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Strategic Management: Concepts

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Preface xi
Acknowledgments xiv
About the Author xvi
Part 1 Overview of Strategic Management 2 (38)
The Nature of Strategic Management 2 (38)
McDonald's Corporation: Doing Great in a Weak 4 (1)
Economy
What Is Strategic Management? 5 (4)
Defining Strategic Management 6 (1)
Stages of Strategic Management 6 (1)
Integrating Intuition and Analysis 7 (1)
Adapting to Change 8 (1)
Key Terms in Strategic Management 9 (5)
Competitive Advantage 9 (1)
Strategists 10 (1)
Vision and Mission Statements 11 (1)
External Opportunities and Threats 11 (1)
Internal Strengths and Weakness 12 (1)
Long-Term Objectives 13 (1)
Strategies 13 (1)
Annual Objectives 13 (1)
Policies 14 (1)
The Strategic-Management Model 14 (2)
Benefits of Strategic Management 16 (2)
 Financial Benefits 17 (1)
Nonfinancial Benefits 18 (1)
Why Some Firms Do No Strategic Planning 18 (1)
Pitfalls in Strategic Planning 19 (1)
Guidelines for Effective Strategic Management 19 (2)
Comparing Business and Military Strategy 21 (19)
The Cohesion Case: McDonald's Corporation---2009 27 (10)
Assurance of Learning Exercises 37 (1)
Gathering Strategy Information 37 (1)
Strategic Planning for My University 37 (1)
Strategic Planning at a Local Company 38 (1)
Getting Familiar with SMCO 38 (2)
Part 2 Strategy Formulation 40 (170)
The Business Vision and Mission 40 (18)
Wal-Mart: Doing Great in a Weak Economy 42 (1)
What Do We Want to Become? 43 (1)
What Is Our Business? 43 (4)
Vision versus Mission 45 (1)
The Process of Developing Vision and Mission 46 (1)
Statements
Importance (Benefits) of Vision and Mission Statements 47 (2)
A Resolution of Divergent Views 48 (1)
Characteristics of a Mission Statement 49 (4)
A Declaration of Attitude 49 (1)
A Customer Orientation 50 (1)
 Mission Statement Components 51 (2)
Writing and Evaluating Mission Statements 53 (5)
Assurance of Learning Exercises 56 (1)
Evaluating Mission Statements 56 (1)
Writing a Vision and Mission Statement for McDonald's 56 (1)
Corporation
Writing a Vision and Mission Statement for My 57 (1)
University
Conducting Mission Statement Research 57 (1)
The External Assessment 58 (32)
Dunkin' Brands, Inc.: Doing Great in a Weak Economy 60 (1)
The Nature of an External Audit 61 (2)
Key External Forces 61 (1)
The Process of Performing an External Audit 62 (1)
The Industrial Organization (I/O) View 63 (1)
Economic Forces 63 (3)
Social, Cultural, Demographic, and Natural Environment 66 (2)
Forces
Political, Governmental, and Legal Forces 68 (1)
Technological Forces 69 (2)
Competitive Forces 71 (3)
Competitive Intelligence Programs 72 (2)
Market Commonality and Resource Similarity 74 (1)
Competitive Analysis: Porter's Five-Forces Model 74 (4)
Rivalry Among Competing Firms 75 (1)
Potential Entry of New Competitors 76 (1)
 Potential Development of Substitute Products 77 (1)
Bargaining Power of Suppliers 77 (1)
Bargaining Power of Consumers 77 (1)
Sources of External Information 78 (1)
Forecasting Tools and Techniques 78 (2)
Making Assumptions 79 (1)
Industry Analysis: The External Factor Evaluation (EFE) 80 (1)
Matrix
The Competitive Profile Matrix (CPM) 81 (9)
Assurance of Learning Exercise 86 (1)
Developing an EFE Matrix for McDonald's Corporation 86 (1)
The External Assessment 86 (1)
Developing an EFE Matrix for My University 87 (1)
Developing a Competitive Profile Matrix for McDonald's 87 (1)
Corporation
Developing a Competitive Profile Matrix for My 87 (3)
University
The Internal Assessment 90 (40)
Amazon.Com, Inc.: Doing Great in a Weak Economy. 92 (1)
How?
The Nature of an Internal Audit 93 (3)
Key Internal Forces 93 (1)
The Process of Performing an Internal Audit 93 (3)
The Resource-Based View (RBV) 96 (1)
Integrating Strategy and Culture 97 (2)
Management 99 (4)
 Planning 100(1)
Organizing 100(1)
Motivating 101(1)
Staffing 102(1)
Controlling 102(1)
Management Audit Checklist of Questions 103(1)
Marketing 103(3)
Customer Analysis 103(1)
Selling Products/Services 103(1)
Product and Service Planning 104(1)
Pricing 105(1)
Distribution 105(1)
Marketing Research 106(1)
Cost/Benefit Analysis 106(1)
Marketing/Audit Checklist of Questions 106(1)
Finance/Accounting 106(7)
Finance/Accounting Functions 107(1)
Basic Types of Financial Ratios 108(5)
Finance/Accounting Audit Checklist 113(1)
Production/Operations 113(2)
Production/Operations Audit Checklist 115(1)
Research and Development 115(2)
Internal and External R&D 116(1)
Research and Development Audit 117(1)
Management Information Systems 117(2)
 Strategic-Planning Software 118(1)
Management Information Systems Audit 119(1)
Value Chain Analysis (VCA) 119(3)
Benchmarking 120(2)
The Internal Factor Evaluation (IFE) Matrix 122(8)
Assurance of Learning Exercises 128(1)
Performing a Financial Ratio Analysis for McDonald's 128(1)
Corporation (MCD)
