Special Issue Book Selection

Anyone searching for solid management principles behind the smokescreen of dynamic approaches to strategic management is up against a preliminary difficulty: a large part of the available material ranges from those requiring a familiarity with mathematics, not necessarily available to the average reader, to those conveying ideas that border on common sense. In Kim’s book, behind the clarity of principles conveyed to the reader, lies a rigorous approach to the analysis of dynamic systems and a robust experience in applying this approach to tackle business and corporate quandaries. The result provides some powerful support for practitioners embarking on strategy analysis and an effective textbook for teaching how to operationalize an approach to strategic management that calls attention to the dynamics of a firm’s resource endowment. In this light, the first chapter is focused on the measures of success with an emphasis on sustainability and long term dynamics. Turning to the subject of the book, the logic that Kim purports to support strategy analysis is solidly grounded on two streams of studies. The first is system dynamics, a discipline that examines emergent, and often puzzling, behaviours of dynamic systems by looking at the underlying feedback causal structures and at the distribution of delays that separate actions from their consequences. (Forrester, 1961; Sterman, 2000; Morecroft, 2007). The second thread of study is the resource-based view of the firm inherent in the strategic management literature (Penrose, 1959; Wernefelt, 1984; Barney, 1986; Peteraf, 1993). The resource-based view of the firm sees the competitive advantage of the firm as being generated by unique bundles of resource assets that it owns. In his book, Kim nicely draws together the two areas of studies by looking at the firm’s performance from the perspective of strategic resource assets and, borrowing principles and concepts from system dynamics, he guides readers to think through the dynamics of co-evolution between a firm’s repertoire of resource stocks and the firm’s performance. This underpinning theoretical framework is articulated in the sequence of chapters two, three and four. The second chapter takes the reader first into the fundamentals of resource-based theory and the third chapter continues the journey by conveying, in a simplified and easily accessible format, the mathematics of resource accumulation dynamics. In chapter four, the concept of ‘feedback’, which is central in system dynamics analysis, is introduced to complete the repertoire of conceptual tools that are used to generate a diagnosis of a firm’s business system. This diagnosis is captured in what Kim calls a ‘strategic architecture’, a map of the interactions among those resources that together influence business performance. After having built the pillars to articulate his discourse, in chapters five and six Kim addresses specific issues to link resources to performance, within a strategic architecture. Specifically, chapter five considers the attributes of resources that are likely to drive up the performance of firms, and chapter six investigates the delays that hinder the accumulation of resource stocks. The inquiry into recurring structures of delay, which characterize resource accumulation, illuminates the inertia that typically challenges the implementation of a strategy. Chapter seven moves the attention towards inter-firm dynamics and explores rivalry. Three types of rivalry are examined depending on what kind of resource stock competitors try to win in their struggle. Chapter eight changes the level of analysis, from the level of resource stock dynamics to policyand decision-making processes. The focal point of this inquiry is the relationship between processes and resource stocks; decision processes influence a resource stock’s dynamics and the level of resource stocks Journal of the Operational Research Society (2011) 62, 933–937 © 2011 Operational Research Society Ltd. All rights reserved. 0160-5682/11