You are on page 1of 6

Gary Hamel & C. K.

Prahalad

Introduction
Gary Hamel and C.K. Prahalad have been recognized as one of the leaders of the theory of Strategic Management in the western management theory field. Gary Hamel is a professor of strategic and international management at London !siness School and chairman of Strategos" a strategy#cons!lting gro!p. C. K. Prahalad is the Harvey C. $r!eha!f professor of !siness %dministration and a professor of corporate strategy and international b!siness at the Grad!ate School of !siness %dministration" &niversity of Michigan. %s cons!ltants" they have wor'ed in companies aro!nd the globe ()*. Hamel and Prahalad has changed the world of strategy management by their contrib!tion on the s!b+ect. ,he strategic intent" core competences" the foresight has changed the strategic thin'ing dramatically. ,heir articles are of the highest -!ality # insightf!l" well written" informative and challenging. ,he Strategic Intent and one year later Core Competence of the Corporation have both won the Mc Kinsey award" and the Competing for the Future has even more s!ccessf!l"(.* which co!ld be seen from the following comments/ More than 250,000 copies in print! Featuring a new preface by the authors. If there is room for only one management boo on your rea!ing shelf each year, this is it. 0,he 1ashington Post "he year#s best management boo . 0 !siness 1ee' $%amel an! &rahala! are' arguably the two most influential thin ers on strategy in the (estern worl!. 0Peter M. Senge" a!thor of "he Fifth )iscipline $%amel an! &rahala!' see to rehabilitate strategy by *irtually rein*enting it. 02nd!stry 1ee' ()*

Main Works
Strategic Intent ,he historical fo!nding moment of their strategic management co!ld be traced bac' to the p!blishing of the article 3Strategic Intent3" in May#4!ne )565. Hamel and C. K. Prahalad whom as Hamel7s co#a!thor assert that in order to gain strategic leadership on a global scale" organisations have to ta'e a long term ()8 # .8 years* view of their p!rpose and goals" and set o!t the way of getting there. ,hey -!ote Canon" Honda and as samples who have gone down this path.

( ()* (.* (

http/99www.hbsp.harvard.ed!9prod!cts9press9boo's9hamel.html http/99www.strategosnet.com9articles9crashco!rse.htm

