Posts filed under ‘Management Theory’
| Peter Klein |
Kudos to Anna Grandori for her edited volume, Handbook of Economic Organization: Integrating Economic and Organization Theory, currently making its way through the editorial process at Edward Elgar. Blurb:
The volume distinctively aims at integrating economic and organization theories for the explanation and design of economic organization. Economic organization is therefore intended both as an object of enquiry and as an emerging disciplinary field: not economics applied to organization as an object, but a forefront interdisciplinary field attracting researches and integrating insights from economics, organization theory, strategy and management, economic sociology, and cognitive psychology. The authors are distinguished scholars at their productive peak in those fields, sharing an in interest in an integrated and enlarged approach to economic organization. Each chapter not only addresses foundational issues and provides a state-of-art, but also offers original contributions and identifies key issues for future research.
Table of Contents is below the fold. You”ll find many of your favorite authors. (more…)
| Lasse Lien |
An important selling point for the consulting industry is that consultants can presumably help a firm identify and implement “best practice.” Surely the consulting industry is an important channel for disseminating knowledge of better ways of doing things, but identifying what constitutes best practice for a given firm in a given situation is no trivial task, and even if the best practice could be identified, transferring it will be a significant challenge.
This begs the question of whether there is a best practice for identification and transfer of best practices, and whether the consulting industry has identified and adopted such a practice. According to this paper Benjamin Wellstein and Alfred Kieser, the consulting industry in Germany is nowhere near a best practice for best practice. This goes for for both inter- and intra-industry transfer. I’ll bet my hat that this finding holds everywhere.
Well, I guess as long as the consulting industry keeps finding better practices for transferring better practices, we shouldn’t be too disappointed that there is no best practice for best practice. (HT: E.S. Knudsen)
| Peter Klein |
Looks like Scott Adams has been reading O&M!
| Peter Klein |
Bricolage — doing the best you can with the materials on hand, rather than choosing and end and getting the resources you need — is an important concept in the contemporary entrepreneurship literature. Garud and Karnøe’s influential 2003 paper on the Danish wind power industry helped bring bricolage into the mainstream, and it has important parallels with effectuation and other approaches to entrepreneurship that emphasize experimentation and incremental learning.
The University of Missouri’s Department of Romance Languages and Literatures is hosting an interdisciplinary conference, 12-13 November 2012, on bricolage in art and entrepreneurship, focusing on the work of Ediciones Vigía, a unique artists’ collective that produces limited edition handmade books by Cuban and international authors and musicians. Participants will come not only from the humanities, education, and journalism, but also economics, management, and entrepreneurship. Among the featured speakers are Ivo Zander, who recently co-edited a book on Art Entrepeneurship, and Sharon Alvarez.
O&M readers interested in the relationship between business and the arts, the parallels between artistic creativity and entrepreneurial creativity, the economic organization of artist networks, and related issues should check it out. The full call for papers, along with related information, is below the fold.
| Nicolai Foss |
As readers of this blog will know, the dialogue between the firm capabilities literature and organizational economics has a long history in management research and economics. Co-blogger Dick Langlois has been an important contributor in this space. The forty years long discussion (dating it from George B. Richardson’s 1972 hint that his newly coined notion of capability is complementary to Coasian transaction cost analysis) has proceeded through several stages. Thus, the initial wave of capabilities theory (i.e., beginning to mid-1990s) was strongly critical of organizational economic. This gave way to a recognition that perhaps the two perspectives were complementary in a more additive manner. Thus, whereas capabilities theory provided insight in which assets firms need to access to compete successfully, organizational economics provide insight into how such access is contractually organized. However, increasingly work has stressed deeper relations of complementarity: Capabilities mechanisms are intertwined with the explanatory mechanisms identified by organizational economists.
In a paper, “The Organizational Economics of Organizational Capability and Heterogeneity: A Research Agenda,” that is forthcoming as the Introduction to a special issue of Organization Science on the the relation between capabilities and organizational economics ideas, Nick Argyres, Teppo Felin, Todd Zenger and I argue, however, that the discussion has been lopsided—hardly qualifying as a real debate—and that a reorientation is necessary.Specifically, the terms of the discussion have largely been defined by capabilities theorists. Part of the explanation for this dominance is that capability theorists have had a rhetorical advantage, because everyone seems to have accepted that organizational economics has very little to say about organizational heterogeneity. We argue that this rests on a misreading of organizational economics: while it is true that organizational economics was not (directly) designed to address and explain organizational heterogeneity, this does not imply that the theory is and must remain silent about such heterogeneity. In fact, we discuss a number of ways in which organizational economics is quite centrally focused on explaining organizational heterogeneity. Specifically, we argue that organizational economics provides guidance around how organizational design and boundaries facilitate the formation of knowledge, insight, and learning that are central to the heterogeneity of firms. We also demonstrate how efficient governance can itself be a source of competitive heterogeneity. We thus call on organizational economists to actively and vigorously enter the discussion, turning something closer to a monologue into real dialogue. (more…)
Nicolai was in town yesterday to deliver the 2012 Sherlock Hibbs Distinguished Lecture in Economics and Business, and he gave a terrific talk about “open entrepreneurship,” the application of concepts and principles from the open innovation literature to the discovery, evaluation, and exploitation of entrepreneurial opportunities. Upon returning to my office after the lecture, I found a surprise waiting for me: the first hardcopies of our new book, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012). As both authors happened to be together, we preserved the moment for posterity.
