4 historians and two strategisst talk about 40 years of seminal book "Strategy and Structure" (1962)

Testimonies and Interviews with James Cortada (IBM, USA), JoAnne Yates (Sloan School of Management, USA), Christopher McKenna (Said Business School, Oxford, UK), Richard R. John (University of Illinois, USA), Kathleen M. Eisenhardt (Stanford University, USA) and Gary Hamel (Strategos)

Alfred duPont Chandler Jr., 83, is a Isidor Strauss professor of Business History, Emeritus, at Harvard Business School. Born September 1918, was a research associate and professor at MIT between 1950-54. Entered Havard Business School in 1971. Emeritus in 1989. He has written extensively on the evolution of the modern american corporation. His major academic works include Strategy and Structure. Chapters in the History of the Industrial Enterprise (1962), now 40 years old, and The Visible Hand: The Managerial Revolution in American Business (1977). Most recent books include Inventing the Electronic Century: The Epic Story of the Consumer Electronics and Computer Industry (2001) and A Nation Transformed by Information: How Information has shaped the United States from Colonial Times to the Present (2001).

© April 2002, Edited by Jorge Nascimento Rodrigues, editor of Gurusonline.tv

Chandler described the most important human innovation of the last 150 years
Testimony by Gary Hamel
London Business School, founder of Strategos
One of the leading innovation gurus

Chandler described the organizational innovation that created the big corporation. No doubt that the large scale industrial organization is the most important human innovation of last 150 years. And this achievment created enormous prosperity in the world.
But, my argument is that today we leave in a world with more descontinuity than 40 years ago. The big industrial organization was done to make one thing, and did that well.
My question is: a historian, a new Chandler, in 2030, what he will describe as the new management practices in the post-industrial era?
I think it's in this new field that we have to be envolved. Chandler described the last industrial revolution. I am interested in the next revolution in innovation and organization. In the past the management revolution was more interested in optimization, today we have to be more
focused on innovation.
Indeed the modern corporation that Chandler described was a product of innovation. The big organizations, with divisions, etc., where pure human invention. What I am now interested is to follow who will invent the next practices.

Obs: This testimony is part of an interview of Professor Hamel to be published in May 2002 in www.janelanaweb.com and Expresso weekly newspaper in Portugal.

Learning with a Great Master
A testimony by James Cortada
Co-authored with Chandler A Nation Transformed by Information (2000)

Professor Chandler and I collected a team of historians and business management professors to examine the role information has played in the United States from the 1700s to the present. He led us through an analysis of what information technologies were used and how over the centuries. So we studied the role of information in colonial times making possible the political philosophies of the day; we looked at the role of the post office in spreading information through the economy and society; the role of information and information technologies in helping create the modern organization; the role of radio, TV, etc. in mid-twentieth century life; the arrival and expansion of the computer and the computer industry; the role of the PC and the Internet in the home and another chapter on its effects in business (along with computing's effects on management). We argued in this book that information was an extraordinarily important element in American society. Professor Chandler guided us so that we would concern ourselves with how technologies and information emerged and were used over time, identifying long patterns of behavior.

I personally felt like I was learning at the foot of a Great Master. He understands so much, knows so much history, and is comfortable talking about the role of computers as he is in how railroads and postal systems operated in America.

Reviewing the strategy history these last 40 years
Interview with historian James Cortada

Before Chandler in 1962 is there any book or author that has contributed to the emergence of strategy as a discipline in management?

The two people who come to my mind are Joseph Schumpeter the economist and Peter Drucker the business management professor. Schumpeter began publishing on capaitalism and economic growth at the firm and industry level while living in what used to be the Austro-Hungarian Empire just before World War I and continuing his work after the war in the USA until his death in the middle of the twentieth century. He was overlooked by the more popular John Keynes in the 1930s, but now is very popular, especially among economists. Peter Drucker, also a European, and also a austrian, began writing on strategy and management immediately following World War II and had become quite influential in management circles by the end of the 1950s. From the 1930s through the 1970s the practice of management became recognized as a discipline--not an art--and in these years many people began to give it definition. One of those definitions involved the role of management in providing direction for a firm and ways to achieve it, what you and I call strategy.

