Strategic Management Review > Vol 1 > Issue 1

Fundamental Issues in Strategy: Time to Reassess?

David J. Teece, Institute for Business Innovation, University of California, Berkeley, USA,
Suggested Citation
David J. Teece (2020), "Fundamental Issues in Strategy: Time to Reassess?", Strategic Management Review: Vol. 1: No. 1, pp 103-144.

Publication Date: 04 Mar 2020
© 2020 now publishers, Inc.
International relations,  International political economy,  Strategic management
Chinadynamic capabilitiesglobal governanceindustrial policynon-market strategy


Login to download a free copy
In this article:
The Broader Foundations of Competitive Advantage 
The China Challenge: Systemic Competition 
Capturing Value from Innovation When the Host Country Wants Otherwise 
Dynamic Capabilities and the Limits of Strategic Management 
Conclusions and Consternations 


The field of strategic management has developed with an implicit assumption that market economies are structurally more or less similar. In the past 30 years, though, the global economy has evolved. The Soviet Union collapsed, market-based orthodoxy spread, and now China is ascendant. These developments require changing our mental models from the Cold War era, in which two economic blocs were quite distinct, to a bifurcated global economy of two engaged but incompatible systems: one side favoring transparency and the rule of law and the other side favoring opaqueness and strategic direction of the economy by government. China's government uses a wide range of policies to support the development of domestic firms while hindering the activities of competitors from abroad and, directly or indirectly, misappropriating their technology when they can do so, which is often. To cope with this situation — as well as with political uncertainty elsewhere in the world — firms need to develop strong dynamic capabilities for formulating viable strategies to create and capture value under potentially adverse and volatile conditions, and to shape the business environment in more favorable ways through market and non-market activity.