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Presents a framework for understanding organizational vision. "Vision" is a term frequently used by academics and practicing managers, but there has been a scarcity of clear concepts and useful tools--in short, the absence of a coherent conceptual framework. This article develops a framework that removes the fuzziness surrounding the topic of vision yet at the same time preserves the magic--the spark--that is an essential quality of vision.

Poverty is a business issue because the American poor are part of the American work force. Most poor adults and 90% of poor children live in families where work is the norm, not the exception. Companies cannot create the work force of the future with the poverty policies of the past. There are some simple policy mechanisms, however, that can help the working poor without putting an undue burden on business. Enacting them requires managers to see poverty policy as part of a national human-resource strategy that links corporate strategy to a broad social agenda.

A new term--networks--has entered the vocabulary of corporate renewal. Ten companies (among them, Conrail, Dun & Bradstreet, Du Pont, and Royal Bank of Canada) provide good examples of networks and how they operate. The process of building a network starts at the top, where senior managers work to build a new social architecture. Networks change the frequency, intensity, and honesty of the dialogue among managers on priority tasks.

Blake Memorial Hospital was in poor financial health, due to rising costs and stagnating revenues. The hospital's quality of care was also a major problem, and its clinics were losing over $250,000 a year. As the new CEO worked on the 1992 budget, he saw he would have to cut some services in order to fund others. One service he was considering cutting was the clinic program. Experts from public service and health care comment on the issues.

In this interview, Robert McDermott tells how he has built customer service into the very fiber of the insurance company he heads--USAA. His successful service recipe has three principal ingredients: 1) A niche market (active and former military officers and their families); 2) Progressive employment practices and commitment to continuous development of its work force; and 3) Innovative use of technology, including imaging and expert systems.

For more than 40 years, service companies like McDonald's prospered with organizations designed according to the principles of traditional mass-production manufacturing. Today that model is obsolete, and companies like Taco Bell, Dayton Hudson, and ServiceMaster have chosen to reverse the cycle of failure by putting workers with customer contact first and designing the business around them. They are developing a model that replaces the logic of industrialization with a new service-driven logic.

In France, management is not a task. It is a "state of mind." Alumni of the grandes ecoles, the elite colleges, dominate the upper echelons of business and have the same social prestige as doctors or lawyers. Movement from public to private sector managerial positions is common, reflecting and reinforcing a rich relationship between French industry and government, not unlike Japan's.

Although they account for 20% of the world's population and a major share of its natural resources, Latin America and Africa have been left out of the move to globalize trade and markets. Now, because of declining protectionism, these countries are ready to take an active role in world trade. By using the emerging Pacific Rim economies as a model, many of the less-developed countries ar e liberalizing their trade policies and privatizing their industries to create wealth.

Many large manufacturing companies are finding themselves at a cost disadvantage in markets they have dominated for years. This is because of excessive overhead structures and the emergence of the "robust" competitor, comparable in size and product scope but able to produce at a lower unit overhead cost. High-overhead companies should not cut overhead by outsourcing or downsizing. If they expect to retain their size and also become more cost competitive, they must rethink their manufacturing systems.

Laura Wollen, group marketing director for ARPCO, was about to recommend her best product manager, Charles Lewis, for a position in the London office. Yet David Abbott, Wollen's counterpart in the United Kingdom, admitted that Lewis looked good on paper, but doubted he would fit in with the team and adjust to the British market. Wollen finally understood that Abbott's reservations were because Lewis was black. Wollen was wary of promoting Lewis into the London job only to have him fail there because of racism. Four experts analyze her alternatives.

In the 1990s, competitive success will come from building and dominating fundamentally new markets. Core competencies are one prerequisite for creating these new markets. Corporate imagination and expeditionary marketing are the keys that unlock the markets. Corporate imagination is unleashed when companies escape the tyranny of their served markets, think about needs and functionalities instead of marketing's more conventional customer-product grid, overturn tradition price-performance assumptions, and lead customers rather than follow them.

By the end of the century, the most successful computer companies will be buying computers rather than building them. Defining how computers are used, not how they are built, will create real value. Three new rules will guide the computer industry's strategic transformation: 1) compete on utility, not power; 2) monopolize the true sources of added value; and 3) maximize the sophistication of the value delivered, while minimizing the sophistication of the technology consumed. McKinsey Award Winner.

Competitive success depends on learning, but most people, including professionals in leadership positions, are not very good at it. Learning is a function of how people reason about their own behavior. Yet most people engage in defensive reasoning when confronted with problems. They blame others and avoid examining critically the way they have contributed to problems. Companies need to make managers' and employees' reasoning patterns a focus of continuous improvement efforts.

In this interview, Commissioner Brown describes the Community Patrol Officers Program -- a return to the days of the cop on the beat. This program requires a total change in the way the department is organized and operates. A cornerstone of community policing is empowering the workforce -- in this case, the patrol officers who are the backbone of the department. Brown also wants to involve the police more closely with their customers--the law-abiding citizens of New York's neighborhoods--and let the customers set the department's priorities. Change requires Brown to articulate the department's vision and its values, to alter the recruitment, hiring, training, and reward practices.

Activity-based cost management (ABC) can help managers find the places in their organizations where improvement is likely to have the greatest financial payoff. To best utilize ABC, managers must separate whatever expenses are required to produce individual products from those required to process batches, to maintain a product, or to keep a manufacturing facility up and running.

In a once-impoverished inner city section of Chicago, South Shore Bank has combined what its owners call old-fashioned commercial banking with a progressive social agenda to transform the neighborhood, without forcing out its old residents. It designated itself a community development bank, extending credit to residents to support small business, restore community self-confidence, and reinvigorate market forces.

Unions can make a pivotal contribution to competitiveness. In a world where business success increasingly depends on creating more flexible, team-based work organizations, unions can be a surprisingly effective means to integrate employees into managerial decision making. In order for U.S. unions to act in this capacity, they must reinvent themselves much as companies are trying to do.

The results of the HBR World Leadership Survey found that change is indeed everywhere--regardless of country, culture, or corporation. But the idea of a corporate global village where a common culture of management unifies the practice of business around the world is more dream than reality. In addition to profiling the views of the average manager, the survey detected the deep and powerful national differences that overwhelm age, sex, or industry distinctions among respondents.

Vermillion Paper Co. saw a proposed eucalyptus plantation in the tropical country of Equitania as an opportunity to do right by the environment after years of insensitivity. Vermillion spent almost two years obtaining the support of national and local government officials and environmentalists. But soon a renegade group broke with the Equitanian environmentalists and joined a militant U.S. group in publicly condemning the project. Four experts on environmental strategy discuss Vermillion's option.

Recent contributions to strategic management and the theory of the firm collectively known as the "resource-based view of the firm" provide illuminating insights into the sources of profitability and the nature of competitive strategy. This article argues that internal resources rather than the market environment should provide the foundations for a firm's strategy. On the basis of an analysis of the relationships among resources, capabilities, competitive advantage, and profitability, this article advances a framework for a resource-based approach to strategy formulation.