A historic change is occuring in today's competitive environment, one that demands an equally historic response from managers. In the past, managers competing on low cost needed to concentrate on "mass production"—hierarchical structures, specialized process capabilities, stable systems, and meeting the demands of large, growing markets—while managers seeking to differentiate their product needed to focus on "invention"—introducing new products and processes, fluid structure, malleable systems. But today, managers must be positioned to build an organization that combines the best of mass production and invention. They must create a new kind of organization—a "dynamically stable" organization that is capable of serving the widest range of product demands (dynamic) while building on the firm's long-term process capabilities and know-how (stability).
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