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Business Strategy And Competitive Advantage A Reinterpretation Of Michael Porters Work Jovo Ateljevi
BUSINESS STRATEGY AND
COMPETITIVE ADVANTAGE
A REINTERPRETATION OF MICHAEL
PORTER’S WORK
Jovo Ateljević, Dženan Kulović, Filip Đoković,
and Mirza Bavčić
Routledge Research in Strategic Management
Business Strategy and
Competitive Advantage
Michael Porter is recognised as one of the top authorities on business strategy
and competitive advantage. The historical review of strategic management
clearly shows that Porter’s research has bridged up two general paradigms
(before and after the 1980s) thus helping both researchers and practitioners to
better understand unanticipated global changes. His two generic strategies, cost
leadership and diversification, the two interdependent strategic options, are key
in the context of the competitiveness of orthodox microeconomic theory. This
is where Porter went further, constructing a popular value chain concept that
provides the ability to disaggregate the key activities of business process in
creating products and services in terms of cost analysis and value creation.
This book is a collection of seven interconnected chapters that provides a
coherent understanding of Michael Porter’s contribution to the field of
strategic management. It addresses key changes and challenges in the global
business environment. The value chain concept has become highly
applicable in both theory and practice. In this book, the authors offer an
original interpretation of the Porters’ research on strategic management in
order to unravel or simplify his key theoretical concepts. It will be of
interest to researchers, academics, practitioners and students in the fields of
strategic management and international business.
Jovo Ateljević is a Professor of Economics and Business Studies in the
Department of Economics at the University of Banja Luka, Bosnia and
Herzegovina.
Dženan Kulović is an Associate Professor of Management and
Organisation in the Department of Economics at the University of Zenica,
Bosnia and Herzegovina.
Filip Đoković is an Associate Professor of Tourism and Business Studies in
the Department of Tourism and Hotel Management at the Singidunum
University, Serbia.
Mirza Bavčić is a Country Manager and Co-owner of Express Courier ‐
Authorised Service Contractor for UPS in Sarajevo, Bosnia and
Herzegovina.
Routledge Research in Strategic Management
This series explores, develops and critiques the numerous models and frameworks
designed to assist in strategic decision-making in internal and external environ­
ments. It publishes scholarly research in all methodologies and perspectives that
comprise the discipline, and welcomes diverse multi-disciplinary research methods,
including qualitative and quantitative studies, and conceptual and computational
models. It also welcomes the practical application of the strategic management
process to a business world inspired by new economic paradigms.
Strategic Analysis: Processes and Tools
Andrea Beretta Zanoni
Strategic Management and the Circular Economy
Marcello Tonelli and Nicoló Cristoni
Strategic and Innovative Pricing: Price Models for a Digital Economy
Mathias Cöster, Einar Iveroth, Nils-Göran Olve, Carl-Johan Petri and Alf Westelius
Competitive International Strategy: Key Implementation Issues
Edited by Anders Pehrsson
Ambidextrous Strategy: Antecedents, Strategic Choices, and Performance
Agnieszka Zakrzewska-Bielawska
Strategic Management During a Pandemic
Edited by Vikas Kumar and Gaurav Gupta
Acquisitions and Corporate Strategy: Alliances, Performance, and
Divestment
Edited by David R. King
Strategic Management and Myopia: Challenges and Implications
Wojciech Czakon
Business Strategy and Competitive Advantage: A Reinterpretation of
Michael Porter’s Work
Jovo Ateljević, Dženan Kulović, Filip Đoković and Mirza Bavčić
https://www.routledge.com/Routledge-Research-in-Strategic-Management/
book-series/SE0470
Business Strategy and
Competitive Advantage
A Reinterpretation of
Michael Porter’s Work
Jovo Ateljević, Dženan Kulović,
Filip Đoković, and Mirza Bavčić
First published 2023
by Routledge
605 Third Avenue, New York, NY 10158
and by Routledge
4 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2023 Jovo Ateljević, Dženan Kulović, Filip Đoković and
Mirza Bavčić
The right of Jovo Ateljević, Dženan Kulović, Filip Đoković and
Mirza Bavčić to be identified as authors of this work has been asserted in
accordance with sections 77 and 78 of the Copyright, Designs and
Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced
or utilised in any form or by any electronic, mechanical, or other means,
now known or hereafter invented, including photocopying and
recording, or in any information storage or retrieval system, without
permission in writing from the publishers.
Trademark notice: Product or corporate names may be trademarks or
registered trademarks, and are used only for identification and
explanation without intent to infringe.
ISBN: 978-1-032-41666-3 (hbk)
ISBN: 978-1-032-41668-7 (pbk)
ISBN: 978-1-003-35917-3 (ebk)
DOI: 10.4324/9781003359173
Typeset in Bembo
by MPS Limited, Dehradun
Contents
List of tables viii
List of figures x
Preface xii
1 Shifting Paradigms in Business Competition 1
Introduction and context 1
The evolution of economic thought: From cost control to the affirmation
of the knowledge economy 2
New economic paradigms 3
Conceptual and practical understanding of the purpose of the
company 9
Purpose and academic discourse 10
The purpose and success of the company 11
Measuring business success 12
Balancing business models and company strategy 14
References 15
2 Porter’s Contribution to Strategic Management 17
The paradoxical foundation of strategic management 17
Theoretical framework of strategic management 20
Porter’s contribution to the development of the new paradigm 23
The transition of the course business policy into the course business
strategy 25
Porter’s theoretical ground for developing this discipline 26
Criticism of Porter’s contribution to strategic management 31
References 35
3 Competitive Advantage 36
Creating sustainable competitive advantage 36
Business strategy and operational effectiveness 38
Economic and social benefits 43
The approaches to creating and sustaining competitive advantage 47
The perspectives of the structural approach 48
The perspectives of the resource approach 49
Porter’s critic of the resource approach 50
References 52
4 Environmental Analysis: Porter’s Five Competitive
Forces Concept 54
Strategic environmental analysis 54
Constructs of environmental strategic analysis 58
Industry analysis 58
Entry barriers – the danger of newcomers 68
The negotiation power of suppliers – the danger of
suppliers 69
The negotiation power of buyers – the danger of buyers 70
Substitute pressure – the danger of substitutes 71
Competition intensity – the rivalry of competitors 71
Strategic group analysis 73
Competitors analysis from the environmental perspective 76
References 81
5 Company Analysis: Porter’s Value Chain Concept 83
Strategic company analysis 83
Constructs of strategic comapny analysis 92
Value chain analysis 93
Low cost 97
Differentiation 104
Strategic activities analysis 107
Competitors analysis from the company
perspective 109
References 113
6 The Company and Environmental Interaction: Porter’s
Concept of Generic Strategies 115
The company and environment interaction 115
Business strategy – the manner of interaction between the company
and the environment 117
Porter’s generic strategies 119
Competitive advantage 120
Competitive volume 122
vi Contents
Competitive strategies 125
Strategists 126
The planning components 126
The action component 130
The interaction between the planning and the action component 136
The sustainability of generic strategies 144
The sustainability of overall cost leadership 146
The sustainability of differentiation 146
The sustainability of focus 147
Upgrading Porter’s generic strategies concept 147
The stuck-in-the-middle position 150
Following more than one generic strategy 154
References 157
7 Porter’s New View on Competitive Advantage: Green
and Competitive 159
Reasons “for” and “against” organisational involvement in social
activities 159
Levels of corporate social responsibility 162
“How green your business is” 165
Porter’s modified matrix of business strategies 167
Digital transformation strategy 168
References 172
Index 174
Contents vii
Tables
1.1 Understanding strategic management over time 5
5
1.2 Purpose as a generator of success and defining an action
plan 13
3.1 The characteristics of the structural and the resource
approach 49
4.1 “Good” and “bad” environment 63
4.2 Possible approaches to the analysis of the competitive
game 67
4.3 Elements for assesing the influence of the danger of
newcomer 69
4.4 Elements for assessing the influence of the negotiation
power of suppliers 70
4.5 Elements for assessing the influence of the negotiation
power of buyers 72
4.6 Elements for assessing the influence of substitute pressure 72
4.7 Elements for evaluating the influence of competition
intensity 73
5.1 Two concepts: strategic business unit or essential core
competences 84
6.1 Business strategy elements 117
6.2 Common requests from competitive strategies to
organisational structure 133
6.3 The features of an organisational structure in three
competitive strategies 133
6.4 Competitive advantage resources in business functions 134
6.5 The influence of competitive strategies on employee
policies and practices 135
6.6 Competitive strategies and control types 136
6.7 The role of the board (board of directors or board of
supervisors) and the top management in the strategic plan 144
6.8 Distinctive features of generic strategies 145
6.9 General features of the three generic strategies 146
7.1 Reasons for organisational involvement in social activities 160
7.2 The evolution of the corporate social responsibility
concept 163
7.3 Recommendations for companies in order to establish
good environmental practice 166
Tables ix
Figures
1.1 Flat demand curve 7
1.2 Curve of the law of diminishing (market) demand of a
competing company 7
1.3 Decline of manufacturing jobs 10
2.1 Simple relationship: industry-market 28
2.2 Market definition levels 29
2.3 Supply, demand and balanced price in the function of
profit 30
3.1 Effectiveness and efficiency ratio 40
3.2 Profit as a measure of total income and total cost
balancing 40
3.3 The relationship between economic and social benefit 44
3.4 Creating economic added value 45
3.5 Sustainable competitive advantage 47
3.6 The comparison of structural and resource approach 50
4.1 Strategic alternatives in a postindustrial cycle 60
4.2 Market structure 61
4.3 Porter’s five competitive forces concept 66
4.4 Elements of industry structure 67
4.5 The influence of five competitive forces on profit 68
4.6 The map of strategic groups according to two key
dimensions 75
4.7 Porter’s competitor analysis framework 77
4.8 Industry barriers and profitability 79
5.1 The correlation of strategic business units in a company 87
5.2 The correlations among strategic business units in a
company (correlation matrix) 87
5.3 Value system 90
5.4 Activity identification 95
5.5 Porter’s value chain concept 96
5.6 The change of the company business paradigm 98
5.7 Value chain activity cost distribution 101
5.8 Assets distribution in value chain activities 102
5.9 Activity analysis 109
5.10 Disaggregation of value chain activities 110
5.11 Cost comparison of one activity 112
6.1 The strategic triangle 118
6.2 The curve of experience 120
6.3 Low cost vs. differentiation 121
6.4 The transfer from low cost to differentiation 122
6.5 Different market segments 123
6.6 Competitive strengths in an industry segment 124
6.7 Generic strategies types 125
6.8 Competitive strategy: the manner of company and
environmental interaction 127
6.9 Overall cost leadership features 128
6.10 Differentiation features 129
6.11 Focus features 130
6.12 The synchronisation between competitive strategy and
organisational structure 131
6.13 Bureaucratic versus organic organisational structure 131
6.14 The relationship between strategy, structure and
environment 134
6.15 The relationship between the governing and the top-
managerial position 139
6.16 Typical board structure (either governing or supervisory)
in some companies 142
6.17 Miles’ and Snow’s adaptive cycle 149
6.18 The combination of Porter’s and Miles’ and Snow’s
typology 150
6.19 Combined typology of generic strategies 150
6.20 The stuck in the middle position 153
7.1 Company as an economic and social-economic entity 161
7.2 Political innovations 162
7.3 Levels of corporate social responsibility 164
7.4 Porter’s modified matrix of generic strategies for
achieving competitive advantage 168
Figures xi
Preface
Paradigm change in the strategic management led to the emergence of the
paradox of strategic thinking, according to which, on the one hand, there
is an inadmissible vagueness of strategic management, and on the other
hand, its strong expansion. However, it is unchanged that the creation
and maintenance of competitive advantage remained at the heart of the
business strategy. Undoubtedly, the most important contribution to the
permanent removal, and permanent reshaping, of that very paradox was
made by Harvard Business School Professor Michael Porter, generally
recognised as the father of the modern business strategy. His works have
shaped our basic understanding of competitive advantage and competitive
strategy over the past three decades despite the fact that he has widely
been contested and often criticised. The integration of these two,
theoretically separated but practically deeply connected processes, is
the essential topic of this book, which is primarily intended for
academics and practitioners. Michael Porter’s comprehensive view of
strategic management significantly determined the content of the book,
which consists of six interrelated chapters. They follow and clarify
Michael Porter’s concepts – how they were tentatively created
deepened over time and supplemented by criticism. The ultimate aim
of this book is to clarify Porter’s contribution to strategic management
based on the industrial organisation, on the basis of which he founded his,
to date, it seems, unsurpassed conceptual concepts. The formation of a
generic business strategy is conditioned by the analysis of the company
(with the help of the conceptual framework of the value chain) and the
analysis of the environment (with the help of the conceptual framework
of the five competitive forces), on the basis of which it creates and
maintains a competitive advantage through the lens of sources of
competitive advantage (low costs or differentiation). Thanks to his
unique ability to connect economic theory and managerial practice,
Michael Porter helps us understand business strategy as an existential
being of modern strategic management. This book not only brings
together the influential works of Michael Porter but also contains his
latest reflections on competitiveness in the world of global business.
Despite the dramatic changes in the competitive environment, his
concepts remain highly relevant.
Authors
Preface xiii
Business Strategy And Competitive Advantage A Reinterpretation Of Michael Porters Work Jovo Ateljevi
1 Shifting Paradigms in Business
Competition
Introduction and context
The competitiveness of companies is the key to their success and survival in
a changing global market. In spite of numerous successes, companies, that
is, corporations are increasingly facing problems, and academic circles
emphasise that the way they are managed is not synchronised with changes
in the business environment. Despite the fact that a small number of large
companies dominate the global market, there are a significant number of
those who are continuously fighting for mere survival, as well as those who
are not in the system of related economic and political power. With the
changes that have taken place in the economy, both globally and nationally,
especially since the peak of the semi-global financial crisis, the so-called
classic “hands off” capitalism is experiencing a rapid transformation in
which political power comes to the fore. This was most felt by the financial
sector, which according to research considers politics (political power) to be
the biggest risk factor. This new approach to the economy aims to control
global banks and fragment the banking sector (although we are witnessing
the business success of large US banks), but its failure would not have a
significant impact on the global market. The price of rescuing banks during
the financial crisis is paid by market participants, the economy and ordinary
people. The new interventionism implies greater fiscal control and more
aggressive tax policy, even a reduction in the internationalisation of do-
mestic companies. The active role of the state, on the one hand, and the
demands of the public/consumers, on the other hand, impose new rules in
the business environment and pose new challenges for businesses whose
positioning requires an innovative approach to strategic decision-making.
