Posts filed under ‘Teaching’

“PowerPointless”

| Peter Klein |

A clever and funny entry for our ongoing series on the use and abuse of PowerPoint. It’s aimed at classroom presentations but applies, a fortiori, to any professional meeting, including (especially?) academic conferences. I especially appreciate this:

If your audience can understand everything it needs to from your slide show only, . . . cut out about 50 percent of the slides and 90 percent of the text. . . . Your slide show by itself should be incomprehensible. Because, to paraphrase Ludwig Wittgenstein, its most important part is what’s not on it. (I.e., you actually talking with people.)

I  have a few quibbles, e.g., I generally avoid animations (having each point appear only as you mention it), but overall this is great advice, amusingly illustrated.

slide

7 March 2014 at 9:54 am 4 comments

What Are “Transaction Costs” Anyway?

| Peter Klein |

A friend complains that management and entrepreneurship scholarship is confused about the concept of transaction costs. Authors rarely give explicit definitions. They conflate search costs, bargaining costs, measurement costs, agency costs, enforcement costs, etc. No one distinguishes between Coase’s, Williamson’s, and North’s formulations. “Transaction costs seem to be whatever the author wants them to be to justify the argument.”

It’s a fair point, and it applies to economics (and other social sciences and professional fields) too. I remember being asked by a prominent economist, back when I was a PhD student writing under Williamson, why transaction costs “don’t simply go to zero in the long run.” Indeed, contemporary organizational economics mostly uses terms like “contracting costs,” and since 1991 Williamson  has tended to use “maladaptation costs” (while retaining the term “transaction cost economics”).

When I teach transaction costs I typically assign Doug Allen’s excellent 2000 essay from the Encyclopedia of Law and Economics and Lee and Alexandra Benhams’ more recent survey from my Elgar Companion to Transaction Cost Economics (unfortunately gated). Doug, for example, usefully distinguishes between a “neoclassical approach,” in which transaction costs are the costs of exchanging well-defined property rights, and a “property-rights approach,” in which transaction costs are the costs of defining and enforcing property rights.

What other articles, chapters, and reviews would you suggest to help clarify the definition and best use of the “transaction costs”? Or should we avoid the term entirely in favor of narrower and more precise words and phrases?

6 February 2014 at 12:28 pm 17 comments

Disruptive Innovation and Job-Market Signaling

| Peter Klein |

The job-market value of education, as famously argued by Michael Spence (1974), derives from two sources: additions to human capital and signaling. By going to college, you learn some useful skills, but you also demonstrate to potential employers that you have the natural ability to earn a degree. Depending on the difficulty of obtaining a degree for students of varying abilities, a college degree may be valuable even if you don’t learn a thing — you distinguish yourself from those who weren’t clever or patient enough to jump through the necessary hoops.

Of course, the human-capital and signaling components aren’t mutually exclusive. But, as long as at least some part of the job-market value of education comes from signaling, the demand for higher education depends on its perceived signaling value, relative to the cost of signaling. And herein lies the rub: getting a college degree is a very costly signal. Suppose high-ability workers could demonstrate their value to the job market by obtaining some credential that low-ability workers can’t or won’t obtain, without forgoing the explicit and opportunity costs of 4+ years at college. This would be an attractive alternative for many, and bad news for the higher-education industry, which today has a virtual monopoly on credentialing.

Michael Staton makes precisely this argument in today’s HBR Blog: “The Degree Is Doomed.” Staton argues that new technologies increasingly allow the unbundling of the learning and signaling functions of higher education, and that alternative signals such as “work samples, personal representations, peer and manager reviews, shared content, and scores and badges” are undermining the value of the college degree.