A brief description and some endorsements are below the fold.
Update: O&M readers can order directly from Cambridge and receive a 20% discount! Use this link.
| Peter Klein |
An old post of Nicolai’s on journal impact factors is still attracting attention. Two recent comments are reproduced here so they don’t get buried in the comments.
There is an interesting paper by Joel Baum on this, “Free Riding on Power Laws: Questioning the Validity of the Impact Factor as a Measure of Research Quality in Organization Studies,” Organization 18(4) (2011): 449-66. He does a nice analysis of citations, and shows (what many of us suspected) that citations are highly skewed to a small subset of articles, so the idea of an impact factor which is based on a mean citation rate is erroneous. He concludes that “Impact Factor has little credibility as a proxy for the quality of eitehr organization studies journals of the articles they publish, resulting in attributions of journal or article quality that are incorrect as much or more than half the time. The clear implication is that we need to cease our reliances on such non-scientific, quantitative characterisation to evaluate the quality of our work.”
To which Ram Mudambi responds:
This analysis was already done in a paper we wrote in 2005, finally now published in Scientometrics.
We have the further and stronger result that in many years, the top 10 percent of papers in A- journals like Research Policy outperform the top 10 percent of papers in A journals like AMJ.
So it is the paper that matters, NOT the journal in which it was published. Evaluating scholars on the basis of where they have published is pretty meaningless. Some years ago, we had a senior job candidate with EIGHTEEN real “A” publications — it turned out he had only 118 total citations on Google scholar. So his work was pretty trivial, even though it appeared in top journals.
See also the good twin blog for further discussion.
| Peter Klein |
Brainstorming appears in many strategy, entrepreneurship, and leadership texts, often mentioned in passing with the implication that it’s a great tool for group decision-making. But the research literature suggests a more circumspect attitude. Indeed, this week’s New Yorker features an interesting and informative essay on some of the latest results:
The underlying assumption of brainstorming is that if people are scared of saying the wrong thing, they’ll end up saying nothing at all. The appeal of this idea is obvious: it’s always nice to be saturated in positive feedback. Typically, participants leave a brainstorming session proud of their contribution. The whiteboard has been filled with free associations. Brainstorming seems like an ideal technique, a feel-good way to boost productivity. But there is a problem with brainstorming. It doesn’t work.
Writer Jonah Lehrer goes on to quote Keith Sawyer: “Decades of research have consistently shown that brainstorming groups think of far fewer ideas than the same number of people who work alone and later pool their ideas.” Lots more at the source.
| Peter Klein |
O&M co-founder Nicolai Foss will give the 2012 Sherlock Hibbs Distinguished Lecture in Business and Economics Tuesday, 6 March 2012, 10:00-11:30am, in 205 Cornell Hall on the University of Missouri campus. The title is “Open Entrepreneurship: The Role of External Knowledge Sources for the Entrepreneurial Value Chain.” The lecture is sponsored by the Hibbs Professors of the University of Missouri’s Trulaske College of Business and the University of Missouri’s McQuinn Center for Entrepreneurial Leadership (which I direct).
The full announcement (with Nicolai’s impressive bio) is below the fold. The lecture is free and open to the public, so all are welcome! (more…)
| Peter Klein |
This illusion [that correlation implies causality] has led people to make poor decisions about such things as what to eat (e.g., coffee, once bad,is now good for health), what medical procedures to use (e.g., the frequently recommended PSA test for prostate cancer has now been shown to be harmful), and what economic policies the government should adopt in recessions (e.g., trusting the government to be more efficient than the market).
Do not use regression to search for causal relationships. And do not try to predict by using variables that were not specified in the a priori analysis. Thus, avoid data mining, stepwise regression, and related methods.
| Nicolai Foss |
It is not yet online, but the University of Paris-Sorbonne is looking for a Full Professor in the Economics of Organization (see the ad text below). Importantly, proficiency in French is not a requirement … “upfront,” at least.
