Organizations and Markets

| Randy Westgren |

I carried a few articles along with me to punctuate the tedium of consuming as many Belgian beers as one can, in tacit competition with 24 20-year olds. One of these is “The Sociology of Markets” by Neil Fligstein and Luke Dauter, from the 2007 Annual Review of Sociology (ungated version here). Those of you who throw brickbats at sociology will find this an interesting read, as Fligstein and Dauter describe the three major camps and a few lesser cabals as a “cacophony of voices” talking past each other. For others, the piece is a useful entry point for students to see the clear expositions of the development of network theory (i.e. Burt, White, and Granovetter) and institutional theory (i.e. DiMaggio and Powell, Durkheim, and Fligstein, himself). They also review the performativity school — unfortunately named and unfortunately constituted. They tie the review to March and Simon, Williamson, and some of the corporate governance literature, and discuss the roles efficiency plays in the alternative conceptions of markets.There is also some useful allusion to equilibrium and disequilibrium conceptions of markets. This is worth a read, or at least, worth making your grad students read. The entree to seminal literature that undergirds current articles in the management journals is useful.

I’d fault the review only for its insistence on trying to make population ecology appear to be a useful piece of sociology for the study of markets, though the authors admit it really isn’t true. Pop ecology should, like an overly large litter of unwanted kittens, be placed in a burlap sack with a large stone and cast into a deep river.

| Randy Westgren |

I am sorry to have been lax in fulfilling my (implicit) obligations as a guest blogger. I have been in Belgium for about 36 hours, centered at the Katholieke Universiteit Leuven, with 2 dozen undergraduates at the beginning of a two-week study tour which follows on from a semester-long course in the spring semester. The nonpecuniary transaction costs for getting myself from a Midwest university town to another university town 1/3 of the world away have caused me to self-medicate with several of the excellent Trappist brews from Flanders. As a consequence, (a) my attitude has improved greatly and (b) my productivity has plummeted. There are a couple of posts that are near the end of gestation and will follow soon. Alas, tomorrow (Thursday) will be a Brussels day — McDonald’s EU HQ, US Trade Rep assigned to the Mission, the DG for EU agricultural policy, and a reception at the Flemish industrialists’ club, De Warande. So, you’ll have to wait another day. . . .

P.S. Don’t tell anyone how hard professors work.

| 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.

| Randy Westgren |

One of the profoundly valuable benefits of recently giving up an administrator’s position is that I have time to read. I sat down with a stack of journals, biographies, fiction, and cookbooks that has grown since last summer. In the first pass through the stack, I found a couple pieces that echo one of the themes of this blog: how our training affects our perceptions of theory, facts, and phenomena.

One piece is an article by two young, interesting colleagues, Brianna and Arran Caza, who write about “Positive Organizational Scholarship” (POS) in the March 2008 issue of the Journal of Management Inquiry . They argue that the bulk of research on organizations, as highlighted by the top-cited articles in three years of ASQ and AMJ, begin with negative framing of organizational issues — what Brianna and Arran call a deficit model approach. They propose the need for research based on positive framing — not exclusively — as necessary to advance theory and practice in the organizational sciences. The POS paradigm is unabashedly post-modern (up periscope!), but it serves us all when alternative lenses are trained on issues that we all observe from our particular perspectives. (more…)

| Peter Klein |

It’s a pleasure to welcome Randy Westgren as our newest guest blogger. Randy is Professor of Business Administration and Professor of Agricultural and Consumer Economics at the University of Illinois at Urbana-Champaign. A specialist in the economic organization of food sector, Randy’s interests span strategic management, strategic marketing, governance, Austrian and evolutionary economics, supply-chain management, and much more. Randy describes himself as someone who “switches from econ to management and back and forth” and “studies such peculiar things as agent-based modeling, cooperative member commitment, the foodie culture, and biotechnology supply chains.” In explaining his diverse set of interests, Randy quotes this passage from Ralph Waldo Emerson (”Self-Reliance,” from Essays: First Series, 1841):

There will be an agreement in whatever variety of actions, so they be each honest and natural in their hour. For of one will, the actions will be harmonious, however unlike they seem. These varieties are lost sight of at a little distance, at a little height of thought. One tendency unites them all. The voyage of the best ship is a zigzag line of a hundred tacks. See the line from a sufficient distance, and it straightens itself to the average tendency. Your genuine action will explain itself, and will explain your other genuine actions.

Randy has been one of our regular readers, and frequent commentators, from the beginning, showing that he is also a discriminating consumer of blogiana. Welcome, Randy!