9-11, Strategic Management, and Public Policy

11 September 2007 at 7:10 pm Leave a comment

| David Hoopes |

On this sad anniversary I find myself thinking about public policy and the field of strategic management. After six years, how well integrated are our intelligence agencies? A few management and strategic management scholars probably have a lot to say about such issues. Many more might struggle to apply what they work on to this problem or any other policy issue.

A few years back Bill Ouchi was commended by a panel at an Academy of Management meeting. Bill had long since forsaken traditional academic concerns and devoted his considerable intellect to public policy. His main target: public schools. Ouchi’s work has had a profound impact on a number of large and at one time largely dysfunctional school districts. Portions of the session were published in The Academy of Management Executive (recently renamed). I missed the session, but the account in AME had Bill’s talk followed by a number of notable management scholars opining about other applications of management research to public policy. I’ve met a few of the speakers. They are very nice people who are genuinely concerned about the field of management and about how we might be of service to a constituency beyond our students and the business world. Nevertheless, most of what these talented, hardworking, and successful scholars had to say about the field of management and its possible applications to public policy seemed far removed from a direct application to policy questions.

Like much of the work in strategy, management, and economics, most of what was mentioned was pretty abstract and rather difficult to connect to any of the real human issues of the day. In a case or two, I thought the speaker/author was completely detached from any tangible reality. Highly abstract concepts long since removed from their real-life inspirations. More than a few will disagree with me on the above. Yet, in general, in management and strategy research, unlike economics, little has emerged of substantial use in public decision making for a while. Many believe economics has not helped though I think this is jealous fantasizing. And, it doesn’t really matter. With a few exceptions, the many fields in and overlapping with management have a very low profile outside of the private sector (where I think many in management and strategyhave made substantial contributions). There are a few reasons why conversations captured by AME and others like it in management and strategy leave me cold. The one I have in mind relates to a recent conversation here about empirical work. Nicolai wonders if we overly constrain the data we use by the need to connect the data to theory. Wouldn’t we be better off finding ways to be closer to the action? I think this is very true. We need not give up on inferential statistics and modeling. Yet, many researchers in strategy would benefit from thinking a bit more about the practical problems public and private organizations face. A big problem in strategy and management research is that little of it is inspired by observation. As an interesting juxtaposition, think about Coase, Demsetz, or Klein (even Williamson!). In strategy (as in management in general) a great deal of research builds on previous research (a good thing). But, after a short while, everyone forgets just what it was in organizations or industries they were looking at. So, we get detailed empirical models and extensive discussions (conceptual work?! Sorry Nicolai) no longer thought of in terms of behavior.

Although there is a good deal of work in other fields equally guilty (economics, operations research) I don’t think that is much of an excuse for our having drifted away from explaining actual events. Thus, instead of looking at how our theories and models might be smashed into some policy question we would be more effective looking at the policy issues and trying to solve them with what we know. For example, after 9/11 everyone was talking about how the different intelligence agencies were ineffective at sharing important information. I thought most discussions grossly oversimplified the problem. There are five million people in the Department of Defense alone. There are 17 different intelligence agencies. Adding a layer of hierarchy and sending memos to encourage information sharing will take a while to pay dividends. Coming up with a structural solution to a series of bad decisions is a very messy thing. My guess is that Danny Miller could help out with the problems the department of Homeland Security has with integration and coordination significantly more than the overwhelming majority of consultants and career civil servants. Even though Danny has done his share of purely theoretical and large sample statistical studies, he has very clear ideas about how to manage organizations and some of the problems implicit in changing large organizations. Do you think they would mind that he is Canadian? So, I’m not suggesting we give up on models and non-qualitative empirical work. However, I do think that if we think about our work in terms of what people do, how they behave, what our work means to organization-life, we would be much better equipped to join important policy discussions that could use our help.

Entry filed under: Former Guest Bloggers, Institutions, Management Theory, Strategic Management.

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Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).
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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).
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