Hamel and Prahalad also disting!ish :strategic intent: from :strategic fit: in their model of contemporary strategic leadership and strategic vision in this article. ,hey arg!ed that :strategic intent: may be more appropriate for leaders of organisations in dynamic global operating environments" as it permits more organisational fle;ibility than traditional strategic management models. ,raditional strategic management involves a search for the strategic fit between b!siness portfolios" mar'et niches and prod!cts" c!stomers and distrib!tion channels. <mphasising financial targets and containing strategy implementation within reso!rce parameters maintain s!stainable advantage. Strategic intent" on the other hand" is an organisational ambitio!s at a strategic level" and re-!ires entreprene!rial b!siness leaders who see' new r!les for b!siness strategies" foc!ssing on strategic challenges rather than financial targets" and obtaining reso!rce leverage to achieve goals rather than constraining goals within apparent reso!rce constraints. ,hey develop portfolios of core competences in the organisations" and emphasise rapid learning within the organisation (Hamel and Prahalad" )565*. ,he degree of :strategic intent: was contingent on the level of ind!stry competition" organisational history" level of reso!rce control" and strength of e;ternal strategic alliance networ's" etc.(=* Core Competence of the corporation >ne year later" following or even copying the footprint of the previo!s article ?Strategic Intent@ that had won a McKinsey award" Hamel and Prahalad went on to arg!e that companies cannot be defined by what they do" b!t by what they 'now in 3"he Core Competence of the Corporation3" a seminal article on core competencies in May#4!ne )558. 2n the second McKinsey award article" Hamel and C. K. Prahalad acc!rately predicted that 3an obsession with competence b!ilding3 wo!ld mar' o!t the global winners of the coming decade. ,he organisational core competencies have been defined as ?%n organisation7s ma+or val!e#creating s'ills" capabilities" and reso!rces that determine its competitive weapons.@ (Hamel and Prahalad" )558* ,he core competencies are part of the res!lt of organisational analysis" which internal analysis provides the organisation7s specific assets" s'ills" and wor' activities" among which the core competencies are e;ceptional or !ni-!e. (S.P Aobbins and M. Co!lter" )55B* %ccording to Hamel and Prahalad" winning companies has a good grasp of tomorrow:s new b!siness opport!nities" and this theme has been developed in their bestseller Competing for the Future. Competing for the Future Hamel and Prahalad start their most pop!lar wor'" Competing for the Future" with some -!estions. ?Coes the senior management have a clear and broadly shared !nderstanding of how the ind!stry may be different ten years f!t!reD@ ?2s the tas' of regenerating core strategies receiving as m!ch top management attention as the tas' of reengineering core processD@Epp=#FG ,hey indicate" by those -!estions" how largely senior managements of corporations devote their efforts to maintain and improve only present b!siness" s!ch as restr!ct!ring and reengineering. ,he boo'" then" shows the limits of those actions for the f!t!re s!ccess. Hamel and Prahalad accomplished their theories in this masterpiece. ,he pair say management e;ec!tives sho!ld act differently from others" so that they co!ld ma'e their new f!t!re" which represents new ind!stry" new val!e" and new mar'etH rather than maintaining or improving present mar'et or present prod!ct. 2t can be" they say" first of all" having a good I$oresight"7 secondly" designing a IStrategic architect!re7H and finally creating IStrategic intent7 and reb!ilding ICore competencies7" $trategic which will p!ll a corporation to the f!t!re (ntent (fig.)*.
$trategic Foresight #oresight FUTUR %rchitecture $or competing for tomorrow" Hamel and Prahalad insist that the first thing sho!ld be 'ore done is to develop foresight. $oresight is 'ompetencies prescience abo!t the size and shape of #ig. & tomorrow:s opport!nities" s!ch as" new types of c!stomer benefits or new ways of delivering the benefits. ,hey e;plain forgetting the present mar'et" the present prod!ct" or the present b!siness !nits" or the organization. $or instance" Motorola dreams of a world in which telephone numbers will be assigned to people, rather than places; where small hand-held devices will allow people to stay in touch no matter where they are; and where the new communicators can deliver video images and data as well as voice signals. [pp79- !"
(=*

http/99www.law.flinders.ed!.a!9research988#Jmain.htm .

Strategic +rchitecture
,o bring a corporation to real f!t!re from foresight" the two theorists say it is the ne;t action sho!ld be done to craft a IStrategic %rchitect!re7 instead of strategic planning. Strategic architect!re sho!ld describes ?which new benefits" or If!nctionalities7 (not present prod!ct* will be offered@ for the f!t!re" and ?on what new competencies will needed to create those benefit"@ and ?how the c!stomer interface will need to change to allow c!stomers to access those benefits most effectively@.Ep))6G ,hey also indicate it is impossible to create a detailed plan for a ten# or fifteen#year competitive" which is traditionally considered in a strategic planning. ,hey cite K<C" a 4apanese electronic company" as an e;ample of a strategic architect!re. K<C" initially a s!pplier of telecomm!nications e-!ipment" dreamed being a leader in ICLC"7 comp!ters and comm!nication in )568s. ,he company identified three streams of technological and mar'et evol!tion.
-'omputing would evolve from large mainframes to distributed processing )now called client-server*+ -'omponents would evolve from simple integrated circuits )('s+ to ultra large-scale ('s -'ommunications would evolve from mechanical cross-bar switching to comple, digital systems.

,he strategic architect!re bro!ght the company to M.B.. billion sales in )55. from M=.6 billion in )568.

