Robust strategies: lessons from GKN 1759–2013

Abstract

GKN is Britain's surviving top 50 company from 1905, a flourishing world top-player in automotive and aero components. This article traces 254 years of its development, domestically and internationally, drawing on corporate access and the author's worldwide field research since 1974, and three in-depth business histories including one by the co-author. Lessons confirm just some traits expected of successful ‘Built To Last’ (BTL) companies. However, GKN's ‘robust’ sustained strategy also reflects financial conservatism; constant adaptation to its historical and competitive context; highly proactive internationalisation and, from 1902 onwards, a determination to develop always at least ‘three major business legs’ to survive evolutionary processes as sectors mature and consolidate globally.

Keywords::

• long-lived companies
• enduring companies
• longevity
• ‘Built To Last’ traits
• corporate diversification and internationalisation
• evolution
• performance
• GKN
• business history
• Britain's largest companies

Acknowledgements

Both authors fully acknowledge their debt to Edgar Jones for his two superb archival histories of GKN covering the periods 1759–1918 and 1918–1945. We have tried but have sadly not been able to establish any point of contact.

We also gratefully acknowledge the time of many executives and staff at GKN from 1980 onwards and for their willingness to share experiences and lessons and particularly for their checking through this article to guard against any serious misunderstanding of information and data generously provided. We would also like to thank Sally Stewart, formerly Head of Department of Management, The University of Hong Kong, and Alessa Witt, Doctoral Candidate University of Edinburgh Business School, for their diligent proofreading and helpful comments.

Notes

^1.Jones and Khanna, “Bringing History (Back) into International Business,” 453.

^2.Chandler, Strategy and Structure; Ibid., Scale and Scope.

^3.Napolitano, Marino, and Ojala, “Call for Papers: Theoretical and Empirical Research on Business Longevity.”

^4.Peters and Waterman, In Search of Excellence; Pascale, Managing on the Edge, 16–17.

^5.De Geus, The Living Company, 1–2. A third of the companies listed in the 1970 Fortune 500 list had gone by 1983 (Royal Dutch Shell Group Planning PL/1 1983) and “in some countries, 40% of all newly created companies last less than 10 years.” Overall, De Rooij, A Brief Desk Research Study, concluded that the average life expectancy of firms of all sizes was just 12.5 years throughout Japan and most of Europe.

^6. An eminent law firm's partner (interviewed, London July 5, 2012) had originally chosen to study law at Trinity Hall, a small college at Cambridge University. Its reputation, he pointed out, dated back to its founding over 600 years ago to address the shortage of lawyers following the Black Death! Today, law firms are a major global business, netting $82bn in revenue and $31bn profits from just the top 100 (The Times, July 9, 2012, 32–3) but few date back over a century or so.

^7. For example, since the introduction of video games 50 years ago, there have been 10 major product generations. Initially Atari dominated arcades, but successive paradigm changes shifted almost ‘winner-takes-all’ competitive advantages first to Nintendo Famicon, then Sony with its Playstations, later countered by Nintendo's Wii though something of a niche market; whilst today Sony is challenged more forcibly by Microsoft's X Box. Competitive advantages have proved sustainable only over much shorter time periods in such fast moving sectors.

^8.De Geus, The Living Company, 2.

^9. See, for example, Cadbury's acquisition by Kraft: Cadbury, Chocolate Wars.

^10. See Cameron, Bank of Scotland 1695–1995. The Chairman of Banca Monte dei Paschi, Italy's five century-old and third largest bank also warns that its independence is now contingent on meeting targets in its three-year plan (Sylvers, “Monte dei Paschi Turnaround Has No Plan B”). De la Rue's Board has likewise spent little time indulging its formidable 200 year history (interview with former senior executive London, 2011); its focus has been on shareholder value, including opportunities such as Camelot, though recent priorities include restoring its robust City reputation after quality concerns.

^11.Healey, Coutts & Co: 1692–1992; Moss, Standard Life 1825–2000.