What was the main contribution of Chandler to strategy?

Chandler was the first historian to argue the importance of strategy in the development, management, and success of the corporation. Economists had worried about strategy since around 1900, such as Schumpeter and Alfred Marshall [the british economist of Cambridge University, Keynes was one of his students], but not to the extent that Chandler did. Chandler demonstrated through a series of case studies, including most importantly railroads and DuPont, that strategy gave companies focus, and allowed them to determine what should be done and why. He reinforced this idea in 1977 with the The Visible Hand in which he established the power and practices of management in general. In 1990 in Scale and Scope he studied how corporations operated in USA, Britain, and Germany, demonstrating that strategy and management were also influenced by cultural and other influences of a national nature. In 2001 in Inventing the Electronic Century he adds the influence of prior knowledge and capabilities as influencing the role of strategy and management in defining the activities of the firm.

Strategy before structure continues to be the "rule"?

Strategy before structure remains the rule in Asia, Europe, and the United States (I assume Latin America too) and of course, Canada. I have no idea what is happening in Central Europe or what used to be the USSR. Management spends a great deal of time on strategy, then organizes and deployes people, assets, and money to implement these. Of course results vary by company and by industry. Increasingly economists and business management professors around the world are learning that a company's culture, heritage, knowledge, and immediate circumstances have a profound influence on tactics and strategy. Long term configurations of companies are out, short term (less than 3 years) is in. Tactics and strategy become more closely tied as a result.

With Ansoff in 65 strategy has done a new step. What was the importance of strategic planning?

Strategic planning began to be seen as a way of optimizing profit and growth in an organization. It was the recognition that many things had to be coordinated to be successful, especially in very large, complex companies, such as General Motors in the USA and Phillips in Europe, and how with the major consolidations occurring, for example in publishing and media in Europe (actually global). Strategy became a major role of senior management and acquired a collection of best practices and methods that became routine in all large companies. By the early 1970s the largest corporations in the world had strategy departments. They varied in performance: some collected data about the industry the company was in and made suggestions, others thought about where a firm should go over many years, and yet others established planning techniques that were used at lower levels, for example, in divisions.

Strategic planning is "dead" as Mintzerbg puts it in one of his books some years ago?

Mintzberg was incorrect in saying strategic planning was dead. However, he is correct in suggesting that the time line for strategy has shortened tremendously as various industries have increased the amount of change they
experience of a radical nature. Mintzberg over-stated his case because senior executives at the divison and corporate level of companies plan, worry about strategy, and even use some of his ideas. While an important developer of strategic thinking, when he argued the case that strategic planning was dead he lost a great number of followers. And yet he is such a creative, smart individual.

In the 70's the japonese reveal a new kind of strategy and positioning of their companies. Ohmae wrote in japanese his famous book, only known in the 80's in the West. What was the role of The Mind of the Strategist?

When it was published, it captured the attention of consultants and some strategists and became a "best seller." Everyone, it seemed, respected its content. Today most managers probably do not remember the book, although strategy consultants still do.

Truly the "strategist" is a key actor for the company?

The strategist enjoyed a renewed popularity as we went through the second half of the 1990s, especially in the United States, because the Internet had created new opportunities. New "business models" became an important subject of conversation and debate. Companies were trying to determine how they could make money profitably over the Internet - a subject still being debated, particularly after the collapse of so many "dot.com" companies.
The debate was all about strategy. Today, traditional strategic studies are back in style as firms attempt to figure out what markets they need to be in and how to position themselves. This role for strategy is especially evident in the largest companies around the world, particularly with those European firms attempting to expand into other European markets or scale up on a global basis, such as in publishing and automotive.

Regarding professor Michael Porter we have a debt in the 80's - the "discover" of the role of strategy in competitive advantage of companies. How you evaluate this contribution? Has this competitive strategy survived the turbulent 90's?