Strategic Intent an! Core Competence


,he two g!r! describe how to achieve the f!t!re in creating Istrategic intent7 and reb!ilding ICore competencies7" which had been developed in their wor's before the boo'. Strategic intent is something ?ambitio!s and compelling@ that ?provides the emotional and intellect!al energy@ for the f!t!re. ,hey e;plain ?Strategic architect!re is the brainH strategic intent is the heart Ep)F)G.@ 4. $. Kennedy7s statement" ?Going to the moon"@ was a strategic intent. ,he easily !nderstandable and emotional dream reminded the people in &.S. is to be a frontier and get them o!t from realistic ?feasibility sieve@ of any 'inds of strategic planning. ,hey insist the most act!ally providing gateway to the f!t!re is ?core competence.@ Competencies are integration of s'ills and technology" they defined. Competencies of a corporation can be Icore"7 which provide a val!e to c!stomer" are different from competitor" and are e;tendable in new prod!cts or services. ,o get to the f!t!re" core competencies sho!ld be fo!nded" reb!ilt" and developed. Motorola fo!nd" reb!ilt" and developed their competencies in digital compression" flat screen displays" and battery technology" and the company made their foresight to the real f!t!re.

Influence of the Theories


!n "anagement #rea

,rganisational -earning.
%long the change of the type of the wor' from man!al to 'nowledge wor'" the 'nowledge has become one of the cr!cial parts of the organisational core competence. (Choo" )556*,he capability of gaining newest" !p#to#date 'nowledge" the capability of digesting the new 'nowledge and sharing the 'nowledge within the organisation have become part of the efforts from the organisation to gain competence based on the strategy. Hamel and Prahalad ()55=* s!ggest that it is a firm7s ability to learn faster and apply its learning more effectively than its rivals that give it competitive advantage. (F*

Strategic &lan
,here are two stages for the two theorists to give comments on strategic plan. 2n the previo!s stage" the two has arg!ed abo!t the contents of strategic plan that sho!ld contain not only the goal" the aim" the target" the dream of the organisation" as which has been done in the earlier timeH b!t also the way to reach the goal" the dream" the competence which m!st been s!stainable d!ring the approaching the goal. ,herefore" conventional strategic planning approaches act as a ?feasibility sieve.@ Hamel and Prahalad ()565* s!ggest that ?Strategies are accepted or re+ected on the basis of whether managers can be precise abo!t the Ihow7 as well as the Iwhat7 of their plans@" demanding that the ?how@ of the plan m!st be clear before ta'ing action that limits the organization to what it can do" or has done. 2t essentially prevents the organization from stretching for goals for which no conventional approach is ready available.(N*
(F* (N*

http/99www.dc!.ie9b!siness9researchOpapers9no==.html http/99www.s!mmitstrategies.net9$itto.htm =

,he second stage of their comments on the strategic planning is when the traditional notions of strategic planning have come !nder severe attac' by many in the b!siness comm!nity. >ne of the !nderstandings is strategic planning often ta'es an already agreed !pon strategic direction and helps strategists decide how the organization is to be config!red and reso!rces allocated to realize that direction. eca!se of this" one of the most common criti-!es of strategic planning is that it is overly concerned on the sit!ation of the present and the past" while opposed to foc!ssing on how to reinvent the f!t!re (Hamel and Prahalad" )55F*. $!rthermore" $ahey and Pr!sa' ()556*" for e;ample" have identified this predisposition to foc!s on the past and the present rather than on the f!t!re as one of the eleven deadliest sins of 'nowledge management. 2n addition" by being too over#foc!ssed on analysis and e;trapolation rather than creativity and invention" strategic planning tends to create the ill!sion of certainty in a world where certainty co!ldn7t be g!aranteed. Strategic %rchitecht!re in Hamal and Prahalad7s wor' Competing for the Future replaces the phrase ?strategic planning@" which has been described in the previo!s part of this paper. (B*