There are sites — notably Degreed and Accredible — that adapt existing notions of the credential to a world of online courses and project work. But there are also entire sectors of the innovation economy that are ceasing to rely on traditional credentials and don’t even bother with the skeumorph of an adapted degree.  Particularly in the Internet’s native careers – design and software engineering — communities of practice have emerged that offer signals of types and varieties that we couldn’t even imagine five years ago.   Designers now show their work on Dribbble or other design posting and review sites.  Software engineers now store their code on GitHub, where other software engineers will follow them and evaluate the product of their labor.  On these sites, peers not only review each other but interact in ways that build reputations within the community. User profiles contain work samples and provide community generated indicators of status and skill.

These are specialized areas, and probably not substitutes for the credentialing function for other fields and industries. But low-cost, innovative, specialized signaling methods could pose a significant challenge to the university establishment.

Of course, even if higher education loses its credentialing function, it can still add value the old-fashioned way, through teaching.

8 January 2014 at 10:54 am 4 comments

Recent Videos from Top Business Professors

| Peter Klein |

Michael Porter: “Why Business Can Be Good at Solving Social Problems”

 
Costas Markides: “Strategy Is about Making Choices”

 
Clayton Christensen: “Disruptive Innovation”

22 October 2013 at 9:26 am 1 comment

From MOOC to MOOR

| Peter Klein |

Via John Hagel, a story on MOOR — Massively Open Online Research. A UC San Diego computer science and engineering professor is teaching a MOOC (massively open online course) that includes a research component. “All students who sign up for the course will be given an opportunity to work on specific research projects under the leadership of prominent bioinformatics scientists from different countries, who have agreed to interact and mentor their respective teams.” The idea of crowdsourcing research isn’t completely new, but this particular blend of MOO-ish teaching and research constitutes an interesting experiment (see also this). The MOO model is gaining some traction in the scientific publishing world as well.

3 October 2013 at 8:48 am 1 comment

How Much Has Changed, Really?

| Peter Klein |

Henry of Germany lecturing at the University of Bologna, 14th century.

University of Bologna, 14th century

Come to the CSIG Teaching Workshop this Saturday in Atlanta and find out!

25 September 2013 at 1:46 pm 6 comments

SMS Teaching Workshop on Technology and the Future of Higher Education

| Peter Klein |

Tunji Adebesan and I are organizing the second annual teaching workshop for the Strategic Management Society’s Competitive Strategy Interest Group. The workshop is Saturday, September 28, 2:00-5:00pm, part of the upcoming SMS Conference in Atlanta. It’s open to emerging and established scholars in strategic management, organization, and entrepreneurship, or a related field.

This year’s theme is technological innovation and its impact on teaching strategy. The higher-education industry is abuzz with talk about MOOCs, distance learning, computer-based instruction, and other pedagogical innovations. Many of you are already using online exercises and assessments, simulations, and other activities in the classroom. How are these innovations best incorporated into the strategy curriculum? What can strategy scholars say about the impact of these technologies on higher education more generally? Are they sustaining or disruptive innovations, and what do they imply for the structure of the business school, and the university itself?

The interactive, participatory workshop begins with a panel session featuring experts on distance learning, online assessments, simulations, electronic textbooks, social media, and more. Panelists include Michael Leiblein (Ohio State), Jackson Nickerson (Washington University, St. Louis), Frank Rothaermel (Georgia Tech), and Bob Wiseman (Michigan State), along with Tunji and myself. Sample questions: Are MOOCs the future of higher education? Do they work? Can What are best practices for distance learning, and for incorporating online activities into the traditional classroom? Do improved distance-learning and collaboration tools facilitate new models for executive education and corporate training programs? How should strategy teachers make best use of social media, TED talks and other media, iPads, and other tools and apps, especially for younger students? Following the panel session, participants will break into small groups for in-depth discussion and practice using new tools. After regrouping, participants will discuss about what these innovations mean for the higher-education industry, and business schools in particular.

Pre-registration is encouraged but not required. If you’re planning to attend, please let us know by sending an email to csig.teaching2013@gmail.com so we can plan accordingly. Feel free to email me with questions or comments.