Porter remains around the world one of the basic sources of modern strategic thinking. He made several contributions that are long lasting. First, he explained clearly the link between strategy and performance of both companies and industries. Second, he explained how strategic planning should be done, especially about what. Third, he offered a variety of concepts that have proven useful over time, such as his concept of competitive advantage. His ideas, however, are also showing some age because we have not really had him comment fully on the effect of the Internet and technology on strategy and the work of corporations.

Tom Peters was the first one to talk of turbulent times and a kind of emergence of structure vs strategy. Strategy was something we have to formulate on the road, as the things happens at nanoseconds?

The concept that one could define a strategy that could be used for many years is finished, because too many changes come too quickly. This is especially so with companies that are publicly held stock firms. However, I think Tom Peters has been too simplistic in his comments about turbulent times because management is not completely a victim of changes and circumstances. Managers continue to create and react and take advantage of changes, sometimes well and sometimes not so well. Thinking strategically helps management to take advantage of changes or to create some of a positive type.

What was the contribution of "core competencies" to strategy discipline? Probably this book of Hamel and Prahalad was one of the most read of all times...

Their book was very important because it made managers realize how important core capabilities of a firm, and of its people, was to the overall success of the company. Taking advantage of what you know also made good common sense to many people. Their idea also came along at the same time that economists were beginning to argue that there existed "path dependencies." This is the idea that what you have done or what you know from before influences what you can and do in the future. In the 1990s, all over the world core competencies and path dependencies became subjects of great interest to professors, consultants, and management. In some industries, such as pharmaceuticals, it became the central theme of many corporate strategies. Many other high technology industries also became aware of the possibilities and realities of their competencies, such as in the manufacture of semiconductors and airplane engines.

What was the contribution in the 90's of the "revolutionary" authors, like Hamel and Hammer (in the first phase of reengineering)? Is there consistent ideas and practices?

This is a very complicated story, difficult to tell in several short sentences. Hammer, in particular, created a greater revolution than Hamel, because along with his colleagues he held out the promise that one could reengineer the corporation, making it more efficient, leveraging technology (such as computers), and reduce the amount of labor that went into the work of companies. In fact, that did happen, that is to say, companies were able to speed up work, automate work, and reduce labor in work. Since the cost of labor was always high in all industries, that did provide a jump forward in efficiency and reduced costs of operation, but not necessarily more sales or larger markets. Today around the world process reengineering and continuous improvement are well established operating practices in all medium to large firms. Governments less so. Even universities are beginning to teach these bodies of knowledge to students. There are many best practices by function (for example, manufacturing), by industry (health, distribution, retail), by process (supply chain management), etc., well documented and known to companies.

Anyway in the New Economy nobody listen really to al these authors and buzzwords. "New rules" emerged from the practice of the New Economy entrepreneurs. Their strategy was simple: pick money from venture capital and other investors, "sell" projects, and go to the IPO, pick money on the markets and become rich at 30's. The hard criticism from Michael Porter in the HBR review is correct? Can we return to the old days of strategy thinking or something changed the context?

I think this scenario is too simple, especially since the decline of the dot.coms which has now made it more difficult to acquire venture money to invest in new ideas and business models. Management teams around the world are conservative, preferring to extend what they know rather than to do radical things. Porter I think was correct and I agree with him that the fundamental concepts of traditional strategy setting apply and make sense. But it must be dynamic, constantly understanding what is happening in the market place (idea of sense and response), reacting to that knowledge, leveraging what the firm is capable of doing, and constantly adjusting over time. Strategy must be real, be measured, and be a central part of what senior and middle management does in firm. There are no quick roads to riches. Those that achieve it are the exceptions and most of us are not exceptions. We have to make money the old fashioned way, by earning it.

More recently a group of authors become to talk of the emergent process of strategy, trying a synthesis. How we can evaluate these new ideas like those of Kathy Eisenhardt and the just born school of "improvisation" in strategy with a minimal organization and rules?

