Can We Tackle the Big Problems?

29 December 2009 at 9:51 am 3 comments

| Peter Klein |

Russ Coff, Emory University strategy professor extraordinaire and former O&M guest blogger, sends this special report:

I’m reporting live (but jet lagged) from the Israel Strategy Conference that Peter had mentioned earlier. A theme among the keynote speakers (particularly Jay Barney and Anita McGahan) has been how we can apply our theories to tackle more meaningful problems.

Jay delivered a tearful account of his personal efforts to apply resource based theory to help a small village in Bolivia. There, the women wove clothing (scarves, hats, etc.)  and carried them each week to a larger town where they joined women from other villages to sell identical goods. A variety of factors conspired to reinforce the  village’s continued poverty (inefficient production, low quality, and undifferentiated products). Jay’s MBA students quickly concluded the only rare resource the village had was access to them. They devised a plan to produce grey scarves with a red “O” to sell on OSU’s campus. While the project has met with some success, it is fair to say that a major lesson for Jay has been how hard it was.  I cannot here go into all of the problems they experienced but they included quality, a lack of understanding of what would add value to their customer, and unexpected norms for work, effort and incentives. Assumptions from the west could not be easily applied in Bolivia.

Anita described a host of world problems on the horizon including the end of oil, healthcare, demographic shifts, distribution of wealth and resources, and economic volatility. While these are daunting problems, in her view, it will be possible to “innovate our way out.” As researchers focused on strategy, innovation, and entrepreneurship, we ought to have something to say about solutions — especially when compared to other approaches like pure economics that typically have a narrower understanding of these problems. Anita’s message is to continue our research but to consider these problems as possible opportunities.

Common to both Jay and Anita’s approaches is to highlight these problems to students and ask them to think creatively about solutions. In both cases, it was a challenge to apply our extant theories to solve the “big” problems. Both would also conclude that there are no alternative approaches that seem better suited to address these challenges.

I hope to rise to the challenges they pose. However this is a tall order for me personally. Beyond injecting these problems into the classroom, what opportunities do you see for applying your existing research to address such big picture issues?

Entry filed under: Conferences, Innovation, Strategic Management.

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3 Comments Add your own

  • 1. David Hoopes  |  31 December 2009 at 1:11 am

    As usual I’ll rifle off a comment that might be more effectively done with some deliberation (of course if i sit around and thought about it the odds of finishing decline).

    I would point Bill Ouchi out as one who has successfully applied scholarship to policy. Perhaps I’ve commented on this somewhere else. But, Bill’s example is excellent. Bill applied what he considered to be one of the real truths of organization, that all things considered decentralization is better than decentralization, to the problem of public schools. He spent a great deal of time in the field examining school districts. Then spent a great deal of time applying the blend of what he thought he would find and what he found in his empirical examinations to help a number of large school districts greatly improve.

    Bill was quite focused on the problem he wanted to address (public primary education). He had some clear ideas going in (see the movement from Theory Z to The M-Form Society). He did a great deal of field work to see what was happening. And finally, found somehow to apply this.

    I think my previous comments on this at this site had to do with the pathetic comments and talks Bill’s efforts elicited from the academy. I guess my conclusion to this little ramble will dance in that same area but I’ll try to be more positive.

    We can tackle big problems. First, you have to do it. Mostly our discussions seem to involve a lot of hand-wringing. But, it seems to me you have to make the big problem the center of your attention. Second, going into it you should have a pretty clear theory of what’s going on. This means you’ve examined the issue. It has something to do with your expertise. You have an idea of how to examine events to boil things down to some prescriptions.

    If you hit success like Bill. Great. He kept plugging away. If you feel you fall short like Jay. You keep plugging away. I’m not sure how Jay picked his issue. Looks a bit like serendipity. Either way, it seems to me the central issue is to make attacking a “big problem” central issue of your work.

    The complex network of social and political machinations seems to be an important obstacle. So, perhaps the final consideration is what levels of analysis are most useful for you study and your problem solving? Are you analyzing a problem that exploits waht you’ve learned in your career? Do you have the tools to analyze the problem? Can the problem you want to address be addressed without an act of congress?

    It’s cool to see Jay give it a shot.

    I think we have a lot we can do to help out. But, I think the biggest issue is how willing we are to set other things aside and address these issues as a top priority. If you’re waiting for the President to give you a call it might be a wait.

  • 2. David Hoopes  |  7 January 2010 at 6:59 pm

    I was gonna say, “Yes, we can!” But, somehow……………..

    As I pondered this “issue” one theme emerged that has been gnawing at me since. ‘

    The participants at this blog, and perhaps our goodie-two-shoes twin, are especially well poised to inform public policy. Not so much presenting new ideas. But, articulating old ideas in new ways (or maybe just saying it over and over again).

    My previous rambling noted Bill Ouchi’s belief that all else equal decentralized organizations will be more effective and efficient than centralized. Of course, there are many examples when all else is not equal. Often a firm needs to coordinate horizontally and the involved units can have little to no autonomy. For example, Boeing is large, and even if they decentralize as much as they possibly can, they still will be a large somewhat centralized organization.

    Nothing new so far.

    Many Americans view large business organizations with great skepticism. Some feel that large U.S. businesses are the root of most of the world’s evils. After the financial problems in 2008 many in the press hailed the end of capitalism or the end of “corporate” capitalism. [Not just liberals in this camp either right?]

    However, the solution we have been offered recently is the large government organization. There are many faulty assumptions in the pro big-government policies. The Austrian economists here know these better than I do I would suppose. A few important assumptions to let-the-government help us solutions:

    1) People in government do not suffer the moral foibles that “capitalists” do. So, corporate capitalists are greedy and selfish while people in government are not.
    2) If you give a government department money it will solve the problems it is asked to solve.
    3) [This seems a bit less axiomatic to but is at the heart of problems with policy solutions currently popular with Democratic leaders.] People who have attained wealth do not deserve it. People who are less wealthy are so because of some unfairness.


    The central policy issue of our time revolves around incentives, coordinated action, and bounded rationality.

    This is what the argument against large government is about.

    I not only suggest that we CAN tackle big policy problems. I propose that those of us at the intersection or organizational economics, strategic management, and organization theory that incorporates individuals (read that as you will that’s as nicely as i can say it) are uniquely qualified to tackle these problems.

    I realize my views on the current solutions to “the health care problem” are not shared by all. However, we have the language and have considered the central issues.

    Do you think a large centralized health care system will work in the U.S.? Some of us may be happy with just that in their countries.

    I think there is no chance that this will be efficient or effective. The organizational problems will cripple it. The money will be wasted. I think there is too much information, weak incentives, and decision making that is far from the transaction points.

  • 3. Peter Klein  |  7 January 2010 at 10:41 pm

    Dave, may I immodestly suggest this paper as one that addresses some of your issues? BTW you should expand your comment into a paper, maybe a SO! follow-up to ours?

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