The ninth edition of Strategic Management: Formulation, Implementation, and Control is divided into 11 chapters that provide a thorough, state-of-the-art treatment of the critical business skills needed to plan and manage strategic activities. Each chapter has been filled with new, current real-world examples to illustrate concepts in companies that students recognize and regularly read about in the news around the world. Strategic ramifications of topics like executive compensation, E-commerce, the Internet, entrepreneurship, ethics, continuous improvement, virtual organization, cultural diversity, outsourcing, strategic alliances, and global competition can be found across several chapters. While the text continues a solid academic connection, students will find the text material to be practical, skills oriented, and relevant to their jobs.

AN OVERVIEW OF OUR TEXT MATERIAL

The ninth edition uses a model of the strategic management process as the basis for the organization of the text material. Previous adopters have identified this model as a key distinctive competence for our text because it offers a logical flow, distinct elements, and an easy-to-understand guide to strategic management. The model has been modestly refined to reflect strategic analysis at different organizational levels as well as the importance of internal analysis in the strategic management process. The model and subsequent structure provide a student-friendly approach to the study of strategic management.

The first chapter provides an overview of the strategic management process and explains what students will find as they use this book. The remaining 10 chapters cover each part of the strategic management process and techniques that aid strategic analysis, decision making, implementation, and control. The literature and research in the strategic management area have developed at a rapid pace in recent years in both the academic and business press. This ninth edition includes several upgrades designed to incorporate major developments from both these sources. While we include cutting-edge concepts, we emphasize straightforward, logical, and simple presentation so that students can grasp these new ideas without additional reading. The following are a few of the revisions that deserve particular note:

Following the Enron bankruptcy and the wrongdoings of Worldcom executives, Washington lawmakers passed the Sarbanes-Oxley Act of 2002, which requires certifications for financial statements, new corporate regulations, disclosure requirements, and penalties for failure to comply. Chapter 2 provides in-depth coverage of the Act, including discussions of the provisions restricting the corporate control of executives, accounting firms, auditing committees, and attorneys. Also discussed is the restructuring of the governance structure of American corporations, including the heightened role of corporate internal auditors who now routinely deal directly with top corporate officials.

The ninth edition expands on it market-leading coverage of social responsibility. Principal perspectives are presented. A continuum of social responsibilities is discussed to help students differentiate among economic, legal, ethical, and discretionary social responsibilities. Arguments for and against social responsibility are explained. Numerous examples, drawn from recent headlines, appear in this section.

Central to the belief that companies should be operated in a socially responsive way for the benefit of all stakeholders is the belief that managers will behave in an ethical manner. Thus planners often adopt a philosophical approach that can provide the basis for the consistency they seek. The utilitarian, moral rights, and social justice approaches are presented and explained in this new edition.

A new approach to generic strategy centers on delivering superior customer value through one of three value disciplines: operational excellence, customer intimacy, or product leadership. Companies that specialize in one of these disciplines, while simultaneously meeting industry standards in the other two, gain a sustainable lead in their markets. Chapter 6 provides details on these approaches with several examples of successful company experiences.

Of the recent approaches to corporate governance and strategic management, probably none has had a greater impact on managerial thinking than agency theory. While the breadth and measurement of its usefulness continue to be hotly debated, students of strategic management need to understand the role of agency in our free enterprise, capitalistic system. This edition presents agency theory in a coherent and practical manner. We believe that it arms students with a cutting-edge approach to increasing their understanding of the priorities of executive decision making and strategic control.

One of the most significant conceptual frameworks to systematize and "measure" a firm's strategic capabilities is the resource-based view (RBV) of the firm. The RBV has received major academic and business press attention during the last decade, helping to shape its value as a conceptual tool by adding rigor during the internal analysis and strategic analysis phases of the strategic management process. This edition provides a revised treatment of this concept in Chapter 5. We present the RBV in a logical and practical manner as a central underpinning of sound strategic analysis. Students will find several useful examples and a straightforward treatment of different types of "assets" and organizational capabilities culminating in the ability to determine when these resources create competitive advantage. They will see different ways to answer the question "what makes a resource valuable?" and be able to determine when that resource creates a competitive advantage in a systematic, disciplined, creative manner.