^12. Royal Bank of Scotland, established in 1725, is a case in point; recent crises highlight the pertinence of banking histories: Larson et al., “Strategic Responses to Local Challenges.”

^13.Collins and Porras, Built to Last: Successful Habits of Visionary Companies. These being: Citigroup 1812, Proctor & Gamble 1837, Philip Morris 1847, American Express 1850, Johnson & Johnson 1886, Merck 1891, General Electric 1892, Nordstrom 1901, 3M 1902, Ford 1903, IBM 1911, Boeing 1915, Walt Disney 1923, Marriott 1927, Motorola 1928, Hewlett-Packard 1938, Sony 1945, Wal-mart 1945.

^14. Analysis of all companies from both Collins and Porras “Built To Last's list, and from Peters and Waterman's In Search of Excellence companies, for which financial data available on Thomson One Banker in the five year period to 2011, in respect of averaged returns on capital employed, sales growth and total investor returns. Please note given that the latter study was older there is an even greater danger of survival bias.

^15.Marsh, The New Industrial Revolution, 19. Please note figures for country shares of the Fortune Global 500 have been updated using 2013 figures from CNN Money's website accessed 30 July 2013.

^16.Stadler, Enduring Success; Ibid, “Four principles of enduring success.” Star enduring performers included: Siemens, Nokia, Allianz, Legal and General, Munich Re, Shell, GSK, HSBC and Lafarge. Stadler's methodology is similar to Collins and Porras in using total investor returns over 50 years to determine stars being directly compared against less spectacularly performing long-lived peers.

^17.De Geus, The Living Company. Companies include: Anglo American, Booker McConnell, British American Tobacco, Daimaru, Du Pont, East India Companies, Anthony Gibbs, W.R. Grace, Hudson's Bay Company, IBM, Kennecott, Kodak, Kounike, 3-M, Mitsubishi, Mitsui, Pilkington, Rolls-Royce, Rubber Culture, SKF, Siemens, Societe Generale, Suez Canal Company, Sumitomo, Suzuki, Unilever and Vestey. See also O'Hara, Centuries of Success.

^18.Chandler, Strategy and Structure; Ibid., Scale and Scope.

^19.Channon, The Strategy and Structure of British Enterprise; Dyas and Thanheiser, The Emerging European Enterprise; Kono, Strategy and Structure of Japanese Enterprises.

^20.Sloan, My years with General Motors; Chandler, Strategy and Structure; Ibid., Scale and Scope.

^21. Many of today's top global car companies are essentially family-dominated particularly in Europe and Asia: e.g. Ford, BMW, Peugeot-Citroen, FiatChrysler, and Tata Motors. Many ‘public’ companies are heavily influenced by families or at least by strong corporate values, embedded by their family founders in the recent past: e.g. VW/Porsche, Honda, Hyundai and even Toyota.

^22.Author and Bateman, “International Strategy Configurations of the World's Top Family Firms.”

^23.Higgins and Toms, “Explaining Corporate Success.”

^24.Kay, “Finance Needs Trusted Stewards, Not Toll Collectors”; Lex, “Kay Review”; Oakley, “Review Calls for Simpler Share Buying”; Oakley, Pickard, and Burgess, “No ‘Silver Bullet’ to End City Short-termism.”

^25.Peters and Waterman, In Search of Excellence; Hamel and Prahalad, Competing for the Future.

^26.Porter, “From Competitive Advantage to Corporate Strategy.”

^27.Goold and Campbell, Strategies and Styles.

