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In this study, we use the terms 'organizational structure' and 'organizational design' interchangeably. While we considered the broader organizational context (such as incentive systems, cultural traits, and leadership structures) in our empirical analysis, this article's primary focus is on the firm's formal, corporate-level structures.
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The distinction between supply-side and demand-side exploitation and exploration was introduced and thoroughly conceptualized by
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Ford and HP are described in Nickerson and Zenger (2002), op. cit. at Ref 8; Ericsson in C. A. Bartlett and S. Ghoshal, Managing Innovation in the Transnational Corporation, in C. A. Bartlett, Y. Doz, and G. Hedlund (eds.), Managing the Global Firm, Routledge, London; Sony in V. Gupta and K. Prashanth, Restructuring Sony, ICFAI Case Study, ECCH #303-155-1(2004); and ABB in K. Prashanth and V. Gupta, Reorganizing ABB, ICFAI Case Study, ECCH #303-156-1 (2003).
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Ford and HP are described in Nickerson and Zenger (2002), op. cit. at Ref 8; Ericsson in C. A. Bartlett and S. Ghoshal, Managing Innovation in the Transnational Corporation, in C. A. Bartlett, Y. Doz, and G. Hedlund (eds.), Managing the Global Firm, Routledge, London; Sony in V. Gupta and K. Prashanth, Restructuring Sony, ICFAI Case Study, ECCH #303-155-1(2004); and ABB in K. Prashanth and V. Gupta, Reorganizing ABB, ICFAI Case Study, ECCH #303-156-1 (2003).
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54249122332
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Our findings are contrary to Nickerson and Zenger's (2002, op. cit. at Ref 8) recommendation that firms should fluctuate frequently, even in the absence of environmental change. Their theoretical model excludes the cost of change, a factor that played a central role in our real-life case examples.
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For a detailed description of the Nespresso concept, see K. Kashani and J. Miller, Innovation and Renovation: The Nespresso Story, IMD Case Study M 543 (2003).
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For a detailed description of the Nespresso concept, see K. Kashani and J. Miller, Innovation and Renovation: The Nespresso Story, IMD Case Study M 543 (2003).
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54249158526
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note
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By the end of the 1990s BMW Group could be described as 'stagnating' and 'in need of new revenue streams'. It had realized no growth for over five years, had incurred severe losses in 1999 and had sold less than a million cars in 2000, and was actively looking for new growth platforms such as Rolls-Royce to diversify into the luxury segment and MINI to diversify into smaller cars. In the case of Rolls-Royce, BMW had only acquired the brand name, all operational activities having been acquired by VW. Thus, BMW had to set up an entirely new company from scratch, hiring designers, establishing headquarters, building a new production plant etc. In contrast, MINI had been acquired as part of an earlier acquisition - but BMW shut down the existing operation and developed the new model in a newly created network composed of BMW employees and externally hired people. A new production plant was built, managed by BMW employees, and the 'new MINI' was distributed through BMW's sales networks and targeted at a different customer segment. Despite the fact that both these marques had substantial previous histories, the particulars of their 'rebirths' justify this article in dealing with them as effectively 'new' BMW Group initiatives.
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54249169798
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For more information on Nestlé Nutrition, refer to P. Killing and B. Buechel, Nestlé: Creating Nestlé Nutrition, IMD Case Study 3-1667 (2006); and
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For more information on Nestlé Nutrition, refer to P. Killing and B. Buechel, Nestlé: Creating Nestlé Nutrition, IMD Case Study 3-1667 (2006); and
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S. Raisch and F. Ferlic, Nestlé: Sustaining Growth in Mature Markets, HSG Case Study, ECCH # 306-615-1(2006).
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While the organizational learning literature has traditionally suggested that exploitation and exploration may be impossible to reconcile within single units, recent studies find that exploration can be compatible with exploitation under specific conditions. For example, see
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While the organizational learning literature has traditionally suggested that exploitation and exploration may be impossible to reconcile within single units, recent studies find that exploration can be compatible with exploitation under specific conditions. For example, see. Ahn J.H., Lee D.J., and Lee S.Y. Balancing business performance and knowledge performance of new product development: Lessons from ITS industry. Long Range Planning 39 (2006) 525-542
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The full list is: Adecco, Adidas, Bank Austria, Baywa, BMW Group, Celesio, Continental, Credit Suisse, Deutsche Bank, Erste Bank, Fresenius, Hannover Rueck, Helvetia, Holcim, Kuehne & Nagel, Metro, Nestlé, Porsche, SAP, Securitas, Siemens, Swiss Life, Swiss Re, UBS.
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Standard methods were used to compare cases and examine emergent patterns: see Eisenhardt (1989), op. cit. at Ref 29 and Miles and Huberman (1994), op. cit. at Ref 26.
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