Author Archive
Dynamic Capabilities: The Emperor’s New Clothes?
| Nicolai Foss |
One of the most delightful innovations in the recent history of management journals is the “SO!apbox Editorial Essays” in Strategic Organization. These are short and pointed “opinion pieces” by thought leaders, designed to provoke and raise debate. (Interestingly, these essays seem to be the most cited contributions to the journal).
The February issue of Strategic Organization contains an excellent critique of the dynamic capabilities view (DCV) — launched in the beginning of the 1990s by David Teece (however, the much cited Teece, Pisano, and Shuen paper wasn’t published until 1997) — by Richard Arend and Phil Bromiley, “Assessing the Dynamic Capabilities View: Spare Change, Anyone?” As Arend and Bromiley notes the DCV is the “new touchstone firm-based performance-focused theory” (p. 75).
Some of their critiques have been around for some time, but this is the first systematic compilation of these critiques, and the authors add quite a number of novel critical points. Inspired by Larry Laudan’s work in the theory of science, Arend and Bromiley assess the “ability of the DCV to explain successful change with logical consistency, conceptual clarity and empirical rigor” (p. 75). (more…)
The Danish Mortgage System to the Rescue?
| Nicolai Foss |
As many O&M readers will remember, George Soros recommended a “Danish fix” for the US mortgage crisis. The American Enterprise Institute is sponsoring a whole-day event today on the related, if more cautious, topic, “Can Elements of the Danish Mortgage System Fix Mortgage Securitization?” Here is the wiki on the Danish mortgage system.
New Friedman Book
| Nicolai Foss |
K. Puttaswamaiah has edited Milton Friedman, Nobel Monetary Economist: A Review of his Theories and Policies (Isle Publishing Co., 2009). I only know the names of a few of the contributors, but I do recognize a certain Samuelson, who recently “remembered” Friedrich Hayek in a scandalously superficial and misleading note published in the pages of the Journal of Economic Organization and Behavior. Ones hopes that Friedman isn’t up for a similar treatment, but perhaps he is: One of the chapters in the volume is titled, “Milton Friedman: A Late and Overestimated Master of Sophistry.”
Management Innovation Conference
| Nicolai Foss |
There are reasons to think that changes in organization designs, administrative systems, and managerial technologies are important sources of firm-level value creation. It is also quite conceivable that changes that amount to innovations in organization design, etc. may give rise to sustained competitive advantages. Business history, popular management writing, and some academic papers offer examples, notably the introduction of the M-form, TQM, the Oticon spaghetti organization, the HRM practices of Lincoln Electric, and so on. And yet, very little systematic, research-based knowledge exists about such “management innovation.” The first conceptual and theoretical treatment of management innovation as a subject deserving of focused inquiry is Julian Birkinshaw and Michael Mol’s paper in the Academy of Management Review — which was published in 2008!
To further research on management innovation, the Center for Strategic Management and Globalization at the Copenhagen Business School is arranging a conference on management innovation later this year (3-4 September 2009). Keynote speeches will be delivered by Julian Birkinshaw, Ed Zajac and Richard Burton. Details on the conference homepage (version 1.0). Submit a paper!
Oliver Hart: Hon Doc at CBS — and O&M Reader
| Nicolai Foss |
Every year in April the Copenhagen Business School confers honorary doctorates to prominent management theorists, finance scholars, economists, sociologists, etc. Oliver Williamson, James March, and Jay Barney have all received honorary doctorates. This year’s honorary doctors included no less than six scholars, of which one should be familiar to O&M readers, namely Professor Oliver Hart of Harvard University (Hart’s Harvard site is currently down — too many hits? ;-)). Hart is, of course, one of the authors of the seminal 1986 paper, “The Costs and Benefits of Ownership,” and the author of numerous other papers that build on this paper. His property-rights approach to the theory of the firm (really, the theory of the boundaries of the firm) is the dominant approach in economics.
Although I have met Hart on previous occasions, I didn’t expect him to recognize me. However, not only did he recognize me, he also greeted me with “You blog a lot!!” (I confess I didn’t disclose that it is Peter who blogs a lot ;-)). It turned out that Hart was well aware of O&M and apparently also likes it!
