Archive for August, 2007
Open-Source Political Campaigns
| Peter Klein |
Republican Ron Paul’s presidential campaign — a highly decentralized, small-budget, bottom-up effort — is like an open-source software project, writes Jay Roberts. As such, he notes, it has strengths and weaknesses compared to traditional modes of organzation.
Here are some earlier posts on the open-source model.
Schumpeter Podcast
| Peter Klein |
Bloomberg’s Tom Keene interviews Thomas McCraw on his new book Prophet of Innovation: Joseph Schumpeter and Creative Destruction. McCraw discusses Schumpeter’s relationship with Keynes, the impact of Schumpeter’s concept of the entrepreneur, the legacy of Alfred Chandler, and more.
I’ll Be the Terror Bird and You Can Be the Ostrich
| Steven Postrel |
In the July 2007 AMR, there is an interesting article by Matthew Cronin and Laurie Weingart that looks at “representational gaps” between differentiated specialists working together on problems like product development. They employ a Carnegie School approach and postulate that these gaps will tend to hinder joint problem solving. Different specialties conceptualize goals and constraints differently, they may have trouble communicating, and so on. (more…)
In the Journals
| Nicolai Foss |
What can possibly be better than to return after a long holiday (Euro-style — 2 weeks!!) and a long conference (the AoM; at 6 days definitely too long) to a stack of lovely journals that arrived in your pigeonhole while you were away? After clearing the administrative, department-head-specific tasks that had accumulated in my absence, I spent this afternoon browsing the journals. Here are some of those papers, special issues, etc. I found particularly interesting, and which may interest the O&M readership: (more…)
Did Solzhenitsyn Win the Cold War?
| Peter Klein |
[A]ny news account, biography or political history of the twentieth Century that talks about who “won” the Cold War — a complicated historical reality for sure — and does not include Solzhenitsyn with Reagan, Thatcher, and Pope John Paul II is not only incomplete but wrong. Solzhenitsyn was the inside man.
That is John Couretas, writing about Edward Ericson and Daniel Mahoney’s Solzhenitsyn Reader (ISI Books, 2006). Here is a longer review in the Occidental Quarterly. Here is editor Mahoney writing about the book.
Expensive Hayek Materials
| Peter Klein |
As Nicolai has reported, great economists’ autographs can be had for just a few dollars. This lot of Hayek artifacts — lecture notes, memoranda, autographed picture postcards, and the like — recently sold at auction for £3,400, according to Bonhams. Wonder what my stuff would go for?
Managing Through Incentives
| Nicolai Foss |
In my recent mention of various textbooks on organizational economics I somehow forgot to mention two excellent books on the subject. One is by former O&M guest blogger Joe Mahoney (which makes the omission the more embarrassing), Economic Foundations of Strategy (most of which turns out to be organizational economics). The other is the more managerially oriented Managing Through Incentives by Dwight Lee (my co-blogger’s former University of Georgia colleague) and Donald McKenzie. In addition to watching 300, I read through most of Managing Through Incentives on my flight back from the AoM in Philadelphia.
The book is light and engaging, but not exactly your average management book. Although clearly intended for a management audience it is probably too long and complicated to successfully serve that role. But it is excellent as an inspiration for teachers of organizational economics and organizational strategy. It abounds in nice examples and applications of, mainly, agency theory that can be very usefully applied in teaching. Or you may simply read it for fun. There is a humorous tone to much of the writing, it has appealing libertarian leanings (David Friedman and Robert Hessen are approvingly cited), and it features a nice chapter that takes issue with Alfie Kohn’s views on incentives. Highly recommended!
Sociology Blogs
| Peter Klein |
A nice list from Tina Guenther. I’m afraid to start reading them because I won’t understand them.
Thoughts on Entrepreneurship Research
| Peter Klein |
The Academy of Management Annual Meeting has been a great success. I’ll blog later about the pre-conference workshop on Austrian economics organized by Nicolai and myself and a few other sessions I participated in. For now I want to share some thoughts on entrepreneurship research drawn from my discussant’s remarks at a session featuring papers by Ciaran Heavey, Zeki Simsek, and Aidan Kelly (“Environmental Scanning and Corporate Entrepreneurship in SME”), Thomas Dalziel, Robert White, and Jonathan Arthurs (“The Influence of Top Management Team Human and Relational Capital on Corporate Entrepreneurship”), Frederic Delmar and Erik Wetter (“The Predictive Strength of Absorptive Capacity on New Firm Performance”), and Brent Ross and Randall Westgren (“The Dynamics of Rent Creation on a Strategic Landscape”). The first three are empirical papers explaining firms’ “entrepreneurial” activity in terms of manager and worker characteristics, while the last one uses an agent-based simulation model to examine the effects of the competitive environment on entrepreneurial behavior.
1. Concepts and definitions of entrepreneurship are all over the map, ranging from abstract notions of alertness, judgment, innovation, and what Ross and Westgren (borrowing from March and Simon, 1958) term “aspiration,” the level of certain returns a firm is willing to forgo for the prospect of uncertain future returns, to concrete measures of R&D expenditures, patent activity, new venture creation, and strategic reorganization. Within the corporate entrepreneurship literature there seems to be a consensus that a composite measure of innovation, venturing, and strategic renewal is appropriate. Of course, one can quibble about these as unique proxies for entrepreneurship because mundane, but equally “entrepreneurial,” activities (production, sales, marketing, and so on) are excluded. (more…)
Defending the Book
| Peter Klein |
Books teach more than videos, PowerPoint presentations, and similar substitutes, writes Alan Wall (via Mark Brady):
[H]owever central the computer might have become in our lives, in a literary education, the book remains our main technological tool, and none of us should be bullied into apologizing about the fact. The book represents one of the greatest technological innovations in history, and its fitness for its task, its versatility, its convenience, mean that it will surely continue well into the future. It is also a remarkably democratic technology, in educational terms. If a teacher is giving a power-point presentation, as we teachers are now being exhorted to do, at every available opportunity, then that teacher dictates what is available in the form of knowledge to everyone in the room. She or he presses the keys on the laptop that change whatever text or image is up there on the screen. She decides what I can see and when. But if I am a student and I have a book in front of me, then I can answer back. I can turn my own pages in my own good time, and remind myself of my own marginalia. “Excuse me, but I don’t agree. What you said about Dorothea in Chapter Five might well be true, but if you’d care to turn to Chapter Nine, I think you might find. . . .”
