hence, most of them _have to_ align their 'theory of business' with the changing external reality.

You may like to review the following article by Drucker (although there are several papers / books, etc. by authors such as Charles Handy, Hamel & Prahalad, Huber & Glick, Nadler & Tushman, that offer different interpretations on this point), before offering your counter- argument.

Drucker, P.F. "The Theory of Business," Harvard Business Review, September/October 1994b, pp. 95-104.

This articles [like some others] suggests the problems faced by blue-chip companies (such as GM and IBM) who had to 'bite the dust' since they had the 'over-assurance' to assume that they had the necessary wherewithal to "keep the 'external' theories of business aligned with internal reality of business." Conversely, one may characterize the unwritten policy of successful companies such as Intel and Microsoft, i.e., "Only the Paranoid Survive," that remain on the leading edge by "obsoleting themselves before others can do so." Hence they are obsoleting their own "internal theories of business" to redefine the game, i.e., "external realities of business" for their competitors.

Some 'exceptional' organizations, such as Microsoft, have demonstrated their clout by attempting to do what you have suggested, i.e., "keep the 'external' theories of business aligned with internal reality of business." However, the latest decision against Microsoft putting a cease-and-dust order on bundling IE with Windows, suggests that even such 'exceptions' may not necessarily be successful all the time. See for instance, the following article, on the decision against Microsoft:

Microsoft Ordered To Stop Bundling IE With Windows (Web Week, Dec. 15, 1997)

- Yogesh

• Yogesh Malhotra

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