Ireland, R. D., Hoskisson, R. E., Hitt, M. A., The Management of Strategy, 9th Interna-tional Edition, Florence: South-Western/Cengage Learning 2010

Introduction to the Review and Target of the Book

The textbook “The Management of Strategy” (formerly “Strategic Management. Com-petitiveness and Globalization”) by Ireland, Hoskisson, and Hitt first appeared in 1995 and is now in its ninth edition already. While it is self-evident that a book appearing in its ninth edition offers value to its audience, a book review may nevertheless help those academics who look for new support for their courses or who reflect upon whether they should use additional readings. The review can be helpful to appraise whether this book, which claims to be a “market-leading text”, fulfils its aspiration to be “intellectually rich yet thoroughly practical” (page xvi).

Structure and Contents

The book whose text is 405 pages in length is structured into three major parts. Part 1 is devoted to the inputs in the strategy process, Part 2 covers the formulation of strategy, and Part 3 focuses on the implementation of strategy. At the end of the book, a name index, a company index, and a subject index help the reader to find the relevant informa-tion. In addition to the standard version of the book with the subtitle “Concepts”, two other versions exist, which are subtitled “Cases” and “Concepts and Cases”, respectively. These versions include (another) 442 pages with 29 case studies in the field of strategic management. The present book review focuses on the “Concepts” version.

Manag Int Rev (2010) 50:655–658DOI 10.1007/s11575-010-0048-x

Biblio Service

Stefan Schmid · Thomas Kotulla

Published online: 14.09.2010© Gabler-Verlag 2010

Prof. S. Schmid () · Dipl.-Kfm. T. KotullaDepartment of International Management and Strategic Management, ESCP Europe, Berlin, Germanye-mail: stefan.schmid@escpeurope.de

BIBlIO SERvICE

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Part 1 of the book starts with Chap. 1, which is an introduction into strategic manage-ment and strategic competitiveness. The authors outline their framework, which con-sists of strategic inputs (external environment, internal organization, vision and mission), strategic actions (strategy formulation, strategy implementation), and strategic outcomes (strategic competitiveness, above-average returns). From the beginning, Ireland, Hoskis-son, and Hitt emphasize the competitive challenges resulting from globalization and from rapid technological changes. Chapter 2 explains how the external environment of the firm (including the general environment and the industry environment) can be analyzed in order to identify the so-called opportunities and threats. Chapter 3 focuses on the appraisal of the internal situation of the firm in terms of resources, capabilities, competencies, and competitive advantages, showing how to find the firm’s strengths and weaknesses. The authors base their writings on the industrial-organization school and the resource-based view; hence, they are fully in line with mainstream thinking in strategic management. Interestingly, the authors do not explicitly address the SWOT analysis for integrating the external and the internal perspective.

In Part 2, beginning with Chap. 4, the authors of the book stress that firms have to develop business-level strategies. They center their arguments on Porter’s traditional alternatives of cost leadership, differentiation, and focus, while also introducing an inte-grated strategy of cost leadership and differentiation. In Chap. 5, Ireland, Hoskisson, and Hitt discuss how firms have to react to competitive rivalry and how they can handle com-petitive dynamics. In this context, the authors also cover game-theoretical concepts, such as the likelihood of attack and the likelihood of response. Chapter 6 provides the reader with an overview of corporate-level strategies. Interestingly, diversification is seen as the major decision at the corporate level and is developed in all its facets, whereas other stra-tegic issues at the corporate level (such as growth versus shrinking) are not considered in detail. The authors of the book devote Chap. 7 to acquisition and restructuring strategies. However, the reader is not told in how far these strategies are linked to the corporate level, nor does the relationship with the subsequent chapter become apparent, where the authors concentrate on global strategy. In Chap. 8, the authors present various reasons for going international, and they describe international strategies at the business level and at the corporate level. In particular, they discuss the differences between a multidomestic, a glo-bal, and a transnational strategy. Furthermore, the authors introduce major international modes of entry. However, other central topics in global strategy, such as international standardization versus adaptation or international centralization versus decentralization, are not addressed. Cooperative implications for strategy are at the core of Chap. 9, in which Ireland, Hoskisson, and Hitt differentiate between joint ventures, equity strategic alliances, and non-equity strategic alliances. In addition, the authors introduce coopera-tive strategies at the business, corporate, international, and network levels.

Part 3 of the book deals with strategy implementation and embraces chapters on “Cor-porate Governance and Ethics”, “Structure and Controls with Organizations”, “Leadership Implications for Strategy”, and “Entrepreneurial Implications for Strategy”. In Chap. 10, the authors mainly present the U.S. American (and partially the U.K.) way of corporate governance, placing high emphasis on the agency relationship between managers and shareholders. A short overview of the German, the Japanese, and the Chinese corporate

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governance shall make the reader aware of the differences existing around the globe. Some thoughts on governance mechanisms and ethical behavior conclude the chapter. Chapter 11 outlines the structural alternatives firms have when implementing their strat-egies. The authors not only explain the characteristics of functional, multidivisional, regional, and network structures, but they also discuss the parallels with specific strategic approaches. Although being mentioned in the title of Chap. 11, control aspects are not really at the heart of the discussion. Chapter 12 not only links leadership to the vision and the mission of the firm; it also highlights the importance of top managers for strategic change and firm performance. Furthermore, Ireland, Hoskisson, and Hitt remind their readers of the fact that leadership includes building an effective organizational culture and establishing ethical practices. Since leadership is interpreted in a very broad sense, the authors introduce the balanced scorecard as a framework for control. Finally, Chap. 13 brings entrepreneurship and innovation to the attention of the reader; entrepreneurship and innovation are seen as key drivers for creating value and for making a firm competi-tive. At the end of the chapter, the authors address innovation through acquisitions and through cooperative strategies, thereby linking Chap. 13 to Chaps. 7, 8, and 9.

Recommendation and Critique

There is no doubt that the present book covers essential topics in strategic management. The book integrates the ideas of prominent scholars, adds many examples and short cases from the business world, and offers lots of supplements to instructors, such as case notes, a resource manual, a test bank, a testing software, a video case program, power point slides, and a web-based system for distance learning courses. The authors and the editor have created a whole service area around the textbook, which can be of great benefit.

The book, written in an easily understandable style, is definitely useful to support undergraduate courses. Undergraduate students will find the book suited to their needs. From a Continental European view, we would also recommend the book to post-graduates (such as participants in Master of Science programs or MBA programs). However, in the case of these target groups, some minor limitations shall be kept in mind. The book is sometimes not as “critical” as it could be; the weaknesses of some theories as well as the limitations of some firm strategies could be discussed in more detail. Some of the definitions and concepts presented are very simplifying; and this is not fully reflecting the authors’ aspiration to be “intellectually rich”. Readers could be challenged more in an intellectual way and get better prepared for decision-making in a complex, often ambigu-ous and changing world.

By selecting many examples and cases about firms from various countries, the authors try to appear as international as possible. Still, it is normal that the readers will discover the origins of the book as being U.S. American (and not European, Asian, or African). The U.S. American style is reflected both in the design of the book (e.g., by using a certain type of photos that do not always add value) and in terms of contents (e.g., by focusing on the U.S. American corporate governance system). However, no book is culture-free, not even in the age of globalization. Therefore, the book is definitely a valuable textbook for

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traditional classes in strategic management—also outside the U.S.! In previous editions, the book was sold with the term “Globalization” in its sub-title. The decision to skip this sub-title was a wise one, since aspects of global strategy are not at the heart of the book.