Author Archive

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…)

10 August 2007 at 9:28 pm Leave a comment

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…)

4 August 2007 at 4:21 pm 3 comments

Design Puzzles II

| Steven Postrel |

When I last posted on whether apparent inefficiencies in the design of objects and institutions were real opportunities or only mirages, there were many well-informed and thoughtful comments. One of the issues I addressed was the use of multiple queues at checkout counters, despite their theoretical inferiority to a single queue where the next available checker gets the next customer in line. (more…)

2 July 2007 at 4:33 pm 5 comments

Do We Need a Project Project?

| Steven Postrel |

A peculiar fact about business schools (at least in the USA) is that project management is not part of the regular MBA curriculum. Why is this peculiar? Only because a huge percentage of the work managers do is organized into projects, the success or failure of strategies often rests on the quality of execution of projects, and many of the principles and techniques of good project management are not immediately obvious. But hey, if anyone needs to know about this trivial stuff they can always go to a two-day workshop and get a certificate (probably from an engineering department). (more…)

6 June 2007 at 1:17 am 18 comments

Design Puzzles

| Steven Postrel |

So you’ve purchased your coffee and chosen to sit at one of those round outdoor tables. As you lean on the table to write comments on a paper, it rocks annoyingly, possibly spilling some of your coffee. You try moving the table slightly on the uneven pavement, hoping to stumble into a stable configuration for its four feet, but several attempts fail. Eventually you resort to shimming one of the table feet with a piece of folded up paper, or a stack of sweetener packets, and this creates at least a metastable condition. Looking around, you notice that many other tables have similar combat repairs, so that the cafe looks like a furniture trauma ward. (more…)

28 March 2007 at 2:54 pm 49 comments

Paging the Pigou People

| Steven Postrel |

It looks like the rent-seekers at US-CAP are way ahead of the Pigou Club on CO2 restriction policy. So it looks like I’ll be able to oppose CO2 restriction not just on its own merits but because the policy instrument will be inferior.

21 March 2007 at 2:24 pm 2 comments

Utility Strategy

| Steven Postrel |

Skeleton of a Harvard Business Review article:

How do you get sustainable advantage in a service business today? One approach: Become a new-wave utility. Think about Google or Yahoo, eBay, Amazon, etc. on the Internet; think about UPS or FedEx, Grainger, Ryder, Public Storage in logistics; think about McDonald’s, Starbucks, 7-Eleven, in convenience food consumption. (more…)

19 March 2007 at 4:57 pm 5 comments

Taxes al Carbon

| Steven Postrel |

Let’s suppose you’ve been swept up in the recent frenzy and decided that it actually makes sense to apply coercive regulations to reduce human carbon dioxide emissions. Let’s further suppose that you’ve caught up to the 21st century and know that imposing specific technology standards on particular sources of emissions is a sign of policy incompetence: (more…)

14 March 2007 at 1:05 am 40 comments

Toyota at the Crossroads

| Steven Postrel |

The recent NYT article (not the Sunday Magazine story but an earlier business sectiion piece by Martin Fackler) describing Toyota’s struggle to transmit its methods and culture to large numbers of foreign workers, in the face of unprecedented recalls and quality problems, provokes a number of thoughts about the company’s past successes and its current problems. (more…)

20 February 2007 at 12:06 am 3 comments

Do I Need an (Ideological) Affirmation?

| Steven Postrel |

Arnold Kling has proposed that “libertarian conservatives” form an “Ideological Affirmation Task Force” (IATF) and requested comments on an initial draft of such an affirmation. Borrowing the lingo of Internet governance, he calls this an “IATF RFC.” I loosely qualify to be part of the interested group, so here are a few random thoughts, not a systematic treatise, on his first draft (which is a quick read, so you might want to look at it): (more…)

1 February 2007 at 3:49 pm 8 comments

Night Thoughts of a Strategy Instructor

| Steven Postrel |

1. Exactly what is accomplished by teaching (present or future) managers the five forces framework? It’s useful for investment and diversification decisions, but otherwise isn’t very actionable, unless you’re engaged in cartel management.

