Mitsuru Kodama. Boundary Management. Developing Business Architectures for Innovation

Transcription

1 Boundary Management

2 Mitsuru Kodama Boundary Management Developing Business Architectures for Innovation 123

3 Mitsuru Kodama, Ph.D. Professor of Information and Management College of Commerce and Graduate School of Business Administration Nihon University Kinuta Setagaya-ku Tokyo Japan ISBN e-isbn DOI / Springer Heidelberg Dordrecht London New York Library of Congress Control Number: Springer-Verlag Berlin Heidelberg 2010 This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilm or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permission for use must always be obtained from Springer. Violations are liable to prosecution under the German Copyright Law. The use of general descriptive names, registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Cover design: WMX Design GmbH, Heidelberg Printed on acid-free paper Springer is part of Springer Science+Business Media (

4 To my family

5 Preface and Acknowledgement In recent years, the development of ICT and digitization has increased the need to develop new products and services and build business models that transcend industries and merge different technologies. Technology innovation in the past closely pursued and developed specialist knowledge, but with the development of unprecedented new products and services based on new concepts, innovations increasingly arise from merging one technology field with another. Amid continuous environmental change, dynamic strategic management to deliberately and constantly create new positioning (including new products, services, and business models) and values is an important theme for practitioners on a day-to-day basis. How should companies exploit and implement strategy under a dynamically fluctuating environment? What is the essence of dynamic strategic management? These issues are common points of deliberation for strategy researchers and numerous corporate leaders alike. The research question I would like to pose as a specialist in the fields of innovation and strategic management is that of how to achieve this corporate strategy for dynamic strategic management. This book suggests a framework and case studies for dynamic strategic management theory for strengthening existing business and taking new positions to target new business (products, services, and business models) under a rapidly changing environment. The essence of strategic management goes beyond companies simply adapting to environmental change while creating appropriate strategies for the future. It also involves companies optimizing the individual management elements that comprise the corporate system (including organization, strategy, operation, and leadership) in alignment with these factors, and achieving continuance and growth through integrative and dynamic development. How companies consider congruence with the environment and dynamically transform corporate boundaries to adapt to the environment (or create new environments) has become a key theme in the implementation of corporate strategy. In this book the optimal design of a corporate system comprising the management elements of strategy, organization, operation, and leadership aimed at designing corporate boundaries compatible with the environment is referred to as business architecture. Business architecture is a concept for optimizing corporate boundaries aimed at realizing targeted business models and corporate system design involving stakeholders. To optimize the corporate boundaries, companies must partially and wholly vii

6 viii Preface and Acknowledgement optimize the individual management elements (strategy, organization, technology, operation, and leadership) comprising the corporate system that has achieved congruence with the environment. The management to optimize these corporate boundaries and the corporate systems comprising individual management elements is referred to in this book as boundary management. The concept of boundaries congruence inside and outside the corporate system, and the building of optimal architecture concerned with environmental change and with management elements such as strategy, organization, technology, operation, and leadership are key to realizing dynamic strategic management. This book presents the concept of business architecture and optimizing processes as a corporate system based on multiple corporate case studies. I could not have completed this book without interacting painstakingly and rigorously with practitioners. I would like to extend my gratitude to these practitioners, who are too numerous to count. I would like to express my appreciation, especially, for the senior executives and managers of the companies targeted (including Sony, NTT-DATA, NTT-DoCoMo, Toyota, Honda, Omron, Takara, Recruit, First Retailing, Panasonic, and Canon) for this book s research. I would also like to express my deep appreciation to Dr. Ikujiro Nonaka, emeritus professor at Hitotsubashi University, for a wealth of intellectual stimulation including innovative thinking and philosophical insights. Concerning the publication of this book, the author wishes to extend his appreciation to Dr. Niels Peter Thomas, Senior Editor at Springer, who provided tremendous support. Finally, I would like to express my gratitude for a grant-in-aid for scientific research from JSPS, for the publication of this book, and for publishing grant-in-aid from Nihon University s College of Commerce. Nihon University, Tokyo Mitsuru Kodama

