Firm capabilities and diversication: how mission matters

Mohammad Pakneiat, Monireh Panahi and Javad Noori

Mohammad Pakneiat is a Senior Advisor at SamaSamaneh Advisory Company, Tehran, Iran. Monireh Panahi is a PhD candidate at Shahid Beheshti University, Tehran, Iran. Javad Noori is Director of the Technology Management Department at Iran Khodro, Tehran, Iran.

1. Introduction
The process of late industrialization has been the subject of debate among many scholars. Many have introduced several stages that rms in developing countries pass through (Dahlman et al., 1987; Kim, 1997; Hobday, 1995; Amsden and Tschang, 2003; Yu, 2005). These studies mostly discuss the process of late industrialization from the perspective of knowledge, learning and capabilities. They all identied a number of stages for the late industrialization process; although the names of the stages are different, the ndings are similar (Bell, 2006). However, few studies have focused on strategies and structures of late industrializing rms (e.g. Amsden and Hikino, 1994; Khanna and Palepu, 1997; Kock and Guillen, 2001). These studies have noticed structural factors like ownership and governance structure, diversication, organizational centralization/decentralization, etc. Among these studies, Kock and Guillen (2001) tried to investigate why unrelated diversication is observed in late industrializing rms. They argue that a rms diversication strategy is related to the type of its capabilities. They also identify the accomplishment of capabilities in three stages. In the rst stage, contact capabilities lead to unrelated diversication. Attributes of the second stage are general capabilities that cause less unrelated diversication; the capabilities of the third stage, which are organizational and technological capabilities, result in related diversication. However, Khodro (an Iranian-based carmaker, the largest in the Middle East and North Africa), which had almost all the requirements (i.e. those stated in the theory) to diversify unrelatedly, focuses on related elds only. We arranged interviews with top executives and decision makers from the company to nd out the reasons for this behavior. The paper is organized as follows: in the next section, we introduce the theoretical framework proposed by Kock and Guillen (2001), followed by a discussion of Khodro and its past activities. Thereafter we discuss why we think Khodro could have unrelated diversications. The following section is devoted to a discussion about the results of the interviews and analysis, followed by a concluding discussion.

2. Theoretical framework
Kock and Guillen (2001) proposed a framework that tries to explain unrelated diversication in developing countries. Their theory can be traced back to Schumpeters (1934) theory of innovation, the resource-based view (RBV) of the rm (Penrose, 1959; Wernerfelt, 1984; Barney, 1986), and the evolutionary theory of economics (Nelson and Winter, 1982). Schumpeter (1934) argues that there are ve types of innovation: 1. new goods; 2. new production methods;

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3. opening new markets; 4. utilizing new resources and materials; and 5. new organization. While developing new products or production methods is linked to technological and organizational capabilities, nding new sources of supply and new markets are the results of market knowledge and network contacts. According to the RBV, we can dene a capability based on scarcity, the fact that it is hard to imitate, and that it can be used in several products. Kock and Guillens (2001) framework identies three stages of development for rms in a developing country (see Figure 1). The rst two stages occur under protectionism, and the third stage happens when a rm behaves similarly to a rm in a developed country. In the rst stage of development, rms contacts are scarce in the selective environment. They are quite personal and very hard for rivals to imitate, and rms also use them to create new opportunities for diversication. They use these relations and lobby to absorb new public projects (new market) or to access different materials (new inputs). When they enter new businesses, they often acquire rms with high losses and use their contacts to make them protable. At this stage, protectionism plays a major role. Protectionism may be a restriction on the importing of foreign goods or foreign investment. Without protectionism, embryonic domestic rms would be devoured by multinational rms. In this stage, the environment selects those with better contacts i.e. those with access to new markets and new inputs. In short, based on the framework, it could be argued that in the early era of development of a rm in a developing country: 1. rms innovations open new markets and nd new supply resources; 2. these innovations need market knowledge and contacts; and 3. the selective environment under protectionism selects those with better contact capabilities. When an entrepreneur tries to exploit its contacts as much as s/he can, we must not expect him to pursue related diversication. Therefore, the entrepreneur in this era of development Figure 1 Capabilities of a rm during late-industrialization (Kock and Guillen, 2001)