Constructing an IFE Matrix for McDonald's Corporation 128(1)
Constructing an IFE Matrix for My University 128(2)
Strategies in Action 130(42)
Volkswagen AG. Doing Great in a Weak Economy. 132(1)
How?
Long-Term Objectives 133(2)
The Nature of Long-Term Objectives 133(1)
Financial versus Strategic Objectives 134(1)
Not Managing by Objectives 135(1)
The Balanced Scorecard 135(1)
Types of Strategies 136(3)
Levels of Strategies 138(1)
Integration Strategies 139(2)
Forward Integration 139(1)
Backward Integration 140(1)
Horizontal Integration 141(1)
Intensive Strategies 141(2)
Market Penetration 141(1)
 Market Development 142(1)
Product Development 142(1)
Diversification Strategies 143(3)
Related Diversification 144(1)
Unrelated Diversification 144(2)
Defensive Strategies 146(5)
Retrenchment 146(2)
Divestiture 148(1)
Liquidation 149(2)
Michael Porter's Five Generic Strategies 151(4)
Cost Leadership Strategies (Type 1 and Type 2) 152(1)
Differentiation Strategies (Type 3) 153(1)
Focus Strategies (Type 4 and Type 5) 154(1)
Strategies for Competing in Turbulent, High-Velocity 155(1)
Markets
Means for Achieving Strategies 155(7)
Cooperation Among Competitors 155(1)
Joint Venture/Partnering 156(2)
Merger/Acquisition 158(3)
First Mover Advantages 161(1)
Outsourcing 161(1)
Strategic Management in Nonprofit and Governmental 162(2)
Organizations
Educational Institutions 162(1)
Medical Organizations 163(1)
Governmental Agencies and Departments 163(1)
 Strategic Management in Small Firms 164(8)
Assurance of Learning Exercises 168(1)
What Strategies Should McDonald's Pursue in 2011- 168(1)
2013?
Examining Strategy Articles 168(1)
Classifying Some Year 2009 Strategies 169(1)
How Risky Are Various Alternative Strategies? 169(1)
Developing Alternative Strategies for My University 170(1)
Lessons in Doing Business Globally 170(2)
Strategy Analysis and Choice 172(38)
Apple: Doing Great in a Weak Economy. How? 174(1)
The Nature of Strategy Analysis and Choice 175(1)
The Process of Generating and Selecting Strategies 175(1)
A Comprehensive Strategy-Formulation Framework 176(1)
The Input Stage 177(1)
The Matching Stage 177(15)
The Strengths-Weaknesses-Opportunities-Threats 178(3)
(SMOT) Matrix
The Strategic Position and Action Evaluation (SPACE) 181(4)
Matrix
The Boston Consulting Group (BCG) Matrix 185(3)
The Internal-External (IE) Matrix 188(3)
The Grand Strategy Matrix 191(1)
The Decision Stage 192(4)
The Quantitative Strategic Planning Matrix (QSPM) 192(3)
Positive Features and Limitations of the QSPM 195(1)
 Cultural Aspects of Strategy Choice 196(1)
The Politics of Strategy Choice 196(2)
Governance Issues 198(12)
Assurance of Learning Exercises 205(1)
Developing a SWOT Matrix for McDonald's 205(1)
Developing a SPACE Matrix for McDonald's 205(1)
Developing a BCG Matrix for McDonald's 205(1)
Developing a QSPM for McDonald's 206(1)
Formulating Individual Strategies 206(1)
The Mach Test 206(2)
Developing a BCG Matrix for My University 208(1)
The Role of Boards of Directors 208(1)
Locating Companies in a Grand Strategy Matrix 209(1)
Part 3 Strategy Implementation 210(74)
Implementing Strategies: Management and Operations Issues 210(40)
Google: Doing Great in a Weak Economy. How? 212(1)
The Nature of Strategy Implementation 213(2)
Management Perspectives 214(1)
Annual Objectives 215(2)
Policies 217(2)
Resource Allocation 219(1)
Managing Conflict 220(1)
Matching Structure with Strategy 220(9)
The Functional Structure 222(1)
The Divisional Structure 222(3)
 The Strategic Business Unit (SBU) Structure 225(1)
The Matrix Structure 226(2)
Some Do's and Don'ts in Developing Organizational 228(1)
Charts
Restructuring, Reengineering, and E-Engineering 229(2)
Restructuring 230(1)
Reengineering 231(1)
Linking Performance and Pay to Strategies 231(3)
Managing Resistance to Change 234(1)
Creating a Strategy-Supportive Culture 235(1)
Production/Operations Concerns When Implementing 236(1)
Strategies
Human Resource Concerns When Implementing Strategies 237(13)
Employee Stock Ownership Plans (ESOPs) 239(1)
Balancing Work Life and Home Life 240(2)
Benefits of a Diverse Workforce 242(1)
Corporate Wellness Programs 242(6)
Assurance of Learning Exercises 248(1)
Revising McDonald's Organizational Chart 248(1)
Do Organizations Really Establish Objectives? 248(1)
Understanding My University's Culture 249(1)
Implementing Strategies: Marketing, Finance/Accounting, 250(34)
R&D, and MIS Issues
The Nature of Strategy Implementation 252(1)
Johnson & Johnson (J&J): Doing Great in a Weak 252(1)
Economy. How?
 Current Marketing Issues 253(4)
New Principles of Marketing 254(2)
Advertising Media 256(1)
Purpose-Based Marketing 257(1)
Market Segmentation 257(3)
Does the Internet Make Market Segmentation Easier? 259(1)
Product Positioning 260(1)
Finance/Accounting Issues 261(1)
Acquiring Capital to Implement Strategies 262(13)
New Source of Funding 266(1)
Projected Financial Statements 266(2)
