1. There have literally been thousands of newspaper and magazine articles written about the Iridium strategy, its implementation, and the resulting bankruptcy. One of the best overviews of the entire project can be found in Steve Frank’s analyst report at Morgan Stanley Dean Witter, “Iridium World Communications: A New Shoe for ‘Get Smart!’” March 18, 1998 . An excellent article outlining the contractual benefits Motorola derived from Iridium is in a piece by Ida Picker in the Seattle Times called, “Despite Stunning Failure, Motorola Wins”, October 24, 1999. Joanna Glasner, a writer at Wired News, wrote several insightful articles, including “Iridium: Edsels in the Sky?” May 10, 1999; and “A Buyer for Iridium?” December 3, 1999. Finally, a terrific piece on Iridium’s technological arrogance appears in L. Cauley, “Losses in Space—Iridium’s Downfall,” Wall Street Journal, August 18, 1999, A1.
2. There is a rich research literature on escalating commitment. Two of the “classic” articles in this area are: B. M. Staw, “Knee-deep in the Big Muddy: A Study of Escalating Commitment to a Chosen Course of Action,” Organizational Behavior and Human Decision Processes 1976, 16, 27–44; and J. Brockner, “The Escalation of Commitment to a Failing Course of Action: Toward Theoretical Progress,” Academy of Management Review 1992, 17, 39–61. An interesting application of the theory was written by J. Ross and B. M. Staw, “Expo 86: An escalation prototype,” Administrative Science Quarterly 1986, 31, 274–297.
3. For a discussion on how to think about investments as real options, see T. Luehrman, “Investment Opportunities as Real Options: Getting Started on the Numbers,” Harvard Business Review 1998, 76 (July-August), 51–67, and E. H. Bowman and D. Hurry, “Strategy Through the Option Lens: An Integrated View of Resource Investments and the Incremental-choice Process,” Academy of Management Review 1993, 18, 760–782. Two other articles on real options are also noteworthy. Rita McGrath explores real option logic in entrepreneurial ventures in “Falling Forward: Real Options Reasoning and Entrepreneurial Failure,” Academy of Management Review 1999, 24, 13–30. Bruce Kogut, in a seminal 1991 article, argues that joint ventures are actually real options that are cashed in via subsequent acquisition: “Joint Ventures and the Option to Expand and Acquire,” Management Science 1991, 37, 19–33.
4. To learn more about strategic leadership, one of the best sources is S. Finkelstein and D. C. Hambrick’s Strategic Leadership: Top Executives and Their Effects on Organizations (St. Paul, MN: West Publishing, 1996). A terrific book on best practices in boards of directors is Ram Charan’s Boards at Work: How Corporate Boards Create Competitive Advantage (San Francisco: Jossey–Bass Publishers, 1998). Consulting and executive search firms also publish periodic surveys of board practices, for example, Korn/Ferry International, Board of Directors Annual Study, 1999. Finally, although most studies of executive compensation extol the virtues of stock options and other performance-contingent pay, the best article on unintended consequences of pay plans is still Steve Kerr’s seminal “On the Folly of Rewarding A, While Hoping for B,” Academy of Management Journal 1975, 18, 769–783.
5. Although the study of strategy and organizations has been dominated by a focus on best practices and organizational successes, there are several interesting articles on corporate failures and mistakes. Perhaps the largest body of work comes out of the organizational learning framework, and includes C. Argyris, “Double Loop Learning in Organizations,” Harvard Business Review 1977, 55, 115–125; D. A. Levinthal and J. G. March, “The Myopia of Learning,” Strategic Management Journal 1993, 14, 95–112; and S. B. Sitkin, “Learning Through Failure: The Strategy of Small Losses,” in B. M. Staw and L. L. Cummings (Eds.), Research in Organizational Behavior (Greenwich, CT: JAI Press, 1992). Other good sources include J. E. Russo and P. J. Schoemaker’s Decision Traps (New York: Doubleday, 1989) (on decision-making failures) and C. M. Christensen’s The Innovator’s Dilemma (Boston: Harvard Business School Press, 1997) (on innovation failures).