I am not sure because while I have read the literature, I have not yet had the opportunity to apply it. It feels right, especially because of the need to be constantly dynamic, but I would have to try it to see how it would link strategic intent with what people do each day at work. That is not yet clear to me, but that is my weakness not necessarily their's. We do need a synthesis because as your questions have pointed out, there has been a great deal of change and discussion in the field of strategy over the past 30 years. It has been useful, productive, but remains scattered about. A logic synthesis on methods and practices that is supported by a genation of managers and experts would be most welcome. Peter Drucker performed this service for the general field of management in the 1950s-70s with the various editions of his large book, Management. Perhaps Porter can do this for us?

In your personal opinion what are the main trends in strategy?

1.Incorporating globalization in design, manufacture, distribution of products and services, including scaling up into larger international companies.
2.Leveraging technologies to enhance traditional core businesses, e.g., the Internet, DNA, information technologies.
3.Increased use of scenario planning (again) to define options and possibilities.
4.Greater use of strategic planning by small firms; it no longer is just something large companies do. Everyone seems to want a plan and structure, everyone is being told they must have to obtain funding or to defend the value of their stocks.

Chandler inspired all a generation of business historians
Testimony by JoAnne Yates
Sloan School of Management, MIT
Author of Control Through Communication: The Rise of System in American Management (1993) based on Chandler's insights

Alfred D. Chandler has had a large impact on management and on my work, though my work is not in the strategy discipline. Scholars in management who have read any historical treatments have typically read Chandler - usually Strategy and Structure or The Visible Hand. The former book gave management and strategy a way to link strategy with structure, and that link is crucial in a field that is trying to improve managerial strategy.

Chandler's research inspired and provided the framework for my original research on the historical emergence of communication systems in late 19th century and early 20th century firms. It is the starting point for much subsequent research in management and in business history, my own and that of others. Without Chandler's pathbreaking work in mapping the broad outlines of strategy and structure and of the managerial revolution, the rest of us would not have had that base on which to build. Many have found new things to add to his perspective, but without his perspective as a starting point, our work would have been much less.

Chandler remains a historian
Interview with Christopher McKenna
Said Business School, University of Oxford, UK
Forthcoming book The World's Newest Profession: Management Consulting in the 20th Century

It's not more acurate to place the birth of the managerial revolution' concept and the emergence of business strategy as a discipline in a "cluster" of books that goes from Chester Barnard's The Functions of the Executive (1938), Drucker's 1946 and 1954 seminal books, Chandler's Strategy and Structure (1962), and Igor Ansoff's Corporate Strategy (1965)? Or professor Chandler has an unique approach that puts him apart from the other 3?

While it is true that Chandler's work was a product of his times - its focus on the rational and on the stages of economic growth (like W. W. Rostow who was also teaching at MIT at the time) -, he was different from the other strategists largely because he did not situate himself in the work of managerial theorists but remained a historian. This explains why Chandler, unlike the others, felt it was so important to define his terms - his definition of strategy remains the most important one to this day - and also why his perspective seemed so different.

Can we situate the emergence of strategy as a management tool with the emergence of the consulting industry in the 70's, with the projection of the old McKinsey & Co and the newest Boston Consulting Group (founded in the 60's)? After those seminal books, it was the time of the consulting firms to develop the discipline and make some good money?

Chandler's work took place just as the first strategy consulting firms were emerging. Prior to the 1960s, McKinsey & Co. was not a 'strategy' firm, since strategy as a discipline did not exist, but instead concentrated on restructuring organizations. Similarly, BCG which was founded in the early 1960s after Bruce Henderson left Arthur D. Little, Inc., also benefited from this new interest in strategy as a subject. The key addition that Chandler made was to connect strategy and structure. Thus restructuring was an outgrowth of strategy, and this meant that a company should first review its strategy before pursuing a different structure. Since corporations are always reviewing new strategies, the growth of strategy consulting gave a tremendous boost to consulting as a field and the consultancies who were able to profit from this growth did very well.

In the 80's we have two historical moments - professor Michael Porter first book on strategy and McKinsey guys Peters and Waterman with the report on excellence. How you evaluate these contributions for the strategy discipline?