According to the results of a significant number of empirical studies, in
changed circumstances, concern for company behaviour is evident in a
wider range of interest groups, including employees, consumers, the local
community and public sector representatives. This attitude changes the
traditional approach of companies in creating values based on their own
interests and the interests of owners and executive managers. Also, this
attitude affects their defined business strategies. The influence of interest
DOI: 10.4324/9781003359173-1
groups on the strategic directions of companies also affects their social
position. The purpose of the company is reflected in the process of
making strategic decisions. The aim of this introductory chapter is to
analyse changes in strategic management with a focus on the purpose of
the company, a concept that is often understood in theory and practice as
an abstract construct. In order to better understand the context and
concept of new approaches in running companies, this chapter covers a
relatively long period of time: From Alfred Marshall to the present – in
the interaction of macro and micro aspects of economic trends. In that
sense, the structure of work is defined, starting with the evolution of
economic thought.
The evolution of economic thought: From cost control
to the affirmation of the knowledge economy
In 1942, John Maynard Keynes used a biographical essay on his mentor,
Alfred Marshall, to describe a good economist:
… he must be mathematician, historian, statesman, philosopher – in
some degree. He must understand symbols and speak in words. He
must contemplate the particular in terms of the general, and touch
abstract and concrete in the same flight of thought. He must be
purposeful and disinterested in a simultaneous mood; as aloof and
incorruptible as an artist, yet sometimes as near the earth as a politician.
(The Economist, 2017a:63)
Such perfection is almost impossible to meet, so Keynes thought: God, even
competent economists are rare birds. It was at the Cambridge, the Department of
Economics, which was founded by Marshall himself, the father of eco-
nomics as a scientific discipline. At a time when the Cambridge School of
Economics was the leading school of its kind, the best were educated there
and earned the title of economist in order to be successful traders, able to
provide advice to policy makers, impartially and professionally. Today
exam questions, both at the Cambridge and at other universities, are dif-
ferent, technically more demanding, and the answers require solid
knowledge of mathematical models. All this tells us how much economics
as a scientific discipline has evolved.
Let us return to Alfred Marshall, the author of the popular textbook
Principles of Economics (1890), in which he established the use of diagrams
illustrating economic phenomena, including the supply and demand curve,
the mantra of microeconomic analysis. As an economic neoclassicist,
Marshall used a fictitious firm as a unit of analysis in optimising business
costs (minimising costs) in his research. Focusing on the cost leadership of
the observed company, he often did not take into account other aspects of
its business, including innovation, technological progress, business decision-
2 Shifting Paradigms in Business Competition
making and everything that is necessary today to manage the company. The
central Marshall’s problem, as well as the problem of the economist Leon
Walras (Walras’s law, the theory of general equilibrium,
p D p S = 0
j
k
j j
j
k
j j
=1 =1
(1.1)
where pj is the price of goods, Dj is supply and Sj is demand, respectively),1
is the role of prices in conditions of balanced supply and demand. Hence,
the term marginality means the use of marginal concepts within the eco-
nomics. Marginal concepts include marginal cost, marginal productivity and
marginal utility, the law of reduction of the rate of replacement (substitu-
tion) and the law of reduction of marginal utility.
We must emphasise that Marshall, who studied history and philosophy in
addition to economics, claims that fragmented statistical hypotheses are used
as a temporary means of measuring dynamic economic concepts (princi-
ples), so economics should be understood as a living force or driver, and its
main concern is human beings who need to be encouraged to think and
make decisions: Good or bad, in order to create social change and progress.
Keynes and Pigou, both Marshall’s students, transformed this discipline
by giving it a new theoretical basis in terms of the functioning of the
economic system, taking an active role in creating economic policies. Many
well-known economists agree that the discipline at both the micro and
macro levels is overloaded with numbers and facts whose sources are often
questionable, and their analysis yields estimated results (predictions) of
economic trends.
New economic paradigms
After more than a century, the circumstances in the global market are in-
comparably different. The increasingly dynamic global market and ac-
celerated technological changes have called into question the sustainability
of the company’s competitive advantage, as well as the conventional ap-
proach to strategic planning. In such circumstances, the company’s man-
agement uses various conceptual tools and techniques such as Total Quality
Management (TQM), benchmarking, restructuring and the like to improve
productivity and the quality of products and services. The results are ex-
cellent in terms of operating level but often unsustainable in terms of
profitability. Why is it so?
More than 50 years ago, the competitiveness of companies was largely
based on cost leadership, i.e. low production or operating costs. Lowering
relative costs often results from the benefits of the curve of experience.
With the rise of global competition, other approaches to creating compe-
titive advantage were born, including diversification, which is characteristic
Shifting Paradigms in Business Competition 3
for the period of the 1980s. Also, during this period, one of the most
deserving scientists in the field of management, especially strategic, Michael
Porter, worked and created. His works which related to competitive advantage
at both micro and macro levels are still an indispensable reference in
teaching and research in the field of economics. He defined and affirmed
widely known generic strategies that take significant place in both theory
and practice. Indeed, Porter’s contribution to the field occupied the central
stage as presented in Table 1.1. He developed some of the most applicable
models in theory and practice including five forces and value chain fra-
meworks. The historical review of strategic management clearly shows that
Porter’s research has bridged up two general paradigms (before and after the
1980s), thus helping both researchers and practitioners to better understand
changes. Certainly, managers must comprehend the evolution of strategy to
effectively facilitate decision-making process, closely following key changes
in the business environment, most of all digital technology and digital
transformation. However, the essence of strategic management remained
unchanged that is matching business resources to market opportunities.
Now we return to the conventional way of business strategic thinking.
Two generic strategies, costs and diversification, are keys in the context of
the competitiveness of orthodox microeconomic theory whose analysis is
largely based on market demand dynamics.2
In the business world, there are
two demand conditions that a company encounters in terms of supply: A
flat demand curve3
(Figure 1.1) and the downward curve4
(negative
downward slope, the law of diminishing demand; Figure 1.2) for most
goods and services (not always the case for luxury goods/services).5
Other
factors that affect demand should be mentioned, such as those related to the
amount of income – personal income, substitutes, complementarity, taste
and consumer preferences, etc.
In the second case where the curve tends to fall,6
the perception of cus-
tomers in terms of the value that one company offers in relation to another
means that prices are simply determined by the market mechanism,7
regardless
of the wishes of the company. In such circumstances, there is always only one
type of generic strategy to create a competitive advantage for a company, and
that is low production costs. Although there are a number of ways for a
company to position itself at the bottom of the cost curve in the market, each
approach should provide a competitive advantage of low costs. This is where
Porter went further, constructing a popular value chain concept that provides
the ability to disaggregate the key activities of business process in creating
products and services in terms of cost analysis and value creation. Here we are
talking about a new paradigm of cost management, i.e. the transition from the
classic costing to the so-called Activity-Based Costing (ABC) method, which
introduces radical changes in business management. The conventional ap-
proach to measuring effectiveness and efficiency is solely based on traditional
accounting performance measures, while the Balance Scorecard (BSC) best
reflects a modern approach that takes into account qualitative measures.
4 Shifting Paradigms in Business Competition
Table
1.1
Understanding
strategic
management
over
time
Period
1960s
1970s
1980s
1990s
2000
2020s
Label
Definition
of
Strategy
Conceptualising
Strategic
Management
Industrial
Organisation
Economics
View
of
Strategy
Resource-Based
View
of
Strategy
New
Paradigm
for
Strategic
Management
Digital
Transformation
Selected
authors
Andrews
(1971)
Rumelt
(1974),
Mintzberg
(1978)
Porter
(1980),
Porter
(1986)
Bartlett
(1979),
Ghoshal
(1986),
Wernerfelt
(1984),
Barney
(2001),
Prahalad
and
Hamel
(1990)
Nonaka
(1991),
Hammel
(2000),
Pfeffer
and
Sutton
(2000),
Everett
Rogers
(2000)
Kaufman
and
Horton
(2015),
McGrath
(2013),
Kotter
(2012),
Bolstorff
(2003)
Dominant
themes
Corporate
strategy,
planning
growth
Strategic
management
content
and
planning
Competitive
advantage
development
Resources
and
capabilities
development
Learning
knowledge
and
innovation
Digital
intrinsic
agility,
digital
balance,
digital
frameworks
Rationale
Strategy
as
a
rule
for
making
decisions
Evaluation
and
implementa-
tion
of
critical
aspects
of
formulated
strategy
Five
forces
analysis
of
the
industry
attractiveness
to
develop
competitive
advantage
through
generic
strategy
Valuable,
rare
and
costly
to
imitate
Dynamic
strategic
model
to
obtain
information,
create
knowledge
and
intangible
capabilities
Exploitation
of
new
business
strategy
opportunities
Brand
controls
the
channel;
digital
media
create
values
Strategic
role
of
customers
(Continued)
Shifting Paradigms in Business Competition 5
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“No, I did not. I shipped aboard the Petrel in Cuba, supposing
that she was bound for the States; but she took me to the Sandwich
Islands and then brought me here. I want to go home by the easiest
and quickest route I can find, and I shall start as soon as I receive
money from my father.”
“You ain’t strapped, be you?”
“Not quite. I want to write a letter to my father at once,”
continued Chase. “I shall hear from him in ten days or two weeks,
and, in the meantime, I want some cheap place to stay.”
“Well, you’re in it now. You couldn’t find a better place in Fr’isco.
How much be you going to ask your father for?”
“I suppose it will take considerable money to buy me some
shore-clothes and pay my railroad, stage and steamboat fare all the
way home,” said Chase, rather surprised at the question—“two
hundred dollars, perhaps.”
“Every cent of it, and more,” said the man, slapping his hand on
the counter. “Travelling is high, I can tell you. Is the old man rich?”
“He’s got some money,” answered Chase, who wondered how
the man could tell that it would take more than two hundred dollars
to pay his fare home when he did not know where he lived.
“Then ask him for three hundred. You’ll need it all, and you can
stay here till it comes. I won’t charge you a cent, either. But, I say
——”
Here the man came out from behind the counter, drew a chair
up by Chase’s side, and slapping him on the knee, said, in a
confidential tone:
“I say, you’d best leave the money you’ve got in my hands, as a
sort of security, you know. I’ll take care of it for you. There’s some
pretty rough fellows comes around here sometimes, and they
wouldn’t mind taking it away from you, if they knew you had it. Eh?”
“How much do you charge a day for boarding and lodging?”
“A dollar.”
“If I pay you every day as long as I stay here, won’t that satisfy
you?”
“No, it won’t. You see, if there’s any robbing and stealing done, I
shall be blamed for it, because I’m sorter responsible for you while
you are here.”
“You needn’t be. I can take care of myself. Besides, I may
conclude not to stay with you, you know. I shall probably find some
place I like better,” said the boy, glancing about the room.
“O, you’ll stay, I’ll bet you on that,” said the landlord, with a
laugh and a look that Chase did not like.
“I don’t think you will compel me to stay against my will,” said
the boy, rising to his feet. “I have no desire to stop in a house
frequented by men who do ‘robbing and stealing.’ I think I can find
more agreeable quarters. At any rate, I will look around a little
before I decide. I’ll trouble you for my bundle.”
“And I’ll trouble you to sit down,” said the man, pushing him
back into his chair. “You needn’t think you’re going to go out on the
street to carry tales to the police about my house.”
“I have no intention of doing anything of the kind, for I don’t
know anything about your hotel, and I don’t want to,” said Chase,
trying hard to keep up a bold front, although his heart sank within
him.
The boy had been in the house scarcely ten minutes, and he
began to see that he had got himself into trouble by coming there.
He was in one of those low sailor boarding-houses of which he had
heard and read so much, kept by a man known as a “landshark,”
who, while he pretended to make a business of feeding and
sheltering seafaring men, gained the principal part of his living by
robbing them. Those who came into his house with full pockets,
never took a cent out with them. Probably his cupidity had been
excited by the mention of the large amount that Chase expected his
father to send him immediately upon the receipt of his letter. If he
could keep the boy there until the money arrived, Chase would
never see a cent of it. He would retain it all himself, and wind up the
business by shipping his lodger off on some vessel, pocketing his
advance, which would amount to twenty or fifty dollars more,
according to the length of the voyage for which he was shipped.
Chase had heard much of landsharks from the sailors on board the
Petrel, and he understood the situation perfectly, but he was at a
loss how to get out of it. It would be folly to irritate the man, so he
tried to appease him.
“There’s no use in getting angry over it,” said he. “What do you
want me to do?”
“I want you to hand out your money, and let me take care of it
for you,” said the landlord.
“There it is,” said Chase, producing the five-dollar bill.
“This ain’t no account. We use gold in this country. Where’s the
rest? Better let me have it all, because I’m responsible, you know.”
“You’ve got it all now. I haven’t another cent.”
“I don’t believe it.”
“Then you had better sound me,” said Chase. “My wages
amounted to only seventy-five dollars, and the articles I drew from
the slop-chest used them all up.”
“Well, you’re a nice lad to come ashore after a long voyage, ain’t
you now?” said the landlord, who did not try to conceal his disgust.
“I am not worth robbing, am I?” said Chase, to himself.
“I believe you’re a deserter,” continued the landlord, “else you’d
have more money.”
“I couldn’t very well have deserted in broad daylight with a
bundle over my shoulder,” said Chase. “And besides, there’s my
certificate of discharge.”
“That may be all right, and then again it may not,” said the
landlord, holding the document upside down while he looked at it.
“There’s a law that governs us boarding-house keepers, and you
must stay here till I find out whether or not you are all right.”
“Very good,” replied the boy, who knew that he could not help
himself. “Send somebody down to the Petrel with that discharge,
and if Captain Pratt doesn’t say it is correct, I am willing to go back.”
“Perhaps he’ll put you in jail. That’s what they do with deserters
sometimes.”
“I’ll risk it. Now, if you will furnish me with writing materials, I’ll
write that letter. The sooner that money gets here, the better it will
suit me.”
“Will the old man be sure and send it?”
“Of course he will.”
“Do you know anybody here in Fr’isco?”
“Not a soul.”
“Then you had better tell him to send the money to me—John
McKay is my name—because you can’t get it, being a stranger. You’ll
need somebody to prove who you be.”
“Couldn’t you do that?”
“Well, no; I couldn’t. I don’t know you from a side of sole
leather. I never seen you before. If it is sent to me I can get it easy
enough, no matter whether it comes by check or express.”
“And then you can hand it over to me?”
“Of course, and I will, too—every cent. I’m honest.”
“O, I don’t doubt it,” said Chase. “You look honest.”
“Well, I’ll go and get the pen, ink and paper for you, and then I’ll
show you to a room up-stairs, where you’ll be quiet and peaceable
like, and there won’t be nobody to bother you.”
“I can write the letter down here just as well,” said Chase, who
was afraid that if he went up-stairs he might not be allowed to come
down again very soon, “and then I can take it to the post-office
myself.”
“But I don’t want you to write it down here, because there’s
always fellows coming in. When you get it writ, I can send it to the
office for you. Don’t forget my name—John McKay.”
