Charles O’Reilly: Why Some Companies Seem to Last Forever

All companies hit rough patches from time to time. But only a few manage to survive decade after decade — some of them in a form that bears no resemblance to the original organization. Nokia began in 1865 as a riverside paper mill along the Tammerkoski Rapids in southwestern Finland. In the late 1880s, Johnson & Johnson got its start by manufacturing the first commercial sterile surgical dressings and first-aid kits. And in 1924, the founder of Toyota came out with his company’s first invention — an automatic loom.

What explains this longevity? Stanford Graduate School of Business Professor Charles O’Reilly calls it “organizational ambidexterity”: the ability of a company to manage its current business while simultaneously preparing for changing conditions.

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