Michael Porter was remarkable for bringing the basic principles of economics into strategy. By repackaging the basics of economics as strategy, Porter revolutionized the way that business school faculty taught strategy. His work served as a rapprochement between the two subjects that had been divided at the moment of conception. In comparison, Peters and Waterman's work, In Search of Excellence, did two things at once. First, their book showed the potential for blockbuster books on business. Ever since the publication of In Search of Excellence, strategists and other writers have sought a bestseller whenever they publish a new book. Secondly, the book showed that having a bestselling author(s) within a consulting firm could greatly add to your consulting firm's growth. So where Porter's work fundamentally changed the nature of MBA teaching in strategy, Peters and Waterman's work resulted in the expansion of the market for strategists within companies and consulting firms.

After Porter and Tom Peters success, can we say that we saw the emergence of the management consulting as the newest profession and a real business (for a top level firms circle) on its own? The managerial revolution (something from the XIX century) was finally dominated by the business consulting money-makers?

It is tempting to see consultants as dominant over the businesses they serve - and it is true that their recommendations have fundamentally reshaped the way that the Western economy functions - but in reality, it is best to understand that consulting is only one part of a larger institutional infrastructure of professions that undergird the Western model of business (itself largely American in origin). Thus consulting, the world's newest profession [as I titled by forthcoming book], is only one part of an array of professional services, including accounting, engineering, law firms, investment banks, public relations, advertising, venture capital, and even business schools, now considered to be essential to the modernization of a non-western economy. Consultants, importantly, have not only become one of these central features, but have recommended that countries and companies adopt this array of advisors. In the process, they have fundamentally reshaped the nature of the managerial revolution in business as they have institutionalized the place of strategy in business.

Have you saw a kind of "desert" in the 90's, as Michael Porter accuses recently in Harvard Business Review, saying that the new economy period was a counter revolution in strategy?

Porter is both right and wrong about the new economy as a counter revolution in strategy. He is right that many startup companies ignored strategy as it is taught or simplified it in order to justify their existence to venture capitalists. On the other hand, Porter himself was responsible for the apparent slowdown in strategy during the 1990s, for his dominance of the field as a theorist and as a model for teaching, meant that the post-Porterian period of the 1990s left people without a clear guru to attach to strategy. Just like the period after the retirement of a dominant player in sports, the individual achievements of strategists in building new models seemed less significant during the 1990s not because the field was any less active but simply because outsiders could not attach a single name to the discipline.

How you evaluate the contribution for strategy discipline of some books from CEOs that appears in the last 50 years - Sloan's My years at GM or Grove's Only the Paradoid Survive (and his operational concept of "inflection points")? Would you choose other important books from real managers?

It is worth mentioning that Chandler helped Sloan to write his famous memoir, so it is not surprising that it bears the imprint of his views. Similarly, the fact that Grove has been teaching at Stanford for years also helped him to shape a book that is not just a memoir but also an important statement about strategy. It is generally the case, however, that corporate memoirs are not very useful for theorizing about decision-making. Interestingly, even very good memoir's like Tom Watson's Father, Son, and Co. about IBM is more interesting for its discussion about the personal aspects of running a business than in formulating strategy. Thus aspects of IBM's decision to capitulate to the American government in its response to antitrust suits, turn out to be as much rooted in the psychology of the person as in the strategic dimensions of the problem. And this, of course, is in direct contradiction to the way that objective strategy has generally been taught.

40 years after the seminal work of Chandler, strategy is definitely a knowledge commodity?

Luckily for Chandler, and for the rest of us who work at the nexus of strategy and history, strategy is not yet a commodity. A commodity is an undifferentiated good and thus cheap - by comparison, strategy can easily be differentiated and made valuable in that process. What is interesting is that forty years after Chandler's seminal work in strategy, history is once again becoming a central feature in the analysis of strategy. In particularizing the analysis of strategy away from generic strategies and simple mnemonics, strategists, alongside historians, are once again demonstrating the important differences between strategy and economics. Chandler's work, in this way, is not simply the alpha - the starting point - but also the omega - the finishing point - in the growth of strategy as a subject.

