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Corporate Terror: How ISIS Adopted a Time-Honored Business Model for Success

Even Americans who have no interest in the news media or geopolitics would be hard-pressed to know nothing of the so-called Islamic State, perhaps better known by its acronyms ISIS (Islamic State in Syria) or ISIL (Islamic State in the Levant). So reports BusinessWeek.

It's widely recognized that ISIS is a growing threat in the Middle East, having sprouted from Syria's civil war. Many in the Obama administration, the Pentagon and throughout Europe regard the terror group as a threat to Western interests in varying degrees of severity, and no one yet knows how the scenario will evolve.

Until now, however, even people who do follow the volatile situation being played out across Syria and Iraq have been made aware that the Islamic State's rapid growth is mainly due to its adoption of a decentralized, hierarchical, highly organized business model first implemented by General Motors (GM) pioneer Alfred Sloan in the 1920s.

It's known in business circles as the "multidivisional hierarchy form" (or M-form) of management, and helped make GM the runaway success it was for much of the 20th century. Now ISIL appears to be expanding its reach and becoming a formidable opponent for the U.S. military and others committed to its destruction through M-form-style metrics, decentralized units and leadership, mergers & acquisitions, fundraising, and capturing of local armaments and resources.

Is it possible that the so-called "war on terror" could shift from the battlefield to the boardroom? Doubtful, but it may change the way the Islamic State is engaged by its enemies.

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