Organizations and Markets

| Peter Klein |

One of my favorite local restaurants sits next to a Sherwin-Williams paint store. When leaving the restaurant I always pause to gaze upon the Sherwin-Williams logo. A paint can dumping red ooze over the planet’s surface — you can’t get more politically incorrect than that! There’s even a tagline, “Cover the Earth,” in case you miss the point. In today’s environmentally sensitive age this logo is the Anti-Green. It screams: synthetic, industrial, man-made, unnatural. I love it.

I imagine there’s a lot of pressure on the company to reject the logo, but Sherwin-Williams soldiers on. There’s a brief description, charmingly apologetic, on the “Green Initiatives” page of the company website. “Created in the late 1800s, the logo’s purpose was to represent the company’s desire to help beautify and protect the buildings of the world. It was a symbol of a young company’s enthusiasm, idealism and hope regarding its future and the possibility for achievement that hovered on the nation’s horizon.” In other words, that was a different age, please forgive us. Today it’s simply “a figurative emblem signifying quality, integrity and service.” And no more oily residue!

What other firms have politically incorrect logos? Marlboro of course ditched the Marlboro man long ago. Joe Camel made it to 1997 before being ushered into retirement. Robertson’s kept Golly on its marmalade jars until 2001. Oh, and check out this funny set of politically incorrect ads of yesteryear (Santa smoking Chesterfields, a husband spanking his wife for serving the wrong coffee, a group of servicemen being warned “You can’t beat the Axis if you get VD”).

| Peter Klein |

Like other blogs, O&M gets most of its new readers through links from other blogs and websites. But people also find us by searching. Our software shows us what search terms lead people here, and I recently looked up the most popular search terms from our 24 months of existence. Here’s the list.

1. agency theory
2. organizations and markets
3. market based management
4. corruption in organizations
5. concept map
6. organization and markets
7. life in hell
8. history of marketing
9. strategic entrepreneurship journal
10. swot model
11. nicolai foss
12. history of accounting
13. theories of profit
14. unusual business ideas
15. market-based management
16. queen bee syndrome
17. peter klein
18. pareto criterion
19. management theory
20. management theories

Obviously there’s something wrong with the order of items #11 and #17, but otherwise the software seems to work pretty well. . . .

| Peter Klein |

Did you catch the list of Top Business Gurus in Monday’s WSJ? Based on Google, Lexis-Nexis, and academic citation indexes, it puts Gary Hamel at the top, followed by Tom Friedman, Bill Gates, Malcolm Gladwell, and Howard Gardner. Our own Jeff Pfeffer checks in at #11. Click the picture below for the entire list. Hamel, Stephen Covey, Michael Porter, Clayton Christensen, and Tom Peters are obvious candidates for Guru Status, though the ranking algorithm produces some unlikely results too, such as Robert Reich and Myron Scholes.

| Randy Westgren |

Before enplaning for Vancouver, I spent a great day at the University of Missouri with Peter Klein and his (local) colleagues. I discovered that Peter and I share a common interest in the fiction of Richard Powers, a novelist whose works draw from the biological, physical, cognitive, and information sciences. Moreover, Peter acknowledged that his favorite Powers novel is The Gold Bug Variations; it’s my favorite as well. I finished my second reading on the airplane and found a passage that incites this post:

The world we know, the living, interlocked world, is a lot more complex than any market. The market is a poor simulation of of the ecosystem; market models will never more than parody the increasingly complex web of interdependent nature. (First edition, p. 411)

I agree that market models are pale abstractions compared to any ecosystem. But I have studied a great many models of ecosystems (dynamic system simulations, agent-based simulations, statistical models of species interactions, analytical models of populations) and find them to be pale abstractions of ecosystems, as well. I will propose — for refutation — that most market models I see are less interesting than ecosystem models; they are still undersocialized in the Granovetter sense. The ecological models seem to require more attention paid to the social interactions of the individuals.

Just a thought.

| Randy Westgren |

I have been hunkered down in Vancouver for several days, teaching the final module of an executive education course. One of the amusing elements of the course is that it migrates from Halifax, Nova Scotia, to Vancouver, British Columbia during the year, with intermediate stops in Calgary and Niagara Falls. Execs and instructors get to spend time in some innovative, entrepreneurial firms outside their own regions (and escape the classroom).