/e0engineering
,he two say" ?Aestr!ct!ring seldom res!lts in f!ndamental improvement.@ Ep))G ritish man!fact!ring s!rrendered global mar'et share while they had decreased the n!mber of employees =JP and increased the o!tp!t )8P d!ring the early and mid )568s. Aeengineering" the most common 'ey#word of e;ec!tives remar'ed by Hammer in )55." is m!ch better than restr!ct!ring" Hamel and Prahalad say ?Aeengineering aims to root o!t needless wor' and get every process in the company pointed in the direction of c!stomer satisfaction" red!ced cycle time" and total -!ality@ Ep).G However" they indicate reengineering is catching !p the predecessors in the present ind!stry. &.S. care companies s!cceeded in its reengineering b!t they co!ld not ma'e new competitive val!e s!ch as ?breathta'ing engine performance@ or ? razor#edge handling"@ which were set by their 4apanese rivals. ,h!s" the pair developed their theories foc!sing on how to in the f!t!re rather than the improvement of the present sit!ation. !n Facility "anagement

-imitation of facility strategy


2n a 4apanese $M te;tboo'" I$acility Management G!ide oo'7 (&zawa" M.)556* the primary 4ob of facility manager sho!ld be to establish long#term strategic action plan of their facilities. 2ndeed" 2 M#4apan" the leading model of this boo'" had )N#year strategic plan. However" they co!ld not predict the rapidly depression of 4apanese real estate mar'et in the middle of the )558s. HP#4apan also had a fine long#term strategy based on the one of their parent company. However" the plan co!ld not incl!de the company7s division into ?%gilent ,echnology@ and new ?HP.@ 2t seems it has been impossible to ma'e long#term plan" as Hamel and Prahalad write in their boo' ECompeting for the f!t!re p))5G. Aecently" many facility managers have been referring to Ifle;ibility.7 ,hey have tho!ght wor'place portfolio of a company sho!ld absorb organisational changing. I%lternative officing7 seems to be a IStrategic %rchitect!re7 of facility management. ,his idea shows the foresight of wor'place as wor'er can wor' anywhere they want(J*. ,he idea release wor'place from being reflected of organisational str!ct!re. 2t can be fle;ible how many people !se the wor'place and where they want to !se. ,he wor'place m!st be provided highly organised information networ' and on demand services. 2t means facility department m!st has competencies which will provide s!itable services for the wor'place.

1our sore is ,ur core


%fter Hamel and Prahalad showed the idea of Icore competencies"7 managements have been more considering o!tso!rcing their none#core f!nctions" s!ch as facility management. Managers thin' not only red!cing the n!mber of employees (restr!ct!ring* b!t also what core competencies is that sho!ld be remained in#ho!se and what is not. >n the other aspect" facility management department also as' to themselves ?what is o!r core competenciesD 1hat sho!ld we doD@ %s a res!lt" there have been a stream that facility department did management#b!y#o!t. ,he facility management department of 2 M &K sp!n o!t to Procode in )55) and it developed into 4ohnson Control 2$M" and C Q was emerged from Aan' Qero; in )55F. $reling" the director of $M Schiphol" said their slogan ?Ro!r sore is >!r core.@ ($reling G.)55J*

Critics
,here are also some critics to the theory of Hamel and Prahalad. Mic'lethwait ()556*" the b!siness editor of ,he <conomist and 1ooldridge" its management correspondent" write that being the first is not necessary elements or is not the s!fficient elements for the grantee of f!t!re s!ccess. ,hey point o!t that the content of the strategy for
(B* (J*

http/99www.psc#cfp.gc.ca9prcb9rd9pdr9docs9strathin'Oe.htm http/99www.fmlin'.com9 F