Projected Financial Statement for Mattel, Inc. 268(3)
Financial Budgets 271(2)
Evaluating the Worth of a Business 273(2)
Deciding Whether to Go Public 275(1)
Research and Development (R&D) Issues 275(2)
Management Information Systems (MIS) Issues 277(7)
Assurance of Learning Exercises 282(1)
Developing a Product-Positioning Map for McDonald's 282(1)
Performing an EPS/EBIT Analysis for McDonald's 282(1)
Preparing Projected Financial Statements for McDonald's 282(1)
Determining the Cash Value of McDonald's 283(1)
Developing a Product-Positioning Map for My University 283(1)
Do Banks Require Projected Financial Statements? 283(1)
Part 4 Strategy Evaluation 284(24)
 Strategy Review, Evaluation, and Control 284(24)
Family Dollar Stores: Doing Great in a Weak Economy. 286(1)
How?
The Nature of Strategy Evaluation 286(4)
The Process of Evaluating Strategies 290(1)
A Strategy-Evaluation Framework 290(5)
Reviewing Bases of Strategy 290(2)
Measuring Organizational Performance 292(2)
Taking Corrective Actions 294(1)
The Balanced Scorecard 295(2)
Published Sources of Strategy-Evaluation Information 297(1)
Characteristics of an Effective Evaluation System 298(1)
Contingency Planning 299(1)
Auditing 300(1)
Twenty-First-Century Challenges in Strategic Management 301(7)
The Art of Science Issue 301(1)
The Visible or Hidden Issue 301(1)
The Top-Down or Bottom-Up Approach 302(4)
Assurance of Learning Exercises 306(1)
Preparing a Strategy-Evaluation Report for McDonald's 306(1)
Corp.
Evaluating My University's Strategies 306(2)
Part 5 Key Strategic-Management Topics 308(38)
Business Ethics/Social Responsibility/Environmental 308(20)
Sustainability
Walt Disney: Doing Great in a Weak Economy. How? 310(1)
 Business Ethics 311(4)
Code of Business Ethics 312(1)
An Ethics Culture 313(1)
Bribes 314(1)
Love Affairs at Work 314(1)
Social Responsibility 315(2)
Social Policy 315(1)
Social Policies on Retirement 316(1)
Environmental Sustainability 317(11)
What Is a Sustainability Report? 317(1)
Lack of Standards Changing 318(1)
Obama Regulations 318(1)
Managing Environmental Affairs in the Firm 319(1)
Should Students Receive Environmental Training? 319(1)
Reasons Why Firms Should ``Be Green'' 320(1)
Be Proactive, Not Reactive 320(1)
ISO 14000/14001 Certification 320(1)
Electric Car Networks Are Coming 321(1)
The March 2009 Copenhagen Meeting 322(4)
Assurance of Learning Exercises 326(1)
Does McDonald's Have a Code of Business Ethics? 326(1)
The Ethics of Spying on Competitors 326(1)
Who Prepares a Sustainability Report? 327(1)
Global/International Issues 328(18)
 Marriott International: Doing Great in a Weak Economy. 330(1)
How?
Multinational Organizations 331(1)
Advantages and Disadvantages of International Operations 332(1)
The Global Challenge 333(2)
Globalization 334(1)
A Weak Economy 335(1)
United States versus Foreign Business Cultures 335(4)
The Mexican Culture 337(1)
The Japanese Culture 338(1)
Communication Differences Across Countries 338(1)
Worldwide Tax Rates 339(1)
Joint Ventures in India 339(7)
Assurance of Learning Exercises 343(1)
McDonald's Wants to Enter Africa. Help Them 343(1)
Does My University Recruit in Foreign Countries? 343(1)
Assessing Differences in Culture Across Countries 343(1)
How Well Traveled Are Business Students at Your 344(2)
University?
Part 6 Strategic-Management Case Analysis 346(13)
How to Prepare and Present a Case Analysis 346(2)
What Is a Strategic-Management Case? 348(1)
Guidelines for Preparing Case Analyses 348(1)
The Need for Practicality 348(1)
The Need for Justification 348(1)
The Need for Realism 348(1)
 The Need for Specificity 349(1)
The Need for Originality 349(1)
The Need to Contribute 349(1)
Preparing a Case for Class Discussion 349(1)
The Case Method versus Lecture Approach 349(1)
The Cross-Examination 350(1)
Preparing a Written Case Analysis 350(1)
The Executive Summary 350(1)
The Comprehensive Written Analysis 351(1)
Steps in Preparing a Comprehensive Written Analysis 351(1)
Making an Oral Presentation 351(5)
Organizing the Presentation 351(1)
Controlling Your Voice 352(1)
Managing Body Language 352(1)
Speaking from Notes 352(1)
Constructing Visual Aids 352(1)
Answering Questions 353(1)
Tips for Success in Case Analysis 353(1)
Content Tips 353(1)
Process Tips 354(1)
Sample Case Analysis Outline 355(1)
Steps in Presenting an Oral Case Analysis 356(3)
Introduction (2 minutes) 356(1)
Mission/Vision (4 minutes) 356(1)
Internal Assessment (8 minutes) 356(1)
 External Assessment (8 minutes) 357(1)
Strategy Formulation (14 minutes) 357(1)
Strategy Implementation (8 minutes) 357(1)
Strategy Evaluation (2 minutes) 358(1)
Conclusion (4 minutes) 358(1)
Name Index 359(4)
363
Subject Index
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 ARTICLE L.
When the agents and counsel of the parties have submitted
all explanations and evidence in support of their case, the
President pronounces the discussion closed.