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invests in a series of businesses with products and technologies not necessarily related. The rm can form lobbies and leverage its contacts to change a business with high losses to a protable one. Developing capabilities in a developed country often requires a decade or more (Porter, 1996). However, rms in developing countries can open a new business in a short time, as they do not need long-term concentration to build technological/organizational capabilities (Kim, 1997). In the second era of development, there are many rms that have formed these relations. As a result, contacts would not be scarce, and therefore they would lose their value to the rm. Firms would compete to increase their market share. At this time a second set of capabilities (general capabilities) become more important. These organizational capabilities are related to project execution and mass production, including capabilities to deal with cultural idiosyncrasies and market imperfections. These capabilities are scarce at the time in the environment, they facilitate production of new goods in the protected market, and they are hard to imitate as they are based on rms accumulated experience. In this era, rms also try to form internal factor markets (for example internal labor market) to overcome inefcient market factors. Of course, when the rm grows up to this stage, there should be more relatedness among its elds of activity. Therefore its activities become a little more related, and it tries to change its organization in order to cope with the new environment. The environment at the second stage selects the rm with more effective general capabilities. In short, it could be argued that at the second stage: 1. rms innovation is mostly special organizational innovations; 2. these innovations need general capabilities (project execution, mass production, etc.); and 3. the selective environment selects those who have contacts and who perform efciently due to their general capabilities. Diversication at this time is less unrelated, as each general capability is useful in specic sectors. For example, mass production capability is useful in sectors in which large-scale production is an advantage. Internal factor markets also restrict rms options for diversication. For example, an internal labor market means that employees have limited expertise, and so the rm cannot diversify into every new business that it wants to. In the third era of development, rms should have the capabilities to develop new products and processes. Growing intensity of competition, especially if protectionism is also removed, should make rms think about concentrating their activities and reducing costs by taking advantage of economies of scope. Thus, the need for relatedness at this stage increases and more related diversication is observed. Contacts lose their importance; generic capabilities become basic and necessary abilities, not something to bring advantage; and organizational and technological capabilities are necessary to survive. This is the state of rms in developed countries. In short, it could be argued that at the third stage: 1. rms innovate mostly in products and processes; 2. these innovations need organizational and technological capabilities; and 3. the selective environment (without protectionism) selects those who are organizationally and technologically more qualied.

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3. Khodro and its history

Founded in 1962 by two brothers, the company was originally named Iran National. Soon after its formation, it started assembling a model of Hillman Hunter from Rootes Group. In this era, the company was making its rst steps forward and was developing its internal capabilities: it learned packaged technology transfer. In 1967 the company designed the Paykan, with major changes to the Hillman Hunter, and scaled up its production. As a result, the company gained minor design capabilities. At this time parts were imported in complete knock-down (CKD) form. This helped the company to experience unpackaged technology transfer. By 1976 every part of the Paykan except the engine was produced internally. The engine was produced under a Peugeot license after Rootes went bankrupt in 1978. In the subsequent years the Paykan experienced other minor modications too. These included using a Peugeot 504 engine and redesigning the lights. In 1979, after the revolution, the company was nationalized. Economic shocks resulted from the revolution, and the eight-year long Iran-Iraq war retarded the companys development. After the war, following the national intention to develop the auto industry, the company started new programs. The Auto Law (approved in 1993), guaranteed a ten-year protection of the auto sector. These protection policies included tariff barriers, funding production, development projects, etc. The company soon started assembling the Peugeot 405 model, and a few years later, a national brand Samand was introduced. The car was designed with foreign aid, which Khodro received via its foreign research center, a British branch of Khodros R&D center, in association with designers from MG Rover. At present Khodro is trying to increase Samands export market. It has so far been exported to Russia, Central Asia, China, Venezuela, Bulgaria and Syria and requests have been received for left-hand drive models from India and Pakistan. Khodros turnover exceeded nine billion dollars in 2008 (Business Monitor International, 2008). Following passenger cars, Khodro diversied into commercial vehicles (buses and trucks), engineering and construction related to the auto industry and the railway sector. As our study concentrates on Khodros activities from 1962 to 2007 (45 years) comparing the scope of diversication among Hyundai, Samsung and Khodro (all in developing environments) in the rst half-century of their life may be useful. Figure 2 shows a comparison among these rms in a more or less similar period of their existence. As can be seen in Figure 2, Samsung and Hyundai have followed a rapid unrelated diversication pattern during their rst 50 years; however, Khodro has remained mostly a specialized business group. While Hyundai and Samsung have opened a new business almost every three years, Khodro has started to diversify into unrelated elds only in the last few years. Khodros engineering and construction businesses (which may seem unrelated) have been developed mostly for internal purposes and are mostly concentrated on engineering and construction activities related to the auto industry (e.g. building new plants, installing new auto assembly machinery). Hyundai and Samsung have passed the second era of the theory. By the late 1990s and early 2000s they had gone through restructuring programs and had divested a number of their businesses to concentrate on their core activities (Bangsberg, 1999). This means that they are moving to become more concentrated, similar to rms in developed countries. Their presence in global markets is increasing, and they are competing with established rms in the developed world.