Chandler has always been critical of financiers
Interview with Richard R. John
University of Illinois, Chicago, USA
Author of Elaborations, Revisions, Dissents: Alfred D. Chandler, Jr.'s The Visible Hand after twenty years, a most quoted paper published in 1997 in the Business History Review

What's the uniqueness of Chandler's contribution for the strategy discipline with his seminal book Strategy and Structure? Chester Barnard's 1938 book and Peter Drucker's 1946 and 1954 management books were not in the same field?

Strategy and Structure is a historical monograph, based on an exhaustive investigation of the relevant primary sources. Thus, it brought the tools of the historian to the study of corporate governance. This was new at the time, and has remained a distinguishing feature of Chandler's work. Barnard was a business executive; Drucker a consultant. Neither were working within established academic disciplines.

What was the main contribution of The Visible Hand (1977), the other seminal book of professor Chandler? It was definitely the death of the Invisible Hand paradigm of Adam Smith and its powerful ideological influence?

The Visible Hand summarized and recast a half-century of scholarship in business history. It shifted the focus from the morality of individual business leaders to the effectiveness of different kinds of organizational forms -of which the most important was the industrial corporation (or what Chandler called the "modern business enterprise"). In so doing, it gave the modern corporation a kind-of moral legitimacy that altered the ways historians and economists wrote about the modern American economy.

That visible hand of management and of the managerial class (including the middle management) has a more profound influence in the emergent sectors of the economy linked with the technological revolutions?

Chandler has always linked technological innovation with the modern business enterprise. Not everyone has agreed with him here, but this is a consistent theme in his work. He has, in particular, encouraged a great deal of scholarship on industrial research, and has recently been working on two "high-tech" fields: electronics and chemicals.

How it happens that the managerial revolution begins in the XIX Century, was probably complete by the First World War, and only in the 40-60's of the XX century Drucker and Chandler begins to talk about it?

It is common in historical inquiry for periods to be characterized long after the event. No one living through the late eighteenth century British "Industrial Revolution" called it by this name. (The term was only popularized in the 1880s.) GM executive Alfred Sloan, beginning in the 1920s, anticipated some of the themes that Chandler would highlight. In addition, the principles of modern management were well understood by certain figures in the business press. A full answer to this question would demand a review of much of twentieth-century American cultural history. It is a good question--and not an essay one to answer in a short space.

What's the difference between the heroic "entrepreneurs" of Schumpeter (people that "opens" the new economic long waves) and the managers that Drucker and Chandler talked about?

Chandler is interested both in managers and in Schumpeterian entrepreneurs. But he has tended to highlight the contributions of the managers, since they maintain the organizations that entrepreneurs help establish. To put it simply (and perhaps too simply) managers operate within given constraints; entrepreneurs alter the constraints.

One of the important practical management inventions borned with Alfred Sloan work at GM in the 20's. Have we in recent times something similar, in the practical field?

I am not the best person to answer this question, since, as a historian, I focus my attention on the less recent past. But here are some thoughts: Dell Computer is very innovative in the assembly and marketing of custom-designed computers. This might well be an example worth amplifying on. General Electric's Jack Welsh is much admired in the business press. His work at GE might be worth mentioning too.

With the last events around the Enron case (something it seems is a general trend of "creative finance" in big business in the States), the managerial class is not accused in his power? Aren' we approaching the end of the rule of the managerial class and their "friends" in consultancy business and audit?

Chandler has always been critical (if not contemptuous) of financiers. He would distinguish sharply between managers and financiers - as would most commentators in the United States, going back all the way to Thorstein Veblen [died in 1929]. The Enron debacle is very serious, but it is an indictment of the current deregulatory mania - not of managerial capitalism - with which (at least as Chandler would define it) it has very little in common.