8 September 2013 at 3:54 pm 4 comments

Culture, Entrepreneurship, and Innovation: French Edition

| Peter Klein |

Quote of the day, from Peter Gumbel’s France’s Got Talent: The Woeful Consequences of French Elitism, an interesting first-person account of the French educational system:

[T]he patterns of behavior established at [French] school appear to continue in later life, reproducing themselves most obviously in the workplace. If you learn from an early age that volunteering answers at school may prompt humiliating put-downs from your teachers, how active a participant will you be in office strategy discussions in the presence of an authoritarian boss? If working together in groups was discouraged as a child, how good a team player will you be as a grown-up? If you are made to believe as a 10-year-old that it’s worse to give a wrong answer than to give no answer at all, how will that influence your inclination to take risks?

I won’t repeat the apocryphal George W. Bush quote that “the problem with France’s economy is that the French have no word for entrepreneur,” but I will say that I have found French university students to be less aggressive than their US or Scandinavian equivalents. To be fair, when I’ve taught in France it has been in English, and I initially attributed the students’ reluctance to speak up, to answer questions, and to challenge the instructor to worries about English proficiency. But talking to French colleagues, and reading accounts like Gumbel’s (based on his experiences teaching at Sciences Po), I think the problem is largely cultural. The French system tends to favor conformity and memorization over creativity and spontaneity, which may or may not have a harmful effect on the performance of French organizations and French attitudes toward entrepreneurship and innovation.

I’m curious to know what our French readers think (but don’t hammer me with Bourdieu or Crozier references, please).

6 July 2013 at 11:36 pm 2 comments

Coasean Bargaining Opportunity

| Peter Klein |

Forget Wrigley Field: here’s a colorful example for classroom discussions of property rights, external costs, bargaining, and the Coase Theorem. Literally colorful. (Via Bob Subrick.)

19 March 2013 at 2:21 pm Leave a comment

SMS in Prague

| Peter Klein |

The Strategic Management Society conference has just wrapped up from the lovely city of Prague. Three-fourths of the O&M team,along with several former guest bloggers, enjoyed the festivities. There were many excellent papers, panels, workshops, and social events. Too many to summarize here, but I’ll mention a few highlights:

  • A panel organized by good-twin Teppo Felin, “What Are the Big Questions in Strategy?” More on this soon from one of the participants, who used the opportunity to plug his new book shamelessly.
  • The Dan and Mary Lou Schendel Best Paper Prize, “to honor substantial work published in the SMJ,” at least five years prior to the award, to Oliver Williamson for his 1991 paper “Strategizing, Economizing, and Economic Organization.”
  • A panel on teaching strategic entrepreneurship at the undergraduate, MBA, and PhD levels. I covered the third of these; my slides are here.
  • A “common ground” session on “Austrian Economics and Creative Destruction,” demonstrating the growing interest in the Austrian school among management and organizational scholars.

I also participated in a pre-conference workshop on career strategy, and was asked to talk about social media. Should PhD students and untenured assistant professors blog, tweet, share professional information on Facebook, etc.? I said I could see no evidence that a social media presence had hurt any young scholar; quite the contrary, blogs (like this one) and other, appropriate, uses of social media, can enhance a scholar’s presence and reputation. I argued that it’s a mistake to view these as competing with serious research; after all, it’s not like someone’s going to say, “I was going to complete a major research article today, but decided to send a tweet instead.” Rather, judicious use of blogs, Facebook, Twitter, etc. is a complement to serious research. I think of it as water-cooler or lunch-table chatter with colleagues. You learn about people’s broader interests, their sense of the field, what topics they think are particularly interesting, what they’re reading, etc. Professionals like to know this about each other. Learning these sorts of things about colleagues certainly doesn’t make you think less of them!

There’s much more to report — including an episode of me impersonating a female colleague — but that will have to wait for a future post.