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Figure 2 Diversication of Hyundai, Samsung and Iran Khodro business groups

4. Was unrelated diversication possible for Khodro?

To understand why Khodro has not diversied unrelatedly, we would examine the conditions of our framework. The rst assumption is that the company lacked contact capabilities but this idea does not seem to be valid. It is hard to believe that a company that has created about 60 percent of the total direct and indirect jobs in the auto sector (about 650,000) had limited contacts (Irans Ministry of Industries and Mines, 2007), as it could easily press government ofcials and threaten them with the possibility of ring a portion of its workers for numerous reasons in order to gain leverage. Some signs of Khodros contact capabilities are outlined below. Shareholders Major shares of the company are held by the Ministry of Industries and Shasta, a holding company linked to Irans largest public insurance company. This holding controls companies in 25 sectors, including pharmaceuticals, steel, oil and gas, agro-food and construction materials. Its connection to Ministry of Industries shows that the company could have easily formed relations with this Ministry to manipulate industrial policies as well as some trade policies in its favor.

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This was what Khodro did to postpone laws that pressed it to decrease the level of polluting materials in its autos. It was also successful in delaying the reduction in tariffs. While auto import tariffs were planned to decrease to 50 percent by 2009, they are still being kept at about 90 percent (Irans Ministry of Industries and Mines, 2007, Irans Ministry of Industries & Mines and Irans Ministry of Commerce, 2004). Shasta is also a large holding company with a large sphere of inuence that Khodro could utilize. Advisory Department on Parliament Affairs The company has an advisory department called the Advisory Department on Parliament Affairs. This department is responsible for monitoring related laws before they are approved or implemented, proposing favored laws to parliament members, and resisting harmful ones. The institutional environment can be affected in favor of Khodro. These examples show that the company had valuable contact capabilities that could be used to engage in numerous endeavors. The second assumption is that Khodro (in the second stage of its life) lacked general capabilities. However it is observed that as Khodro grew, it gained a lot of experience and strengthened its general capabilities. Several experiences of technology development, working together with foreign partners, etc., provided Khodro with signicant experience and strong general capabilities like capabilities of mass production and project execution. Some signs of Khodros general capabilities are detailed below. Production scale Khodros scale of production is a sign of the presence of mass production capabilities. Khodros production exceeded 650,000 cars in 2008. Producing so many cars in a year could not happen without basic organizational capabilities, and of course capabilities that are necessary in mass production, e.g. the ability to transfer production technologies, process technologies, set up line production, etc. Export Khodros growing export is also a sign of its capabilities. As stated earlier, starting production plants in Latin America, Central Asia, Middle East and Eastern Asia in recent years shows that Khodro has gained project execution capabilities in addition to its mass production and organizational capabilities to some extent. Peugeot 206 project Joint Khodro-Peugeot production of Peugeots 206 model is one of Khodros important projects. The project, which was a symbol of international cooperation, was performed with little delay and could reach its goals. Cooperating with multinationals in a joint project also tells us that Khodro has to some extent gained project execution and organizational capabilities. The last assumption might be about the environment. Unrelated diversication may happen under protectionism. It seems that Khodro has been also enjoying a protected environment. Protected environment Due to the Auto Industry law approved in 1993, the auto industry could enjoy a ten-year period of government support. This included tariff barriers and permission to sell before production, among others. This intention was reected in the national science and technology policies. Support of technological projects related to the auto industry in the universities was signicant. Asked about the concentration of research on auto industry, a professor of the School of Material Sciences in Sharif University (Irans best technological university) told us in an interview that:

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I had to relate my projects to auto industry to get the fund. When I said that the new material could be used in ABS brakes, I could soon get the fund. Auto industry is a powerful clique in research area. As soon as they understand that you are useful for them, they support you, but if you cant convince them, you will not easily get a nancial support.