Chandler idea make sense in static markets
Interview with Kathleen M. Eisenhardt, a critical view
Stanford University, California, USA
The new "school" of emergent strategy

Strategy and Structure of 62 from Chandler - 40 years ago - continue to be a valid "bible" in its foundations?

The Chandler idea that strategy is set and then structure follows makes sense in clear, static markets. In ambiguous, dynamic markets, the two are much more intertwined. In my view, in the overall approach, structure and, more important, the processes by which structure changes are the constant while strategy changes.

The criticism of Professor Michael Porter about the "death" of strategy in the New Economy period is correct?

Althow I have not read his HBR article in some time, I can make a couple of points. First, Mike knows a lot about traditional industries, but may well be less informed about more dynamic, ambiguous or uncertain industries such as those that were prevalent in the so-called new economy. The pace, uncertainty and ambiguity faced by these companies calls for a strategic logic that is different from Mike's nearly static positioning logic and its related reliance on tightly woven activity systems. Therefore, he might not have understood that while the general precept about strategy as being centered on differences is still valid, the manner in which those differences play out is unlike static industries. The underlying logic is much more about opportunity capture, and much less about a static position.
Second, I think that it is an over-statement to claim that new economy companies did not have strategies. As in any market situation, some companies had effective strategies, some had ineffective ones, and some simply had none. This was the case in the new economy as it is in any market situation. So I would not generalize to say that there was a death of strategy although there might well have been more companies than usual in the third category.

Are competitive advantage strategies still relevant?

Competitive advantage is always desirable, but it is not always achievable. The core issue is not so much whether there is a competitive advantage. Rather, it is how long that advantage will last. From the perspective of managers in uncertain, ambiguous, and/or dynamic markets, the reality is that it is almost impossible to know how long any advantage will last. Therefore, managers must operate as if sustained competitive advantage does not exist.

What really hapenned in the New Economy period - a wave of entrepreneurship à la Schumpeter and of entrepreneurial 'revolutionary' strategy à la Gary Hamel, or a simple "toolkit" to pick money from the financial markets?

I think that there was a wave of entrepreneurship (in both new and established companies). This kind of era has happened before (e.g., in the early 80s with the rise of the personal computer and microprocessor technologies) and it will happen again. More so than in other types of eras, these time periods create a few big winners and large number of losers. Also in such an era, the relevant strategic logic becomes capture of fleeting opportunities and strategies become simple rules for capturing those opportunities.

What changed in strategy since the 90's? And what are the main consequences for strategy formulation?

There are several changes in strategy that largely relate to changes in the clarity and dynamism of markets. Strategy has become: 1) simpler - in the kinds of markets that we saw in the 90s and see today, there is too much fluctuation and ambiguity to make complicated strategies sensible. Simple strategies provide coherence while retaining flexibility to adjust; 2) more organizational - strategy depends a lot more on organizational processes of change, the ability to change is a key aspect of strategy; and 3) more time related - not in the sense of speed, but in the sense of rhythm as central aspect of strategy. The key consequences for formulation are: 1) a lowering of responsiblity for setting strategy to business unit teams; 2) a change of responsibilities among corporate executives to center on organizing the internal and external boundaries of the corporation rather than on business strategy; 3) a shift from an emphasis on analysis to one on recognizing patterns in the marketplace through intense reliance on information and the intuition that comes from this information; 4) an increased importance of conflict management as smart people are likely to disagree; and 5) an increased need to be able to manage in a longer time frame - working in real time, short term and long term time frames.

What are the main concepts of the "emergent" theory about strategy?

The main idea is a focus on the strategic logic of capturing fleeting opportunities as opposed to building monolithic positions or core competences. Strategy becomes the selection of one or several key processes that place the corporation in the best flow of opportunities (e.g., acquisitions, product development) and a few simple rules to guide those processes. The idea is to create enough structure to guide strategy, but not so much that flexibility is impaired. Obviously such an approach requires better people than other strategies (just as jazz improvisation does because this is after all strategy improvisation). In this world, the strategy is known in the sense that the processes and rules are known, but the outcomes are not.