“I won’t,” said Chase, rising to his feet. He executed this
movement with the determination of making a bold strike for his
freedom. The landlord was moving toward the counter, and Chase
stood ready for a spring, intending, as soon as he went behind it, to
dart for the door and run out into the street. But the man acted as if
he suspected his design, for he walked straight to the door, locked it
and put the key into his pocket.
“That’s just to keep everybody out till I come back,” said he, by
way of explanation.
The landlord then went behind his counter, and after overhauling
the contents of a drawer, found the writing materials and a stamped
envelope. Nodding to Chase to follow, he led the way out of the
barroom, up two flights of uncarpeted stairs, along a narrow,
winding hall, and finally opened a door which led into a room so
dark that Chase could not see a single thing in it. There were
windows in it, however, for little streaks of light came in through
what appeared to be closed blinds.
“Can’t you give me a better room than this?” asked Chase, with
an involuntary shudder. “I can’t see to write in here.”
“You can after a while,” said the landlord. “It ain’t so dark as it
looks at first sight. Now, how long before I shall come back?”
“O, give me an hour. I’ve got a good deal to say, and besides it
takes me a long time to write a letter.”
The man deposited the writing materials on a rough table in one
corner of the room, and then went out, closing the door after him,
and turning a key in the lock as he did so. Chase heard it and knew
that he was a prisoner.
C
CHAPTER XVI.
BROWN’S MISFORTUNE.
HASE realized his situation, but he was not as badly frightened
as he would have been a few months before. One soon learns to
bear up bravely under almost any adverse circumstances, especially
if he have an object in view. Chase had an object to accomplish, and
that was to reach home and friends once more. He could do nothing
toward it while he was locked up there, so he at once began an
examination of his prison with a view to escaping from it. He waited
until the landlord had descended the stairs, and then, after listening
a few minutes at the door, to make sure that he did not come back,
turned his attention to the nearest window. He found there only the
shattered remains of a sash, and what he had supposed to be blinds
were rough boards nailed on the outside. These boards were further
secured by two bars of iron, one at the top and the other at the
bottom. They had been forced out a little at the bottom, as far as
the bar would allow them to go, and there were deep dents and
scratches on them, showing that a lever of some kind had been used
against them.
“This room is a regular jail,” thought Chase. “That landlord takes
in all the sailors that come here, and after they have spent every
cent of their money, he locks them up here until he gets ready to
ship them off on some vessel. That’s what he intends to do with me,
and he seems in a fair way to accomplish his object.”
Talking thus to himself, Chase made a close examination of the
fastenings of the window. Some one who had been confined in that
room had made a desperate effort to push off the boards, that was
evident, for the marks of the lever he had used were there yet. But
before the boards could be pushed out far enough to draw the nails,
they had been stopped by the bar outside. The first thing was to get
at these nails and break them off. The bottom of one of the boards
could then be pushed aside, leaving an opening through which he
could crawl out.
Chase’s Escape from the Sailor Boarding House.
Chase thought a moment, and then pulling out his knife, which
fortunately contained a large, strong blade, set to work to cut
through the soft wood of the window-sill, down to one of the nails
which held the outside board. This he did in a very few minutes.
Then he placed the point of his knife under the nail, and prying it up
until he could take hold of it with his fingers, bent it back and forth
until he broke it off. Three others were served in the same way, and
then Chase pushed the lower end of the board aside and looked out.
The roof of the adjoining house was six or eight feet lower than the
window. It was flat, and there was a woman upon it engaged in
hanging out clothes. She hung up the last article while Chase was
looking at her, and picking up her empty basket disappeared through
a scuttle which she left open behind her.
“I don’t much like the situation,” said the boy, wiping the big
drops of perspiration from his face. “My only way of escape is
through that house. Suppose that scuttle leads into the living-room
of some family, and I should find a big fellow there who would want
to know my business?”
Chase did not stop to answer this question, being resolved to
trust to luck. He was working his way through the window while he
was talking to himself, and hanging by his hands dropped down
upon the roof. He ran at once to the scuttle, and upon looking into
it, saw that it led into a hall which did not seem to be occupied.
Without hesitation he descended the ladder, hurried down the flight
of steps he found at the end of the hall, and in a moment more was
safe in the street.
The very first man he saw when he got there was the landlord,
John McKay, who stood in the open door of his boarding-house, no
doubt looking out for an opportunity to take in some other unwary
sailor who had just landed from a long voyage. If the boy’s sudden
appearance caused him any surprise, he did not show it. He made
no move, and neither did he say anything. Chase walked away,
looking back now and then to make sure that the landlord did not
follow him, and at the first corner he found a policeman, to whom
he hurriedly related all that had passed since his arrival at the
boarding-house. The officer did not act as though he heard a word
of the story. He kept looking up and down the street, and when the
boy ceased speaking walked slowly toward the boarding-house,
Chase following. The landlord saw them coming, but, somewhat to
Chase’s surprise, exhibited no signs of alarm. He kept his place in
the doorway, and when the two came up, said, familiarly:
“Hallo, Jenkins!”
“How are you, Mack?” said the officer. “This boy says you’ve got
a bundle of his.”
“Well, that isn’t the only lie he’s told since I first seen him,”
returned the landlord. “He came to my house about two weeks ago,
without clothes or money, and I’ve been boarding him free gratis
ever since.”
“Why, I came to your house not more than an hour ago, and you
took my bundle away from me and robbed me of five dollars
besides,” said Chase, greatly amazed at the man’s impudence.
“Do you hear that, Jim?” said the landlord, turning partly around
and addressing some one in the house.
“I do,” replied a voice; and a burly fellow, whom Chase had not
before seen about the premises, came out from behind the bar and
approached the door. “That’s the return you always get for doing a
sailor-man a kindness. I can show on the books that he owes for
two weeks’ board and lodging.”
“I guess you had better move on,” said the officer, turning to
Chase.
“And leave my clothes and money? I guess not. They’re mine
and I want them. I make a complaint against this man, and it is your
business to arrest him.”
“Go on without another word,” said the policeman, “or I’ll make
it my business to run you in.”
Chase was not a city boy, but he knew what the officer meant.
Filled with surprise and bewilderment, he turned about and made his
way around a corner, out of sight. When he reached the next street
he looked back, and saw that the policeman was standing on the
corner watching him.
“Now I am beaten,” thought Chase, turning down the first street
he came to, in order to leave the hated officer out of sight. “A
landshark robs me in broad daylight, and a policeman upholds him in
it, and threatens to arrest me if I say another word! I wonder if that
is what city folks call justice!”
Chase lost heart now, for the only time since his first night on
board the Petrel. With no clothing or money, alone in a strange city,
where the officers appeared to be in league with the rascals, and an
honest boy was followed and watched as if he were a suspicious
character, it was no wonder that he felt afraid and dispirited. He did
not dare remain in San Francisco now, for if, while in search of
employment, he should chance to wander back on policeman
Jenkins’s beat, that officer might arrest him and have him locked up
as a vagrant. The bare thought was horrifying to Chase, who hurried
along as if he hoped to get away from it, turning down every corner
he came to, until at last he found himself near the wharf again. Here
he was accosted by a stalwart young fellow with a pack on his back,
who hurriedly asked if a boat, which was lying close by with steam
up, was the one that carried passengers from Fr’isco to Vallejo.
“I am sure I don’t know,” answered Chase. “I am a stranger
here. Where is Vallejo?”
“It is on the other side of the bay,” replied the man. “It is the
place where they go to take the cars for the States.”
“Then I should like to go there,” said Chase, eagerly. “I am
bound for the States.”
“So am I, if I can ever get there. I came out here three years
ago to dig gold, and I had more money when I first got here than I
have ever had since. I shall never be able to scrape enough together
to pay my fare to Indiana, so I am going to work my way back. They
want hands on the railroad up here at Independence. They are
paying three dollars a day.”
“Now, I should like a chance like that,” said Chase. “Where is
Independence?”
“Up the road a piece.”
“How is one to get there?”
“That’s the question. If we were only at Vallejo, we could walk
up the railroad; but there are twenty-five miles of water between us
and that place.”
“Well, won’t the railroad company furnish transportation to those
who want to work for them?”
“I don’t know. Suppose we go back and look.”
Chase did not know what the man meant by going back and
looking, but he followed him without asking any questions, and
presently found himself in front of a large placard posted on a
billboard and headed—
“500 More Men Wanted to Work on the Central
Pacific Railroad.”
It was this notice that had first put it into the head of Chase’s
new acquaintance to work his way back to his home in Indiana; and
near the bottom was something that had escaped his eye:
“For further particulars and transportation, apply at the
Company’s Office, No. 54 K street, Sacramento.”
“Humph! we are no better off now than we were before,” said
Chase, who remembered enough of his geography to know that
Sacramento was some distance from San Francisco. “How are we
ever going to get to the company’s office.”
“Go right aboard that steamer you see up there,” said a man,
who was standing near enough to them to overhear their
conversation. “She goes to Vallejo, and from there you can take the
train to Sacramento.”
“Without a cent in our pockets?” asked Chase’s companion.
“Yes, if you will contract to work on the railroad for one month.”
“I will, and be glad of the chance,” said Chase. “We are obliged
to you for the information.”
Chase and his friend hurried back to the steamer, and going on
board seated themselves near a group of men who were
congregated on the lower deck. They were rough-looking fellows, of
all nationalities, and as many of them were talking earnestly in their
own tongue—although nobody appeared to be listening to them—
the hubbub that arose made Chase wonder. Like himself, they were
bound for the company’s office; and he shovelled dirt and blasted
rocks in company with some of them for many a day afterward.
During the run up the bay Chase told his new friend, who said
his name was George Brown, something of his history, and in return
Brown gave him a sketch of his own life. It did not take him long to
do it, for he had nothing interesting or exciting to tell. He had left a
comfortable home in the States, hoping to acquire a fortune in a few
days in California. He had gone first to the mines, and, although he
had seen men take gold in paying quantities from holes almost by
the side of the one in which he was working, he had not been able
to earn enough to pay for his provisions. He had finally become a
teamster, and on more than one occasion had been glad to saw
wood for his breakfast. He was bound to get home now in some
way, and when he once got there he would stay. If he had worked
half as hard on his farm as he had worked in California for the last
three years, he would have had money in the bank.
The trip up the bay would, no doubt, have been a pleasant one
to Chase had he been in a frame of mind to enjoy it. But he was
thinking of his home off in Louisiana, and of his friends, who now
seemed farther away from him than ever before. If this man, who
was accustomed to work and to “roughing it,” had been three years
trying to get back to his home, how long at that rate would it take
him, Chase asked himself.
When the steamer reached Vallejo he followed the others to the
train, and was packed away in a box-car for Sacramento. At the
company’s office he went through certain forms of agreement, which
he could not have repeated when he came out if he had tried, and
was then ordered into another box-car that was to take him to
Independence. He travelled night and day, and, although he had no
bed to sleep on, he had plenty to eat, and kept up his spirits by
telling himself over and over again that every turn of the wheels
brought him nearer to his home.
Arriving at Independence, he was put to work at once, and
during the next month led a life of toil and hardship to which his
experience on board the Petrel was mere boy’s play. The first thing
he did when he had a few minutes’ leisure, was to hunt up the
superintendent, or the “boss,” as the men called him, to whom he
stated his troubles, and of whom he begged a stamped envelope,
and a sheet of paper, and borrowed a lead-pencil. With these he
wrote a long letter to his father, telling what he had done since
leaving Bellville and what he intended to do, not forgetting to
mention the amount which he thought would be necessary to take
him home; and having given the letter into the hands of the
superintendent, who promised to see that it was duly sent off, he
went to work with a lighter heart than he had carried for many a
day, believing that by the time his month had expired, the assistance
he so much needed would be at hand.
“And when it does come, Brown,” said Chase, who had learned
to look upon his new acquaintance with almost a brother’s affection,
“you shall not be left out in the cold. If it hadn’t been for you I
wouldn’t be here now, and I’ll see you through as far as my money
will take us.”
It was well for the boy’s peace of mind that he did not know
what became of that letter. The superintendent put it carefully away
in his pocket, and took it out again—nearly eight weeks afterward,
when the one who wrote it was hopelessly lost in the mountains
near Fort Bolton.
Although Chase expected a happy deliverance out of all his
troubles without any effort on his part to bring it about, neither he
nor Brown neglected to post himself in everything that it might be
necessary for them to know, in case they should be compelled to
continue their journey without money to pay their fare on the
stages. Among other things, they learned that the Union Pacific,
which was slowly advancing to meet the road on which they were at
work, had progressed beyond Cheyenne, and that between that
point and Independence there were several trails and stage-routes,
some longer and some shorter, but any one of which would lead
them in the direction they wished to go. Their fellow-workmen
assured them that it would not be much of a tramp across the
country for a couple of healthy youngsters, and if at any time they
got out of food, the first man they met would be willing to supply
them, no matter whether they had money or not.
The month for which Chase and his friend had contracted wore
slowly away, but the expected letter from Bellville did not arrive.
Chase grew more and more impatient and anxious as the days
passed, and when he was paid off at the end of the month, he
would have been glad to renew his contract, but Brown would not
listen. “Let’s put out and go to work when we reach the other road,”
said he. “You can write to your father just as well from Cheyenne as
you can from here. Your letter must have miscarried.”
Brown emphasized his advice by declaring that he was going
whether Chase did or not. Cold weather was coming on, he said; the
snow had fallen, during the previous winter, sixty feet deep over
seven miles of the road-bed on which the rails had since been laid,
and he did not like the idea of being shut out from home by any
such barrier as that. He was bound to get through to the other side
of the mountains before winter set in, come what might. So Chase
reluctantly made up the small bundle of clothing and bedding he had
purchased from the stores, put carefully away the slender stock of
money that he had remaining after paying his board-bill and other
debts he had contracted, and followed Brown, who stepped off with
a light heart. The latter’s face was turned toward home once more,
and that was enough to put him in the best of spirits.
“If we were in the settlements now,” said he, making an effort to
bring Chase’s usual smile back to his face, “the folks would say of
us: ‘Look at those two tramps; lock the dog in the hen-house.’ But
out here, where there are better fellows than ourselves as poor as
we, we are ‘emigrants,’ and people don’t think it necessary to watch
us, lest we should steal everything they’ve got.”
Keeping up a fire of small-talk, Brown enlivened many a mile of
their first day’s journey, and finally succeeded in making his
companion take a brighter view of their prospects. They made about
twenty miles by dark, and then built a fire beside the road and went
into camp.
Chase awoke once during the night and saw Brown sitting by the
fire, engaged in tying his money up in his handkerchief. He simply
noted the fact, and would never have thought of it again, had it not
been brought to his mind by an incident that happened the next day.
They were walking along toward the close of the afternoon, when
Brown, who had kept up a constant singing and story-telling,
suddenly paused and put his hand into his pocket. He opened his
eyes, felt in his other pocket, then threw down his bundle and began
a thorough examination of his clothing.