^28. GKN is the only British top 50 company from 1905 surviving independently. Lever Brothers from this same 1905 rankings, though, survives and flourishes today as part of Unilever, formed by a merger in 1930 with Margarine Unie from Holland. See Jones, Renewing Unilever, for an excellent highly pertinent business history. Lever & Co. dates back to 1884 and the Dutch side to 1872. Likewise, Reckitt from 1905 also survives and flourishes today following two mergers: the first with J.J. Colman in 1913 and the second with Benckiser from Holland in 1999 forming today's Reckitt Benchisher. Reckitt & Sons, J.J. Colman and Benckiser date back to 1840, 1814 and 1823 respectively. See Chapman-Huston, Sir James Reckit. A Memoir and Reckitt, The History of Reckitt and Sons Ltd. These mergers raise questions as to the extent of any continued autonomy and complicate direct performance comparisons with GKN. Both companies would render pertinent, shorter business histories. Other 1905 top 50 companies have mostly been acquired by, and fully integrated into foreign multinationals. In automotive components Dunlop, for example, was acquired by Sumitomo Rubber Industries, ironically Dunlop's own Japanese subsidiary in 1909!

^29.Kenny et al., Cases in Business Policy; Turner, “How GKN Plans Now”; MacDonald, “Culture and Myth in International Strategy”; Wang and Ahmed, “Leveraging Knowledge in the Innovation and Knowledge and Learning Process at GKN.”

^30.Author, The Competitiveness of U.K. Vehicle Component Manufacturers. Also of note is Invensys which absorbed BTR, including its automotive activities, although its main area is controls for other sectors; Invensys is currently the subject of a $5bn takeover bid by France's Schneider Electric the global number one player in controls (Bloomberg, 12 July 2013).

^31. Visited and interviewed by the author in Pune, India, January 2011.

^32.Wembridge, “Invensys set to join foreign legion in £3.4bn takeover by Schneider.” As a senior industrials banker at Espirito Santo commented in the same article: “Of course there is some emotion tied up in old names but these are global industries and you can't be parochial about it. The Board's job includes maximising shareholder value and they have realised substantial value.” The automotive conglomerate Tomkins was likewise acquired by a Canadian consortium in 2010.

^33. GKN's share price has also increased some 70% over the last 12 months to 1 August 2013, virtually double that of the FTSE 100, due to City endorsement of its increasing global dominance in aero parts.

^34. See James, Krupp and Fear, Organizing Control for deep historical accounts of Krupp and Thyssen.

^35.Higgins and Toms, “Explaining Corporate Success.”

^36. Imperial Tobacco (#1), Watney (#2), Coates (#3), United Alkali (#4), Vickers (#6), Guinness (#10), Whitbread (#13), Bass (#14), Dunlop (#16), John Brown (#30), Reckitt and Sons (#41, and now part of Reckitt Benckiser) at least survive in some form as part of larger groups following mergers or acquisition. Lever Bros (#24) continues successfully as part of Unilever, an Anglo Dutch Merger, though they rank number two to P&G in most markets (Jones, Renewing Unilever; The Economist, “Consumer Good”, 70). Anglo-Dutch Shell originates from a merger in 1906, with the British side dating back to the 1890s (De Geus, The Living Company, 3). BP was not in the UK top 50 in 1905. Its global position today is similar to Shell's. Both are some way behind ExxonMobil at about £80bn market capitalisation (The Sunday Times, September 30, 2012, 3).

^37.Tate & Lyle, Tate & Lyle.

^38.Jones, A History of GKN: Volume 1. Innovation and Enterprise, 1759–1918; Ibid., A History of GKN: Volume 2. The Growth of a Business. 1918–1945; co-author, GKN: 1759–2009.

^39. The author's hands-on operations experience with GKN and technical knowledge of their international plants, and subsequent UK and international plant visits, helps address the slight blind spot in our knowledge of day-to-day management practices (Cooper and Lyth, Business in Britain in the Twentieth Century). He has also visited plants of major rivals, such as NTN in Japan, interviewing their President in 1983.

^40. Such independence has been proposed as “our Hippoctratic Oath” (Amatori, “Business History as History”). Since leaving GKN's employment in 1980 and entering research, the author has both kept in touch with GKN recognising the benefits of close cooperation (Kobrak and Schneider, “Varieties of Business History”), yet maintained absolute independence by accepting no money from either GKN or well over a hundred of its rivals and customers interviewed worldwide. Confidentiality regarding clearances of any commercially sensitive data, not in the public domain, has also been maintained over the research period extending to 33 years.