10 October 2012 at 4:18 am 1 comment

Carpenter’s Strategy Toolbox

| Peter Klein |

Carpenter’s Strategy Toolbox, named for the late Mason Carpenter, is a terrific resource for teachers in strategic management and related fields. Here’s an advertisement from former guest blogger Russ Coff:

Some of you may be familiar with Mason Carpenter’s old teaching toolkit. I have initiated a new site that includes everything from that site plus quite a few additional exercises and videos. Please check it out at:

www.CarpenterStrategyToolbox.com

You can filter by type of tool (exercise, video, etc.) using the tabs at the top or you can filter by topic (entrepreneurship, 5 forces, RBV, global, alliances, etc.) using the categories on the right side. You should find something useful in no time at all.

Here are links to a few exercises and resources that you might find especially useful (to give you a quick feel):

Please help make the site more useful:

  • Comment on tools you have used (adding tips, etc.)
  • Submit new tools so the resource is always growing
  • Let me know if you have any questions or suggestions

28 August 2012 at 9:25 am 2 comments

Coase-Theorem Behavior Actually Does Happen

| Dick Langlois |

I often find it hard to persuade students that the Coase Theorem actually “works” – that one party really will bribe another party to give up a right when transaction costs are low. So I was pleased to find this example on the Atlantic Monthly website. An author called Patrick Wensink ripped off the trademarked Jack Daniel’s label for the cover of a novel called Broken Piano for President, whose principal (perhaps only) interesting characteristic is that it was published by a press called Lazy Fascist. Clearly this is a conflict over the use of a property right, and the author is enjoying uncompensated benefits. One would think that, as Jack Daniel’s clearly owns the property right, the company could force the author to change the cover. Apparently, however, the transaction costs of doing that are high, so the attorney for Jack Daniel’s wrote the author a charming cease-and-desist letter that actually offered to bribe the author to change the cover right away. This is a general point, I suppose, now that I think about it: as the transaction costs rise of using official legal institutions to resolve externality conflicts, the de facto owner of the right can effectively switch, even in a world in which the transaction costs we usually talk about – those of finding and negotiating with the conflicting users of the property – remain small enough to allow Coasean bargaining.

2 August 2012 at 2:21 pm 3 comments

IT and Higher Ed

| Peter Klein |

Joshua Gans’s Forbes piece on Stanford’s online game theory course brought up a larger point about higher education. I’ve been involved in various online, distance, web-based educational activities for many years. When designing an online course, the typical professor imagines each element of a traditional course, then creates a virtual equivalent. I.e., paper syllabus = html syllabus; books, articles, handouts = pdf files; classroom lecture = webcast lecture; office hours = chat session; pen-and-paper exams = online exams; and so on. The elements are exactly the same as before; only the method of delivery has changed.

This is almost certainly the wrong way to leverage the information technology revolution. The pedagogy is exactly the same. But isn’t this just what we would expect of entrenched incumbents? The record companies didn’t create iTunes. The online New York Times is pretty much like the paper New York Times; it took Google and Flipboard and other innovators to revolutionize the newsreading business. As we’ve noted before, isomorphism and stasis is exactly what we would expect from a protected cartel — disruptive innovation, in the Christensen sense, will almost certainly come from outside. (Hopefully after Yours Truly is comfortably retired.)

11 May 2012 at 10:45 am 4 comments

And If You Can’t Teach, Teach Gym

| Peter Klein |

Kate Maxwell, writing at Growthology, is concerned about the distance between those who do entrepreneurship and those who teach or research entrepreneurship:

In my reading of the entrepreneurship literature I have been struck by the large gap between entrepreneurs and people who study entrepreneurship. The group of people who self select into entrepreneurship is almost entirely disjoint from the group of people who self select to study it. Such a gap exists in other fields to greater and lesser degrees. Sociologists, for instance, study phenomenon in which they are clearly participants whereas political scientists are rarely career politicians but are often actors in political systems.

But in the case of entrepreneurship the gap is cause for concern. My sense is that all too often those studying entrepreneurship don’t understand, even through exposure, the messy process of creating a business, nor, due to selection effects, are they naturally inclined to think like an entrepreneur might.