“What’s the matter?” asked Chase.
“Matter enough,” replied his companion, glancing back along the
road. “I’ve lost my money.”
Business Strategy And Competitive Advantage A Reinterpretation Of Michael Porters Work Jovo Ateljevi
“Y
CHAPTER XVII.
WHAT CAME OF IT.
ES, sir, I have lost my money,” repeated Brown, pulling out
each of his pockets in succession, to show that they were all
empty. “I haven’t got a red cent.”
“But it wasn’t in your pocket,” said Chase, as soon as he had
recovered from his surprise.
“Eh?” exclaimed Brown, his face assuming a genuine look of
astonishment now. “How do you know it wasn’t?”
“Because I saw you sitting by the fire last night, tying your
money up in your handkerchief,” replied Chase.
“Ah! I—eh? Yes; certainly you did, and that very move was what
has ruined me. Money, handkerchief and all are gone.”
Chase looked sharply at his companion. There was something
about the business that did not look just right. Brown didn’t act sorry
enough.
“I say it is gone,” said the latter, as if Chase had disputed the
point. “What is to be done now? You’ll have to support us both,
Hank.”
“But fifteen dollars will not buy us food until we reach
Cheyenne,” replied Chase.
“I know it; but it will have to last us as long as we can make it,
and then we must go to work. If we can find nothing to do, the only
thing left for us is to separate and let each fellow take care of
himself.”
Again Chase looked closely at his friend. This was a new doctrine
for the latter to advocate. Heretofore, especially since he learned
that Chase expected assistance from home, Brown had laid great
stress on the fact that they were to remain together until they
reached the States, no matter what might happen; and if good
fortune befell either of them, the other was to share it. Chase had
been glad to agree to it. As matters stood when they left
Independence, Brown had the advantage, for not having been
obliged to purchase any clothes or bedding, he had been able to
save every cent of his month’s wages, except what he had expended
for food. If the superintendent had mailed that letter, then Chase
would have carried the heavier purse, and he never would have
thought of deserting his companion.
“I never saw the like of this,” said Brown, looking down at the
ground and shaking his head.
“We’ll not give it up without trying to find it,” said Chase. “Let’s
go back.”
With a great show of eagerness Brown caught up his bundle and
hurried down the road, followed by Chase, who, however, did not
make any effort to find the money. He had found it already. He could
have put his hand upon it without stepping out of his tracks. The
moment Brown turned his back to him, he saw something sticking
out from under the collar of his shirt. It was the corner of a blue
cotton handkerchief—the same one in which Chase had seen him
tying up his money the night before. The gold was slung around
Brown’s neck, under his shirt. Of that much Chase was certain; but
he was not quite so certain that he understood the motive the man
had in view in hiding it.
“I don’t think there is any need of going farther back,” said
Brown, pausing and looking dejectedly at Chase, after they had
retraced their steps for a short distance up the road; “do you?”
“No, I do not,” answered the boy. “We have travelled fast to-day,
and it is a long way back to the place where we camped last night.
You had the money then?”
“Yes, and I haven’t seen it since. Some fellow has got it safe
enough before this time.”
“I know it,” said Chase.
With one accord the two turned about and resumed their
journey. Chase wanted to think, but Brown was anxious to talk.
“What do you say to my proposition, Hank?” said he. “I don’t like
to leave you, but if we can’t get work together, ought not each one
to look out for himself?”
“Of course he ought.”
“But you won’t leave me in the lurch?” continued Brown. “You
won’t go back on me because I have no money?”
“I have just as much intention of deserting you as you have of
serving me that way,” replied Chase, earnestly.
“Give me your hand on that, my boy,” said Brown. “I knew you
were true blue, or I shouldn’t have stuck to you as long as I have.”
Brown, having, as he imagined, extorted a promise from his
companion that he would remain with him as long as his money held
out, relapsed into silence, and the boy was allowed leisure to follow
out some plans that had suggested themselves to him. In the first
place, he wanted to make sure that he was not mistaken in regard
to the money; so he watched his opportunity, and presently he and
Brown bumped their shoulders together with some violence, as
people will sometimes do who walk together without keeping step.
The result was positive proof that Brown had not lost his money, for
Chase heard the gold pieces jingle as plainly as he could hear the
sound of his own footsteps. Brown heard it, too, and glanced quickly
into Chase’s face; but seeing nothing there to excite his suspicions,
he said nothing, but simply moved farther away so that the
experiment could not be repeated.
“The money is tied up in his handkerchief, just as I supposed it
was,” soliloquized Chase. “I think I begin to see into the matter a
little. We have just fifty-five dollars between us—I have fifteen and
he owns the balance,—and that must last us during a tramp of
nearly four hundred miles. He thinks that forty dollars will furnish
food for one man longer than fifty-five will for two. He intends to live
off my money without touching his own, and when I am strapped,
he is going to run away from me; and he’ll have his forty dollars left
to support him during the rest of his journey. It is enough for one,
but I am a good deal of his opinion that it is not enough for two.
Now, fifteen dollars will keep me alone in food longer than it will
both of us, so if you please, Mr. Brown, I’ll do the running away
myself. If I must travel on my own hook, I’ll do it while I have
money in my pocket.”
Chase had hit the nail squarely on the head. He had told Brown’s
plans in detail as well as Brown could have told them himself. The
truth of the matter was, that the man was too homesick to be either
honest or truthful. He was determined to work his way back to
Indiana by some means, no matter who might suffer by it.
“I have half a mind to tell him that I know what he is about,”
thought Chase. “The coward, to want to desert me when I offered to
give him half the money I expected to receive from father! I say,
Brown!”
When the boy had said this much, prudence stepped in, and he
paused. If he excited Brown’s anger, the latter might take his money
away from him by force, and then he would be in a predicament
indeed.
“Well, what is it?” asked Brown. “Bad business, ain’t it?”
“Yes, it is,” replied Chase. “How long do you suppose my fifteen
dollars will last us?”
“We must make it hold out as long as we possibly can, even if
we eat but one full meal a day. But there is no use in looking so
down-hearted over it. We’ll work through somehow.”
Brown broke out into a song, to show how lightly the matter sat
on his own mind, and Chase once more went off into a reverie.
During the rest of the day he had little to say, and when night came
he made preparations to slip away from his companion; but no
opportunity offered itself. Did Brown suspect his designs? He
certainly acted as if he did, for he kept a sharp eye on Chase all the
time. If the latter moved during the night, Brown turned over and
looked at him.
For the three following days and nights Chase lived under a sort
of surveillance that was galling to him, and during that time the
provisions they had brought with them from Independence were
exhausted, and two of Chase’s fifteen dollars were spent at Salt Lake
City, to replenish their store. On the fourth night they encamped
near a party of teamsters. Brown being weary with the day’s journey
remained at the fire, while Chase started out to pay a visit to their
neighbors. They were glad to see him, offered him some of their
supper, and, of course, wanted to know where he was going and
what he intended to do when he got there. Chase answered all their
questions, and in accordance with his usual custom, made inquiries
concerning the route to Cheyenne. The teamsters being perfectly
familiar with the road gave him all the information he asked, and
then one of them said:
“If you only knew it, you are going miles out of your way by
going to Cheyenne. Why don’t you take the other trail?”
“Where is it?” asked Chase.
“About a quarter of a mile below here. It is the first road that
turns to your right. You can’t miss it, for there is a big dead oak
hanging over it. You’ll save at least a hundred miles of hard walking
by taking that route, and you’ll strike the prairie either at Bolton or
Reynolds. When you get there, you will be just as near the States as
you will be at Cheyenne.”
“Any chance of losing my way?”
“Not if you keep your eyes open and use your tongue.”
“What can I find to eat?”
“Just as much as you can by this route. You’ll meet a team or a
train every day.”
“Any grizzly bears or other ferocious animals on the way?”
“No more than there are on this. There’s plenty of grouse, and if
you get hard up for grub, you can snare and cook enough in a day
to last you a week. I was lost down in there once, years ago, when
the trail wasn’t as well travelled as it is now, and, although I had
nothing but a pocket-knife with me, I lived on the fat of the land and
had a good time besides.”
The teamster then went on to relate the particulars of his
adventure, which did not have much interest for Chase, for he was
thinking of something else. When the story was finished, he bade his
entertainers good-night, and slowly returned to his own camp. Now
was the time, he told himself, to put his plans into execution. A
lonely journey through the mountains was not a pleasant thing to
look forward to, but it was better than remaining in company with a
man who intended to live off him as long as his money held out, and
then desert him. He would take his bundle and start off on his own
hook that very night.
Having come to this determination, Chase made the best of his
way back to his camp, walking with noiseless footsteps, so as not to
disturb Brown, who, he supposed, must be asleep by this time. But
his precaution proved to be useless, for Brown was wide awake and
waiting for him. “I thought you were never coming back,” said he,
with some impatience.
“Those fellows down there had some very interesting stories to
tell,” replied Chase. “Say, Brown, would you sell your pack for ten
dollars, if you were me?”
“Ten dollars!” exclaimed Brown, raising himself on his elbow, “I
guess I would. That would buy lots of bacon and biscuit.”
“I could use one of your blankets at night, couldn’t I?” added
Chase.
“Of course you can, as long as we remain together.”
“Then that settles it.”
As Chase said this, he caught up his bundle and hurried down
the road again, while Brown lay back in his blanket to await his
return, laughing to himself when he thought how nicely he was
taking care of himself at the expense of his confiding friend. He
waited an hour, but Chase did not return; still another, and then he
got up and walked down the road. When he came within sight of the
camp of the teamsters he saw that the fire was burning brightly, but
the men themselves were wrapped up in their blankets, sleeping
soundly. Nothing more being needed to convince him that a very
neat trick had been played upon him, Brown turned and walked back
to his own fire.
Meanwhile Chase was hurrying along the old trail to which the
teamster had directed him. He had no difficulty in finding it, for the
dead oak tree pointed out its location. It was very dark and gloomy
in there, for the mountains on both sides were thickly covered with
trees, and the rays of the moon could scarcely penetrate through the
dense shade which they threw over the road. The road itself,
however, showed very plainly through the darkness, and Chase had
no difficulty in following it. He travelled with all the speed of which
he was capable until too tired to go farther; and then building a fire
beside the road, he lay down near it and slept until morning.
Ere many days had passed away Chase found that he could get
on just as well without Brown as he had done with him. He met any
number of teamsters and emigrants, who willingly answered his
questions concerning the route before him, and if he happened on a
camp during the dinner or supper hour, he was cordially invited to
“stop and take a bite.” Of course he was always obliged to tell his
story to those whose hospitality he shared, and when he departed,
he was invariably provided with all the cooked provisions he was
willing to carry in addition to his bundle, and they never cost him a
cent. At that rate his thirteen dollars would last him until he reached
home. Of course, too, the journey grew more and more monotonous
and wearisome as the days passed, and, worse than all, the thick,
strong shoes he had purchased before leaving Independence, began
to show signs of wear. But just as they were ready to drop to pieces,
he met a kind-hearted emigrant, who gave him a pair of old boots,
which, although much too large for him, served to keep his feet off
the hard, rocky road. It was getting colder, too, every day; the
leaves were falling from the trees, the wind whistled dismally
through the gorges, the teams and wagon-trains were not as often
met as at first, and everything told Chase that winter was fast
approaching. “You’d better toddle along right peert,” said one of the
teamsters to him. “Bolton, which is the nighest station, is two
hundred and fifty miles away yet, and we’re going to ketch it in a
few days. When she does come she’ll be a snorter. You’ve got a
good stretch of prairie to cross after you leave the foot-hills, and you
don’t want to get ketched out there in a snow-storm. Look out for
that.”
Chase gave heed to the friendly warning, and made headway as
rapidly as possible. “Two hundred and fifty miles,” he kept saying to
himself. His journey was not half completed, and it seemed to him
that he had been an age on the road. Would he ever reach Bolton?
Sometimes he was almost ready to give up trying, and lie down in
the road and wait until the snows of winter came and covered him
up. Then recollections of home and friends would come thronging
upon him, and he would press forward with renewed energy, in spite
of blistered feet and weary, aching limbs, which sometimes almost
refused to sustain him. He was up before the sun, and continued his
journey until long after dark. His situation at best was bad enough,
but one night he met with an adventure that made it infinitely
worse.
As he was hurrying along after dark, he came suddenly upon a
camp-fire. He was glad to see it, for he had not met a human being
for the last three days, and the provisions that had been furnished
him by the last teamster were all exhausted. He hoped to procure a
fresh supply at this camp. If he could not, he would be obliged to
spend a day or two in trapping grouse; and he was so very much
afraid of the snow-storm which had been so often predicted, that he
did not dare to waste a single hour. Furthermore, the road of late
had been growing very rough and rocky, and he could no longer see
the prints of wagon-wheels. He began to fear that while travelling in
the dark, he had lost his way. Perhaps these people could set him
right. He walked boldly up to the fire and greeted the men sitting
there—two rough-looking fellows, whom he at once put down as
hunters.
“Good evening, strangers,” said he.
“Wal, what do you want?” growled one of the men, after they
had both given him a good looking over.
“Will you give me some supper and permission to sleep by your
fire?” asked Chase, rather doubtfully. This was the first time during
his fifteen days in the mountains that any one had spoken to him so
roughly.
“I don’t reckon we’ve got any more grub nor we want ourselves,”
was the surly response.
“O, I don’t ask you to give it to me,” said Chase. “I am able and
willing to pay for it.”
“You got any shiners?” asked the hunter, running his eyes over
the boy’s clothes.
“I know I don’t look like it, but I can prove my words. See
there,” said Chase, putting his hand into his pocket and drawing out
several gold and silver pieces.
“How many of them you got?”
“Thirteen dollars’ worth. Can you give me something to eat
now?”
“I reckon we mought,” said the man, pointing to a haunch of
venison that hung upon a tree close by.
Having become accustomed to the ways of the world, Chase
understood the invitation thus given. He took down the joint, cut off
a couple of generous slices with his knife, and holding them over the
flames with two sticks, looked about him with some satisfaction. His
supper was secure; he had a warm fire to sleep by, and that was
something on which to congratulate himself.
The men were hunters or trappers, sure enough, Chase told
himself, and as they were the first of their calling he had ever seen,
he looked at them with as much curiosity as the Sportsman’s Club
had looked at Parks and Reed, when those worthies first came into
their camp. They wore buckskin coats and moccasins, were armed
with rifles, and there were two bundles of furs, principally otter and
beaver-skins, near the fire. They had no blankets, but each had a
saddle for a pillow, and their horses were picketed on the other side
of the road. In answer to an inquiry from Chase, they told him,
rather gruffly, that they had been hunting in the mountains, and
were on their way to some fort to dispose of their plunder. They did
not seem inclined to talk. They smoked their pipes and watched the
boy while he ate his supper, growled out a reply in the affirmative
when he asked if he was on the road to Fort Bolton, but paid no
attention to the pleasant good-night he wished them as he rolled
himself up in his blankets preparatory to going to sleep.