ARTICLE LI.
The deliberations of the Tribunal take place in private.
Every decision is taken by a majority of members of the
Tribunal. The refusal of a member to vote must be recorded
in the "procès-verbal."

ARTICLE LII.
The award, given by a majority of votes, is accompanied by
a statement of reasons. It is drawn up in writing and
signed by each member of the Tribunal. Those members who
are in the minority may record their dissent when signing.

ARTICLE LIII.
The award is read out at a public meeting of the Tribunal,
the agents and counsel of the parties being present, or
duly summoned to attend.

{359}

ARTICLE LIV.
The award, duly pronounced and notified to the agents of
the parties at variance, puts an end to the dispute
definitely and without appeal.

ARTICLE LV.
The parties can reserve in the "Compromis" the right to
demand the revision of the award. In this case, and unless
there be an agreement to the contrary, the demand must be
addressed to the Tribunal which pronounced the award. It
can only be made on the ground of the discovery of some new
fact calculated to exercise a decisive influence on the
award, and which, at the time the discussion was closed,
 was unknown to the Tribunal and to the party demanding the
revision. Proceedings for revision can only be instituted
by a decision of the Tribunal expressly recording the
existence of the new fact, recognizing in it the character
described in the foregoing paragraph, and declaring the
demand admissible on this ground. The "Compromis" fixes the
period within which the demand for revision must be made.

ARTICLE LVI.
The award is only binding on the parties who concluded the
"Compromis." When there is a question of interpreting a
Convention to which Powers other than those concerned in
the dispute are parties, the latter notify to the former
the "Compromis" they have concluded. Each of these Powers
has the right to intervene in the case. If one or more of
them avail themselves of this right, the interpretation
contained in the award is equally binding on them.

ARTICLE LVII.
Each party pays its own expenses and an equal share of
those of the Tribunal.

General Provisions.

ARTICLE LVIII.
The present Convention shall be ratified as speedily as
possible. The ratification shall be deposited at The Hague.
A "procès-verbal" shall be drawn up recording the receipt
of each ratification, and a copy duly certified shall be
sent, through the diplomatic channel, to all the Powers who
were represented at the International Peace Conference at
The Hague.

ARTICLE LIX.
The non-Signatory Powers who were represented at the
International Peace Conference can adhere to the present
Convention. For this purpose they must make known their
adhesion to the Contracting Powers by a written
notification addressed to the Netherland Government, and
communicated by it to all the other Contracting Powers.

ARTICLE LX.
The conditions on which the Powers who were not represented
at the International Peace Conference can adhere to the
present Convention shall form the subject of a subsequent
Agreement among the Contracting Powers.

ARTICLE LXI.
In the event of one of the High Contracting Parties
denouncing the present Convention, this denunciation would
not take effect until a year after its notification made in
writing to the Netherland Government, and by it
communicated at once to all the other Contracting Powers.
This denunciation shall on]y affect the notifying Power. In
faith of which the Plenipotentiaries have signed the
present Convention and affixed their seals to it. Done at
The Hague, the 29th July, 1899, in a single copy, which
shall remain in the archives of the Netherland Government,
and copies of it, duly certified, be sent through the
diplomatic channel to the Contracting Powers.
United States, 56th Congress,
1st Session., Senate Document 159.