Many power-point demonstrations are mechanical and halting, because the presenter or lecturer spends much of the time staring at a laptop screen, instead of engaging with the audience. In terms of teaching literature, there is also a limit to the usefulness of any visual material. I can have a picture of Milton, or Charles I heading for the scaffold, or Cromwell displaying his legendary wartiness, but sooner or later we have to buckle down and read Paradise Lost.
Some of you are thinking, “That’s fine for literature, but not economics or sociology or management. Besides, nobody in these fields writes books anyway, just articles.” Still, training students (and colleagues) to grapple with ideas through long, sustained arguments, rather than short bullet points, is a worthy goal for scholars in all disciplines, especially management.
Would You Give Up Your Patents?
| Peter Klein |
“Would you give up your right to sue others for patent infringement in exchange for immunity from all patent lawsuits?” 78 percent of respondents in an informal web poll said yes.
This and much more is in Stephan Kinsella’s summary of anti-IP arguments.
Incoherence Is Bad For You but Good For Us
| Steven Postrel |
I just finished reading David Hull’s remarkable Science as a Process (1988), and was struck by one of his arguments. One of his claims (not his major thesis) is that while each scientist strives to make his own work coherent and internally consistent, overall progress only occurs because the views of every school of thought and every discipline are somewhat incoherent. (more…)
Tulip Mania: Not So Manic After All
| Peter Klein |
Popular and scholarly accounts of the Dutch tulip bubble of 1636-37 — including Robert Shiller’s — greatly exaggerate the magnitude of the crisis. It seems the tulipmania literature tends to rely not on primary sources or other authoritative documents but on popular pamphlets that appeared shortly after the crisis, designed to ridicule tulip-market participants.
So says Larry Neal, reviewing Anne Goldgar’s Tulipmania: Money, Honor, and Knowledge in the Dutch Golden Age for EH.Net. Goldgar’s careful archival research demonstrates, among other things, that tulip-market participants were not hapless dupes but experienced merchants who knew how to price risks and who were part of a small, close-knit community that relied on strong social ties to enforce good behavior. Indeed, tulip transactions were highly complicated ones governed by detailed contractual arrangements designed to protect both buyers and sellers. Goldgar “notes that the participants in the tulipmania largely worked out the terms of the broken contracts among themselves with little impact on the rest of the Dutch economy. . . . So the tulip trade in Holland revived and continued to prosper, as it does to this day.”
Firm Boundaries in the Japanese Auto Industry
| Peter Klein |
A new NBER paper by Sadao Nagaoka, Yoshihisa Noro, and Akira Takeishi, “Determinants of Firm Boundaries: Empirical Analysis of the Japanese Auto Industry from 1984 to 2002.”
We have assessed the determinants of the choice of integration, relational contracting (keiretsu sourcing) and market sourcing by seven Japanese automobile manufacturers (OEMs) with respect to 54 components in light of contract economics. Our major findings are the following. First, the specificity and interdependency of a component significantly promotes vertical integration over keiretsu and keiretsu over market, consistent with transaction cost economics. Second, interdependency is a more important consideration for the former choice than for the latter choice, and the reverse is the case for specificity. This suggests that the hold-up risk due to specific investment can be
often effectively controlled by a relational contracting based on keiretsu sourcing, while accommodating non-contractible design changes may often require vertical integration. Third, while higher testability of a component makes the effects of specificity significantly smaller, it also promotes the choice of keiretsu sourcing over market sourcing. One interpretation of this last result is that while higher testability improves the contractibility of the component with high specificity, it simultaneously enhances the advantage of keiretsu sourcing since it provides more opportunities for the supplier to explore new information for a collaborative exploitation with an OEM.
Should B-School Students Pay More?
| Peter Klein |
Business professors earn more than their faculty counterparts in history or music. Why shouldn’t business majors pay higher tuition than history or music majors?
That’s the reasoning many US public universities are employing, reports this New York Times piece. Undergraduates majoring in business, engineering, journalism, and other professional programs are starting to face tuition premia. Faculty salaries vary, by discipline, according to supply and demand (at least within limits set by the university cartel), and tuition and fees are starting to adjust to match. An interesting move for institutions that have long resisted using the price mechanism to allocate resources among and within operating units.
Update: See Brian McCann’s commentary here.
O&M Gala Reception in Philadelphia
| Peter Klein |
Those of you coming to Philadelphia for the Academy of Management Annual Meeting are invited to a gala reception co-hosted by O&M and orgtheory.net. Well, um, not really. Actually Nicolai, Teppo Felin, Brayden King and I will gather at the bar in the Marriott hotel Sunday at 6:30pm 8:00pm to have a few drinks and compare hit counts. All current and former guest bloggers, regular and occasional commentators, lurkers, and other curious parties are invited to join us (Dutch treat).
Update: Note the corrected time above.
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