That was the last comfortable night that Chase passed for more
than a week.
C
CHAPTER XVIII.
CONCLUSION.
HASE was awakened the next morning by the crackling of the
fire which the hunters had replenished at daylight. He started up
with a cheery “good-morning” on his lips, but no sooner was he
fairly awake, than a sight caught his eyes which arrested the words
ere they were spoken. The men, having finished their breakfast,
were overhauling his bundle—or rather one of them was, while the
other sat by smoking his pipe and looking at him. Chase found, too,
that the blanket which had covered him during the night, had been
pulled off, and was now rolled up and tied to the horn of one of the
saddles.
“I am to be robbed, I can see that plainly enough,” said Chase,
his heart sinking within him. “I have been afraid of it all along, and it
has come at last. I might as well give up now. But if I am to lose all
my things, I’ll at least have a breakfast in part payment,” he added,
after a moment’s reflection.
The men looked at Chase as he got up, but did not speak to
him. He took down the haunch of venison, and while he was cutting
off a portion of it, the hunter who was examining his bundle, coolly
rolled up the blanket from which he had just arisen, and laid it down
beside his saddle. Chase shivered as he watched the operation, and
thought of the nights he had yet to pass in the mountains, but said
nothing. He thrust some sticks through the slices of venison, and
proceeded to roast them over the flames.
“Now, then,” said the hunter, who had done the most of the
talking the night before, “whar’s them shiners?”
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  • 5. BUSINESS STRATEGY AND COMPETITIVE ADVANTAGE A REINTERPRETATION OF MICHAEL PORTER’S WORK Jovo Ateljević, Dženan Kulović, Filip Đoković, and Mirza Bavčić Routledge Research in Strategic Management
  • 6. Business Strategy and Competitive Advantage Michael Porter is recognised as one of the top authorities on business strategy and competitive advantage. The historical review of strategic management clearly shows that Porter’s research has bridged up two general paradigms (before and after the 1980s) thus helping both researchers and practitioners to better understand unanticipated global changes. His two generic strategies, cost leadership and diversification, the two interdependent strategic options, are key in the context of the competitiveness of orthodox microeconomic theory. This is where Porter went further, constructing a popular value chain concept that provides the ability to disaggregate the key activities of business process in creating products and services in terms of cost analysis and value creation. This book is a collection of seven interconnected chapters that provides a coherent understanding of Michael Porter’s contribution to the field of strategic management. It addresses key changes and challenges in the global business environment. The value chain concept has become highly applicable in both theory and practice. In this book, the authors offer an original interpretation of the Porters’ research on strategic management in order to unravel or simplify his key theoretical concepts. It will be of interest to researchers, academics, practitioners and students in the fields of strategic management and international business. Jovo Ateljević is a Professor of Economics and Business Studies in the Department of Economics at the University of Banja Luka, Bosnia and Herzegovina. Dženan Kulović is an Associate Professor of Management and Organisation in the Department of Economics at the University of Zenica, Bosnia and Herzegovina. Filip Đoković is an Associate Professor of Tourism and Business Studies in the Department of Tourism and Hotel Management at the Singidunum University, Serbia. Mirza Bavčić is a Country Manager and Co-owner of Express Courier ‐ Authorised Service Contractor for UPS in Sarajevo, Bosnia and Herzegovina.
  • 7. Routledge Research in Strategic Management This series explores, develops and critiques the numerous models and frameworks designed to assist in strategic decision-making in internal and external environ­ ments. It publishes scholarly research in all methodologies and perspectives that comprise the discipline, and welcomes diverse multi-disciplinary research methods, including qualitative and quantitative studies, and conceptual and computational models. It also welcomes the practical application of the strategic management process to a business world inspired by new economic paradigms. Strategic Analysis: Processes and Tools Andrea Beretta Zanoni Strategic Management and the Circular Economy Marcello Tonelli and Nicoló Cristoni Strategic and Innovative Pricing: Price Models for a Digital Economy Mathias Cöster, Einar Iveroth, Nils-Göran Olve, Carl-Johan Petri and Alf Westelius Competitive International Strategy: Key Implementation Issues Edited by Anders Pehrsson Ambidextrous Strategy: Antecedents, Strategic Choices, and Performance Agnieszka Zakrzewska-Bielawska Strategic Management During a Pandemic Edited by Vikas Kumar and Gaurav Gupta Acquisitions and Corporate Strategy: Alliances, Performance, and Divestment Edited by David R. King Strategic Management and Myopia: Challenges and Implications Wojciech Czakon Business Strategy and Competitive Advantage: A Reinterpretation of Michael Porter’s Work Jovo Ateljević, Dženan Kulović, Filip Đoković and Mirza Bavčić https://www.routledge.com/Routledge-Research-in-Strategic-Management/ book-series/SE0470
  • 8. Business Strategy and Competitive Advantage A Reinterpretation of Michael Porter’s Work Jovo Ateljević, Dženan Kulović, Filip Đoković, and Mirza Bavčić
  • 9. First published 2023 by Routledge 605 Third Avenue, New York, NY 10158 and by Routledge 4 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN Routledge is an imprint of the Taylor & Francis Group, an informa business © 2023 Jovo Ateljević, Dženan Kulović, Filip Đoković and Mirza Bavčić The right of Jovo Ateljević, Dženan Kulović, Filip Đoković and Mirza Bavčić to be identified as authors of this work has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. ISBN: 978-1-032-41666-3 (hbk) ISBN: 978-1-032-41668-7 (pbk) ISBN: 978-1-003-35917-3 (ebk) DOI: 10.4324/9781003359173 Typeset in Bembo by MPS Limited, Dehradun
  • 10. Contents List of tables viii List of figures x Preface xii 1 Shifting Paradigms in Business Competition 1 Introduction and context 1 The evolution of economic thought: From cost control to the affirmation of the knowledge economy 2 New economic paradigms 3 Conceptual and practical understanding of the purpose of the company 9 Purpose and academic discourse 10 The purpose and success of the company 11 Measuring business success 12 Balancing business models and company strategy 14 References 15 2 Porter’s Contribution to Strategic Management 17 The paradoxical foundation of strategic management 17 Theoretical framework of strategic management 20 Porter’s contribution to the development of the new paradigm 23 The transition of the course business policy into the course business strategy 25 Porter’s theoretical ground for developing this discipline 26 Criticism of Porter’s contribution to strategic management 31 References 35 3 Competitive Advantage 36 Creating sustainable competitive advantage 36 Business strategy and operational effectiveness 38
  • 11. Economic and social benefits 43 The approaches to creating and sustaining competitive advantage 47 The perspectives of the structural approach 48 The perspectives of the resource approach 49 Porter’s critic of the resource approach 50 References 52 4 Environmental Analysis: Porter’s Five Competitive Forces Concept 54 Strategic environmental analysis 54 Constructs of environmental strategic analysis 58 Industry analysis 58 Entry barriers – the danger of newcomers 68 The negotiation power of suppliers – the danger of suppliers 69 The negotiation power of buyers – the danger of buyers 70 Substitute pressure – the danger of substitutes 71 Competition intensity – the rivalry of competitors 71 Strategic group analysis 73 Competitors analysis from the environmental perspective 76 References 81 5 Company Analysis: Porter’s Value Chain Concept 83 Strategic company analysis 83 Constructs of strategic comapny analysis 92 Value chain analysis 93 Low cost 97 Differentiation 104 Strategic activities analysis 107 Competitors analysis from the company perspective 109 References 113 6 The Company and Environmental Interaction: Porter’s Concept of Generic Strategies 115 The company and environment interaction 115 Business strategy – the manner of interaction between the company and the environment 117 Porter’s generic strategies 119 Competitive advantage 120 Competitive volume 122 vi Contents
  • 12. Competitive strategies 125 Strategists 126 The planning components 126 The action component 130 The interaction between the planning and the action component 136 The sustainability of generic strategies 144 The sustainability of overall cost leadership 146 The sustainability of differentiation 146 The sustainability of focus 147 Upgrading Porter’s generic strategies concept 147 The stuck-in-the-middle position 150 Following more than one generic strategy 154 References 157 7 Porter’s New View on Competitive Advantage: Green and Competitive 159 Reasons “for” and “against” organisational involvement in social activities 159 Levels of corporate social responsibility 162 “How green your business is” 165 Porter’s modified matrix of business strategies 167 Digital transformation strategy 168 References 172 Index 174 Contents vii
  • 13. Tables 1.1 Understanding strategic management over time 5 5 1.2 Purpose as a generator of success and defining an action plan 13 3.1 The characteristics of the structural and the resource approach 49 4.1 “Good” and “bad” environment 63 4.2 Possible approaches to the analysis of the competitive game 67 4.3 Elements for assesing the influence of the danger of newcomer 69 4.4 Elements for assessing the influence of the negotiation power of suppliers 70 4.5 Elements for assessing the influence of the negotiation power of buyers 72 4.6 Elements for assessing the influence of substitute pressure 72 4.7 Elements for evaluating the influence of competition intensity 73 5.1 Two concepts: strategic business unit or essential core competences 84 6.1 Business strategy elements 117 6.2 Common requests from competitive strategies to organisational structure 133 6.3 The features of an organisational structure in three competitive strategies 133 6.4 Competitive advantage resources in business functions 134 6.5 The influence of competitive strategies on employee policies and practices 135 6.6 Competitive strategies and control types 136 6.7 The role of the board (board of directors or board of supervisors) and the top management in the strategic plan 144 6.8 Distinctive features of generic strategies 145 6.9 General features of the three generic strategies 146
  • 14. 7.1 Reasons for organisational involvement in social activities 160 7.2 The evolution of the corporate social responsibility concept 163 7.3 Recommendations for companies in order to establish good environmental practice 166 Tables ix
  • 15. Figures 1.1 Flat demand curve 7 1.2 Curve of the law of diminishing (market) demand of a competing company 7 1.3 Decline of manufacturing jobs 10 2.1 Simple relationship: industry-market 28 2.2 Market definition levels 29 2.3 Supply, demand and balanced price in the function of profit 30 3.1 Effectiveness and efficiency ratio 40 3.2 Profit as a measure of total income and total cost balancing 40 3.3 The relationship between economic and social benefit 44 3.4 Creating economic added value 45 3.5 Sustainable competitive advantage 47 3.6 The comparison of structural and resource approach 50 4.1 Strategic alternatives in a postindustrial cycle 60 4.2 Market structure 61 4.3 Porter’s five competitive forces concept 66 4.4 Elements of industry structure 67 4.5 The influence of five competitive forces on profit 68 4.6 The map of strategic groups according to two key dimensions 75 4.7 Porter’s competitor analysis framework 77 4.8 Industry barriers and profitability 79 5.1 The correlation of strategic business units in a company 87 5.2 The correlations among strategic business units in a company (correlation matrix) 87 5.3 Value system 90 5.4 Activity identification 95 5.5 Porter’s value chain concept 96 5.6 The change of the company business paradigm 98 5.7 Value chain activity cost distribution 101 5.8 Assets distribution in value chain activities 102
  • 16. 5.9 Activity analysis 109 5.10 Disaggregation of value chain activities 110 5.11 Cost comparison of one activity 112 6.1 The strategic triangle 118 6.2 The curve of experience 120 6.3 Low cost vs. differentiation 121 6.4 The transfer from low cost to differentiation 122 6.5 Different market segments 123 6.6 Competitive strengths in an industry segment 124 6.7 Generic strategies types 125 6.8 Competitive strategy: the manner of company and environmental interaction 127 6.9 Overall cost leadership features 128 6.10 Differentiation features 129 6.11 Focus features 130 6.12 The synchronisation between competitive strategy and organisational structure 131 6.13 Bureaucratic versus organic organisational structure 131 6.14 The relationship between strategy, structure and environment 134 6.15 The relationship between the governing and the top- managerial position 139 6.16 Typical board structure (either governing or supervisory) in some companies 142 6.17 Miles’ and Snow’s adaptive cycle 149 6.18 The combination of Porter’s and Miles’ and Snow’s typology 150 6.19 Combined typology of generic strategies 150 6.20 The stuck in the middle position 153 7.1 Company as an economic and social-economic entity 161 7.2 Political innovations 162 7.3 Levels of corporate social responsibility 164 7.4 Porter’s modified matrix of generic strategies for achieving competitive advantage 168 Figures xi
  • 17. Preface Paradigm change in the strategic management led to the emergence of the paradox of strategic thinking, according to which, on the one hand, there is an inadmissible vagueness of strategic management, and on the other hand, its strong expansion. However, it is unchanged that the creation and maintenance of competitive advantage remained at the heart of the business strategy. Undoubtedly, the most important contribution to the permanent removal, and permanent reshaping, of that very paradox was made by Harvard Business School Professor Michael Porter, generally recognised as the father of the modern business strategy. His works have shaped our basic understanding of competitive advantage and competitive strategy over the past three decades despite the fact that he has widely been contested and often criticised. The integration of these two, theoretically separated but practically deeply connected processes, is the essential topic of this book, which is primarily intended for academics and practitioners. Michael Porter’s comprehensive view of strategic management significantly determined the content of the book, which consists of six interrelated chapters. They follow and clarify Michael Porter’s concepts – how they were tentatively created deepened over time and supplemented by criticism. The ultimate aim of this book is to clarify Porter’s contribution to strategic management based on the industrial organisation, on the basis of which he founded his, to date, it seems, unsurpassed conceptual concepts. The formation of a generic business strategy is conditioned by the analysis of the company (with the help of the conceptual framework of the value chain) and the analysis of the environment (with the help of the conceptual framework of the five competitive forces), on the basis of which it creates and maintains a competitive advantage through the lens of sources of competitive advantage (low costs or differentiation). Thanks to his unique ability to connect economic theory and managerial practice, Michael Porter helps us understand business strategy as an existential
  • 18. being of modern strategic management. This book not only brings together the influential works of Michael Porter but also contains his latest reflections on competitiveness in the world of global business. Despite the dramatic changes in the competitive environment, his concepts remain highly relevant. Authors Preface xiii
  • 20. 1 Shifting Paradigms in Business Competition Introduction and context The competitiveness of companies is the key to their success and survival in a changing global market. In spite of numerous successes, companies, that is, corporations are increasingly facing problems, and academic circles emphasise that the way they are managed is not synchronised with changes in the business environment. Despite the fact that a small number of large companies dominate the global market, there are a significant number of those who are continuously fighting for mere survival, as well as those who are not in the system of related economic and political power. With the changes that have taken place in the economy, both globally and nationally, especially since the peak of the semi-global financial crisis, the so-called classic “hands off” capitalism is experiencing a rapid transformation in which political power comes to the fore. This was most felt by the financial sector, which according to research considers politics (political power) to be the biggest risk factor. This new approach to the economy aims to control global banks and fragment the banking sector (although we are witnessing the business success of large US banks), but its failure would not have a significant impact on the global market. The price of rescuing banks during the financial crisis is paid by market participants, the economy and ordinary people. The new interventionism implies greater fiscal control and more aggressive tax policy, even a reduction in the internationalisation of do- mestic companies. The active role of the state, on the one hand, and the demands of the public/consumers, on the other hand, impose new rules in the business environment and pose new challenges for businesses whose positioning requires an innovative approach to strategic decision-making. According to the results of a significant number of empirical studies, in changed circumstances, concern for company behaviour is evident in a wider range of interest groups, including employees, consumers, the local community and public sector representatives. This attitude changes the traditional approach of companies in creating values based on their own interests and the interests of owners and executive managers. Also, this attitude affects their defined business strategies. The influence of interest DOI: 10.4324/9781003359173-1