PEACE CONFERENCE:
The Permanent Court of Arbitration.

The following is the membership of the Permanent Court of

Arbitration, as finally organized, in January, 1901, and
announced to be prepared for the consideration of any
international dispute that may be submitted to it. Fifteen of
the greater nations of the world are represented in this most
august tribunal that has ever sat for judgment of the disputes
of men:

Austria-Hungary.

His Excellency Count Frederic Schonborn, LL. D., president

of the Imperial Royal Court of Administrative Justice,
former Austrian Minister of Justice, member of the House of
Lords of the Austrian Parliament, etc.

His Excellency Mr. D. de Szilagyi, ex-Minister of Justice,

member of the House of Deputies of the Hungarian
Parliament.

Count Albert Apponyi, member of the Chamber of Magnates and

of the Chamber of Deputies of the Hungarian Parliament,
etc.

Mr. Henri Lammasch, LL. D., member of the House of Lords of

the Austrian Parliament, etc.

Belgium.

His Excellency Mr. Beernaert, Minister of State, member of

the Chamber of Representatives, etc.
 His Excellency Baron Lambermont, Minister of State, Envoy
Extraordinary and Minister Plenipotentiary,
Secretary-General of the Ministry of Foreign Affairs.

The Chevalier Descamps, Senator.

Mr. Rolin Jacquemyns, ex-Minister of the Interior.

Denmark.

Professor H. Matzen, LL. D., Professor of the Copenhagen

University, Counsellor Extraordinary of the Supreme Court,
President of the Landsthing.

France.

M. Leon Bourgeois, Deputy, ex-President of the Cabinet

Council, ex-Minister for Foreign Affairs.

M. de Laboulaye, ex-Ambassador.

Baron Destournelles de Constant, Minister Plenipotentiary,

Deputy.

M. Louis Renault, Minister Plenipotentiary, Professor in

the Faculty of Law at Paris, Law Office of the Department
of Foreign Affairs.

Germany.

His Excellency Mr. Bingner, LL. D., Privy Councillor,

Senate President of the Imperial High Court at Leipsic.

Mr. von Frantzius, Privy Councillor, Solicitor of the

Department of Foreign Affairs at Berlin.
 Mr. von Martitz, LL. D., Associate Justice of the Superior
Court of Administrative Justice in Prussia, Professor of
Law at the Berlin University.

Mr. von Bar, LL. D., Judicial Privy Councillor, Professor

of Law at the Göttingen University.

Great Britain.

His Excellency the Right Honorable Lord Pauncefote of

Preston, G. C. B., G. C. M. G., Privy Councillor,
Ambassador at Washington.

The Right Honorable Sir Edward Baldwin Malet,

ex-Ambassador.

The Right Honorable Sir Edward Fry, member of the Privy

Council, Q. C.

Professor John Westlake, LL. D., Q. C.

Italy.

His Excellency Count Constantin Nigra, Senator of the

Kingdom, Ambassador at Vienna.

His Excellency Commander Jean Baptiste Pagano

Guarnaschelli, Senator of the Kingdom, First President of
the Court of Cassation at Rome.

His Excellency Count Tornielli Brusati di Vergano, Senator

of the Kingdom, Ambassador at Paris.

Commander Joseph Zanardelli, Attorney at Law, Deputy to the

National Parliament.

{360}
Japan.
Mr. Motono, Envoy Extraordinary and Minister
Plenipotentiary at Brussels.

Mr. H. Willard Denison, Law Officer of the Minister for

Foreign Affairs at Tokio.

Netherlands.
Mr. T. M. C. Asser, LL. D., member of the Council of
State, ex-Professor of the University of Amsterdam.

Mr. F. B. Coninck Liefsting, LL. D.,

President of the Court of Cassation.

Jonkheer A. F. de Savornin Lohman, LL. D.,

ex-Minister of the Interior, ex-Professor of the Free
University of Amsterdam, member of the Lower House of the
States-General.

Jonkheer G. L. M. H. Ruis de Beerenbrouck,

ex-Minister of Justice, Commissioner of the Queen in the
Province of Limbourg.

Portugal.
Count de Macedo, Peer of the Realm,
ex-Minister of Marine and Colonies, Envoy Extraordinary and
Minister Plenipotentiary at Madrid.

Rumania.
Mr. Theodore Rosetti, Senator,
ex-President of the High Court of Cassation and Justice.

Mr. Jean Kalindero, Administrator of the Crown Domain,

ex-Judge of the High Court of Cassation and Justice.

Mr. Eugene Statsco,

 ex-President of the Senate, ex-Minister of Justice and
Foreign Affairs.

Mr. Jean N. Lahovari, Deputy, ex-Envoy Extraordinary and

Minister Plenipotentiary, ex-Minister of Foreign Affairs.