I agree entirely with this description, but am not sure I understand the concern. Kate seems to assume a particular concept of entrepreneurship — the day-to-day mechanics of starting and growing a business — that applies only to a fraction of the entrepreneurship literature. Surely one can study the effects of entrepreneurship on economic outcomes like growth and industry structure without “thinking like an entrepreneur.” Same for antecedents to entrepreneurship such as the legal and political environment, social and cultural norms, the behavior of universities, etc. Even more so, if we treat entrepreneurship as an economic function (alertness, innovation, adaptation, or judgment) rather than an employment category or a firm type, then solid training in economics and related disciplines seems the main prerequisite for doing good research.

Of course, this doesn’t mean that entrepreneurship scholars shouldn’t talk to entrepreneurs or study their lives and work. Want to know how if feels to throw the winning Superbowl pass? Ask Tom Brady or Eli Manning. The stat sheet won’t tell you that. But this doesn’t mean that only ex-NFL players can be competent announcers, analysts, sportswriters, etc. Similarly, I like to read about food, and have enjoyed the recent memoirs of great chefs like Jacques Pépin and Julia Child. These first-hand accounts are full of unique insights and colorful observations. But there are plenty of great books on the restaurant industry, on the relationship between food and culture, on culinary innovation, etc. by authors who couldn’t cook their way out of a paper bag.

What do you think?

7 April 2012 at 11:18 pm 6 comments

Law and Strategy

| Peter Klein |

Over at The Conglomerate, Gordon Smith asks:

Law professors teach and write about topics like public choice, agency capture, rent seeking, etc., but I don’t often hear law professors talking systematically about the use of law for strategic purposes. . . . In simplest terms, the study of law and strategy views the world from the perspective of a business and asks: how can we use law to gain a competitive advantage? This question ought to be of interest to lawyers, but does any law school teach a class on law and strategy?

The context is Richard Shell’s book Make the Rules or Your Rivals Will, which sounds interesting and important. Perhaps the O&M readership can help? The emerging field of non-market strategy (1, 2), led by people like David Baron, Vit Henisz, and the de Figueiredo brothers, studies how firms use not only law but also the regulatory system, bureaucracies, and other non-market features to achieve competitive advantage. The older economics literatures on public choice and rent-seeking of course deal with these issues as well, but typically from “society’s” point of view, rather than the firm’s. As for teaching, I see from a little Googling that John de Figueiredo is teaching law and strategy at Duke, and I suspect other members of the non-market strategy crowd housed at law schools do so as well. Suggestions for Gordon?

3 February 2012 at 10:53 am 2 comments

Request for Test Questions

| Peter Klein |

A friend writes:

I would very much appreciate if you help me in locating multiple choice exam questions for an “Organizations and Markets” course.

We are switching into a new teaching model and as part of that the course now has 400+ students, which make it necessary to have a least a part of automatic grading.

He has access to some publisher-provided testbanks from managerial economics textbooks, but these aren’t exactly on target. If you have any undergraduate- or MBA-level questions you’re willing to share, or leads on sources, please drop me a note. (Don’t post your questions in the comments — you never know what students might be reading this!)

13 January 2012 at 9:59 am 3 comments

Teaching in the 2010s

| Peter Klein |

A new University of Missouri policy. As the young people would say, this was so not a problem in my day:

2. Students may make audio or video recordings of course activity unless
specifically prohibited by the faculty member.

a. To foster a safe environment for learning, however, the redistribution of audio or video recordings of statements or comments from the course to individuals who are not students in the course is prohibited without the express permission of the faculty member and of any students who
are recorded. Unauthorized distribution of such materials is a violation of academic standards and may violate copyright laws and/or privacy rights. Students found to have violated this policy are subject to discipline in accordance with the provisions of Section 200.020 of the Collected
Rules and Regulations of the University of Missouri pertaining to student conduct matters. Faculty and staff found to have violated this policy are subject to discipline in accordance with applicable University policies.