Very apropos (if I may) the Department of Strategic Management and Globalization will be hiring one assistant professor and three associate professors in ”strategic and international management” over the next few months. Proficiency in French, or Danish for that matter, is not required at all. The job ads are here. Or, contact me directly on firstname.lastname@example.org (more…)
| Peter Klein |
Über-guru Jim Collins has taken more than his share of hits here at O&M, mainly for lack of attention to experimental design (1, 2, 3). It appears that his new book, Great by Choice: Uncertainty, Chaos, and Luck: Why Some Thrive Despite Them All (Harper, 2011), finally tries to address this issue with an attempt at causal identification. If the dust-jacket blurb is to be believed, Great by Choice introduces to the Collins project the concept of treatment and control:
With a team of more than twenty researchers, Collins and Hansen studied companies that rose to greatness — beating their industry indexes by a minimum of ten times over fifteen years — in environments characterized by big forces and rapid shifts that leaders could not predict or control. The research team then contrasted these “10X companies” to a carefully selected set of comparison companies that failed to achieve greatness in similarly extreme environments.
This looks like a step in the right direction, but Collins is still selecting on the dependent variable — in a quasi-experimental design one normally chooses the treatment and control groups based on behaviors, not outcomes. (You don’t compare 100 healthy people to 100 sick people, you compare 100 smokers to 100 otherwise similar nonsmokers or 100 people on a medication to 100 similar people on a placebo to see which get healthy or sick.
For more, see Collins in the NYT or this interview from Knowledge@Wharton. I don’t have the actual book but I tried searching keywords from the Amazon “Look Inside,” and didn’t get any hits for “Knight,” “Schumpeter,” “dynamic capabilities,” or other appropriate key words, so I’m not expecting much theory here.
| Lasse Lien |
Rich Bettis makes an important point in a forthcoming issue of SMJ. Bettis points out how two unfortunate practices interact with each other to create a very serious and fundamental problem for knowledge accumulation in (strategic) management.
One is the widespread practice of running numerous regressions on a given dataset and subsequently adapting (or in milder cases “tuning”) hypotheses or theory to fit the data. By itself this practice is quite unfortunate, since data patterns can and will occur by chance, and the more regression models one tries the more likely that one will “find” something. We obviously do not want such random patterns to influence either theory building or our catalog of empirical findings. However, this problem would be a great deal less serious if replication studies were common and we gladly published non-findings. Random correlations in the data would not survive replication tests, and would be eliminated fairly quickly.
As we all know, in management, replication studies cannot get published and are basically just not done. To make matters worse, we don’t publish non-findings either. This is the second unfortunate practice. Taken together these two practices may in the worst case indicate that much of what we think we know in management are just random data patterns, discovered through data mining, and protected by our lack of replication studies and refusal to publish non-findings. This is a sobering thought. As Bettis points out, we should all be very thankful that replication studies are more common in medical research than in management.
What is the solution? Well, a first step might be to launch the Journal of Managerial Replication Studies and give it the prestige it deserves. Either SMS or AOM should see the launch of such a journal as a crucial responsibility. I mean, we really don’t want to be quacks, do we?
HT: Helge Thorbjørnsen
| Peter Klein |
Mike Ryall writes about the 2011 HBS strategy conference:
Of the empirical papers, almost half incorporated some method aimed at causal identification. My sense is that such identification strategies will soon become a fairly standard requirement for publication in a top management journal (“soon” being measured in academic time, of course).
We’ve discussed this issue several times, including a 2008 post on the potential tradeoffs between choosing problems that are well-identified and choosing problems that are important. I agree with Mike that the management and entrepreneurship literatures — at least the quantitative empirical part of those literatures — are catching up the economists here. But consider the advantages of backwardness: can management research learn to take identification seriously without falling into the Freakonomics trap? (Please, no Freakostrategy or Super-Freakopreneurship!)
Of course, management and entrepreneurship researchers, unlike most economists, tend to sympathize with (or at least tolerate) qualitative methods, and one legitimate means of generating causal inference is careful, detailed, historical investigation, case work, ethnography, analytical narrative, and so on. I suspect, though, that the trend Mike describes will tend to push these approaches to the side as well.
| Peter Klein |
O&M friend Brent Ross sends along this CFP for a track session of the 2012 Wageningen International Conference on Chain and Network Management. The session, “Managing Wicked Problems: The Role of Multi-Stakeholder Engagements for Resource and Value Creation,” is linked to a special issue of the International Food and Agribusiness Management Review. Info below the fold: (more…)
| Peter Lewin|
- Self-employment is a form of contractual relationship which, in certain circumstances, will have greater benefits to the parties involved than an employer–employee relationship. Government intervention, however, may make selfemployment artificially more attractive by raising the costs of employment relationships.