Russia.
Mr. N. V. Mouravieff, Minister of Justice, Active Privy
Councillor, Secretary of State of His Majesty the Emperor.

Mr. C. P. Pobedonostzeff, Attorney-General of the Most

Holy Synod, Active Privy Councillor, Secretary of State of
His Majesty the Emperor.

Mr. E. V. Frisch,
President of the Department of Legislation of the Imperial
Council, Active Privy Councillor, Secretary of State of His
Majesty the Emperor.

Mr. de Martens, Privy Councillor,

permanent member of the Council of the Ministry of Foreign
Affairs.

Spain.
His Excellency the Duke of Tetuan,
ex-Minister of Foreign Affairs, Senator of the Kingdom,
Grandee of Spain.

Mr. Bienvenido Oliver,

Director-General of the Ministry of Justice, ex-Delegate of
Spain to the Conference on Private International Law at The
Hague.

Dr. Manuel Torres Campos,

Professor of international law at the University of
Grenada, associate member of the Institute of International
Law.
Sweden and Norway.
Mr. S. R D. K. D'Olivecrona,
member of the International Law Institute, ex-Associate
Justice of the Supreme Court of the Kingdom of Sweden,
Doctor of Laws and Letters at Stockholm.

Mr. G. Gram,
ex-Minister of State of Norway, Governor of the Province of
Hamar, Norway.

United States.
Mr. Benjamin Harrison,
ex-President of the United States.

Mr. Melville W. Fuller,

Chief Justice of the United States.

Mr. John W. Griggs,

Attorney-General of the United States.

Mr. George Gray,

United States Circuit Judge.
First Secretary of the Court

J. J. Rochussen.
Second Secretary of the Court

Jonkheer W. Roell.

The Administrative Council consists of the Minister of Foreign

Affairs of the Netherlands and the diplomatic representatives
at The Hague of the ratifying Powers.

Secretary-General
Mr. R Melvil, Baron Van Leyden,
Judge of the District Court of Utrecht and a member of the
 First Chamber of the States-General.

PEACE CONFERENCE:
Convention with respect to the Laws and Customs of
War on Land.

ARTICLE I.
The High Contracting Parties shall issue instructions to their
armed land forces, which shall be in conformity with the
"Regulations respecting the Laws and Customs of War on Land"
annexed to the present Convention.

ARTICLE II.
The provisions contained in the Regulations mentioned in
Article I. are only binding on the Contracting Powers, in case
of war between two or more of them. These provisions shall
cease to be binding from the time when, in a war between
Contracting Powers, a non-Contracting Power joins one of the
belligerents.

ARTICLE III.
The present Convention shall be ratified as speedily as
possible. The ratifications shall be deposited at The Hague. A
"procès-verbal" shall be drawn up recording the receipt of
each ratification, and a copy, duly certified, shall be sent
through the diplomatic channel, to all the Contracting Powers.

ARTICLE IV.
Non-Signatory Powers are allowed to adhere to the present
Convention. For this purpose they must make their adhesion
known to the Contracting Powers by means of a written
notification addressed to the Netherland Government, and by it
communicated to all the other Contracting Powers.

ARTICLE V.
In the event of one of the High Contracting Parties denouncing
 the present Convention, such denunciation would not take
effect until a year after the written notification made to the
Nethterland Government, and by it at once communicated to all
the other Contracting Powers. This denunciation shall affect
only the notifying Power.

In faith of which the Plenipotentiaries have signed the

present Convention and affixed their seals thereto.

[Signed by representatives of Belgium, Denmark, Spain, Mexico,

France, Greece, Montenegro, the Netherlands, Persia, Portugal,
Roumania, Russia, Siam, Sweden and Norway, and Bulgaria.]

REGULATIONS.

SECTION I.
On Belligerents.

CHAPTER I.
On the qualifications of Belligerents.

ARTICLE I.
The laws, rights, and duties of war apply not only to armies,
but also to militia and volunteer corps, fulfilling the
following conditions:

1. To be commanded by a person responsible for his

subordinates;

2. To have a fixed distinctive emblem recognizable at a

distance;

3. To carry arms openly; and,

4. To conduct their operations in accordance with the laws

and customs of war. In countries where militia or volunteer
corps constitute the army, or form part of it, they are
 included under the denomination "army."

ARTICLE II.
The population of a territory which has not been occupied who,
on the enemy's approach, spontaneously take up arms to resist
the invading troops without having time to organize themselves
in accordance with Article I, shall be regarded a belligerent,
if they respect the laws and customs of war.

ARTICLE III.
The armed forces of the belligerent parties may consist of
combatants and non-combatants. In case of capture by the enemy
both have a right to be treated as prisoners of war.

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CHAPTER II.
On Prisoners of War.

ARTICLE IV.
Prisoners of war are in the power of the hostile Government,
but not in that of the individuals or corps who captured them.
They must be humanely treated. All their personal belongings,
except arms, horses, and military papers remain their
property.

ARTICLE V.
Prisoners of war may be interned in a town, fortress, camp, or
any other locality, and bound not to go beyond certain fixed
limits; but they can only be confined as an indispensable
measure of safety.