^41.Co-author, GKN: 1759–2009; Kobrak and Schneider, “Varieties of Business History.”

^42.Orbell, A Guide to Tracing the History of a Business.

^43.Jones, A History of GKN: Volume 1. Innovation and Enterprise, 1759–1918; Jones, A History of GKN: Volume 2. The Growth of a Business. 1918–1945.

^44.Amatori, “Business History as History.”

^45.Hunter, The Value of Iron: 2.

^46. Ibid., 4.

^47.Knight and Cavusgil, “The Born Global firm.”

^48. Sources: JA3, 5&7. For full JA original archival sources, all of which are numbered as here and throughout our text, see Jones, A History of GKN: Volume 1. Innovation and Enterprise, 1759–1918; Ibid., A History of GKN: Volume 2. The Growth of a Business. 1918–1945.

^49. Source: JA18.

^50. Source: JA14.

^51.Marsh, The New Industrial Revolution, 4–5.

^52.Marsh, The New Industrial Revolution, 7–9.

^53. Britain's competitiveness at this point reflected several factors highlighted in Porter Competitive Advantage of Nations's diamond model: strong supply clusters such as Merthyr Tydfil and Sheffield, vigorous rivalry between these ironmasters, strong industrial customer sectors, and some comparative sector advantages, though certainly not relative wage costs as compared with China.

^54. Source: JA23.

^55. Dowlais’ internationalisation thus represents a departure from the traditional, Uppsala, model of direct exporting initially targeted on geographically or culturally proximate countries, though neither could it be correctly classified as ‘born global’.

^56. Source: JA28.

^57. Source: JA35.

^58. Source: JA28.

^59. Sources: JA40–41.

^60. Sources: JA62&65.

^61. Sources: JA267&104.

^62. Source: JA105.

^63. The significance of social networks and value of social capital should not be underestimated here (Ojala and Luoma-aho, “Stakeholder Relations as Social Capital in Early Modern International Trade”). The Guests were friends of Brunel affording mutual help during the development of iron rails, placing them in prime position in this market both domestically and internationally, as with their huge Russian order. Similarly they were in a position to spot the latest technology developments and potential licensing opportunities. Lady Charlotte was well connected: even Disraeli commented on her eligibility as a potential marriage partner in the same year as she actually married John Guest instead!

^64. Source: JA107.

^65. Albeit being the daughter of an Earl and decidedly feminine. “She had experienced a brief romance in May 1833, just before meeting Sir John Guest, with the young Disraeli, who described her as “very clever [worth] £25,000 and domestic.” She thought him ‘wild, enthusiastic and very poetical’ but could not understand why he was trying to get into Parliament’ (Jones, A History of GKN: Volume 1, 84). Like James Jolly, Trevor Holdsworth and Sir David Lees in the twentieth century, Lady Charlotte moved took over as CEO in the mid-nineteenth century, having served effectively as Finance Director for some years. She had held on ‘iron grip’ on all Dowlais Iron's accounts and finances, down to the minutest cost and profit calculations (see, for example, ibid: 264). Her diaries, documented in Jones (ibid: 280) might help address the gender gap in our knowledge of business history (McKinlay, “Business in Britain in the Twentieth Century”). Guest Vol VIB, Guest Vol X1.

^66.Jones, A History of GKN: Volume 1, 280; Guest, “Journal, Vol IX, 725.”

^67.Jones, A History of GKN: Volume 1, 302.

^68.Jeans, The Iron Trade of Great Britain, 8–9.

^69.Guest 1853. Journal, Vol IX, 14.

^70.Jones, A History of GKN: Volume 1, 251.

^71. Ibid., 209.

^72. Ibid., 303.

^73. Ibid., 137.