7 Contents 1 Dynamic View of Strategic Management Dynamic Competitive Environments and New Business Models New Competition and Strategic Positioning Business Ecosystems as New Competitive Rules The Need for Dynamic Strategic Management Theory Strategic Management as Practice Process Boundaries Congruence Through Boundary Management TheAimsandStructureofThisBook References Theoretical Framework of Dynamic Strategic Management Through Boundary Management The Optimal Design of Corporate Boundaries The Concept of Business Architecture StrategyasBusinessArchitecture Technology as Business Architecture OrganizationasBusinessArchitecture OperationasBusinessArchitecture Leadership as Business Architecture Dynamic Process of Business Architecture Strategic Management in a Dynamic Environment Positioning-andResource-BasedViews Environment Adaptive Strategy EnvironmentCreationStrategy Managing Corporate Innovation Streams References Developing New Business Models Through Dynamic Boundary Management: Case Studies of Sony and NTT-DATA InnovationbyInternalCorporateVenture(ICV) Sony:ACaseStudy StartingUpaNewBusiness Integrating Knowledge from Different Fields Through Network Concepts ix

8 x Contents SWSandSWSNetworkCreation NTT-DATA:ACaseStudy New Business Model Development Building Flattened Organizations and Organic Networks ConstructionInnovations MarketingInnovations ContentInnovations Gathering and Integrating Distinct Creative and Practical Knowledge Optimizing Boundaries Congruence for Business Architecture Optimizing Boundaries Congruence in SCE Optimizing Strategic Framework Through Boundaries Congruence in NTT-DATA References Developing New Broadband Services by Dynamic Collaboration Through Strategic Boundary Networks: A Case Study of NTT DoCoMo Innovation Through Synthesis of Exploration and Exploitation Case Study: Mobile Phone Business Innovation DoCoMo sinnovations Phase 1 ( ): The Challenge of Voice Communication Phase 2 ( ): The Challenge of Multimedia Phase 3 (2004 to Present): The Challenge of a LifestyleTool FormingSmall-WorldNetworksWithintheCompany Network Integrative Competences Through Leadership Teams The Dynamic Boundaries Congruence of Business Architecture.. 85 References New Knowledge Creation Through Leadership-Based Strategic Community Introduction Networks of Strategic Communities Summary of an In-depth Case Current Status and Issues in the Field of Veterinary Medicine in Japan Formation of Strategic Community and Networked Strategic Communities Innovation in New Knowledge Creation ResultsandDiscussion CharacteristicsofNetworkedSCs Synthesizing Capability Through Dialectical Leadership of Community Leaders Managerial Implications: Toward the Realization ofstrategiccommunity-basedorganizations

9 Contents xi 5.6 Conclusion References New Theoretical Framework and Insights Derived from Comparative Case Studies NewBusinessCreationbyTransformation The Importance of Change Management Issues in Promoting New Business: Noncongruence Among Individual Management Elements ComparativeCaseAnalysisandNewInsights Congruence of Strategy and Technology Congruence of Strategy and Organization Congruence of Strategy and Operation Management and Leadership Crucial Elements for Boundaries Congruence and Successful Innovation Creative/Productive Dialogue and Practitioners Recognition Capability at SWS and Networked SWS Drawing in Knowledge Boundaries and the Practice Process at Process-Based Organizations Traffic and Synthesis Among Dual Networks References Theoretical and Managerial Implications Boundaries Management Frameworks OptimizingOrganizationArchitectureforInnovation BusinessArchitectureforIntegratedOrganization New Knowledge Creation From the Process-Based Organization NetworkArchitectureThinking NetworkArchitectureoftheSmall-WorldStructure InternalNetworkArchitectureofSWS TheExternalNetworkArchitectureofSWS References Conclusion The Dynamics of Business Architecture InnovationfromNetworkArchitectureThinking Appendix: Research Methodology and Data Collection References Index