Austrian Economics and Strategic Management
| Nicolai Foss |
In terms of direct influence, the impact of Austrian economics (AE) on strategic management is fairly limited (e.g., Jacobson, 1992; Young et al., 1996; Foss et al., 2008). Different kinds of industrial economics, namely the SCP approach, the Chicago-UCLA school, and game theoretical industrial economics, have clearly been stronger influences. However, the points of contact and even overlap between the mainstream of strategic management and AE are many, and AE has the potential to contribute to the further development of the field. (more…)
Nifty Little Nuggets for Improving Your Impact
| Nicolai Foss |
OK — since we are apparently doing the ligther posts currently (cf. Lasse’s recent post, the Mahoney and Pitelis list, etc.), here’s some potentially useful (?), hands-on advice on how to improve your academic impact.
Academic impact is obviously a multi-dimensional construct. While often measured simply in terms of publications in high-ranking journals, many universities now increasingly look at citation counts (i.e., SSCI numbers). This makes considerable sense. While an uncited paper in, for example, the Academy of Management Journal (and such exist) may have some social value (after all, it does certify the author as a competent researcher), there is no social value in terms of broader knowledge dissemination (and the results thereof). While the US seems to have the lead (in social science) when it comes to letting citation counts matter, the European scene is rapidly changing towards an increasing emphasis on citation figures. After all, these figures can be easily gathered, compared, etc. by research and university bureaucrats, looking for new areas where they can meddle in a low-cost manner.
Here are some simple ideas that may help to increase your citation numbers: (more…)
Case Studies and Causal Inference
| Nicolai Foss |
Can case studies — in the extreme: a study of a single case — play any systematic role in causal inference? If so, how? These are the questions posed in a paper by brilliant LSE mathematical sociologist, Peter Abell, forthcoming in the European Sociological Review. The paper is essentially a summary of Abell’s work over more than two decades with building stronger foundations for “qualitative” or “case study” research (a more comprehensive statement can be found in the “A Case for Cases” paper on Abell’s site).
Of course, in the standard statistical interpretation of causal inference, N should be large, and certainly not equal to 1. And most social scientists believe there is no explanation without generalization (an issue discussed at length by Popper, Dray, Collingwood, and others in the philosophy of history as well as by more recent social scientists such as Ragin and Goldthorpe — and James March (here)), so causal inference is predicated on generalization and comparative method. (more…)
Copula Functions and the Current Crisis
| Nicolai Foss |
Forget about effective demand failures, malinvestments caused by expansionary monetary policy, or even political regulation of the US housing market: The true bete noire in the current meltdown is a specific copula function (here is the Wiki on copulas), or more precisely David Li’s application of it to the modeling of default correlation (here). Or, so Wired claims. Writer Felix Salmon is pretty explicit in his condemnation of Li’s approach:
It was a brilliant simplification of an intractable problem. And Li didn’t just radically dumb down the difficulty of working out correlations; he decided not to even bother trying to map and calculate all the nearly infinite relationships between the various loans that made up a pool. What happens when the number of pool members increases or when you mix negative correlations with positive ones? Never mind all that, he said. The only thing that matters is the final correlation number — one clean, simple, all-sufficient figure that sums up everything.
Apparently, major finance academics — like Darrell Duffie — had warned against the application of Li’s work.
I am by no means competent to pass any judgment on Salmon’s story. I merely recommend it as a highly interesting read — and wonder how long it will take before the performativity-in-financial-markets-crowd picks it up. Actually, it may rather support the Felin & Foss argument that false social constructions are eventually weeded out (here).