^74. Lady Charlotte Guest similarly recognised the US technology lead here, having scrutinised the new American process of making screws by machinery in August 1839.

^75. Source: JA137-9

^76. Analysis of Nettlefold's accounts in Jones, A History of GKN: Volume 1, 137, based on J.A. Nettlefold, Private Journal 1834–54, 30–5 and loose working papers within.

^77. Ibid., 139.

^78. Ibid., 146, 147, 150 and 153.

^79. Ibid., 157.

^80. Ibid., 165.

^81. Ibid., 172 and 174.

^82. Ibid., 181–5.

^83. Ibid., 192–3.

^84.Marsh, The New Industrial Revolution, 19 and 152.

^85.Co-author, GKN: 1759–2009, 57.

^86. Ibid.

^87. The author worked in GKN Forgings in their Garrington plant as a process and product development engineer from 1974 to 1978. Only briefly overlapping with Brookes, he was however able to research employees' experiences going back 30 years previously, with good accounts of his era as chief executive, including his notably ‘hands-on’ charismatic management style!

^88. Ibid., 71.

^89.Jones, A History of GKN: Volume 2, 73.

^90. Ibid., 167.

^91. Ibid., 173.

^92.Co-author, GKN: 1759–2009, 95.

^93. Author's earlier interview with GKN's Strategic Planning Director in the late 1990s. The term ‘fruit salad’ refers to the heterogeneity of several fairly unrelated acquisitions undertaken at this time.

^94.Jones, A History of GKN: Volume 2, 287–8.

^95. Ibid., A History of GKN: Volume 1, 389; Ibid., A History of GKN: Volume 2, 368.

^96.Co-author, GKN: 1759–2009, 98 and 103.

^97. Ibid., 120.

^98. Ibid.

^99. Ibid., 119.

^100. Ibid., 141.

^101. Ibid., 142.

^102. Ibid., 151.

^103. Ibid., 176.

^104. As project engineer on the four-man international project management team, the author can attest to the level of absolutely first-class international technology transfer involved.

^105. Ibid., 165.

^106. Ibid., 207.

^107.Author, Britain's Competitiveness, 199.

^108.Co-author, GKN: 1759–2009, 193.

^109. Ibid., 198.

^110. For an excellent account of other British companies following such corporate level approaches between 1950 and 1984, see Higgins and Toms, “Explaining Corporate Success.”

^111. Author's earlier interviews with key executive over-viewing these decisions in the late 1990s.

^112.Co-author, GKN: 1759–2009, 249.

^113. Ibid., 208.

^114. Ibid., 223.

^115. Ibid., 337.

^116. Author's interviews with top executives in GKN's subsidiaries in Brazil and India, in October 2010 and January 2011.

^117.Co-author, GKN: 1759–2009, 139.

^118. Almost half of the author's Process and Product Development colleagues at GKN Forgings worked on this new powder metallurgy process throughout the 1970s.

^119. Ibid., 303.

^120. Ibid., 304.

^121. Ibid., 253.

^122. Ibid., 257.

^123. Ibid., 279.

^124. Author's discussions with GKN's strategic planner in the mid-2000s.

^125.Co-author, GKN: 1759–2009, 330.

^126. Ibid., 314.

^127. Making GKN Britain's third largest aero manufacturer after BAe and Rolls-Royce, Ibid., 351–2).

^128.Marsh, “GKN chief bullish over global economy.”

^129.Wembridge, “GKN focus on aviation sees results take off.”

^130.Co-author, GKN: 1759–2009, 98.

^131.Jones and Khanna, “Bringing History (Back) into International Business,” 453.

^132.Rasmussen and Madsen, The Born Global Concept: 13.

^133. I.e. according to Rugman, The Regional Multinationals, just £1 sales in each key continent would be enough to define a company as global! Rugman's imposed criteria levels also appear arbitrary and set so high as seemingly to confirm his own thesis. What are needed are criteria having at least some regard to global market share, as GKN would have satisfied in both centuries, in contrast to ‘born global’ samples which exhibit no such evidence.

