The Company of the Future: Markets, Tools, and Strategies

Rating:
Summary: Insight of senior executives
Review: The Company of the Future

It is not often that one encounters the views of senior executives of large industrial companies on the subject of management with emphasis on the role of R & D. All the more rewarding are their contributions to this volume, which reflect deep insight into some of the issues which will dominate the companies of the future.

Each of the 6 chapters dealing with various aspects of management of large industrial companies was written by a different author(s). Some of the authors hold or have recently held senior executive positions in some of the largest companies in Europe and Japan. Some of the chapters are due to well established university professors from European management science faculties.

In the first chapter, Danielmeyer and Airaghi set out to provide a general framework and define the concepts which will provide the basis for managing global enterprise in the future. They develop a most rigorous and selfconsistent model based upon widely accepted economic data from many parts of the world. This model relates investment policies of nations and companies to their relative position in their competitive environment. The model also provides a firm basis for the appropriateness of various types of investments, for risk assessment and the role of employment. A persuasive aspect of the model is the fact that it is based upon the sort of mathematical rigor and analysis usually associated with the physical sciences. While the equations lend clarity to those familiar with calculus, the text is understandable without it.

Both the application of the model to the economic future outlook and the role of R&D in corporate strategy reveal a depth of understanding borne of intense involvement with the direction of major multinational corporations as well as hands on management of major R & D operations. The model is also used to derive and recommend a number of effective management tools.

This ~50 page essay is the most insightful, relevant and concise presentation of the subject of managing large R & D intensive companies, I have come across.

A chapter due to Paganetto deals with "The System Company" where the author addresses some problems associated with companies where technology management and system integration play a major role. The unique challenges to the system integrator who in some way needs to manage other enterprises who are part of the system supply chain will be faced by many companies of the future.

Takeda's chapter on hands on Technology Management is based upon a life long career with Hitachi where he moved from the research laboratory to Managing Director of the company. His strategies for technology management and resource allocation for R & D activities are well illustrated by specific examples.

Nakahara's contribution focusing on the multinational aspects of global enterprises is based upon his long experience with Sumitomo and MITI . He draws attention to the need for greater compatibility in methods of capitalization of R & D and the need for more uniformity in international tax - and intellectual property - laws.

Perlitz's international consulting experience has convinced him of the need for more flexible accounting for R & D intensive high tech companies. He presents the elements of a new Flexible Innovation Accounting System and a method for Goal Oriented Performance Evaluation and Process-oriented Cost Accounting.

The multiple authors bring a diversity of experience and view points to the topic which makes the book relevant to a wide range of enterprises. Since this volume is a collection of essays, rather than the sort of integrated treatment one would expect from a single author, readers will find some essays more relevant than others and the subject matter treated unevenly. This reader, an experienced research manager, found little of relevance to the Company of the Future in the wide ranging study of past and current patterns in R & D management and funding in Europe and Japan (Chapter 2).

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