ARTICLE VI.
The State may utilize the labour of prisoners of war according
to their rank and aptitude. Their tasks shall not be
excessive, and shall have nothing to do with the military
operations. Prisoners may be authorized to work for the Public
Service, for private persons, or on their own account. Work
done for the State shall be paid for according to the tariffs
in force for soldiers of the national army employed on similar
tasks. When the work is for other branches of the Public
Service or for private persons, the conditions shall be
settled in agreement with the military authorities. The wages
of the prisoners shall go towards improving their position,
and the balance shall be paid them at the time of their
release, after deducting the cost of their maintenance.

ARTICLE VII.
The Government into whose hands prisoners of war have fallen
is bound to maintain them. Failing a special agreement between
the belligerents, prisoners of war shall be treated as regards
food, quarters, and clothing, on the same footing as the
troops of the Government which has captured them.

ARTICLE VIII.
Prisoners of war shall be subject to the laws, regulations,
and orders in force in the army of the State into whose hands
they have fallen. Any act of insubordination warrants the
adoption, as regards them, of such measures of severity as may
be necessary. Escaped prisoners, recaptured before they have
succeeded in rejoining their army, or before quitting the
territory occupied by the army that captured them, are liable
to disciplinary punishment. Prisoners who, after succeeding in
escaping, are again taken prisoners, are not liable to any
punishment for the previous flight.

ARTICLE IX.
Every prisoner of war, if questioned, is bound to declare his
true name and rank, and if he disregards this rule, he is
liable to a curtailment of the advantages accorded to the
prisoners of war of his class.

ARTICLE X.
Prisoners of war may be set at liberty on parole if the laws
of their country authorize it, and, in such a case, they are
bound, on their personal honour, scrupulously to fulfil, both
as regards their own Government and the Government by whom
they were made prisoners, the engagements they have
contracted. In such cases, their own Government shall not
require of nor accept from them any service incompatible with
the parole given.

ARTICLE XI.
A prisoner of war cannot be forced to accept his liberty on
parole; similarly the hostile Government is not obliged to
assent to the prisoner's request to be set at liberty on
parole.

ARTICLE XII.
Any prisoner of war, who is liberated on parole and
recaptured, bearing arms against the Government to whom he had
pledged his honour, or against the allies of that Government,
forfeits his right to be treated as a prisoner of war, and can
be brought before the Courts.

ARTICLE XIII.
Individuals who follow an army without directly belonging to
it, such as newspaper correspondents and reporters, sutlers,
contractors, who fall into the enemy's hands, and whom the
latter think fit to detain, have a right to be treated as
prisoners of war, provided they can produce a certificate from
the military authorities of the army they were accompanying.

ARTICLE XIV.
A Bureau for information relative to prisoners of war is
instituted, on the commencement of hostilities, in each of the
belligerent States and, when necessary, in the neutral
countries on whose territory belligerents have been received.
This Bureau is intended to answer all inquiries about
prisoners of war, and is furnished by the various services
concerned with all the necessary information to enable it to
keep an individual return for each prisoner of war. It is kept
informed of internments and changes, as well as of admissions
into hospital and deaths. It is also the duty of the
Information Bureau to receive and collect all objects of
personal use, valuables, letters, &c., found on the
battlefields or left by prisoners who have died in hospital or
ambulance, and to transmit them to those interested.

ARTICLE XV.
Relief Societies for prisoners of war, which are regularly
constituted in accordance with the law of the country with the
object of serving as the intermediary for charity, shall
receive from the belligerents for themselves and their duly
accredited agents every facility, within the bounds of
military requirements and Administrative Regulations, for the
effective accomplishment of their humane task. Delegates of
these Societies may be admitted to the places of internment
for the distribution of relief, as also to the halting places
of repatriated prisoners, if furnished with a personal permit
by the military authorities, and on giving an engagement in
writing to comply with all their Regulations for order and
police.

ARTICLE XVI.
The Information Bureau shall have the privilege of free
postage. Letters, money orders, and valuables, as well as
postal parcels destined for the prisoners of war or despatched
by them, shall be free of all postal duties, both in the
countries of origin and destination, as well as in those they
pass through. Gifts and relief in kind for prisoners of war
shall be admitted free of all duties of entry and others, as
well as of payments for carriage by the Government rail ways.

ARTICLE XVII.
Officers taken prisoners may receive, if necessary, the full
pay allowed them in this position by their country's
regulations, the amount to be repaid by their Government.
 ARTICLE XVIII.
Prisoners of war shall enjoy every latitude in the exercise of
their religion, including attendance at their own church
services, provided only they comply with the regulations for
order and police issued by the military authorities.

ARTICLE XIX.
The wills of prisoners of war are received or drawn up on the
same conditions as for soldiers of the national army. The same
rules shall be observed regarding death certificates, as well as
for the burial of prisoners of war, due regard being paid to
their grade and rank.

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ARTICLE XX.
After the conclusion of peace, the repatriation of prisoners
of war shall take place as speedily as possible.

