Melissa BuehrlenInstructor SomersBusiness Economics06/13/2013Case Study 3: Creative Destruction...

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Melissa BuehrlenInstructor SomersBusiness Economics06/13/2013Case Study 3: Creative Destruction Foster and Kaplan, drawing on research they’ve conducted at McKinsey & Company on more than 1,000 companies over 36 years show that even the best-run and most widely admired companies are unable to sustain market beating levels of performance for more than 10 to 15 years. They write, “Corporations are built on the assumptions of continuity; their focus is on operations. Capital markets are built on the assumption of discontinuity; their focus is on creation and destruction.” They argue that corporations do not change or create value at the pace and scale of markets or entrepreneurs who drive markets. The philosophy of continuity means that their governance, their control processes, and other aspects that have enabled them to survive over the long haul, deaden them to the vital and constant need for change. Corporations, they argue, must learn to be as dynamic and responsive as the market itself if they are to sustain superior returns and thrive over the long term.    	How can corporations be as dynamic and responsive as the market itself if they are not markets?     	Does the argument of the book make any sense? How can corporations learn to be as dynamic as markets without experiencing creative destruction as well as creatively destroying?     	Can a company be an entrepreneur? Explain.     	What does the following mean? Corporations are built on the assumption of continuity; their focus is on operations. Capital markets are built on the assumption of discontinuity; their focus is on creation and destruction.     	Can any firm “sustains superior returns and thrive over the long term”?

David · Accepted Answer

Running Head: CREATIVE DESTRUCTION   1 

Creative Destruction
Running Head: CREATIVE DESTRUCTION   2 
 
Answer 1:  
The corporation can be dynamic and responsive as the market itself by the help of their 
intelligence and marketing research. This research also provides the information about the 
economic situation of market, customers and their potentiality that also helps the corporation to 
make the counter business strategies to be responsive and dynamic as the market itself.   
Answer 2:  
Yes, it could stated that the argument of book also makes the sense about the corporation 
in the context of dynamics and responsive as the market on the basis of continuity. This 
argument also describes the importance of operational functions for the growth of company in 
the market. The argument also presents the philosophy of continuity that helps t he audience to 
develop in-depth understandings about the importance and significance of governance, and 
organizational control processes in the context of organizational growth and development.  
It is also true that the people learn by destruction as well as creatively destroying but a 
corporation learns without these activities. The business corporation learns from its daily 
activities and the help of its employees that represents different cultural background. (González, 
2012).

Melissa Buehrlen Instructor Somers Business Economics 06/13/2013 Case Study 3: Creative Destruction Foster and Kaplan, drawing on research they’ve conducted at McKinsey & Company on more than 1,000...

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