21 December 2011 at 5:00 pm 3 comments

Theory Construction Bleg

| Peter Klein |

A friend writes:

I am trying to improve the theory writing skills of my doctoral students. . . . [In my field] we don’t often build complicated mathematical models; our theory tends to be more story telling. But nevertheless there is good and bad theory. I have found some papers that discuss how to write theory and what constitutes a theoretical contribution. But I really would like for you to recommend a book on the theory of theory construction. I want to assign chapters from it to my students as well as learn something myself. Since the principles of theory construction are generic, I don’t care what literature the author comes from . The insights will be useful regardless.

What would you suggest?

13 December 2011 at 11:14 pm 9 comments

Hotelling Model

| Peter Klein |

I often use the Hotelling model in class to illustrate the frequent clustering of firm and product characteristics. The example of firms locating on a street is boring, so I show the student’s Wired’s classic “Battle for Blue.” I think I’ll start using this one now (via Scott Rouse).

8 December 2011 at 9:21 pm 6 comments

The Institutional Revolution

| Peter Klein |

I’m very excited about Doug Allen’s forthcoming book The Institutional Revolution (University of Chicago Press). Trained by Yoram Barzel (and hence part of the Tree of Zvi), Doug is a leading contemporary scholar on property rights, transaction costs, contracting, and economic history. His work on agricultural contracting with Dean Lueck, including their 2002 book The Nature of the Farm, is a classic contribution to the economics literature on economic organization. He also has a very good introductory textbook. More information is at Doug’s informative (and amusing) website.

Here’s the cover blurb for the new book:

Few events in the history of humanity rival the Industrial Revolution. Following its onset in eighteenth-century Britain, sweeping changes in agriculture, manufacturing, transportation, and technology began to gain unstoppable momentum throughout Europe, North America, and eventually much of the world—with profound effects on socioeconomic and cultural conditions.

In The Institutional Revolution, Douglas W. Allen offers a thought-provoking account of another, quieter revolution that took place at the end of the eighteenth century and allowed for the full exploitation of the many new technological innovations. Fundamental to this shift were dramatic changes in institutions, or the rules that govern society, which reflected significant improvements in the ability to measure performance—whether of government officials, laborers, or naval officers—thereby reducing the role of nature and the hazards of variance in daily affairs. Along the way, Allen provides readers with a fascinating explanation of the critical roles played by seemingly bizarre institutions, from dueling to the purchase of one’s rank in the British Army.

Engagingly written, The Institutional Revolution traces the dramatic shift from premodern institutions based on patronage, purchase, and personal ties toward modern institutions based on standardization, merit, and wage labor—a shift which was crucial to the explosive economic growth of the Industrial Revolution.

Bonus: Here’s the syllabus from Doug’s course on the economics of property rights.

4 September 2011 at 9:43 pm 3 comments

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Our Recent Books

Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).
Peter G. Klein and Micheal E. Sykuta, eds., The Elgar Companion to Transaction Cost Economics (Edward Elgar, 2010).
Peter G. Klein, The Capitalist and the Entrepreneur: Essays on Organizations and Markets (Mises Institute, 2010).
Richard N. Langlois, The Dynamics of Industrial Capitalism: Schumpeter, Chandler, and the New Economy (Routledge, 2007).
Nicolai J. Foss, Strategy, Economic Organization, and the Knowledge Economy: The Coordination of Firms and Resources (Oxford University Press, 2005).
Raghu Garud, Arun Kumaraswamy, and Richard N. Langlois, eds., Managing in the Modular Age: Architectures, Networks and Organizations (Blackwell, 2003).
Nicolai J. Foss and Peter G. Klein, eds., Entrepreneurship and the Firm: Austrian Perspectives on Economic Organization (Elgar, 2002).
Nicolai J. Foss and Volker Mahnke, eds., Competence, Governance, and Entrepreneurship: Advances in Economic Strategy Research (Oxford, 2000).
Nicolai J. Foss and Paul L. Robertson, eds., Resources, Technology, and Strategy: Explorations in the Resource-based Perspective (Routledge, 2000).

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