In This Review

The Nokia Revolution: The Story of an Extraordinary Company That Transformed an Industry
The Nokia Revolution: The Story of an Extraordinary Company That Transformed an Industry
By Dan Steinbock
Amacom, 2001, 375 pp
When Genius Failed: The Rise and Fall of Long-Term Capital Management
When Genius Failed: The Rise and Fall of Long-Term Capital Management
By Roger Lowenstein
Random House, 2000, 264 pp

Markets increasingly drive global developments, and firms are the key participants in markets. Here are books on two remarkable firms -- one a surprising success, the other a nearly disastrous failure. Nokia is an old Finnish company that started as a lumber business in 1865 before diversifying into rubber products and cable in the early twentieth century. Only when the company began emphasizing mobile communications after a reorganization in the 1990s did it emerge as a global leader. In 2000, in fact, it ranked ninth globally in market capitalization, according to BusinessWeek. Nokia is a living demonstration of how a good idea, good product design, and focused marketing can succeed in the world economy, even if the business is based in a small country that many people cannot locate on a map. Steinbock's story, however, ends before the stock declines of 2000 and the economic slowdown of 2001.

Long-Term Capital Management offers equally dramatic material. Its hedging activities were so successful, according to Lowenstein, that its senior partners became overconfident of their skills and ventured into areas of which they had little knowledge. They leveraged themselves so much that when the world deviated from their assumptions in August 1998, ltcm became a threat to many other firms and even to the financial markets. As a result, the New York Federal Reserve Bank convoked a meeting of creditors that led to ltcm's rescue. A fascinating and well-told story of rise and decline.