From the Listel Hotel on Robson Street, one can reach 29 Starbucks stores within a 2 km by 2.5 km area of downtown. There are seven Starbucks on Robson Street alone, between the 400 and 1700 blocks — a 20 minute walk. Among these are the stores at 1099 Robson and 1100 Robson; they face each other kitty-corner across Thurlow Street. One of the execs stated that this constitutes a unique phenomenon within the Starbucks chain — two stores so closely juxtaposed.

1. Has anyone seen or heard of a similar situation in another city?

2. Has someone written about this (apparent) strategy of location-packing Starbucks stores?

BTW, if you are a Starbucks-hater, there twice as many direct competitors in the same 5 square km area, including 13 Blenz Coffee outlets, which is a local competitor with international ambitions (www.blenz.com). The best thing they do isn’t coffee; they will make you Japanese ceremonial green tea while you wait — bamboo whisk and all.

| Peter Klein |

As a student of Austrian economics, I hope to inherit not only the clarity of thought, insight, originality, and productive habits of the great Austrians, but also their longevity. Carl Menger, founder of the Austrian school, lived to be 81 (fathering a son, the mathematician Karl Menger, Jr., at age 62). Mises died at 92, having taught his graduate seminar at NYU well into his eighties. Hayek made it to 93. Böhm-Bawerk died relatively young, at 63, though Wieser lived to be 75. I also admire Ronald Coase, still going strong at 97, and Armen Alchian, who turned 94 this month (and is still serving on PhD dissertation committees). So hopefully I have many good years left (unlike some people).

This came to mind when reading Steve Levitt’s account of his attempt to get a referee report out of a former Chicago economist:

[W]hen I asked the octogenarian economist if he could referee a paper for me, here is the response I received:

Much as I would like to do a review of this paper, my schedule looking ahead for as much as a year is just too crowded. Maybe next time!!

I hope when I am in my eighties “too busy” is the reason I am turning things down! 

| Peter Klein |

So I wake up about 2:30 this morning to the sounds and lights of emergency vehicles outside my house. I look out the front window and see my neighbor’s house, across the street and two houses down, engulfed in flames. Firefighters are already on the scene, hooking up their hoses. Flames are shooting 25 feet into the air. The occupants, a young couple without children, are outside already, and no one is hurt. The husband says they were asleep in the bedroom when smoke started pouring out of the ceiling vents. My next-door neighbor said he heard loud pops and cracks, like fireworks.

The wife is shaking and crying, asking if she can go in and look for her wedding photos. I begin to wonder, if this happened to me, once my wife and children were safely outside would I foolishly run back in to retrieve my laptop, or my signed first edition of Risk, Uncertainty, and Profit, or my CDs with old Compustat data? My Blackberry? (I wouldn’t want to miss an important email while standing outside watching my house burn down.) What would you do?

Mises, as many of you know, lost virtually his entire personal library, and most of his notes and research materials, when the Nazis entered Vienna in 1938. (The papers ended up in Moscow,  where they were discovered in the early 1990s.) Mises arrived in the US in 1940, a refugee without an academic position, without substantial personal funds, and having lost most of a lifetime’s worth of accumulated books and materials. Can you imagine starting over, at age 59, under such circumstances?

| Peter Klein |

How can anyone doubt the value added of mainstream economics research:

• Jeffrey S. DeSimone, “Fraternity Membership and Drinking Behavior,” NBER Working Paper No. W13262, July 2007.

• Jay Pil Choi, “Up or Down? A Male Economist’s Manifesto on Toilet Seat Etiquette.” Working Paper, Department of Economics, Michigan State University, 2002.

• Robert Oxoby, “On the Efficiency of AC/DC: Bon Scott versus Brian Johnson,” Economic Inquiry, forthcoming (via Lasse). The abstract’s worth quoting in full:

We use tools from experimental economics to address the age-old debate regarding who was a better singer in the band AC/DC. Our results suggest that (using wealth maximization as a measure of “better”) listening to Brian Johnson (relative to listening to Bon Scott) resulted in “better” outcomes in an ultimatum game. These results may have important implications for settling drunken music debates and environmental design issues in organizations.

Note that I’m not completely innocent in this area either.

