Archive for August, 2006

Transgressing the Boundaries

| Peter Klein |

Our colleagues at have been reporting on the recent meeting of the American Sociological Association. I’ve enjoyed following the discussion and learning more about what our sociologically inclined brethren say about organizations. But only today did I learn that the theme of this year’s ASA meeting was “Great Divides: Transgressing Boundaries.” Where, I thought, have I heard that expression before? Then I remembered: the title of Alan Sokal’s famous hoax paper was “Transgressing the Boundaries: Towards a Transformative Hermeneutics of Quantum Gravity.”

I guess sociologists have a sense of humor after all.

30 August 2006 at 5:52 pm Leave a comment

Down With Spitzer

| Peter Klein |

Professor Bainbridge reviews Brooke Masters’s biography of Eliot Spitzer:

A fair reading of Eliot Spitzer’s record as presented by Masters suggests that he is both a genuine cause crusader and a career political hack. Spitzer has consistently used — and abused — his authority as New York attorney general to level sweeping accusations against a wide swath of American business. In some cases, like the proverbial stopped clock, he got it right. In a lot of cases, however, the much ballyhooed charges got a lot of press attention but then quietly went away. Indeed, on the few occasions he’s taken one of these high profile business cases to trial, he’s lost at least as often as he’s won. Instead, his record consists mainly of using media pressure to extort settlements from frightened executives.

Oh, and by the way, down with Giuliani too.

30 August 2006 at 11:48 am Leave a comment

Foucault and Economics

| Nicolai Foss |

Catallaxy has a post on “Foucault at the Sydney Institute.” More precisely, the post is about a presentation on Foucault by Foucault scholar, Clare O’Farrell:

She noted that Foucault’s ideas are rapidly growing in popularity and influence in a wide range of fields including the social sciences and the humanities, also nursing, health administration and education. Unfortunately this list coincides with a list of problem areas in my humble opinion, though I would not be rash enough to blame Foucault’s influence alone.

O’Farrell is then ” .. asked about Foucault’s economics … The reply did not address the specific issues but it seems that late in his life Foucault wrote a book (in French) on the rises of neoliberalism.”  (more…)

30 August 2006 at 11:29 am Leave a comment

Levels Issues I: Homogeneity and Heterogeneity

| Nicolai Foss |

Issues that relate to levels of analysis are some of the most vexing ones in social science, both theoretically and empirically.  I plan to post on levels issues over the coming week or so. Today’s topic: Homogeneity and heterogeneity across levels of analysis. (more…)

30 August 2006 at 10:25 am 1 comment

Measuring Organizational Form

| Peter Klein |

A reader, inspired by our discussion on organizational form, asks for references to empirical papers relating organizational form to performance. My suggestions:

1. The literature from the 1970s and 1980s on the “M-form hypothesis.” The classification scheme is described in Williamson and Bhargava, “Assessing and Classifying the Internal Control Apparatus of the Modern Corporation,” in Keith Cowling, ed., Market Structure and Corporate Behavior (London: Gray Mills, 1972). Empirical papers (you’ll have to Google them) include Armour and Teece (1978), Steer and Cable (1978), Teece (1981), Thompson (1981), Harris (1983), Cable and Dirrheimer (1983), Cable and Yasuki (1984), and Hill (1985). I’m currently working on a paper revisiting these data using some updated techniques.

2. The “diversification discount” literature in empirical corporate finance. This literature is about organizational form to the extent that organizational form is correlated with the number of industry segments, the distribution of activities across industries, or some measure of relatedness. (Among the many papers in this literature, the best known are Lang and Stulz, 1994; Berger and Ofek, 1995; Campa and Kedia, 2003, Chevalier, 2004). A few papers try to infer organizational form from past activities, such as prior acquisitions (Hubbard and Palia, 1999; Klein, 2001).

3. More direct measures include segment or subsidiary counts within a single industry (Klein and Saidenberg, 2005, Sanzhar, 2006), the ratio of administrative staff to total employees (Zhang, 2005), the number of positions reporting directly to the CEO (Rajan and Wulf, 2003), and the average number of management levels between the CEO and division managers (Rajan and Wulf, 2003).

This will all be discussed in more detail in the magnum opus.

30 August 2006 at 9:08 am 1 comment

Ken Lay Chair Still Available

| Peter Klein |

The University of Missouri is once again trying to fill the Kenneth L. Lay Chair in Economics. Drop me a line if you’re interested. But you’d better move fast

29 August 2006 at 9:02 am Leave a comment

The Corporation versus Tom Cruise

| Peter Klein |

Hollywood studios are standing up to eccentric, pampered stars like Tom Cruise and Lindsay Lohan. At last, says Professor Bainbridge, corporate studios are acting like corporations. “Once again, the public corporation and its norm of shareholder wealth maximization prove to be a force for good.” (Prof. B. is not a fan of stakeholder theory, if you didn’t know.)

On the other hand, if the dependent variable is individual film revenues, rather than film studio market value, the presence (and presumably behavior) of particular stars seems to have little impact on performance. So says Art DeVany (via Marginal Revolution).

28 August 2006 at 2:13 pm Leave a comment

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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).