  • 21. groups on the strategic directions of companies also affects their social position. The purpose of the company is reflected in the process of making strategic decisions. The aim of this introductory chapter is to analyse changes in strategic management with a focus on the purpose of the company, a concept that is often understood in theory and practice as an abstract construct. In order to better understand the context and concept of new approaches in running companies, this chapter covers a relatively long period of time: From Alfred Marshall to the present – in the interaction of macro and micro aspects of economic trends. In that sense, the structure of work is defined, starting with the evolution of economic thought. The evolution of economic thought: From cost control to the affirmation of the knowledge economy In 1942, John Maynard Keynes used a biographical essay on his mentor, Alfred Marshall, to describe a good economist: … he must be mathematician, historian, statesman, philosopher – in some degree. He must understand symbols and speak in words. He must contemplate the particular in terms of the general, and touch abstract and concrete in the same flight of thought. He must be purposeful and disinterested in a simultaneous mood; as aloof and incorruptible as an artist, yet sometimes as near the earth as a politician. (The Economist, 2017a:63) Such perfection is almost impossible to meet, so Keynes thought: God, even competent economists are rare birds. It was at the Cambridge, the Department of Economics, which was founded by Marshall himself, the father of eco- nomics as a scientific discipline. At a time when the Cambridge School of Economics was the leading school of its kind, the best were educated there and earned the title of economist in order to be successful traders, able to provide advice to policy makers, impartially and professionally. Today exam questions, both at the Cambridge and at other universities, are dif- ferent, technically more demanding, and the answers require solid knowledge of mathematical models. All this tells us how much economics as a scientific discipline has evolved. Let us return to Alfred Marshall, the author of the popular textbook Principles of Economics (1890), in which he established the use of diagrams illustrating economic phenomena, including the supply and demand curve, the mantra of microeconomic analysis. As an economic neoclassicist, Marshall used a fictitious firm as a unit of analysis in optimising business costs (minimising costs) in his research. Focusing on the cost leadership of the observed company, he often did not take into account other aspects of its business, including innovation, technological progress, business decision- 2 Shifting Paradigms in Business Competition
  • 22. making and everything that is necessary today to manage the company. The central Marshall’s problem, as well as the problem of the economist Leon Walras (Walras’s law, the theory of general equilibrium, p D p S = 0 j k j j j k j j =1 =1 (1.1) where pj is the price of goods, Dj is supply and Sj is demand, respectively),1 is the role of prices in conditions of balanced supply and demand. Hence, the term marginality means the use of marginal concepts within the eco- nomics. Marginal concepts include marginal cost, marginal productivity and marginal utility, the law of reduction of the rate of replacement (substitu- tion) and the law of reduction of marginal utility. We must emphasise that Marshall, who studied history and philosophy in addition to economics, claims that fragmented statistical hypotheses are used as a temporary means of measuring dynamic economic concepts (princi- ples), so economics should be understood as a living force or driver, and its main concern is human beings who need to be encouraged to think and make decisions: Good or bad, in order to create social change and progress. Keynes and Pigou, both Marshall’s students, transformed this discipline by giving it a new theoretical basis in terms of the functioning of the economic system, taking an active role in creating economic policies. Many well-known economists agree that the discipline at both the micro and macro levels is overloaded with numbers and facts whose sources are often questionable, and their analysis yields estimated results (predictions) of economic trends. New economic paradigms After more than a century, the circumstances in the global market are in- comparably different. The increasingly dynamic global market and ac- celerated technological changes have called into question the sustainability of the company’s competitive advantage, as well as the conventional ap- proach to strategic planning. In such circumstances, the company’s man- agement uses various conceptual tools and techniques such as Total Quality Management (TQM), benchmarking, restructuring and the like to improve productivity and the quality of products and services. The results are ex- cellent in terms of operating level but often unsustainable in terms of profitability. Why is it so? More than 50 years ago, the competitiveness of companies was largely based on cost leadership, i.e. low production or operating costs. Lowering relative costs often results from the benefits of the curve of experience. With the rise of global competition, other approaches to creating compe- titive advantage were born, including diversification, which is characteristic Shifting Paradigms in Business Competition 3
  • 23. for the period of the 1980s. Also, during this period, one of the most deserving scientists in the field of management, especially strategic, Michael Porter, worked and created. His works which related to competitive advantage at both micro and macro levels are still an indispensable reference in teaching and research in the field of economics. He defined and affirmed widely known generic strategies that take significant place in both theory and practice. Indeed, Porter’s contribution to the field occupied the central stage as presented in Table 1.1. He developed some of the most applicable models in theory and practice including five forces and value chain fra- meworks. The historical review of strategic management clearly shows that Porter’s research has bridged up two general paradigms (before and after the 1980s), thus helping both researchers and practitioners to better understand changes. Certainly, managers must comprehend the evolution of strategy to effectively facilitate decision-making process, closely following key changes in the business environment, most of all digital technology and digital transformation. However, the essence of strategic management remained unchanged that is matching business resources to market opportunities. Now we return to the conventional way of business strategic thinking. Two generic strategies, costs and diversification, are keys in the context of the competitiveness of orthodox microeconomic theory whose analysis is largely based on market demand dynamics.2 In the business world, there are two demand conditions that a company encounters in terms of supply: A flat demand curve3 (Figure 1.1) and the downward curve4 (negative downward slope, the law of diminishing demand; Figure 1.2) for most goods and services (not always the case for luxury goods/services).5 Other factors that affect demand should be mentioned, such as those related to the amount of income – personal income, substitutes, complementarity, taste and consumer preferences, etc. In the second case where the curve tends to fall,6 the perception of cus- tomers in terms of the value that one company offers in relation to another means that prices are simply determined by the market mechanism,7 regardless of the wishes of the company. In such circumstances, there is always only one type of generic strategy to create a competitive advantage for a company, and that is low production costs. Although there are a number of ways for a company to position itself at the bottom of the cost curve in the market, each approach should provide a competitive advantage of low costs. This is where Porter went further, constructing a popular value chain concept that provides the ability to disaggregate the key activities of business process in creating products and services in terms of cost analysis and value creation. Here we are talking about a new paradigm of cost management, i.e. the transition from the classic costing to the so-called Activity-Based Costing (ABC) method, which introduces radical changes in business management. The conventional ap- proach to measuring effectiveness and efficiency is solely based on traditional accounting performance measures, while the Balance Scorecard (BSC) best reflects a modern approach that takes into account qualitative measures. 4 Shifting Paradigms in Business Competition
  • 24. Table 1.1 Understanding strategic management over time Period 1960s 1970s 1980s 1990s 2000 2020s Label Definition of Strategy Conceptualising Strategic Management Industrial Organisation Economics View of Strategy Resource-Based View of Strategy New Paradigm for Strategic Management Digital Transformation Selected authors Andrews (1971) Rumelt (1974), Mintzberg (1978) Porter (1980), Porter (1986) Bartlett (1979), Ghoshal (1986), Wernerfelt (1984), Barney (2001), Prahalad and Hamel (1990) Nonaka (1991), Hammel (2000), Pfeffer and Sutton (2000), Everett Rogers (2000) Kaufman and Horton (2015), McGrath (2013), Kotter (2012), Bolstorff (2003) Dominant themes Corporate strategy, planning growth Strategic management content and planning Competitive advantage development Resources and capabilities development Learning knowledge and innovation Digital intrinsic agility, digital balance, digital frameworks Rationale Strategy as a rule for making decisions Evaluation and implementa- tion of critical aspects of formulated strategy Five forces analysis of the industry attractiveness to develop competitive advantage through generic strategy Valuable, rare and costly to imitate Dynamic strategic model to obtain information, create knowledge and intangible capabilities Exploitation of new business strategy opportunities Brand controls the channel; digital media create values Strategic role of customers (Continued) Shifting Paradigms in Business Competition 5
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  • 26. “No, I did not. I shipped aboard the Petrel in Cuba, supposing that she was bound for the States; but she took me to the Sandwich Islands and then brought me here. I want to go home by the easiest and quickest route I can find, and I shall start as soon as I receive money from my father.” “You ain’t strapped, be you?” “Not quite. I want to write a letter to my father at once,” continued Chase. “I shall hear from him in ten days or two weeks, and, in the meantime, I want some cheap place to stay.” “Well, you’re in it now. You couldn’t find a better place in Fr’isco. How much be you going to ask your father for?” “I suppose it will take considerable money to buy me some shore-clothes and pay my railroad, stage and steamboat fare all the way home,” said Chase, rather surprised at the question—“two hundred dollars, perhaps.” “Every cent of it, and more,” said the man, slapping his hand on the counter. “Travelling is high, I can tell you. Is the old man rich?” “He’s got some money,” answered Chase, who wondered how the man could tell that it would take more than two hundred dollars to pay his fare home when he did not know where he lived. “Then ask him for three hundred. You’ll need it all, and you can stay here till it comes. I won’t charge you a cent, either. But, I say ——” Here the man came out from behind the counter, drew a chair up by Chase’s side, and slapping him on the knee, said, in a confidential tone: “I say, you’d best leave the money you’ve got in my hands, as a sort of security, you know. I’ll take care of it for you. There’s some pretty rough fellows comes around here sometimes, and they wouldn’t mind taking it away from you, if they knew you had it. Eh?” “How much do you charge a day for boarding and lodging?”
  • 27. “A dollar.” “If I pay you every day as long as I stay here, won’t that satisfy you?” “No, it won’t. You see, if there’s any robbing and stealing done, I shall be blamed for it, because I’m sorter responsible for you while you are here.” “You needn’t be. I can take care of myself. Besides, I may conclude not to stay with you, you know. I shall probably find some place I like better,” said the boy, glancing about the room. “O, you’ll stay, I’ll bet you on that,” said the landlord, with a laugh and a look that Chase did not like. “I don’t think you will compel me to stay against my will,” said the boy, rising to his feet. “I have no desire to stop in a house frequented by men who do ‘robbing and stealing.’ I think I can find more agreeable quarters. At any rate, I will look around a little before I decide. I’ll trouble you for my bundle.” “And I’ll trouble you to sit down,” said the man, pushing him back into his chair. “You needn’t think you’re going to go out on the street to carry tales to the police about my house.” “I have no intention of doing anything of the kind, for I don’t know anything about your hotel, and I don’t want to,” said Chase, trying hard to keep up a bold front, although his heart sank within him. The boy had been in the house scarcely ten minutes, and he began to see that he had got himself into trouble by coming there. He was in one of those low sailor boarding-houses of which he had heard and read so much, kept by a man known as a “landshark,” who, while he pretended to make a business of feeding and sheltering seafaring men, gained the principal part of his living by robbing them. Those who came into his house with full pockets, never took a cent out with them. Probably his cupidity had been excited by the mention of the large amount that Chase expected his
  • 28. father to send him immediately upon the receipt of his letter. If he could keep the boy there until the money arrived, Chase would never see a cent of it. He would retain it all himself, and wind up the business by shipping his lodger off on some vessel, pocketing his advance, which would amount to twenty or fifty dollars more, according to the length of the voyage for which he was shipped. Chase had heard much of landsharks from the sailors on board the Petrel, and he understood the situation perfectly, but he was at a loss how to get out of it. It would be folly to irritate the man, so he tried to appease him. “There’s no use in getting angry over it,” said he. “What do you want me to do?” “I want you to hand out your money, and let me take care of it for you,” said the landlord. “There it is,” said Chase, producing the five-dollar bill. “This ain’t no account. We use gold in this country. Where’s the rest? Better let me have it all, because I’m responsible, you know.” “You’ve got it all now. I haven’t another cent.” “I don’t believe it.” “Then you had better sound me,” said Chase. “My wages amounted to only seventy-five dollars, and the articles I drew from the slop-chest used them all up.” “Well, you’re a nice lad to come ashore after a long voyage, ain’t you now?” said the landlord, who did not try to conceal his disgust. “I am not worth robbing, am I?” said Chase, to himself. “I believe you’re a deserter,” continued the landlord, “else you’d have more money.” “I couldn’t very well have deserted in broad daylight with a bundle over my shoulder,” said Chase. “And besides, there’s my certificate of discharge.”
  • 29. “That may be all right, and then again it may not,” said the landlord, holding the document upside down while he looked at it. “There’s a law that governs us boarding-house keepers, and you must stay here till I find out whether or not you are all right.” “Very good,” replied the boy, who knew that he could not help himself. “Send somebody down to the Petrel with that discharge, and if Captain Pratt doesn’t say it is correct, I am willing to go back.” “Perhaps he’ll put you in jail. That’s what they do with deserters sometimes.” “I’ll risk it. Now, if you will furnish me with writing materials, I’ll write that letter. The sooner that money gets here, the better it will suit me.” “Will the old man be sure and send it?” “Of course he will.” “Do you know anybody here in Fr’isco?” “Not a soul.” “Then you had better tell him to send the money to me—John McKay is my name—because you can’t get it, being a stranger. You’ll need somebody to prove who you be.” “Couldn’t you do that?” “Well, no; I couldn’t. I don’t know you from a side of sole leather. I never seen you before. If it is sent to me I can get it easy enough, no matter whether it comes by check or express.” “And then you can hand it over to me?” “Of course, and I will, too—every cent. I’m honest.” “O, I don’t doubt it,” said Chase. “You look honest.” “Well, I’ll go and get the pen, ink and paper for you, and then I’ll show you to a room up-stairs, where you’ll be quiet and peaceable like, and there won’t be nobody to bother you.”