See also: “Economics: Puzzles or Problems?”

| Peter Klein |

O&M went live 25 April 2006, exactly two years ago. Introducing ourselves to the world, we wrote:

We started this blog for two reasons. First, while there are many excellent blogs on economics, law, and public policy, there are relatively few on organization, strategy, and management, our main areas of research. Organizations and Markets hopes to help fill this gap. Second, we think we have a unique and interesting perspective on many of these issues, and we thought it would be fun to share this perspective with the world.

We may or may not be interesting (or fresh), but we think we’re still unique. While the econo-blogosphere has become thickly populated, only a few blogs focus on managerial and organizational issues. (Our blogroll includes most of our personal favorites.)

In the last two years we’ve written 1,275 posts in 32 categories (the most popular being Institutions, Management Theory, Methodology/Theory of Science, Strategic Management, Entrepreneurship, and, of course, Ephemera). We’ve hosted 283,822 unique visitors from dozens of countries (including, during just the last week, Slovenia, Iraq, Cameroon, Malaysia, and Guam). Thanks to our readers (students in particular), regular commentators, and former guest bloggers for their continued enthusiasm and support.

We’re planning significant changes to the site in the coming weeks. Watch this space for details!

| Peter Klein |

The University of Missouri’s Kenneth L. Lay Chair of Economics, which we’ve written about before, has been filled, by an internal candidate, Joe Haslag. Joe is a monetary economist who, unlike many macroeconomists, does policy work (some with the controversial Show-Me Institute) and, unlike many economists, is a warm and friendly person. (Did I just write that?)

For those who think that economists, like other social-science and business academics, tend to be overly narrow and specialized, note what Joe says about his patron:

Haslag acknowledged being relatively uninformed about the Enron affair. “Actually, it’s not an episode that’s part of the economics I teach,” he said. “There isn’t anything about the story that entices me to spend a lot of time on it. I couldn’t talk about it with any amount of detail or any analysis.”

| Peter Klein |

OK, I didn’t see the actual billboard, just a photo of it. My colleague Peter Sukovsky, a professor of animal science at MU and a specialist in reproductive physiology, gave a presentation on his startup company AndroLogika at the University of Missouri’s Life Sciences Week. Peter concluded by showing us this picture, helping to illustrate that Missouri is a particularly good state for doing reproductive research. Where else would you find a summer festival like this? (In case you’re wondering, it’s a food festival; you can see examples of the cuisine here. It ain’t Guo-li-zhuang, but in the same genre.)

| Peter Klein |

What would be a fun and cool name for an econ-org-strategy-methodology-law-history-culture blog? I mean something clever, like Marginal Revolution, Asymmetrical Information ["Asymmetric"?], Division of Labour, Truck and Barter, Knowledge Problem, ArgMax, and the like. “Organizations and Markets” is descriptive, and easy to remember, but not terribly witty. Here are some better names. (These are mostly inside jokes, so they’re either funny or they’re not.)

• Stochastic Dominance
• Fundamental Transformation
• Apodictic Certainty
• Exogenous Shock
• Rationality Unbound

I believe these URLs are still available (cybersquatters, take note). Readers, what would you suggest?

| Peter Klein |

An item on the upcoming Italian elections featured a clip from comedian-activist Beppe Grillo denouncing both leading candidates, former PM Sylvio Berlusconi and former Rome mayor Walter Veltroni. Grillo, according to NPR’s Sylvia Poggioli, “has become the most powerful voice of protest in Italy. His blog is ranked among the 10 most-visited in the world, according to blog search engine Technorati.” I’m quite sure that’s the first time I’ve heard a national news program cite someone’s Technorati ranking as his main qualification!

Also curious: Later in the story Poggioli quotes Franco Ferrarotti, described as “one of Italy’s best-known sociologists.” How often have you heard an academic sociologist quoted in a general-interest news story?

| Peter Klein |

From the Berkeley econ skit party: No Dissertation and Stronger (via Mankiw).

As not only a former participant in, but also a two-time Master of Ceremonies for, said skit party, all I can say is thank goodness there was no YouTube in my day.

| Peter Klein |

“She always referred to herself as ‘Dr. S____,’ so I assumed she was a medical doctor. Then I found out she was a former School Superintendent, with a Doctorate in Education.”