CHAPTER III.
On the Sick and Wounded.

ARTICLE XXI.
The obligations of belligerents with regard to the sick and
wounded are governed by the Geneva Convention of the 22d
August, 1864, subject to any modifications which may be
introduced into it.

SECTION II.
On Hostilities.

CHAPTER I.
On means of injuring the Enemy, Sieges: and Bombardments.

ARTICLE XXII.
The right of belligerents to adopt means of injuring the enemy
is not unlimited.

ARTICLE XXIII.
Besides the prohibitions provided
by special Conventions, it is especially prohibited:

(a.) To employ poison or poisoned arms;

(b.) To kill or wound treacherously individuals belonging

to the hostile nation or army;

(c.) To kill or wound an enemy who, having laid down arms,

or having no longer means of defence, has surrendered at
discretion;

(d.) To declare that no quarter will be given;

(e.) To employ arms, projectiles, or material of a nature

to cause superfluous injury;

(f.) To make improper use of a flag of truce, the national

flag, or military ensigns and the enemy's uniform, as well
as the distinctive badges of the Geneva Convention;

(g.) To destroy or seize the enemy's property, unless such

destruction or seizure be imperatively demanded by the
necessities of war.

ARTICLE XXIV.
Ruses of war and the employment of methods necessary to obtain
information about the enemy and the country, are considered
allowable.

ARTICLE XXV.
The attack or bombardment of towns, villages, habitations or
buildings which are not defended, is prohibited.
ARTICLE XXVI.
The Commander of an attacking force, before commencing a
bombardment, except in the case of an assault, should do all
he can to warn the authorities.

ARTICLE XXVII.
In sieges and bombardments all necessary steps should be taken
to spare as far as possible edifices devoted to religion, art,
science, and charity, hospitals, and places where the sick and
wounded are collected, provided they are not used at the same
time for military purposes. The besieged should indicate these
buildings or places by some particular and visible signs,
which should previously be notified to the assailants.

ARTICLE XXVIII.
The pillage of a town or place, even when taken by assault, is
prohibited.

CHAPTER II.
On Spies.

ARTICLE XXIX.
An individual can only be considered a spy if, acting
clandestinely, or on false pretences, he obtains, or seeks to
obtain information in the zone of operations of a belligerent,
with the intention of communicating it to the hostile party.
Thus, soldiers not in disguise who have penetrated into the
zone of operations of a hostile army to obtain information are
not considered spies. Similarly, the following are not
considered spies: soldiers or civilians, carrying out their
mission openly, charged with the delivery of despatches
destined either for their own army or for that of the enemy.
To this class belong likewise individuals sent in balloons to
deliver despatches, and generally to maintain communication
between the various parts of an army or a territory.

ARTICLE XXX.
A spy taken in the act cannot be punished without previous
trial.

ARTICLE XXXI.
A spy who, after rejoining the army to which he belongs, is
subsequently captured by the enemy, is treated as a prisoner
of war, and incurs no responsibility for his previous acts of
espionage.

CHAPTER III.
On Flags of Truce.

ARTICLE XXXII.
An individual is considered as bearing a flag of truce who is
authorized by one of the belligerents to enter into
communication with the other, and who carries a white flag. He
has a right to inviolability, as well as the trumpeter,
bugler, or drummer, the flag-bearer, and the interpreter who
may accompany him.

ARTICLE XXXIII.
The Chief to whom a flag of truce is sent is not obliged to
receive it in all circumstances. He can take all steps
necessary to prevent the envoy taking advantage of his mission
to obtain information. In case of abuse, he has the right to
detain the envoy temporarily.

ARTICLE XXXIV.
The envoy loses his rights of inviolability if it is proved
beyond doubt that he has taken advantage of his privileged
position to provoke or commit an act of treachery.

CHAPTER IV.
On Capitulations.

ARTICLE XXXV.
Capitulations agreed on between the Contracting Parties must
be in accordance with the rules of military honour. When once
settled, they must be scrupulously observed by both the
parties.

CHAPTER V.
On Armistices.

ARTICLE XXXVI.
An armistice suspends military operations by mutual agreement
between the belligerent parties. If its duration is not fixed,
the belligerent parties can resume operations at any time,
provided always the enemy is warned within the time agreed
upon, in accordance with the terms of the armistice.

ARTICLE XXXVII.
An armistice may be general or local. The first suspends all
military operations of the belligerent States; the second,
only those between certain fractions of the belligerent armies
and in a fixed radius.

ARTICLE XXXVIII.
An armistice must be notified officially, and in good time, to
the competent authorities and the troops. Hostilities are
suspended immediately lifter the notification, or at a fixed
date.

ARTICLE XXXIX.
It is for the Contracting Parties to settle, in the terms of
the armistice, what communications may be held, on the theatre
of war, with the population and with each other.

ARTICLE XL.
Any serious violation of the armistice by one of the parties
gives the other party the right to denounce it, and even, in
case of urgency, to recommence hostilities at once.

ARTICLE XLI.