^134.Marsh, The New Industrial Revolution, 4–5.

^135.Porter, Competitive Advantage of Nations.

^136. As equally significant in other sectors, including consumer goods. Jones, Beauty Imagined, illustrates similar crucial strategic adaptations to complex changing historical and competitive conditions in the case of the beauty industry.

^137.Owen, The Rise and Fall of Great Companies: Courtaulds.

^138.Marsh, The New Industrial Revolution, 19 and 152.

^139.Author, “Global, National and Resource-based Strategies.”

^140. Even Porter's, Competitive Advantage of Nations ‘Diamond’ framework understates the rising impact of global strategies in this situation. Having applied this National Competitive Advantage framework to the mobile phone sector in Finland to help explain Nokia's rise to global pre-eminence, Porter would now be in some difficulty explaining Nokia's dramatic decline. Finland's diamond has shifted only modestly but, more importantly, Nokia's Annual Report for 2012 shows Finland constituting less than 1% of worldwide sales. Clearly the weight of explanation lies with weaknesses in its global strategy vis-à-vis worldwide rivals such as the Koreans. Like GKN, Nokia's strategy today is global, not just in terms of sales but also in terms of geographical asset spreads and global integration.

^141.Barney, “Firm Resources and Sustained Competitive Advantage”; Author, “Global, National and Resource-based Strategies.”

^142.Rugman and Verbeke, “A Perspective on Regional and Global Strategies of Multinational Enterprises”; Rugman, The Regional Multinationals; Ghemawat, “Semiglobalization and International Business Strategy”; Ibid., Global Strategy in a World of Differences; Ibid., World 3.0. Ibid. and Ghadir, “The Dubious Logic of Global Megamergers” and “Global Integration is Not Equal to Global Concentration”, and Ghemawat, World 3.0, further argue that many sectors are not globally concentrated, though their empirical data and interpretation on global concentration metrics is challenged by Author and Collis's “Should You Have a Global Strategy” more extensive studies of global sector concentration trends.

^143.Ohmae, The Borderless World; Ibid., The Invisible Continent; Author, Britain's Competitiveness; Author, “Global, National and Resource-based Strategies”; Bryan et al., Race for the World; Sirkin, Hemerling, and Bhattacharya, Globality; Ploetner, Counter Strategies in Global Markets.

^144.Hout, Porter, and Rudden, “How Global Companies Win Out”; Yip and Hult, Total Global Strategy; Dicken, Global Shift; Nolan, Zhang, and Liu, The Global Business Revolution; Author and Collis, “Should You Have a Global Strategy.”

^145.Peters and Waterman, In Search of Excellence.

^146.Porter, “From Competitive Advantage to Corporate Strategy” argues that some 70% of M&As ‘fail’ in the sense of their being ultimately divested. We would likewise see GKN's ‘fruit salad’ acquisitions as classic examples of M&A, not passing Porter's ‘better-off’ tests, so would concur on this point. However, we would take issue with his defining ‘failed’ M&As as those divested. GKN could never have evolved to its present position without intelligently combining both M&A and divestment decisions. Its entry strategy into aero components, for example, proved highly effective through initially acquiring, but later also divesting (and at a substantial profit) Westland's helicopter business.

^147.Goold and Campbell, Strategies and Styles; Whittington and Mayer, The European Corporation; Colli, Iversen, and de Jong, “Mapping Strategy, Structure and Ownership.”

^148. Author's interview in the late 1980s with one of the four key directors responsible for GKN's Board Room coup at this time.

^149.Chandler, Strategy and Structure; Higgins and Toms, “Explaining Corporate Success.”

^150.De Geus, The Living Company; Collins and Porras, Built to Last.

^151. Ibid., 297.

^152.Collins, How the Mighty Fall; Larson et al., “Strategic Responses to Global Challenges: the Case of European Banking”; Wilson and Larson, “Strategic Responses to Global Challenges: the Case of Barclays Bank.”