There was also signicant support from the Ministry of Industries for the auto industry. To ensure the possibility of unrelated diversication, and to nd out the reason for Khodros related diversication, we arranged in-depth interviews with 12 key decision makers from the company (managing director, deputy director, members of board of directors and director of strategic studies center). Interviewees had been inuential in Khodros strategic decisions for about 15 years. In-depth interviews were conducted based on open-ended semi-structured questionnaires. Each interview took about 90 minutes. In our interviews we were trying to answer the following questions: 1. Could Khodro enter any other businesses (from legal, protability and technological capabilities aspects, among others)? 2. Into which sectors could Khodro enter? The results of the interviews showed that Khodro not only has had small legal barriers to entering new businesses, but also public authorities would encourage it to enter some new elds. New sectors were also protable, in that there was no major domestic actor and managers could reserve a protected market for Khodro by using their contacts. Technological capabilities were also on hand; mass production, automation capabilities, plus the ability to transfer a new production line were present at Khodro. Managers also reported no other important barriers to entering new businesses. Sectors like textiles, household manufacturing and food processing were named as possible businesses Khodro could enter. One of the interviewees said:
We can easily enter a sector like textile industry . . . we can use our contacts in the Ministry of Industries and Ministry of Commerce to limit the importation of textile products. Other companies tried to do it last year, but they failed . . . We can transfer its technology soon, and allocate a team of our experienced engineers to set up the new production line.

His comment on the endeavors of other manufacturing companies to lobby for import limitations also shows the exceptional value of Khodros contacts, which others lack. In the textiles case, the current standing of the sector is not good in the country; many bankruptcies, protesting unemployed workers and increasing imports are clear signs of problems of this sector. There could also be attractive markets for Khodro in other sectors. Food processing and household manufacturing represent another sector in which automation and mass production technologies play a major role. So far we have reviewed the conditions of our framework; however, we had another assumption, i.e. lack of motivation among managers. Khodros managers were expected to generate prots and their salaries were directly related to Khodros protability; so, the more protable the company was, the more managers would earn. Thus, lack of motivation for protability among managers could not be the reason for the limitation of the diversication, as they agreed with us that new businesses could generate more prots for them. The nal remaining question is: has the company gained these capabilities recently? Interviews and review of documents in Khodro showed that except export and the Peugeot 206 project that have been done in the last few years, other above-mentioned signs of contact and general capabilities, which are consistent with unrelated diversication, were present for a long time. Khodro should have, in theory, diversied into unrelated elds. It had contacts and some general capabilities, and it was in a protected environment. Managers attested to their capability and were likewise motivated to venture into unrelated elds. Our analysis showed

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that there was no plan for unrelated diversication in Khodro. In order to better understand why there was no unrelated diversication, we arranged a focus group composed of interviewees, and asked them the next question: why has Khodro not had a plan to enter unrelated elds? The three-hour long focus group meeting showed that Khodros plans were mostly based on related diversication. They recognized that unrelated diversication was at odds with their mission. When asked about their mission, they said, It is transportation. They added that they derived this mission during several meetings at Khodros Strategic Studies Center (SSC[1]).