Outsourcing is becoming a standard business practice in every facet of business operations. This trend enhances the usefulness of the value chain approach in strategic analysis. We have simplified our treatment of this useful conceptual framework and added several contemporary examples to enable students to quickly incorporate the value chain perspective into their strategic thinking process.

While our text has led the field in providing a practice-oriented approach to strategic management, we have redoubled our efforts to treat topics with an emphasis on application. Our revised section on executive compensation in Chapter 9 is a clear example. You will find an extended discussion of executive bonus options that provides a comparison of the relative merits of the five most popular approaches, to include the current debate on the use, or overuse, of stock options and the need to accurately account for their true cost.

A recent evolution in the motivation that underpins strategic management is reflected in the adoption of the Balanced Scoreboard approach to corporate performance evaluation. While the maximization of shareholder wealth retains the top spot in executive priorities, the guideline is now widely accepted that strategic initiatives must produce favorable outcomes over a range of stakeholder objectives. We try to help our readers gain an appreciation for this perspective in our ninth edition.

Many revisions in this book are driven by changes in business trends. Nowhere is that more evident than in our discussion of company bankruptcy. In the 1980s bankruptcy was treated as a last option that precluded any future for the firm. In the first decade of the 2000s the view has dramatically changed. Bankruptcy has been elevated to the status of a strategic option, and executives need to be well versed in its potentials and limitations, as you will see in Chapter 6.

We have divided the discussion of strategic analysis and choice into two chapters. Chapter 7 examines the single business setting. Chapter 8 looks at the multibusiness company and the diversification decision. We have provided extensive new coverage of the decision to diversify or not in Chapter 8. In addition to historical reviews of the portfolio and core competency approaches and their deficiencies, we include comprehensive ways to evaluate the role of the corporate parent in adding value, if any, beyond the sum of its businesses. And the concept of "patching," with its identification of "strategy as simple rules" to thrive in turbulent markets receives extensive coverage in this edition. The pages of BusinessWeek have helped us add numerous outstanding examples to these two chapters from business writers around the world. Samsung, Apple, Disney, Quanta, Hewlett-Packard, Delta, and Ryanair are just a few of the names students will quickly recognize in coverage that illustrates and helps them more easily understand how strategic analysis is conducted and choices made.

Chapter 9 focuses on reward systems, short-term objectives, and empowerment mechanisms as part of strategy implementation. Doing so allows students to move quickly into strategy implementation considerations from an executive perspective. At the same time we include in this edition an appendix containing approximately ten pages discussing various functional area tactics necessary to implement business strategy. Doing so serves as a convenient review of functional courses leading up to the capstone strategy class for instructors that prefer to do so.

Chapter 10 provides a new perspective on the issue of organizational structure as a central mechanism for strategy implementation, particularly in larger companies. It explores three fundamental driving forces on contemporary organizational structure-globalization, the Internet, and speed. From this beginning, it covers research by academics and prominent business analysts to identify guidelines relevant to matching structure to strategy in the twenty-first century. Six contemporary guidelines to structuring an effective organization are explored in-depth providing students with useful conceptual tools to take into their post-graduation companies and contribute to specific structural challenges. A concise appendix is provided to Chapter 10 detailing the pros and cons of different basic organizational structures. It is included there rather than in the chapter to increase the readability and contemporary focus of the chapter material.

Chapter 10 has added coverage of outsourcing, virtual organizations, and the recruitment/development process as key contemporary considerations in building effective management teams. How to get and keep top management talent is an issue of critical importance examined in this new edition. The role that leadership and organizational culture has played in the impressive turnaround at P&G is explored in detail in the discussion case.

Chapter 11 offers a major revision in our treatment of these topics. First, a reduced and concise treatment of four broad strategic controls used in the formulation and implementation phases of strategic management are discussed and illustrated. Second, the link between quality/continuous improvement initiatives and the strategic management process receive new, in-depth treatment in this chapter. ISO9004 and Six Sigma are examined as contemporary approaches to the continuous improvement of a company's value chain and a mechanism to guide strategic control. The experiences of several well-known companies in adopting these tools help illustrate their value in a comprehensive strategic management commitment. Finally, the increasingly popular use of the balanced scoreboard approach is explored in this chapter because of its value in supporting strategic control and continuous improvement.

