Archive for November, 2006

Gourlay on Tacit Knowledge

| Peter Klein |

More on tacit knowledge: Steven Gourlay takes on Nonaka and Takeuchi in the current issue of the Journal of Management Studies (vo. 43, November 2006):

Nonaka’s proposition that knowledge is created through the interaction of tacit and explicit knowledge involving four modes of knowledge conversion is flawed. Three of the modes appear plausible but none are supported by evidence that cannot be explained more simply. The conceptual framework omits inherently tacit knowledge, and uses a radically subjective definition of knowledge: knowledge is in effect created by managers. A new framework is proposed suggesting that different kinds of knowledge are created by different kinds of behaviour. Following Dewey, non-reflectional behaviour is distinguished from reflective behaviour, the former being associated with tacit knowledge, and the latter with explicit knowledge. Some of the implications for academic and managerial practice are considered.

30 November 2006 at 4:57 pm Leave a comment

Travails of Patricia Russo

| Peter Klein |

As a certified Francophile I can make fun of the French without getting in trouble. So I enjoyed a segment on NPR this morning (can’t find it online, unfortunately) about Alcatel CEO Patricia Russo, the only American to head a major French company. Russo, as you may have heard, has caused a stir by refusing to learn French. The NPR segment featured a Russo impersonator being tutored in French culture. Sample:

Tutor: Let us try some word association. When I say “Jerry Lewis,” you say. . . .
Russo: Idiot.
Tutor: Mais non! In France, we say, “genius.” Now, when I say “McDonald’s,” you say. . . .
Russo: French fries.
Tutor: Non! You say, “Hellhole”! Now, “Iraq.”
Russo: Quagmire.
Tutor: Bon! We agree on something!

30 November 2006 at 10:34 am Leave a comment

Management by the Numbers

| Peter Klein |

Many principles of “scientific management,” such as Harold Geneen’s concept of “management by the numbers,” are considered outdated, remnants of the Big Science era of the 1960s and early 1970s (the Cold War, the Apollo Project, conglomerates, etc.). Today’s management theorists and practitioners favor more holistic, less quantitative, and presumably more “dynamic” approaches. Organizations should be flexible, “lean and mean,” and focused on people and processes, not numbers.

The newest issue of Strategic Organization (4:4, November 2006) features a paper challenging this conventional wisdom. In “The Power of Numbers in Strategizing,” Jean-Louis Denis, Ann Langley, and Linda Rouleau defend the use of quantitative analysis.

This article draws on a detailed case study of a complex decision process in a public healthcare system to consider the role and potential power of numbers in strategizing. Because of their association with precision and accuracy, numbers may seem at first sight to be unlikely tools for decision making in contexts characterized by ambiguous goals and diffuse authority. Yet in the case described in this article, managers successfully mobilized a system of numbers to make an extremely controversial strategic decision. . . . Though contested, numbers can under certain conditions come to acquire and provide authority in organizations where power is diffuse. This is most likely when the number systems enable the reconciliation of diverse values and interests, when they are embedded in shared systems of meaning, and when they are coupled with and activated by particular micro-practices that support the legitimacy of their promoters as disinterested advocates for the collective good.

Despite references to “shared systems of meaning,” numbers as social constructs, power relations, “pluralism,” and the like — which might seem to warrant inclusion in our Pomo Periscope series — the paper provides a useful overview of the basic issues and some interesting case discussion.

NB: Watch out for some numbers.

30 November 2006 at 10:17 am 2 comments

Should Business Schools Be Like Medical Schools?

| Peter Klein |

Fabio Rojas at suggests that business schools require more field work. You wouldn’t trust a doctor who graduated from medical school without working on a real patient, so why hire an MBA student who hasn’t performed any “rotations,” in companies or in the business school itself?

Of course, as Fabio acknowledges, this model doesn’t work if business education is primarily a signal, a la Spence. On the other hand, gradute school seems a highly costly and inefficient signaling mechanism — why not just give prospective employees an IQ test? Or, if social networking is important, put students in one-year MBA programs or even shorter mini-programs with tough admission requirements and a lot of social events with alumni and local executives. A much cheaper signaling + networking mechanism, presumably. Any thoughts?

30 November 2006 at 1:25 am 8 comments

ETP: Special Issue on Family Firms

| Peter Klein |

The latest issue of Entrepreneurship: Theory and Practice (30:6, November 2006) is a “Special Issue on the Theory of the Family Enterprise.” Plenty of fodder for the ongoing discussion of family firms. Here’s the table of contents: (more…)

29 November 2006 at 4:25 pm Leave a comment

Foss, Klein, Kor, and Mahoney on Entrepreneurship

| Nicolai Foss |

As readers of O&M will know, Peter and I are highly sympathetic to subjectivist economics, mainly Austrian economics, and both take an interest in entrepreneurship and the theory of the firm. Yasemin Kor is an expert on the RBV and top management, and former O&M guest blogger Joe Mahoney is, of course, an expert on the RBV and the theory of the firm. This makes, we think, for an excellent author team. Thus, we have collaborated in writing a paper, “Entrepreneurship, Subjectivism, and the Resource-based View: Towards a New Synthesis.” Here is the abstract:

This paper maintains that the consistent application of subjectivism helps to reconcile contemporary entrepreneurship theory with strategic management research in general, and the resource-based view in particular. The paper synthesizes theoretical insights from Austrian economics and Penrose’s (1959) resources approach, arguing that entrepreneurship is inherently subjective and firm specific. This new synthesis describes how entrepreneurship is manifested in teams, and is driven by both heterogeneity of managerial mental models and shared team experiences.


29 November 2006 at 2:42 pm Leave a comment

We Always Suspected It — Part II

| Nicolai Foss |

As we recently noted O&M has had the dubious honour of being included in the set of “heterodox newslettes and weblogs” along with blogs such as “Actuel Marx.” But it gets worse!! O&M has just received mention in Accounts: ASA Economic Sociology Section Newsletter vol. 6, issue 1, Fall 2006 (on p.15). We tremble when we consider what may come next. Honorable mention on webdeleuze? Endorsements from Bob Sutton?

HT to Teppo.

29 November 2006 at 2:24 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).