Relations Between Micro and Macro Levels
| Nicolai Foss |
Levels issues, micro-foundations, methodological individualism and collectivism, etc. have long been O&M favorites (e.g., here, here, here, and here). While the O&M bloggers are card-carrying methodological individualists, we also (like all other economists and management scholars) acknowledge that macro matters, in the sense that it may be meaningful to think of variables placed at macro levels exerting an influence on decisions made at micro variables (as in the Coleman diagram; see here). The question is, what is the nature of this “relation”? (more…)
Signs of Getting Older
| Nicolai Foss |
My hair is thinning, I can still run those 4 kms in 18 mins or less, but no so easily anymore, I find myself reading obituarities — and here are my selected papers, fresh from the press, on Knowledge, Economic Organization, and Property Rights. I take solace in the fact that these are only selected rather than collected papers. (more…)
New Foss Thought Piece
| Nicolai Foss |
I blatantly confess that I enjoy writing what are known in academic putdown-ese as “essays” or “thought pieces,” that is, “conceptual” papers that do not construct a theoretical model, and/or engage in empirical analysis. My most recent product in this genre is inelegantly titled, “Alternative Research Strategies in the Knowledge Movement: From Macro Bias to Micro-Foundations and Multi-level Explanation.” It is an invited paper for European Management Review (the other invited contributors are David Teece, Bronwyn Hall and Will Mitchell). Mail me at njf.smg@cbs.dk if you want a copy. Here is the abstract:
The emergence over the last two decades or so of “knowledge” as an important part of the explanatory structure of management research is an intellectual breakthrough that is comparable in terms of its transforming impact to the behavioral revolution of the 1960s. A veritable “knowledge movement” has emerged that spans several fields in management. I take stock on alternative research strategies with that movement, distinguishing between “capabilities first,” “networks first,” and “individuals first” strategies. Reasons are given why more research attention need to be allocated to the latter strategy if the knowledge movement is to continue making progress, but that the aim should ultimately be to reach towards multi-level research that combines aggregate constructs with top-down processes and bottom-up processes.
Professorship in Strategy and International Management
| Nicolai Foss |
The Center for Strategic Management and Globalization at the Copenhagen Business School invites applications for this professorship.
Contact me at njf.smg@cbs.dk if you want more info. The deadline is February 1.
New Book on Knowledge Governance
| Nicolai Foss |
I and various other people, notably Prof. Anna Grandori (U. Bocconi), who came up with the term, have been pushing the notion of “knowledge governance” over the last five years or so.
The organizing knowledge governance idea is that processes of knowledge use, creation, retention, integration, and sharing can be influenced towards desired levels through the deployment of administrative apparatus. “Knowledge governance” signifies that this field is taken up with the interplay between knowledge processes and organizational processes. It represents the coalescing of a number of parallel developments, such as the convergence of organizational economics (i.e., transaction cost economics, property rights theory and agency theory) and the knowledge-based view in strategic management, and the emerging interface between knowledge management and perspectives from organization theory and organizational behavior. Here is a Primer on knowledge governance.
With Professor Snejina Michailova of the University of Auckland, I have edited Knowledge Governance: Processes and Perspectives, which was published this week by Oxford University Press. It features a number key contributors to the emerging knowledge governance field, including Anna Grandori, Jackson Nickerson, Todd Zenger, Linda Argote, and Teppo Felin. (more…)
Wernerfelt (1984)
| Nicolai Foss |
Birger Wernerfelt’s 1984 paper in the Strategic Management Journal, “A Resource-based Theory of the Firm,” is conventionally considered one of the founding contributions to the RBV, on par with Jay Barney’s 1986 and 1991 papers. The paper has more than 6,000 hits on Google Scholar (which probably translates into more than a thousand on Web of Science), while Barney’s 1991 paper has more than 10,000. Although the underlying conceptualization of the firm is similar, the papers address different dependent variables, namely diversification and growth (Wernerfelt) and sustained competitive advantage (Barney) (a point missed by those who indiscriminately cite both papers, usually in the context of competitive advantage).
In a recent paper in Organization Studies, “The Development of the Resource-based View: Reflections from Birger Wernerfelt,” Andy Lockett, Rory P. O’Shea, and Mike Wright draw on conversations with Wernerfelt to tell the story of the 1984 paper. (more…)
Micro-Foundations at the Rotterdam School of Management
| Nicolai Foss |
We have blogged extensively on “micro-foundations” here on O&M (particularly in those Golden Days of O&M when the present blogger was more active). The micro-foundations theme seems to be gaining a lot of ground in management recently. About two years ago I had a paper on the subject rejected from a leading management journal because the reviewers and the editor argued that the micro-foundations theme was essentially non-controversial and scholars handled it in a pragmatic manner — i.e., there was no need to raise it as an issue. That same editor, I hear, is now actively talking about the pressing need for micro-foundations in management ;-) This reflects an increasingly widespread discourse on the subject. At the recent Strategic Management Society Conference in Köln micro-foundations were explicitly discussed in several of the PDWs, in David Teece’s keynote speech, in the keynote panel that I participated in, and in lots of paper sessions.