2. It’s a good bet that the term “barriers to entry” adds zero (or worse) to student understanding of when an incumbent has advantage over a new player (and when the anticipation of that advantage deters entry). Also, students are rightly confused about the distinction between entry and rivalry because realized entry contributes to future rivalry. At least in logical terms, I can avoid this confusion by stressing the “threat of entry” as a force separate from rivalry, but then we’re supposing individual firms coordinate their price and capacity decisions to keep out entrants, a view of industry collaboration and statesmanship that was musty in the 1980s (and often involves incredible threats). Maybe it would be better just to talk about the elasticity of long-run supply and not worry too much about whether new capacity comes from incumbents or from entrants.

3. Is it a good idea to teach positioning analysis using cost drivers without having a cost function that combines all the drivers together? Scale, learning, scope, product features, etc. — shouldn’t we worry a lot more about how they reinforce or conflict with one another in a given case?

4. Does it matter that it’s really hard to find good examples that fit the technical definition of economies of scope? Is it OK if I just keep passing off multiproduct scale as if it were scope since the students don’t know the difference?

5. Am I just getting old and curmudgeonly, or does it seem like the newer Harvard cases are more pre-digested than the classics? What’s up with constructing all the pro forma tables for the students instead of scattering the information around in the text and exhibits?

6. Will I be able to teach effectively tomorrow if I don’t fall asleep soon?

18 January 2007 at 7:38 pm 10 comments

In Which I Rise to the Bait

| Steven Postrel |

So I’m browsing some old posts on orgtheory.net, and I see a little discussion about whether organization theory has done much since 2000, and it mentions neo-institutionalism. And since neo-institutionalism kind of gives me the hives, I toss in a little comment about how what little I know about it seems to have been falsified by an empirical paper by Kraatz and Zajac.

What do I get for my troubles? Not exactly a gauntlet to the face, but since their post has such tempting flaws, I’ll bite. (more…)

16 January 2007 at 5:53 pm 6 comments

How Does Management Affect Capabilities?

| Steven Postrel |

What contribution does management make toward producing output? If you watch Federal Express commercials, or read Dilbert, or listen to many technical workers when they talk to each other, the answer is “nothing.” Management is seen as purely an obstruction to the accomplishment of useful work.

If we take “management” as a sociological category, denoting a set of pointy-haired individuals disconnected from actual technical problem solving, then one could perhaps defend this position. But if we think of “management” as a collection of activities and practices, those practices seem essential, and many people, from computer programmers to chemists to special effects wizards, engage in them. But just how does management increase output? (more…)

11 January 2007 at 4:58 pm 24 comments

Macroscope

| Steven Postrel |

Peter’s recent post about macroeconomics and macro vs. micro approaches in organization theory stirs up not-so-fond memories. From my first exposure to Samuelson’s version of the Keynesian synthesis, I found the whole thing off-putting. This feeling was a mixture of impatience with the aggregation assumptions and frustration with the seemingly backward causality of the Keynesian worldview, where production is a trivial matter and the only problem is making sure there is enough effective demand. The latter frustration was somewhat alleviated by learning about adaptive and then rational expectations, aggregate supply, sunspot and other coordination theories, and the host of microfoundation arguments that either got rid of the Keynesian assumptions or at least made some of them plausible. The impatience about aggregation never really went away. (more…)

10 January 2007 at 4:22 pm 3 comments

Physics Envy and All That

| Steven Postrel |

We often hear (sometimes on this blog) that mainstream economics suffers from an excess of mathematical modeling. Supposedly, math is distracting, or misleading, or limits the questions one can study. Occasionally it is asserted that math serves the purpose of disguising the triviality of one’s thoughts, or that it serves as a guild’s protectionist barrier against the worthy but unschooled. In my view, all of the same critiques may apply to any use of technical language (say in philosophy); one can find examples of all of these pathologies even when no math is involved.

Our problems, when they occur, do not lie in our tools but in the quality of our ideas, and our honesty in expressing them. And given the extreme difficulty in thinking clearly or precisely without mathematics about things like supply and demand, or optimal investment, or contingent contracts, or network structure and growth, I’m more than willing to entertain mathematical approaches. At least I can figure out what people’s assumptions are. (Of course, once you have the mathematical intuition down, it’s a good idea to try to translate your new understanding into verbal form, as long as everyone understands that something is always lost in translation.) (more…)

9 January 2007 at 12:44 pm 51 comments


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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).