Thanks to the leadership at McGraw-Hill and BusinessWeek, we have completed a strategic alliance of our own that benefits every professor and student who uses this book. Our book is BusinessWeek's exclusive partner among strategic management textbooks in the collegiate market. We have long felt BusinessWeek to be the unquestionable leader among business periodicals for its coverage of strategic issues in businesses, industries, and economies worldwide. Personal surveys of collegiate faculty teaching strategic management confirmed our intuition: While there are many outstanding business magazines and new publications, none match the consistent quality found in BusinessWeek for the coverage of corporate strategies, case stories, and topics of interest to students and professors of strategic management.

Through this partnership, we get unconditional access to BusinessWeek material for this book and the use of their cutting-edge stories and topical coverage. From our point of view, this is a unique four-way win-win; teachers, students, authors, and BusinessWeek all stand to gain in many ways. The most direct way you can see the impact of the BusinessWeek alliance is in three book features: discussion cases, Strategy in Action modules, and 25 short cases.

Another pedagogical feature we pioneered, Strategy in Action modules, has become standard in most strategy books. Our strategic alliance with BusinessWeek lets us once again pioneer an innovation. We have drawn on the work of BusinessWeek field correspondents worldwide to fill over 60 new BusinessWeek Strategy in Action modules with short, hard-hitting current illustrations of key chapter topics. We are the only strategy book to have BusinessWeek-derived illustration modules, and we are energized by the excitement, interest, and practical illustration value our students tell us they provide.

As professors of strategy management, we continually look for content or pedagogical developments or enhancements that make the strategy course more valuable. We have been concerned for some time about the length of cases typically available for classroom use. On the one hand, length often accommodates a breadth of information that in turn assures a class discussion that covers "all the bases." It even honors the professorial instruction we both experienced as students that "it is your job to extract the relevant information" from the lengthy case. The answer, we have long felt, is to have a blend of cases in terms of length. Some long cases are needed so that the professor can cover many issues within a company and allow for a truly comprehensive strategic analysis. Some shorter cases also play a role by facilitating a focus on one incident, or allow for a discussion of only 20 to 30 minutes so that the case topic can be used in concert with other materials, or provide a springboard for discussion of "real time" situations, perhaps supplemented by website and Internet-derived information. These short cases generate useful class discussions while allowing coverage of other material during the case portion of the course or as a supplement and source of variety during the text portion of the course. We think you will find it useful. We have included 25 such cases in the ninth edition along with50 longer cases. Thirteen out of the 25 comprehensive cases can be found at the end of the book, and the remaining 12 are posted on the book's companion website (as a part of the Instructor's Edition).

We are pleased to offer 50 excellent cases in this edition. As noted above, these include 25 traditional cases and industry notes that adopters expect in a strategic management textbook. The remaining 25 cases are short cases built on solidly developed BusinessWeek articles from the most recent editions of that magazine. Both sets of cases present companies, industries, and situations that are easily recognized, current, and interesting. We have a good mixture of small and large firms, start-ups and industry leaders, global and domestically focused companies, and service, retail, manufacturing, technology, and diversified activities.

Students will feel comfortable with our cases about AOL-Time Warner, Avon, BMW, BP, Expedia, Ford, GE, Honda, Linux, Merrill Lynch, Microsoft, Mitsubishi, Motorola, NFL, Nucor, Perdue, Qualcomm, Samsung, Siebel, Southwest, VW, and Yahoo! They will also have the opportunity to learn about global aspects of strategic management by studying the Cuban Cigar Industry, Huxley Maquiladora in Mexico, Citigroup in Post-WTO China, Eli Lilly & Co in global pharmaceuticals, and IBM in the global computer services industry. We have also included smaller firms that rely on their entrepreneurial strength, including TiVo, Treo, Vail Resorts, and the LASIK eye surgery industry. Students get to examine numerous industry situations through this 50-set case selection including the personal computer, telecom, retailing, electric vehicles, music, and global products and services industries. There are also several opportunities to incorporate the Internet's evolution and the strategic implications within several industries and implications facing specific companies.

We hope that you will find our book and ancillaries all that you expect. We welcome your ideas and recommendations about our material. Please contact us at the following addresses:

Jack Pearce and Richard Robinson