5. Discussion
SSCs key inuential advisors believed that identifying organizational mission is an essential part of the strategic planning exercise (based on orthodox ideas in the business literature, for example Wickham, 1997; Su and Lyons, 2003), and it has priority in strategic planning process (David, 1993). So, as soon as SSC was formed and became important, it started to develop the mission statement for Khodro. As their current business was auto industry, they selected passenger cars as their mission after several meetings. It seems that this was the dominant logic of its managers as well (Prahalad and Bettis, 1986). Years later, despite the maturity of the passenger car market , Khodro was trying to generate more prots in the sector; when its endeavors failed, its managers decided to invest excess nancial resources in a new business. The SSCs advisors had recommended that related diversication could be more successful for Khodro, referring to the business literature. This literature includes the RBV theory of the rm and research studying the relation between the scope of diversication and rm performance, most of which has veried the success of related diversication (Rumelt, 1974, 1982; Teece, 1982; Palepu, 1985; Vardarajan and Ramanujam, 1987; Wernerfelt and Montgomery, 1988; Palich et al., 2000). To limit Khodros scope of diversication, advisors preferred a strategic approach to mission development, which is based on the idea of advocates such as Drucker (1977). This approach to mission strategic approach aims at dening the scope of the business and its position in its market place (Wickham, 1997; Campbell et al., 1990). Dening business scope means clarifying the products that the rm wants to produce and its target markets (David, 1993). In this school, developing a mission is perceived as the rst step in the strategic management process. The mission statement answers two fundamental questions: what is our business, and what should it be? (Drucker, 1977, p. 20). Using the strategic approach, a rm should dene its products/markets. Determining a set of products in its mission statement, a rm should concentrate long enough on them to make enough organizational/technological capabilities to beat the competition. Building such capabilities may require a decade or more in a developed environment (Porter, 1996). Thus, the mission cannot be revised frequently. Firms that dene their mission based on a strategic approach follow a related diversication pattern, and concentrate for a long time on a specic set of products. This concentration allows them to build technological/organizational capabilities in the specic product area to win the global competition. Concentrating on a specic product area to develop technological/organizational capabilities seems to be related with the third era of development of rms in developing countries. In the third era of their development, rms in developing countries act similar to rms in developed world. Based on their approach to mission, Khodros advisors and managers had agreed on transportation as the new mission. When a rm denes its mission as transportation, it means that it wants to produce products related to transportation and sell them in its intended markets. By selecting this mission, the rm tries to enhance its technological/organizational capabilities related to a special set of products to succeed in

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a competitive environment. It also means that this rm has no intention to enter any other businesses. However, as stated earlier, concentration of a rm on technological/organizational capabilities is suitable for rms at the third stage of development. This is a suitable approach for rms which are active in the developed world, or those in developing countries that have developed enough capabilities to enter a global competition. Therefore, if a rm in a developing country uses this approach to mission development, it will loose the benets of its valuable capabilities (contacts and general capabilities), as it limits its scope of diversication. To develop the discussion, examples of strategic approaches to mission are given.
Ford Motors mission: To become the worlds leading Consumer Company for automotive products and services. Exxon Mobils mission: Exxon Mobil Corporation is committed to being the worlds premier petroleum and petrochemical company. Apples mission: Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.

As can be seen in the examples, these rms have decided to concentrate on a special eld, and thereby avoid unrelated diversication. Ford Motors concentration on automotive products and services means that it will not enter other businesses in order to gain the technological/organizational capabilities that it needs to win the global competition. The same can be said about Exxon Mobils concentration on petroleum and petrochemical products, and Apples focus on special hardware, software and internet offerings. Another option in dening the mission statement is the philosophy approach. The philosophy school of thought believes that mission is a cultural glue that makes an organization function as a collective unit. This glue includes strong values and norms that inuence the way in which the people of an organization behave, work together, and pursue the organizations goals. Also, this form of mission statement makes employees perceive and interpret events similarly (Pearce and David, 1987; Campbell et al., 1990; Wickham, 1997). In contrast, with the strategic view of mission, this approach deals with generating cooperation between employees through shared values and norms rather than specifying products/markets. Therefore, it allows the rm to diversify into unrelated elds. To develop the discussion, examples of philosophical approach to mission are given below:
Hyundais mission: Beat the luxury brands. Samsungs mission: Economic contribution to the nation, priority to human resources, pursuit of rationalism.

These mission statements, although they do not state any specic product to concentrate on, bring about a cultural motivation in the organizations. These mission statements allow Hyundai or Samsung to diversify into unrelated elds, as seen in Figure 2. We think that approaches to mission development (strategic/philosophical) are linked to the rms capabilities (contact/general, organizational/technological) and diversication scope (related, unrelated) as evidenced by the examples. Figure 3 shows our idea about the relation of a rm diversication pattern, its capabilities and its approach to mission. It is worth noting that the philosophical approach to mission does not necessarily mean unrelated diversication; it just allows a rm to diversify unrelatedly, but does not force it to. Strategic decisions in an organization (e.g. its mission) are positioned the highest in the hierarchy of organizational decisions. Mission in an organization is developed to clarify the direction of an organizations decisions and activities. This concept overshadows almost every activity and decision in the organization (e.g. in R&D policies, organizational structure, business strategy). Presence of mission and commitment to it in an organization over a long period can evolve as the organizations dominant logic (Prahalad and Bettis, 1986). From Prahalad and Bettiss (1986) point of view, the decision on the scope of diversication (like

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Figure 3 Capabilities, diversication and mission statement

many other decisions) is highly affected by beliefs, experiences and the composition of the dominant coalition. Khodros top management team included experienced managers that had worked in the sector for a long time. What we called mission seems to be the dominant logic of the ruling team. For example, one of the managers stated in an interview:
We have been carmakers for years; we know the technology and market very well; we have formed our international contacts to develop our auto business. Entering new business would be very costly, in that well have to make all these again . . . We may acquire a new business for nancial reasons based on new opportunities, but well do it just for short-term nancial reasons; it would be sold soon. We cannot lose our focus, or well lose all our business.