^153. Author's direct experiences from 1974 onwards; Co-author, GKN: 1759–2009. Behrens, Culture and Management in the Americas, 213–217, contrasts British leadership styles with those encountered in the US and Brazil. The British style, termed the ‘Beaver’ style, is perceived as ‘predictably industrious’, though perhaps slightly ‘inflexible, reliable, unobtrusive, and non-threatening’; GKN's culture is likewise somewhat down-played in comparison with US and Brazilian companies interviewed by the author.

^154.Collins and Porras, Built to Last; Stadler and Dyer, “Why Good Leaders Don't Need Charisma.”

^155. “Numbers add strength to Buffett's law of selection,” Financial Times, 4 August 2013, 20. GKN's sustained return on capital performance and its strong financial controls would almost certainly put it in this top performing quartile globally, though without access to Credit Suisse Holt's unique adjustments further cooperative research would be necessary to confirm this.

^156. See Simon, Hidden Champions of the Twenty-First Century. GKN passes Simon's criteria for Hidden Champions in all respects save one: sales have grown to around $9bn, exceeding Simon's artificially imposed ceiling of $4bn; not many companies aim to keep sales down!

^157. Sony is the only non-US, visionary company. Established in 1945, its share price has recently fallen three-quarters. Source: Financial Times, August 1st, 2012, 14. Lex: “Panasonic the hedgehog.”

^158.Higgins and Toms, “Explaining Corporate Success,” 115–116).

^159.Freyssenet, The Second Automobile Revolution.

^160. Ibid.

^161.De Geus, The Living Company.

^162.Peters and Waterman, In Search of Excellence.

^163.Collins and Porras, Built to Last. This is a surprising omission given internationalisation studies reviewed in Glaum and Osterle, “40 Years of Research on Internationalization and Firm Performance.”

^164.Macintosh, Dethroning the King.

^165. Empirical research and supporting cases seem, however, far too short-term to justify such claims. The prime argument is the theoretical idea that market power may prove more sustainable than relying on potentially imitable technological advantage; but GKN's history suggests that both are intertwined, dynamically changing substantially over time.

^166.Porter, “The Five Competitive Forces That Shape Strategy.”

^167.Barney, “Firm Resources and Sustained Competitive Advantage.”

^168. See Doz and Kosonen, Fast Strategy: “If you want to be a winning company today, you have to learn a new competitive game”. Nokia's recent falls in global market share, financial and stock market performances suggests greater caution over their analysis on p. 5, drawing lessons from its superior ‘agile’ strategy, as compared with other players like Ericsson and Motorola. Nokia's one-hundred-year history might perhaps yield other perspectives.

^169.Napolitano, Marino, and Ojala, “Call for Papers: Theoretical and Empirical Research on Business Longevity.”

^170. This article has focused on larger multinationals. However, Britain's oldest building group Durtnell, an SME established in 1591, has sustained a similarly robust strategy. Alex Durtnell is the 13th generation to run the business. In a tough cyclical business, they have survived more downturns than most! Their former Chairman, John Durtnell, attributes their longevity to tight niching in south-east England in segments least affected by downturns, such as churches, private schools, art galleries and luxury houses; and like GKN to financial conservatism and to ‘quite brutal’ employment cut-backs when necessary (Bloom, “How Britain's Oldest House Builder Survived the Recession”).

Additional information

Notes on contributors

Chris Carr

Following 10 years with BAe Systems and GKN, and 33 years research, Chris Carr is Professor of Corporate Strategy at the University of Edinburgh Business School specialising in Global Strategy. He is author of two books and 36 articles in journals including Strategic Management Journal, Journal of Management Studies, Management International Review and Sloan Management Review.

Andrew Lorenz

Andrew Lorenz is an award-winning industrial journalist, former Sunday Times business editor, author of five books, including GKN: 1759–2009, and Chairman of FD International.