- Certain ethnic minority groups, older people and those without English as a first language tend to be overrepresented among the self-employed. This is partly because of the flexibility the arrangement provides but also because self-employment offers a ‘safety valve’ for those who find it difficult to find employment in the formal labour market.
- It is vital that businesses are not impeded from moving from a situation where the owner is self-employed without employees to a situation where the business has employees. There is evidence that businesses are impeded in this way. In just nine years to 2009, the proportion of micro-businesses with employees fell by almost one fifth. At the same time the proportion of self-employed with no employees rose rapidly.
- Women, individuals from certain ethnic groups, those with young dependants, those with low or no qualifications, those for whom English is not a first language and those who have recently experienced unemployment make up a much greater proportion of the workforce of small firms. For example, whereas 11 per cent of employees of small firms had no qualifications, only 4 per cent of employees of large firms had no qualifications.
- Some workers will prefer to work for small firms because of the greater flexibility they offer in their working practices. In many cases, however, small firms will employ people who are talented but who are not able to negotiate the more formal recruitment processes of larger firms. Micro-businesses therefore perform an important economic and social function – employing people who might be overlooked by larger employers.
- Genuine entrepreneurial insight and discovery tends to come from small firms. Entrepreneurship is crucial for economic growth. The nature of entrepreneurial insight is such, however, that we have no idea where it will come from – not even in the most general terms. Probably only one in every thousand ‘start-up’ firms will become one of the large businesses of the future.
- Policies to promote entrepreneurship must come in the form of removing impediments to business and should not involve the promotion of particular business activities. It is simply not possible for government intervention to pick this tiny number of winners. All government can do is create a climate in which entrepreneurship can thrive.
- The smallest firms are a key driver of job creation. Businesses do not start big. One quarter of employees working in firms that were established ten years earlier are working for firms that started from a position of employing only one person.
- The cost of regulation has grown enormously over the last fifteen years. This particularly affects small firms with employees because regulatory costs act like a ‘poll tax’. Wide ranging exemptions from employment regulation and the minimum wage would be appropriate for small firms. Such exemptions would have the additional advantage of allowing the government to ‘experiment’ with deregulation. Standard terms and conditions of employment could be drawn up which would ensure that employees clearly understood the exemptions. Radical reforms of the tax system would also assist small firms which experience much greater compliance costs than large firms.
- Moves by the government to promote entrepreneurship through the state education system or provide specific tax exemptions and reliefs for particular forms of business activity are wasteful or counterproductive.
| Peter Klein |
The SMG-McQuinn conference, “Multi- and Micro-Level Issues in Strategic Entrepreneurship,” starts today. Not sure if live-blogging will be feasible (“Nicolai Foss has stepped to the podium. Blue tie, white shirt. Scans the crowd….”) but we’ll post information when we can. The program is here. Some reflections on last year’s conference are here. Naturally Nicolai and I will be in book-promotion mode, hopefully not obnoxiously so.
Update: Per Bylund is doing some live blogging at the McQuinn blog.
| Peter Klein |
This is a placeholder page without much detail, but you can pre-order today! The best news is the price: just £55.00 for the hardback and a mere £19.99 for the paperback — less than a family outing to the cinema, and far more rewarding!
| Peter Klein |
An interesting example of scholars in different fields using the same specialized terms to mean entirely different things:
Creating Capabilities: The Human Development Approach
MARTHA C. NUSSBAUM
In this powerful critique, Martha Nussbaum argues that our dominant theories of [economic] development have given us policies that ignore our most basic human needs for dignity and self-respect. For the past twenty-five years, Nussbaum has been working on an alternate model to assess human development: the Capabilities Approach. She and her colleagues begin with the simplest of questions: What is each person actually able to do and to be? What real opportunities are available to them?
Creating Capabilities . . . affords anyone interested in issues of human development a wonderfully lucid account of the structure and practical implications of an alternate model. It demonstrates a path to justice for both humans and nonhumans, weighs its relevance against other philosophical stances, and reveals the value of its universal guidelines even as it acknowledges cultural difference. In our era of unjustifiable inequity, Nussbaum shows how — by attending to the narratives of individuals and grasping the daily impact of policy — we can enable people everywhere to live full and creative lives.
One reviewer suggests the term “capabilitarianism” to describe this approach. Will we soon see management journal special issues on capabilitarianism and dynamic capabilitarianism? Felin and Foss critiques on the lack of microfoundations in capabilitarianism? Calls to join capabilitarianism and transaction costarianism?