“Yeah, the only people who call themselves ‘Dr.’ are medical doctors and people with Doctorates in Education.”

| Peter Klein |

Auto-safety laws have an ambiguous effect on injuries because people drive less carefully when they feel protected from harm. (My former colleague Dwight Lee prefers a more colorful example: Distributing condoms on college campuses may increase the rate of sexually transmitted disease because students less reluctant to, um, engage in certain behaviors when they think their actions don’t carry consequences. Of course, as Dwight points out, the net effect depends on . . . wait for it . . . elasticity.)

Now we learn that red-light cameras, installed to boost city ticket revenues by recording violations and issuing fines automatically, are actually bringing revenues down, as drivers at those intersections learn not to run red lights. Naturally, city governments are upset and plan to remove the cameras. (HT: Anthony Gregory.)

| Peter Klein |

This kind. (Yes, they’re calling it the iWipe.)

| Peter Klein |

Have you filled out your bailout bracket?

| Peter Klein |

Posner and Becker weigh in on “intelligence doping,” using drugs to increase cognitive performance (see our earlier remarks here). Both argue, on utilitarian grounds, against regulating Provigil and similar stimulants. I bet they’d go for the new Snickers bar too.

| Peter Klein |

The gang at St. Maximos’ Hut has been running a series on the Proverbs and Psalms, highlighting verses that apply to faculty life. To wit:

On faculty recruiting: “He that walketh with wise men shall be wise: but a companion of fools shall be destroyed.” (Prov. 20:13)

On peer review: “Boast not thyself of to morrow; for thou knowest not what a day may bring forth. Let another man praise thee, and not thine own mouth; a stranger, and not thine own lips.” (Prov. 27:1-2)

On people who teach 8:00am classes: “He that blesseth his friend with a loud voice, rising early in the morning, it shall be counted a curse to him.” (Prov 27:14)

And perhaps you’ve seen this one before — a prayer before faculty meetings:

Keep me as the apple of your eye;
hide me in the shadow of your wings
from the wicked who assail me,
from my mortal enemies who surround me.
They close up their callous hearts,
and their mouths speak with arrogance.
They have tracked me down, they now surround me,
with eyes alert, to throw me to the ground.
They are like a lion hungry for prey,
like a great lion crouching in cover.
Rise up, O LORD, confront them, bring them down;
rescue me from the wicked by your sword. (Ps. 17:8-13)

The list also includes economic topics such as capital, financial planning, market institutions, information, etc.

| Peter Klein |

Yahoo has changed the look of its home page, including the placement and format of RSS feeds. David Gerard sends along this scary image of what greeted him when he logged onto his computer this morning.

| Peter Klein |

From the great Wiley Miller. The number of listeners seems about right.

| Peter Klein |

This week Anu Garg’s A.Word.A.Day is featuring lesser-known counterparts of common words, e.g.:

• prepone (v. tr.): to reschedule an event to an earlier time
• nocebo (n.): a substance producing harmful effects in someone because it is believed to be harmful, but which in reality is harmless
• dystopia (n.): an imaginary place where everything is very bad, as from oppression, disease, deprivation, etc.
• inhume (v. tr.): to bury
• prequel (n.): a book, movie, drama, etc. set in a time preceding that of an existing work

Can you think of more?

| Peter Klein |

Forget coffee, Red Bull, and Krispy Kreme. Try Snickers Charged, which combines the decadence of a regular Snickers bar with 60mg caffeine. Delicious, nutritious, and sure to see you through that next dissertation chapter!

One taster’s report: “Shortly after downing the Snickers . . . my heartbeat began to accelerate. Within minutes, my hands were trembling and my stomach was a bit upset, but I was typing about twice as fast as I usually do.” Perfect!

| Peter Klein |

Remember Saint Hubbins, the patron saint of quality footwear? He has nothing on Lord Balaji, described in a recent WSJ story as the Hindu god of H-1B visas.

Local officials were on a tear to turn Hyderabad into the next Bangalore, the high-tech capital of the neighboring state of Karnataka. They started referring to Hyderabad as “Cyberabad.” They fixed roads and wooed Microsoft and General Electric Co. to set up offices there.