an organisation is not always incl!ding the pres!mption of position on the mar'etH while Hamel and Prahalad thin' it is necessary. ,he f!t!re mar'et discovery" or the new prod!ct or service" is not as important as Hamel and Prahalad said. $or instance" Microsoft won the mar'et while %pple had e;pressed their vision of Ifriendly comp!ter7 first. More prove co!ld be fo!nd from the development history of many 4apanese companies" which are not the first of the mar'et" or not the first who invent the technology" b!t the biggest winner in the mar'et. ,reacy and 1iersema()556*" a cons!lting firm CSC 2nde;" write Icore competencies7 is not eno!gh for s!ccess. $or e;ample" riggs L Stratton has competence in small engines li'e Honda" which Hamel and Prahalad ta'e !p as an e;ample of core competency" b!t the company had not s!cceeded.

Conclusion
Hamel and Prahalad are the two g!r!s who infl!enced the strategic management field greatly. ,hey foc!s on discovering the 'ey of how to be s!ccess in the f!t!re for the organisations" and portrait the their strategic vision ahead of the strategists. ,o lead to the f!t!re" they insist the importance of Istrategic architect!re7 as a highway map" not strategic planning li'e a city map. ,he strategic intent has been described as an emotional driving force" while the core competencies is the act!al reso!rces to gain the f!t!re. Core competencies has become a common term appearing almost in every new management theories" whatever it is abo!t h!man reso!rce management or 'nowledge management. ,he two g!r!s revealed the limitation of the improvement of present sit!ation s!ch as restr!ct!ring or reengineering. ,he ideas also s!ggested to facility management to thin' different way of strategy and its core competencies" and as an e;ample or rather as a res!lt of their theory" we co!ld see the acceleration of the o!tso!rcing b!siness in facility management area.

Reference: Choo" Ch!n 1. ()556*/ "he 2nowing ,rgani3ationH Kew Ror'" >;ford &niversity Press $ahey" L." L Pr!sa'" L. ()556*. "he ele*en !ea!liest sins of nowle!ge management" California Management Aeview " $reling G ()55J*" the &resentation of FM Schipol in FM International Seminar, Kov )55J in ,o'yo 4apan Hamel" G.H. and Prahalad" C.K. ()565*" Strategic intent" Harvard !siness Aeview" Hamel" G.H. and Prahalad" C.K. ()558*" "he core competencies of the Corporation, Harvard !siness Aeview" Hamel" G." Prahalad" C.K. ()55=*" Strategy as Stretch an! -e*erage, Harvard !siness Aeview Hamel" G.H. and Prahalad" C.K. ()55F*" Competing for the Future, oston" M%/ Harvard !siness School Press. Hamel" G.H ()55B*" Strategy as /e*olution" Harvard !siness 4ohn 1iley and Sons ()55=*" International /e*iew of Strategic Management" Sol!me F C < H!ssey" editor 4oseph oyett and 4immie oyett ()556*" "he 4uru 4ui!e" 4ohn 1iley L Sons" 2nc. Stephen P. Aobbins and Mary Co!lter ()55B*" Management, Prentice Hall &zawa" M" ()556*" Facility Management 4ui!e 5oo 02n! e!ition0" Ki''an'o!gyoshinb!sha" ,o'yo 4apan http/99www.strategosnet.com9articles9crashco!rse.htm Last Modified/ >ctober .5" )556 http/99www.hbsp.harvard.ed!9prod!cts9press9boo's9hamel.html http/99www.law.flinders.ed!.a!9research988#Jmain.htm Last Modified/ 4!ne )B" .888 http/99www.dc!.ie9b!siness9researchOpapers9no==.html Last Modified/)556 http/99www.s!mmitstrategies.net9$itto.htm Last Modified/)55J http/99www.psc#cfp.gc.ca9prcb9rd9pdr9docs9strathin'Oe.htm %pril" .J )555 http/99www.fmlin'.com9 "he (or place It isn6t what it use! to be..., online ). >ct .888

You might also like