The SSC also would encourage related diversication. Business graduates would emphasize that related diversication, which we think ts rms in the developed world, is a suitable option. The SSCs Director said in an interview:
The idea of unrelated diversication has been exhausted years ago in the literature. Global wisdom has veried related diversication. Thinking pragmatic, why shouldnt we use all out technical and technological abilities in our new businesses? Opening unrelated businesses is quite costly in comparison.

The dominant logic is inuenced by the largest business to the core business (Prahalad and Bettis, 1986). Khodros dominant logic is highly inuenced by the idea of the passenger cars as their mission, which accounts for about 65 percent of its annual turnover (Business Monitor International, 2007, 2008). It is seen that the mission statement can affect the scope of diversication in a company, as it becomes its dominant logic. Strategic mission statements can limit the scope of diversication, in that they name the products that the company should produce. This type of mission statement seems to be suitable for companies that desire to gaining technological/organizational capabilities via concentrating on special products.

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However, for rms in developing countries, especially those in the rst two steps, for which contact and general capabilities are important, limiting the scope of diversication does not seem to be fruitful (Lincoln et al., 1996; Khanna and Palepu, 1997).

6. Conclusion
Prior studies on rms capabilities and diversication argue that contact/general capabilities mostly lead to unrelated diversication, and technological/organizational capabilities lead to related diversication. However, our case seems to be at odds with the current literature. Despite its contact/general capabilities, Khodro has diversied into related elds. Our study shows that a rms approach to mission development can also be inuential in its diversication pattern. Missions can be developed based on a strategic or philosophical approach. While a strategic approach to mission requires products to be dened, the philosophical approach proposes general values and cultural directions for the organization. Strategic approach to mission makes a rm concentrate on specic products for a long time, and so it gains related technological/organizational capabilities. These capabilities can guide a rm to diversify relatedly. It seems that strategic approach to mission can induce development of technological/organizational capabilities that encourage related diversication. Philosophical approach to mission allows a rm to decide on a wide range of products. This approach allows rms in developing contexts to leverage their contact/general capabilities. These capabilities can guide a rm to diversify unrelatedly. It seems that philosophical approach to mission can interlock with contact/general capabilities and encourage unrelated diversication. We argue that contact/general capabilities and unrelated diversication seem to be in harmony with philosophical approach to mission, while technological/organizational capabilities and related diversication seem to t strategic approach to mission. Bearing in mind that philosophical approach to mission does not necessarily lead to unrelated diversication, we can observe many rms that use this approach but diversify relatedly (mostly in developed countries). It is worth noting that approach to mission development is one of the many factors that affect rms capabilities and diversication scope. This approach is the only effective factor that our paper tries to shed light on; identication of other factors can be a subject of further studies.

Note
1. The Strategic Studies Center is a division in the company that studies the industry environment, proposes strategic movements, etc.

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Further reading
Kim, L. (1998), Crisis construction and organizational learning: capability building in catching-up at Hyundai Motor, Organization Science, Vol. 9 No. 4, pp. 506-21.

About the auhors

Mohammad Pakneiat is an MBA graduate who is interested in business research. He has been engaged in advisory projects in different organizations for about six years. His area of interest includes technology and innovation management and strategy and strategic management. Mohammad Pakneiat is the corresponding author and can be contacted at: Pakniat@samasamaneh.com Monireh Panahi is a PhD candidate in strategic management at Shahid Beheshti University, Tehran, Iran. She has published several papers on strategic issues in Iranian journals. Her research interests include corporate and business strategic management, and diversication. Javad Noori is Director of the Technology Management Department at Iran Khodro (the largest car maker in the Middle East and North Africa). He is currently doing a part-time PhD in science and technology management at Sharif University of Technology, Tehran, Iran. His research interests include technology management and corporate technology strategy.

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