Honda Effect Reference

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Friday, May 15, 2009
The Honda Effect & Strategy
[pic]I know this article, The Honda Effect, has been around for a while but there is something attractive about the more organic view it proposes regarding the question of strategy. In my view we often develop strategies as a way of trying to control our environments -a very western pursuit. In contrast the article proposes a far more dynamic approach to developing strategies. Here are 2 quotes that I like: Quote 1 is from the article itself and quote 2 is from a paper that discusses The Honda Effect.

"The Japanese don’t use the term “strategy” to describe a crisp business definition or competitive master plan. They think more in terms of “strategic accommodation,” or “adaptive persistence,” underscoring their belief that corporate direction evolves from an incremental adjustment to unfolding events. Rarely, in their view, does one leader (or a strategic planning group) produce a bold strategy that guides a firm unerringly. Far more frequently, the input is from below. It is this ability of an organisation to move information and ideas from the bottom to the top and back again in continuous dialogue that the Japanese value above all things. As this dialogue is pursued, what in hindsight may be “strategy” evolves. In sum, “strategy” is defined as “all the things necessary for the successful functioning of organisation as an adaptive mechanism.".......Richard T. Pascale (1984). “Perspectives on Strategy: The Real Story Behind Honda’s Success," California Management Review "Western consultants, academics and executives express a preference for oversimplifications of reality and cognitively linear explanations of events … (there is) a tendency to overlook the process through which organisations experiment, adapt, and learn… How an organisation deals with miscalculations, mistakes and serendipitous events outside its field of vision is often crucial to success over time."The Many Faces of HondaRichard P Rumelt...
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