Archive for 12 December 2006
The Foss Sandwich Shop
| Peter Klein |
Our first report from the CCSM is a humorous one. Jay Barney opened the conference with a plenary address offering an RBV approach to “strategic renewal.” As this was a practitioner-oriented session, and some audience members may have been unfamiliar with the VRIO framework, Jay began by analyzing the “Nicolai Foss Sandwich Shop,” identifying factors that might be sources of sustained competitive advantage. (Best candidate: Nicolai’s great-great-great-grandmother’s secret sauce.)
The example was obviously a joke (Rich Makadok’s attempt to sing the Foss Sandwich Shop jingle helped establish the mood). And yet, later in the afternoon, we discovered from our blog stats page that at least two web surfers had found O&M by searching for “Nicolai Foss sandwich.” Looks like lots of people are after that secret-sauce recipe!
Awards — Cont’d
| Nicolai Foss |
OK — this will be my last entry on the economics of awards. Promise. Here goes:
We usually take awards to be non-material in nature. In his work on awards, Frey explicitly makes this point by assuming that awards are non-material kinds of compensation (here and here).
Frey does note, however, that sometimes awards are accompanied by money. Indeed, we are all familiar with those pictures in the newspaper of a happy prize recipient presenting a 2,5 x 1 meter cheque with the amount of money very clearly visible.
Thus, note that non-material compensation in the form of awards may have material implications. A distinction, such as a Knighthood bestowed upon a businessman may conceivably do good things to his business, because it may allow him to access networks he could not access earlier and influence decision-makers in favourable ways. A Nobel Prize winner can afterwards enter the highly lucrative lecturing circuit. Many books are advertised on the basis of their winning prestigious awards which of course also impacts the income of the prize winner/author. Etc. (This kind of reasoning is akin to Lerner and Tirole’s discussion of motivation in open source production). (more…)
EH.Net Classic Review: Usher’s A History of Mechanical Invention
| Peter Klein |
George Grantham reviews Abbott Payson Usher’s A History of Mechanical Invention (1929), the first book to “establish logical foundations for an empirically based explanation of economic change.”
By what intellectual and social processes do new methods of production, new products, and new patterns of behavior become objects of choice in the stream of economic and social life?
Historians traditionally answered this question in two ways. The first was that inventions are inspired intuition given to exceptionally gifted persons. This approach stressed the discontinuity of inventions and the importance of a small number of inventors in creating the modern world. Usher deemed it “transcendental,” because in taking invention to be what amounts to a miracle, it puts the event logically outside time, so that it can have no mere historical explanation. The second approach took the opposite tack of holding that inventions occur continuously in small steps induced by the stress of necessity, somewhat like Darwinian evolution. Usher termed this approach “mechanistic,” because it relegated the inventor to the status of “an instrument or an expression of cosmic forces.” Neither the transcendental nor the mechanistic account of invention, then, was historical in the sense that explanation necessarily takes the form of a narrative. To the transcendentalist, inventions just happen (and we should all be grateful they do); to the mechanist, they occur automatically in the fullness of time. Neither explains how inventions happen. . . .
Organizations and Markets 
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