The work of Teppo Felin and I on the micro-foundations issue (e.g., here) has been particularly taken up with the lack of clear micro-foundations in the dominant capabilities view of the firm and strategy. Back in 2005 Teppo and I organized a two-days conference in Copenhagen on the subject. Koen Heimeriks, then an Assistant Professor at Copenhagen Business School, is organizing something like a follow-up conference at the Rotterdam School of Management where he is now an Assistant Professor. Keynote speakers are Sid Winter, Maurizio Zollo, and yours truly. Here is the homepage for Koen’s conference. Koen is a very good and meticulous conference organizer, the subject is inherently interesting, so please submit a paper!
ESNIE School on NIE Archives
| Nicolai Foss |
The European Society for New Institutional Economics, the semi-formal Euro branch of ISNIE, runs a yearly School on New Institutional Economics, usually taking place on Corsica. Organized by Eric Brousseau, the School has now run for seven consecutive years. The line-up is impressive, including Oliver Williamson, Sid Winter, Avinash Dixit, Doug North, Giovanni Dosi, Dick Langlois, Joanne Oxley, Jackson Nickerson, Lee Alston and many other luminaries. The great thing is that the PPTs of their talks are online (here)! Enjoy.
Protesting Against and Sanctioning Bad Reviewers
| Nicolai Foss |
Keynes famously complained (whined) that Hayek, in his review of A Treatise of Money, hadn’t treated the book with the measure of relative goodwill that an author is entitled to expect from a reviewer. He also equally famously informed Hayek that he (Keynes) had changed his mind, so that Hayek’s two-part, article-length review was irrelevant anyway. Hayek later explained that this was the main reason why he had chosen not to review Keynes’ General Theory (the story is a bit more complex, see this paper).
While Keynes was no doubt whining — those who care can check Hayek’s very careful and balanced review — he does have a point: Aren’t authors entitled to a certain measure of goodwill in the sense that they can reasonably expect that the reviewer has tried to understand what the author is talking about, doesn’t misinterpret and misrepresent him too badly, doesn’t kill a paper because of very minor problems, etc. etc.? While I trust that most people would agree with this, we also know that we may occasionally get reviewers (whether anonymous or, in the case, of published reviews, usually non-anonymous) who are not at all inclined to show such goodwill. (more…)
Call for Papers: Org Economics and Org Capabilities
| Nicolai Foss |
The relation between organizational economics (agency theory, TCE, property rights theory, team theory) and the organizational capabilities view has often been debated on O&M. Perhaps not surprising, as at least three out of the four current O&M bloggers have frequently covered this theme in their research, Dick Langlois writing about the relation between these ideas at least as early as 1984 (here), my first publication on the subject appearing in 1993 (here), and Peter’s first paper on it appearing in 1996 (here). I think we hold different views on the nature of the relation between organizational economics and capabilities ideas. I increasingly think of ideas on transaction costs, property rights etc. as primary to, and more fundamental than, notions of capabilities (e.g., see this paper, forthcoming in Strategic Entrepreneurship Journal). Dick, on the other hand, seems to hold the opposite view.
Such differences are even more pronounced in the strategy and organization fields. Some scholars reject organizational economic altogether (Sid Winter seems close to that position). Others argue that organizational economics and the organizational economics view are complementary in an additive sense: They deal with different, yet complementary issues, so that, for example, the organizational capabilities view tells us which assets/resources we need, organizational economics providing insight in the actual organization of those assets/resources (this seems to be the current mainstream view). Some scholars go further, and argue that there is a real scope for integrating, for example, ideas on localized knowledge and learning from the capabilities view with transaction cost economics (e.g., this paper). In fact, overall there seems to have been some movement from the i initial polarized positions of 10-15 years to today’s more integrative stance.
In order to report advances in research on the relation between organizational economics and the organizational capabilities view, Nick Argyres, Teppo Felin, Todd Zenger and I will edit a special issue of Organization Science on “Organizational Economics and Organizational Capabilities: From Opposition and Complementarity to Real Integration.” Papers which can be both theoretical (or, for the US audience, “conceptual”) and empirical, must be submitted between Oct. 1 and Oct. 30 2009. The Call for Papers is here (scroll down a bit). The Call contains a long list of possible themes for papers, but feel free to mail me at njf.smg@cbs.dk (or any of the other editors) if you are in doubt whether your paper may make a fit with the SI.
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