Hoping to capitalize on all the activity, technical colleges sprouted up in the city’s outskirts near Mr. Gopala Krishna’s temple. Students started trickling by on their way home from school; many complained about their failed attempts to secure U.S. visas. That gave the priest an idea to sell the students on the deity by giving him a new persona, “Visa God.” Mr. Gopala Krishna counseled the students in English, then told them to walk around the temple 11 times to get their wish. “I used to say, ‘Go, this time you’ll get it,’” he recalls.

Soon, Mr. Gopala Krishna started seeing dozens — then hundreds — of new visitors a day. In 2005, some local newspapers wrote about the Visa God, just as new U.S. visa restrictions were taking a toll. Mr. Gopala Krishna and his relatives also launched a Web site and a newsletter called Voice of Temples, with features like a primer of sample prayers for help in visa interviews.

The temple’s popularity surged. Last year, a public battle between Mr. Gopala Krishna’s family and the local government, which briefly wanted to take the temple over, only boosted its appeal among the young and subversive. Now devotees of the Visa God say they have to reach the temple by 6 a.m. to avoid the daytime rush.

| Peter Klein |

From the brilliant Jorge Cham (via Per).
Click to enlarge.

| Peter Klein |

You know the game where you take a common word, add or change one letter, and create a new definition? Our good friend Randy W. sends these examples, including some economics and management terms:

1. Cashtration: The act of buying a house, which renders the subject financially impotent for an indefinite period of time.

2. Ignoranus: A person who’s both stupid and an asshole.

3. Intaxication: Euphoria at getting a tax refund, which lasts until you realize it was your money to start with.

4. Reintarnation: Coming back to life as a hillbilly.

5. Bozone: The substance surrounding stupid people that stops bright ideas from penetrating.

I tried but all I could come up with is

6. Jive-forces analysis: a model analyzing the effect of intra- and
inter-industry rivalry on the truthfulness of corporate disclosures.

Dear readers, give it your best shot!

UPDATE: I thought of a few more:

7. Basset specificity: relationship specific investments dog-lovers make in their hounds.

8. Strategic compliments: what you give your significant other on Valentine’s Day.

9. Perennial gale of creative distraction: the blogosphere. (OK I changed two letters on that one.)

| Peter Klein |

Jim Heckman is one. Steve Sailer, whom I enjoy reading despite many disagreements, recently shared this Heckman nugget. Referring to Heckman’s angry 1995 review of Herrnstein and Murray’s The Bell Curve, Sailer notes:

What people didn’t realize . . . is that Heckman is almost always upset. That’s his personality. In a Medieval Big Four Humours model, he’d be The Man of Choler.

Years ago, I was participating in an email discussion with Heckman, who made all of his contributions to the conversation IN ALL CAPS.

As I recall, I privately emailed him to suggest — diplomatically, I hoped — that if he didn’t find the shift key convenient, he could just eschew upper case altogether and type using only lower case, like e.e. cummings. You see, I explained, using all caps gives other readers the impression that you are shouting.

“I AM SHOUTING!” he emailed back.

Heckman’s distinctive personality is one of the things that helps make him a great scientist.

Incidentally, this story helps place the thin-skinned scholar episode in perspective.

| Peter Klein |

Alf Rehn directs his readers to

my favorite gang of theorists I do not agree with at all over at Organizations and Markets (fun blog, and I have a great deal of respect for them, even though we are as far apart in thinking as people in the kinda-the-same-field-although-you-could-be-forgiven-for-thinking-otherwise can be — I even like reading Nicolai Foss’s rants, bless his little hardliner heart).

But why does he think Nicolai has a heart?

| Peter Klein |

SOC 121-015: “Introduction to Sociology: The Sociology of George Lucas and Steven Spielberg’s Films”

This class introduces students to the science of sociology utilizing examples from the real world of society, and the reel worlds of George Lucas and Steven Spielberg’s films. Sociological theories and research, and their application to culture, socialization, religion, technology, inequality, and media are the themes of the class. Films such as THX-1138, American Graffiti, Star Wars, Indiana Jones, Schindler’s List, Amistad, and E.T. will be used as examples oft he these themes, and the fans of Star Wars and Indiana Jones will be discussed. Students will present a paper about the sociological themes of the films and the movies illuminate about the 1970s to 2000s zeitgeist.

For more information about the class, contact Professor Tenuto at jtenuto@clcillinois.edu or at the college website www.clcillinois.edu.

Link via a Star Wars fan site.