The pace of change in the business world is becoming faster. This book provides a detailed account of the network-like organizational forms that some firms are adopting to make themselves more flexible and responsive to changing technologies and customer demands. As these organizations become more pervasive, the winners will be those firms that develop the specific capabilities that are needed to thrive in a networked world. Paradoxically, such capabilities are developed not only at the firm level, but also in the relationships the firm has with its external network and in the operating units within the firm. This perspective has implications for the 'resource-based view of the firm' in the field of strategic management, suggesting that the development of capabilities is a more complex and multi-level process than was traditionally thought.This book brings together eleven chapters, each focusing on a particular aspect of capability development in the networked firm. It is based on research in five big Swedish firms (Ericsson, Volvo, Skandia, Pharmacia & Upjohn, SE Banken) as well as a number of other well-known firms such as HP and ABB. The book will be essential reading for advanced students in strategy and international business wanting to keep abreast of current thinking and company practices.