Honda Effect -Revisited

Class debate
Phenomenon- Honda’s Success
• Explaining what lead to Honda’s success
• Honda – BCG Version:
• Honda – Pascale/Honda Executive Version
• Extending this understanding (theory) to other companies’ success
• Theorizing Strategy (Deliberate or Emergent)
Two Alternate Concepts of Strategy

Deliberate Emergent
• Michael Goold (Consultant - Author of BCG report) • Richard T. Pascale (Wrote the Original
• EOS, Learning, Cost Advantage, Market Share “Honda Effect” Article.)
• Immediate Problem Solving, vs. Trial and Error • Organization Capabilities, Agile
• Managerial vs. Historical Perspective Organization,
• Importance of Time and Money • Being over time
• Strategic weakness in BMI
• Culture defines Being
• Stability leads to Rigidity
• Richard P. Rumelt (Strategy Theorist)
• Design and Innovation
• Henry Mintzberg (Developed the
• Design advantage leads to cost advantage Emergent Strategy View)
• Short Term vs. Long term profitability • Questions Rationality
• Strategic Intent • Informal Learning
• Pascale only covers the initial entry – not later • Expose yourself to marketplace surprises
success • Instead of complete detachment
• If you know how to design great motorcycle engines, I can teach you all
you need to know about strategy in a few days. If you have a Ph.D. in • Looking back vs. Looking ahead
strategy, years of labor are unlikely to give you ability to design great
new motorcycle engines.

• Insufficiency of data
 Some Basic Features of the two Concepts as Emerged from the Readings
Deliberate
• Long Term
• In Detail
• Plans Strategy
Formulation/Implementation/
Evaluation – in Advance – and in
sequence
• Uses Frameworks/Tools
• Fixes it early- and then goes to the
field for implementation
• Inflexible & low in learning
• Top down
• Claims to be Rational/
• – I know! – (Arrogance?)
Emergent
• May be long term – But not detailed
• Gets into the field early
• Learns from the field experiences
• Flexible in Strategy
• May change means as well as
objectives
• Gets insights from the
functional/operational people
• Relies on Peripheral vision
• Uses Common Sense
• – I want to know – (Humility?)