  • 30. “I can write the letter down here just as well,” said Chase, who was afraid that if he went up-stairs he might not be allowed to come down again very soon, “and then I can take it to the post-office myself.” “But I don’t want you to write it down here, because there’s always fellows coming in. When you get it writ, I can send it to the office for you. Don’t forget my name—John McKay.” “I won’t,” said Chase, rising to his feet. He executed this movement with the determination of making a bold strike for his freedom. The landlord was moving toward the counter, and Chase stood ready for a spring, intending, as soon as he went behind it, to dart for the door and run out into the street. But the man acted as if he suspected his design, for he walked straight to the door, locked it and put the key into his pocket. “That’s just to keep everybody out till I come back,” said he, by way of explanation. The landlord then went behind his counter, and after overhauling the contents of a drawer, found the writing materials and a stamped envelope. Nodding to Chase to follow, he led the way out of the barroom, up two flights of uncarpeted stairs, along a narrow, winding hall, and finally opened a door which led into a room so dark that Chase could not see a single thing in it. There were windows in it, however, for little streaks of light came in through what appeared to be closed blinds. “Can’t you give me a better room than this?” asked Chase, with an involuntary shudder. “I can’t see to write in here.” “You can after a while,” said the landlord. “It ain’t so dark as it looks at first sight. Now, how long before I shall come back?” “O, give me an hour. I’ve got a good deal to say, and besides it takes me a long time to write a letter.” The man deposited the writing materials on a rough table in one corner of the room, and then went out, closing the door after him,
  • 31. and turning a key in the lock as he did so. Chase heard it and knew that he was a prisoner.
  • 32. C CHAPTER XVI. BROWN’S MISFORTUNE. HASE realized his situation, but he was not as badly frightened as he would have been a few months before. One soon learns to bear up bravely under almost any adverse circumstances, especially if he have an object in view. Chase had an object to accomplish, and that was to reach home and friends once more. He could do nothing toward it while he was locked up there, so he at once began an examination of his prison with a view to escaping from it. He waited until the landlord had descended the stairs, and then, after listening a few minutes at the door, to make sure that he did not come back, turned his attention to the nearest window. He found there only the shattered remains of a sash, and what he had supposed to be blinds were rough boards nailed on the outside. These boards were further secured by two bars of iron, one at the top and the other at the bottom. They had been forced out a little at the bottom, as far as the bar would allow them to go, and there were deep dents and scratches on them, showing that a lever of some kind had been used against them. “This room is a regular jail,” thought Chase. “That landlord takes in all the sailors that come here, and after they have spent every cent of their money, he locks them up here until he gets ready to ship them off on some vessel. That’s what he intends to do with me, and he seems in a fair way to accomplish his object.” Talking thus to himself, Chase made a close examination of the fastenings of the window. Some one who had been confined in that room had made a desperate effort to push off the boards, that was evident, for the marks of the lever he had used were there yet. But before the boards could be pushed out far enough to draw the nails,
  • 33. they had been stopped by the bar outside. The first thing was to get at these nails and break them off. The bottom of one of the boards could then be pushed aside, leaving an opening through which he could crawl out.
  • 34. Chase’s Escape from the Sailor Boarding House.
  • 35. Chase thought a moment, and then pulling out his knife, which fortunately contained a large, strong blade, set to work to cut through the soft wood of the window-sill, down to one of the nails which held the outside board. This he did in a very few minutes. Then he placed the point of his knife under the nail, and prying it up until he could take hold of it with his fingers, bent it back and forth until he broke it off. Three others were served in the same way, and then Chase pushed the lower end of the board aside and looked out. The roof of the adjoining house was six or eight feet lower than the window. It was flat, and there was a woman upon it engaged in hanging out clothes. She hung up the last article while Chase was looking at her, and picking up her empty basket disappeared through a scuttle which she left open behind her. “I don’t much like the situation,” said the boy, wiping the big drops of perspiration from his face. “My only way of escape is through that house. Suppose that scuttle leads into the living-room of some family, and I should find a big fellow there who would want to know my business?” Chase did not stop to answer this question, being resolved to trust to luck. He was working his way through the window while he was talking to himself, and hanging by his hands dropped down upon the roof. He ran at once to the scuttle, and upon looking into it, saw that it led into a hall which did not seem to be occupied. Without hesitation he descended the ladder, hurried down the flight of steps he found at the end of the hall, and in a moment more was safe in the street. The very first man he saw when he got there was the landlord, John McKay, who stood in the open door of his boarding-house, no doubt looking out for an opportunity to take in some other unwary sailor who had just landed from a long voyage. If the boy’s sudden appearance caused him any surprise, he did not show it. He made no move, and neither did he say anything. Chase walked away, looking back now and then to make sure that the landlord did not follow him, and at the first corner he found a policeman, to whom
  • 36. he hurriedly related all that had passed since his arrival at the boarding-house. The officer did not act as though he heard a word of the story. He kept looking up and down the street, and when the boy ceased speaking walked slowly toward the boarding-house, Chase following. The landlord saw them coming, but, somewhat to Chase’s surprise, exhibited no signs of alarm. He kept his place in the doorway, and when the two came up, said, familiarly: “Hallo, Jenkins!” “How are you, Mack?” said the officer. “This boy says you’ve got a bundle of his.” “Well, that isn’t the only lie he’s told since I first seen him,” returned the landlord. “He came to my house about two weeks ago, without clothes or money, and I’ve been boarding him free gratis ever since.” “Why, I came to your house not more than an hour ago, and you took my bundle away from me and robbed me of five dollars besides,” said Chase, greatly amazed at the man’s impudence. “Do you hear that, Jim?” said the landlord, turning partly around and addressing some one in the house. “I do,” replied a voice; and a burly fellow, whom Chase had not before seen about the premises, came out from behind the bar and approached the door. “That’s the return you always get for doing a sailor-man a kindness. I can show on the books that he owes for two weeks’ board and lodging.” “I guess you had better move on,” said the officer, turning to Chase. “And leave my clothes and money? I guess not. They’re mine and I want them. I make a complaint against this man, and it is your business to arrest him.” “Go on without another word,” said the policeman, “or I’ll make it my business to run you in.”
  • 37. Chase was not a city boy, but he knew what the officer meant. Filled with surprise and bewilderment, he turned about and made his way around a corner, out of sight. When he reached the next street he looked back, and saw that the policeman was standing on the corner watching him. “Now I am beaten,” thought Chase, turning down the first street he came to, in order to leave the hated officer out of sight. “A landshark robs me in broad daylight, and a policeman upholds him in it, and threatens to arrest me if I say another word! I wonder if that is what city folks call justice!” Chase lost heart now, for the only time since his first night on board the Petrel. With no clothing or money, alone in a strange city, where the officers appeared to be in league with the rascals, and an honest boy was followed and watched as if he were a suspicious character, it was no wonder that he felt afraid and dispirited. He did not dare remain in San Francisco now, for if, while in search of employment, he should chance to wander back on policeman Jenkins’s beat, that officer might arrest him and have him locked up as a vagrant. The bare thought was horrifying to Chase, who hurried along as if he hoped to get away from it, turning down every corner he came to, until at last he found himself near the wharf again. Here he was accosted by a stalwart young fellow with a pack on his back, who hurriedly asked if a boat, which was lying close by with steam up, was the one that carried passengers from Fr’isco to Vallejo. “I am sure I don’t know,” answered Chase. “I am a stranger here. Where is Vallejo?” “It is on the other side of the bay,” replied the man. “It is the place where they go to take the cars for the States.” “Then I should like to go there,” said Chase, eagerly. “I am bound for the States.” “So am I, if I can ever get there. I came out here three years ago to dig gold, and I had more money when I first got here than I have ever had since. I shall never be able to scrape enough together
  • 38. to pay my fare to Indiana, so I am going to work my way back. They want hands on the railroad up here at Independence. They are paying three dollars a day.” “Now, I should like a chance like that,” said Chase. “Where is Independence?” “Up the road a piece.” “How is one to get there?” “That’s the question. If we were only at Vallejo, we could walk up the railroad; but there are twenty-five miles of water between us and that place.” “Well, won’t the railroad company furnish transportation to those who want to work for them?” “I don’t know. Suppose we go back and look.” Chase did not know what the man meant by going back and looking, but he followed him without asking any questions, and presently found himself in front of a large placard posted on a billboard and headed— “500 More Men Wanted to Work on the Central Pacific Railroad.” It was this notice that had first put it into the head of Chase’s new acquaintance to work his way back to his home in Indiana; and near the bottom was something that had escaped his eye: “For further particulars and transportation, apply at the Company’s Office, No. 54 K street, Sacramento.” “Humph! we are no better off now than we were before,” said Chase, who remembered enough of his geography to know that Sacramento was some distance from San Francisco. “How are we ever going to get to the company’s office.”
  • 39. “Go right aboard that steamer you see up there,” said a man, who was standing near enough to them to overhear their conversation. “She goes to Vallejo, and from there you can take the train to Sacramento.” “Without a cent in our pockets?” asked Chase’s companion. “Yes, if you will contract to work on the railroad for one month.” “I will, and be glad of the chance,” said Chase. “We are obliged to you for the information.” Chase and his friend hurried back to the steamer, and going on board seated themselves near a group of men who were congregated on the lower deck. They were rough-looking fellows, of all nationalities, and as many of them were talking earnestly in their own tongue—although nobody appeared to be listening to them— the hubbub that arose made Chase wonder. Like himself, they were bound for the company’s office; and he shovelled dirt and blasted rocks in company with some of them for many a day afterward. During the run up the bay Chase told his new friend, who said his name was George Brown, something of his history, and in return Brown gave him a sketch of his own life. It did not take him long to do it, for he had nothing interesting or exciting to tell. He had left a comfortable home in the States, hoping to acquire a fortune in a few days in California. He had gone first to the mines, and, although he had seen men take gold in paying quantities from holes almost by the side of the one in which he was working, he had not been able to earn enough to pay for his provisions. He had finally become a teamster, and on more than one occasion had been glad to saw wood for his breakfast. He was bound to get home now in some way, and when he once got there he would stay. If he had worked half as hard on his farm as he had worked in California for the last three years, he would have had money in the bank. The trip up the bay would, no doubt, have been a pleasant one to Chase had he been in a frame of mind to enjoy it. But he was thinking of his home off in Louisiana, and of his friends, who now
  • 40. seemed farther away from him than ever before. If this man, who was accustomed to work and to “roughing it,” had been three years trying to get back to his home, how long at that rate would it take him, Chase asked himself. When the steamer reached Vallejo he followed the others to the train, and was packed away in a box-car for Sacramento. At the company’s office he went through certain forms of agreement, which he could not have repeated when he came out if he had tried, and was then ordered into another box-car that was to take him to Independence. He travelled night and day, and, although he had no bed to sleep on, he had plenty to eat, and kept up his spirits by telling himself over and over again that every turn of the wheels brought him nearer to his home. Arriving at Independence, he was put to work at once, and during the next month led a life of toil and hardship to which his experience on board the Petrel was mere boy’s play. The first thing he did when he had a few minutes’ leisure, was to hunt up the superintendent, or the “boss,” as the men called him, to whom he stated his troubles, and of whom he begged a stamped envelope, and a sheet of paper, and borrowed a lead-pencil. With these he wrote a long letter to his father, telling what he had done since leaving Bellville and what he intended to do, not forgetting to mention the amount which he thought would be necessary to take him home; and having given the letter into the hands of the superintendent, who promised to see that it was duly sent off, he went to work with a lighter heart than he had carried for many a day, believing that by the time his month had expired, the assistance he so much needed would be at hand. “And when it does come, Brown,” said Chase, who had learned to look upon his new acquaintance with almost a brother’s affection, “you shall not be left out in the cold. If it hadn’t been for you I wouldn’t be here now, and I’ll see you through as far as my money will take us.”
  • 41. It was well for the boy’s peace of mind that he did not know what became of that letter. The superintendent put it carefully away in his pocket, and took it out again—nearly eight weeks afterward, when the one who wrote it was hopelessly lost in the mountains near Fort Bolton. Although Chase expected a happy deliverance out of all his troubles without any effort on his part to bring it about, neither he nor Brown neglected to post himself in everything that it might be necessary for them to know, in case they should be compelled to continue their journey without money to pay their fare on the stages. Among other things, they learned that the Union Pacific, which was slowly advancing to meet the road on which they were at work, had progressed beyond Cheyenne, and that between that point and Independence there were several trails and stage-routes, some longer and some shorter, but any one of which would lead them in the direction they wished to go. Their fellow-workmen assured them that it would not be much of a tramp across the country for a couple of healthy youngsters, and if at any time they got out of food, the first man they met would be willing to supply them, no matter whether they had money or not. The month for which Chase and his friend had contracted wore slowly away, but the expected letter from Bellville did not arrive. Chase grew more and more impatient and anxious as the days passed, and when he was paid off at the end of the month, he would have been glad to renew his contract, but Brown would not listen. “Let’s put out and go to work when we reach the other road,” said he. “You can write to your father just as well from Cheyenne as you can from here. Your letter must have miscarried.” Brown emphasized his advice by declaring that he was going whether Chase did or not. Cold weather was coming on, he said; the snow had fallen, during the previous winter, sixty feet deep over seven miles of the road-bed on which the rails had since been laid, and he did not like the idea of being shut out from home by any such barrier as that. He was bound to get through to the other side
  • 42. of the mountains before winter set in, come what might. So Chase reluctantly made up the small bundle of clothing and bedding he had purchased from the stores, put carefully away the slender stock of money that he had remaining after paying his board-bill and other debts he had contracted, and followed Brown, who stepped off with a light heart. The latter’s face was turned toward home once more, and that was enough to put him in the best of spirits. “If we were in the settlements now,” said he, making an effort to bring Chase’s usual smile back to his face, “the folks would say of us: ‘Look at those two tramps; lock the dog in the hen-house.’ But out here, where there are better fellows than ourselves as poor as we, we are ‘emigrants,’ and people don’t think it necessary to watch us, lest we should steal everything they’ve got.” Keeping up a fire of small-talk, Brown enlivened many a mile of their first day’s journey, and finally succeeded in making his companion take a brighter view of their prospects. They made about twenty miles by dark, and then built a fire beside the road and went into camp. Chase awoke once during the night and saw Brown sitting by the fire, engaged in tying his money up in his handkerchief. He simply noted the fact, and would never have thought of it again, had it not been brought to his mind by an incident that happened the next day. They were walking along toward the close of the afternoon, when Brown, who had kept up a constant singing and story-telling, suddenly paused and put his hand into his pocket. He opened his eyes, felt in his other pocket, then threw down his bundle and began a thorough examination of his clothing. “What’s the matter?” asked Chase. “Matter enough,” replied his companion, glancing back along the road. “I’ve lost my money.”
  • 44. “Y CHAPTER XVII. WHAT CAME OF IT. ES, sir, I have lost my money,” repeated Brown, pulling out each of his pockets in succession, to show that they were all empty. “I haven’t got a red cent.” “But it wasn’t in your pocket,” said Chase, as soon as he had recovered from his surprise. “Eh?” exclaimed Brown, his face assuming a genuine look of astonishment now. “How do you know it wasn’t?” “Because I saw you sitting by the fire last night, tying your money up in your handkerchief,” replied Chase. “Ah! I—eh? Yes; certainly you did, and that very move was what has ruined me. Money, handkerchief and all are gone.” Chase looked sharply at his companion. There was something about the business that did not look just right. Brown didn’t act sorry enough. “I say it is gone,” said the latter, as if Chase had disputed the point. “What is to be done now? You’ll have to support us both, Hank.” “But fifteen dollars will not buy us food until we reach Cheyenne,” replied Chase. “I know it; but it will have to last us as long as we can make it, and then we must go to work. If we can find nothing to do, the only thing left for us is to separate and let each fellow take care of himself.”
  • 45. Again Chase looked closely at his friend. This was a new doctrine for the latter to advocate. Heretofore, especially since he learned that Chase expected assistance from home, Brown had laid great stress on the fact that they were to remain together until they reached the States, no matter what might happen; and if good fortune befell either of them, the other was to share it. Chase had been glad to agree to it. As matters stood when they left Independence, Brown had the advantage, for not having been obliged to purchase any clothes or bedding, he had been able to save every cent of his month’s wages, except what he had expended for food. If the superintendent had mailed that letter, then Chase would have carried the heavier purse, and he never would have thought of deserting his companion. “I never saw the like of this,” said Brown, looking down at the ground and shaking his head. “We’ll not give it up without trying to find it,” said Chase. “Let’s go back.” With a great show of eagerness Brown caught up his bundle and hurried down the road, followed by Chase, who, however, did not make any effort to find the money. He had found it already. He could have put his hand upon it without stepping out of his tracks. The moment Brown turned his back to him, he saw something sticking out from under the collar of his shirt. It was the corner of a blue cotton handkerchief—the same one in which Chase had seen him tying up his money the night before. The gold was slung around Brown’s neck, under his shirt. Of that much Chase was certain; but he was not quite so certain that he understood the motive the man had in view in hiding it. “I don’t think there is any need of going farther back,” said Brown, pausing and looking dejectedly at Chase, after they had retraced their steps for a short distance up the road; “do you?” “No, I do not,” answered the boy. “We have travelled fast to-day, and it is a long way back to the place where we camped last night.
  • 46. You had the money then?” “Yes, and I haven’t seen it since. Some fellow has got it safe enough before this time.” “I know it,” said Chase. With one accord the two turned about and resumed their journey. Chase wanted to think, but Brown was anxious to talk. “What do you say to my proposition, Hank?” said he. “I don’t like to leave you, but if we can’t get work together, ought not each one to look out for himself?” “Of course he ought.” “But you won’t leave me in the lurch?” continued Brown. “You won’t go back on me because I have no money?” “I have just as much intention of deserting you as you have of serving me that way,” replied Chase, earnestly. “Give me your hand on that, my boy,” said Brown. “I knew you were true blue, or I shouldn’t have stuck to you as long as I have.” Brown, having, as he imagined, extorted a promise from his companion that he would remain with him as long as his money held out, relapsed into silence, and the boy was allowed leisure to follow out some plans that had suggested themselves to him. In the first place, he wanted to make sure that he was not mistaken in regard to the money; so he watched his opportunity, and presently he and Brown bumped their shoulders together with some violence, as people will sometimes do who walk together without keeping step. The result was positive proof that Brown had not lost his money, for Chase heard the gold pieces jingle as plainly as he could hear the sound of his own footsteps. Brown heard it, too, and glanced quickly into Chase’s face; but seeing nothing there to excite his suspicions, he said nothing, but simply moved farther away so that the experiment could not be repeated.
  • 47. “The money is tied up in his handkerchief, just as I supposed it was,” soliloquized Chase. “I think I begin to see into the matter a little. We have just fifty-five dollars between us—I have fifteen and he owns the balance,—and that must last us during a tramp of nearly four hundred miles. He thinks that forty dollars will furnish food for one man longer than fifty-five will for two. He intends to live off my money without touching his own, and when I am strapped, he is going to run away from me; and he’ll have his forty dollars left to support him during the rest of his journey. It is enough for one, but I am a good deal of his opinion that it is not enough for two. Now, fifteen dollars will keep me alone in food longer than it will both of us, so if you please, Mr. Brown, I’ll do the running away myself. If I must travel on my own hook, I’ll do it while I have money in my pocket.” Chase had hit the nail squarely on the head. He had told Brown’s plans in detail as well as Brown could have told them himself. The truth of the matter was, that the man was too homesick to be either honest or truthful. He was determined to work his way back to Indiana by some means, no matter who might suffer by it. “I have half a mind to tell him that I know what he is about,” thought Chase. “The coward, to want to desert me when I offered to give him half the money I expected to receive from father! I say, Brown!” When the boy had said this much, prudence stepped in, and he paused. If he excited Brown’s anger, the latter might take his money away from him by force, and then he would be in a predicament indeed. “Well, what is it?” asked Brown. “Bad business, ain’t it?” “Yes, it is,” replied Chase. “How long do you suppose my fifteen dollars will last us?” “We must make it hold out as long as we possibly can, even if we eat but one full meal a day. But there is no use in looking so down-hearted over it. We’ll work through somehow.”
  • 48. Brown broke out into a song, to show how lightly the matter sat on his own mind, and Chase once more went off into a reverie. During the rest of the day he had little to say, and when night came he made preparations to slip away from his companion; but no opportunity offered itself. Did Brown suspect his designs? He certainly acted as if he did, for he kept a sharp eye on Chase all the time. If the latter moved during the night, Brown turned over and looked at him. For the three following days and nights Chase lived under a sort of surveillance that was galling to him, and during that time the provisions they had brought with them from Independence were exhausted, and two of Chase’s fifteen dollars were spent at Salt Lake City, to replenish their store. On the fourth night they encamped near a party of teamsters. Brown being weary with the day’s journey remained at the fire, while Chase started out to pay a visit to their neighbors. They were glad to see him, offered him some of their supper, and, of course, wanted to know where he was going and what he intended to do when he got there. Chase answered all their questions, and in accordance with his usual custom, made inquiries concerning the route to Cheyenne. The teamsters being perfectly familiar with the road gave him all the information he asked, and then one of them said: “If you only knew it, you are going miles out of your way by going to Cheyenne. Why don’t you take the other trail?” “Where is it?” asked Chase. “About a quarter of a mile below here. It is the first road that turns to your right. You can’t miss it, for there is a big dead oak hanging over it. You’ll save at least a hundred miles of hard walking by taking that route, and you’ll strike the prairie either at Bolton or Reynolds. When you get there, you will be just as near the States as you will be at Cheyenne.” “Any chance of losing my way?” “Not if you keep your eyes open and use your tongue.”
  • 49. “What can I find to eat?” “Just as much as you can by this route. You’ll meet a team or a train every day.” “Any grizzly bears or other ferocious animals on the way?” “No more than there are on this. There’s plenty of grouse, and if you get hard up for grub, you can snare and cook enough in a day to last you a week. I was lost down in there once, years ago, when the trail wasn’t as well travelled as it is now, and, although I had nothing but a pocket-knife with me, I lived on the fat of the land and had a good time besides.” The teamster then went on to relate the particulars of his adventure, which did not have much interest for Chase, for he was thinking of something else. When the story was finished, he bade his entertainers good-night, and slowly returned to his own camp. Now was the time, he told himself, to put his plans into execution. A lonely journey through the mountains was not a pleasant thing to look forward to, but it was better than remaining in company with a man who intended to live off him as long as his money held out, and then desert him. He would take his bundle and start off on his own hook that very night. Having come to this determination, Chase made the best of his way back to his camp, walking with noiseless footsteps, so as not to disturb Brown, who, he supposed, must be asleep by this time. But his precaution proved to be useless, for Brown was wide awake and waiting for him. “I thought you were never coming back,” said he, with some impatience. “Those fellows down there had some very interesting stories to tell,” replied Chase. “Say, Brown, would you sell your pack for ten dollars, if you were me?” “Ten dollars!” exclaimed Brown, raising himself on his elbow, “I guess I would. That would buy lots of bacon and biscuit.”
  • 50. “I could use one of your blankets at night, couldn’t I?” added Chase. “Of course you can, as long as we remain together.” “Then that settles it.” As Chase said this, he caught up his bundle and hurried down the road again, while Brown lay back in his blanket to await his return, laughing to himself when he thought how nicely he was taking care of himself at the expense of his confiding friend. He waited an hour, but Chase did not return; still another, and then he got up and walked down the road. When he came within sight of the camp of the teamsters he saw that the fire was burning brightly, but the men themselves were wrapped up in their blankets, sleeping soundly. Nothing more being needed to convince him that a very neat trick had been played upon him, Brown turned and walked back to his own fire. Meanwhile Chase was hurrying along the old trail to which the teamster had directed him. He had no difficulty in finding it, for the dead oak tree pointed out its location. It was very dark and gloomy in there, for the mountains on both sides were thickly covered with trees, and the rays of the moon could scarcely penetrate through the dense shade which they threw over the road. The road itself, however, showed very plainly through the darkness, and Chase had no difficulty in following it. He travelled with all the speed of which he was capable until too tired to go farther; and then building a fire beside the road, he lay down near it and slept until morning. Ere many days had passed away Chase found that he could get on just as well without Brown as he had done with him. He met any number of teamsters and emigrants, who willingly answered his questions concerning the route before him, and if he happened on a camp during the dinner or supper hour, he was cordially invited to “stop and take a bite.” Of course he was always obliged to tell his story to those whose hospitality he shared, and when he departed, he was invariably provided with all the cooked provisions he was
  • 51. willing to carry in addition to his bundle, and they never cost him a cent. At that rate his thirteen dollars would last him until he reached home. Of course, too, the journey grew more and more monotonous and wearisome as the days passed, and, worse than all, the thick, strong shoes he had purchased before leaving Independence, began to show signs of wear. But just as they were ready to drop to pieces, he met a kind-hearted emigrant, who gave him a pair of old boots, which, although much too large for him, served to keep his feet off the hard, rocky road. It was getting colder, too, every day; the leaves were falling from the trees, the wind whistled dismally through the gorges, the teams and wagon-trains were not as often met as at first, and everything told Chase that winter was fast approaching. “You’d better toddle along right peert,” said one of the teamsters to him. “Bolton, which is the nighest station, is two hundred and fifty miles away yet, and we’re going to ketch it in a few days. When she does come she’ll be a snorter. You’ve got a good stretch of prairie to cross after you leave the foot-hills, and you don’t want to get ketched out there in a snow-storm. Look out for that.” Chase gave heed to the friendly warning, and made headway as rapidly as possible. “Two hundred and fifty miles,” he kept saying to himself. His journey was not half completed, and it seemed to him that he had been an age on the road. Would he ever reach Bolton? Sometimes he was almost ready to give up trying, and lie down in the road and wait until the snows of winter came and covered him up. Then recollections of home and friends would come thronging upon him, and he would press forward with renewed energy, in spite of blistered feet and weary, aching limbs, which sometimes almost refused to sustain him. He was up before the sun, and continued his journey until long after dark. His situation at best was bad enough, but one night he met with an adventure that made it infinitely worse. As he was hurrying along after dark, he came suddenly upon a camp-fire. He was glad to see it, for he had not met a human being for the last three days, and the provisions that had been furnished
  • 52. him by the last teamster were all exhausted. He hoped to procure a fresh supply at this camp. If he could not, he would be obliged to spend a day or two in trapping grouse; and he was so very much afraid of the snow-storm which had been so often predicted, that he did not dare to waste a single hour. Furthermore, the road of late had been growing very rough and rocky, and he could no longer see the prints of wagon-wheels. He began to fear that while travelling in the dark, he had lost his way. Perhaps these people could set him right. He walked boldly up to the fire and greeted the men sitting there—two rough-looking fellows, whom he at once put down as hunters. “Good evening, strangers,” said he. “Wal, what do you want?” growled one of the men, after they had both given him a good looking over. “Will you give me some supper and permission to sleep by your fire?” asked Chase, rather doubtfully. This was the first time during his fifteen days in the mountains that any one had spoken to him so roughly. “I don’t reckon we’ve got any more grub nor we want ourselves,” was the surly response. “O, I don’t ask you to give it to me,” said Chase. “I am able and willing to pay for it.” “You got any shiners?” asked the hunter, running his eyes over the boy’s clothes. “I know I don’t look like it, but I can prove my words. See there,” said Chase, putting his hand into his pocket and drawing out several gold and silver pieces. “How many of them you got?” “Thirteen dollars’ worth. Can you give me something to eat now?”
  • 53. “I reckon we mought,” said the man, pointing to a haunch of venison that hung upon a tree close by. Having become accustomed to the ways of the world, Chase understood the invitation thus given. He took down the joint, cut off a couple of generous slices with his knife, and holding them over the flames with two sticks, looked about him with some satisfaction. His supper was secure; he had a warm fire to sleep by, and that was something on which to congratulate himself. The men were hunters or trappers, sure enough, Chase told himself, and as they were the first of their calling he had ever seen, he looked at them with as much curiosity as the Sportsman’s Club had looked at Parks and Reed, when those worthies first came into their camp. They wore buckskin coats and moccasins, were armed with rifles, and there were two bundles of furs, principally otter and beaver-skins, near the fire. They had no blankets, but each had a saddle for a pillow, and their horses were picketed on the other side of the road. In answer to an inquiry from Chase, they told him, rather gruffly, that they had been hunting in the mountains, and were on their way to some fort to dispose of their plunder. They did not seem inclined to talk. They smoked their pipes and watched the boy while he ate his supper, growled out a reply in the affirmative when he asked if he was on the road to Fort Bolton, but paid no attention to the pleasant good-night he wished them as he rolled himself up in his blankets preparatory to going to sleep. That was the last comfortable night that Chase passed for more than a week.
  • 54. C CHAPTER XVIII. CONCLUSION. HASE was awakened the next morning by the crackling of the fire which the hunters had replenished at daylight. He started up with a cheery “good-morning” on his lips, but no sooner was he fairly awake, than a sight caught his eyes which arrested the words ere they were spoken. The men, having finished their breakfast, were overhauling his bundle—or rather one of them was, while the other sat by smoking his pipe and looking at him. Chase found, too, that the blanket which had covered him during the night, had been pulled off, and was now rolled up and tied to the horn of one of the saddles. “I am to be robbed, I can see that plainly enough,” said Chase, his heart sinking within him. “I have been afraid of it all along, and it has come at last. I might as well give up now. But if I am to lose all my things, I’ll at least have a breakfast in part payment,” he added, after a moment’s reflection. The men looked at Chase as he got up, but did not speak to him. He took down the haunch of venison, and while he was cutting off a portion of it, the hunter who was examining his bundle, coolly rolled up the blanket from which he had just arisen, and laid it down beside his saddle. Chase shivered as he watched the operation, and thought of the nights he had yet to pass in the mountains, but said nothing. He thrust some sticks through the slices of venison, and proceeded to roast them over the flames. “Now, then,” said the hunter, who had done the most of the talking the night before, “whar’s them shiners?”
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