Posts filed under ‘– Foss –’
Agency Theory in Management
| Nicolai Foss |
I believe that agency theory is one of the most informative, useful, and interesting theories coming out of economics ever. It is surely also one of the most influential econ theories in management. Agency theory is, however, fundamentally complicated, and difficult to teach. I find it impossible to teach without making use of at least some math (specifically, simple versions of the linear model). In particular, grasping the role that the risk premium plays in the theory, and, in this connection, what is really the source of the agency loss, is often very difficult for students.
However, not only students but also management academics have difficulties understanding the theory. (more…)
Euro Reward Management Conference
| Nicolai Foss |
The First European Reward Management Conference, organized by the European Institute for Advanced Studies in Management, will take place in Bruxelles Dec. 17-18 this year. Deadline for paper submission is Sept. 4. Who knows, perhaps Alfie Kohn will show up.
Christian Asmussen Receives the Haynes Prize
| Nicolai Foss |
My colleague at CBS’s Center for Strategic Management and Globalization, Dr. Christian Geisler Asmussen, received the highly prestigious Haynes Prize, awarded to “Most Promising Scholar” at this year’s Academy of International Business Meetings, for his paper “Local, Regional or Global? Quantifying MNC Geographic Scope”. The Committee was chaired by Peter Buckley and the selection was made among 700 papers.
Christian started work at the Center as an Assistant Professor 2 months ago. With already 2 accepted articles in Journal of International Business Studies, and a string of book chapters and papers, Christian is unusually talented, a nice guy, and we are most lucky and happy to have him here at CBS-SMG. (Pls, no US offers ;-)).
The Internet, Plagiarism, and Fabulism
| Nicolai Foss |
What is the net effect of the internet on the amount (and type) of plagiarism? Many people have predicted the demise of plagiarism as internet search engines make that nasty activity increasingly easy to detect. However, as any university teacher knows from sad experience with students who got tempted to cheat, the internet also prompts plagiarism because it strongly expands the set of texts that can be plagiarized at little direct cost. (more…)
Who Are Those Young Libertarian Org Scholars?
| Nicolai Foss |
In his keynote address to the 2006 meeting in Bergen (Norway) of the European Group for Organizational Studies, Jim March notes that “European organization studies were influenced deeply by the fact that expansion occurred in the decades following the protest and counterculture movements of the 1960s and 1970s . . . [as seen] . . . in such things as qualitative research on culture, gender, sense-making, social construction and power” (p. 14). (more…)
Economic Freedom and Entrepreneurial Activity
| Nicolai Foss |
Christian Bjørnskov and I have just had our paper with the above title accepted for publication in Public Choice. I was very favorably impressed with the review process, which was comparable to the process at the top academy journals in terms of speed and thoroughness. Mail me at njf.smg@cbs.dk if you want a copy of the paper. Here is the abstract:
While much attention has been devoted to analyzing how the institutional framework and entrepreneurship impact growth, how economic policy and institutional design affect entrepreneurship appears to be much less analyzed. We try to explain cross-country differences in the level of entrepreneurship by differences in economic policy and institutional design. Specifically, we use the Economic Freedom Index from the Fraser Institute to ask which elements of economic policy making and the institutional framework are conducive to the supply of entrepreneurship, measured by data on entrepreneurship from the Global Entrepreneurship Monitor. We find that the size of government is negatively correlated with entrepreneurial activity and sound money is positively correlated with entrepreneurial activity. Other measures of economic freedom are not significantly correlated with entrepreneurship
Bryan Caplan’s New Book
| Nicolai Foss |
During my libertarian awakening in the mid-1980s, I remember being particularly impressed by public choice theory. While I read the works of the major Austrians and felt strongly inspired by their vision, PC theory seemed richer in predictive implications and concrete policy proposals. It was also much closer to the mainstream economics I was being taught at the University of Copenhagen. (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…)
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!
Most Overrated Econ or Management Papers
| Nicolai Foss |
Here is a controversial, but perhaps fun, exercise for the O&M readership: nominate a paper that you think is grossly overrated. In operational terms you may think of “overrated” in terms of the ratio of Google Scholar hits to actual content/substance. Remember that you, in contrast to the resident O&M bloggers, have the option and benefit of remaining anonymous. Uninspired? You may draw inspiration from our Pomo Periscope series. (And you are welcome to nominate Ferraro, Pfeffer, and Sutton, Academy of Management Review, 2005. ;-))
How Austrian Can Mark Blaug Get?
| Nicolai Foss |
In Austrian circles, Mark Blaug isn’t a popular figure. Many Austrians remember his characterization in his 1980 book, The Methodology of Economics, of Mises’s methodological writings as “so cranky and idiosyncratic that they have to be read to be believed.” In Economic Theory in Retrospect Blaug has tough things to say of Böhm-Bawerk’s capital theory.
And yet, Professor Blaug seems to become very Austrian in his later writings. Here is a smashing from 2003 of the “formalist revolution” in economics that Pete Boettke would find little to disagree with. Here is a thoroughly Austrian defence of “dynamic competition” from 2001. He also has a series of conference papers on “ugly” or “disturbing” currents in modern economics which are all attacks on modern formalist economics, often with substantial Austrian content.
John Hagel’s Blog
| Nicolai Foss |
John Hagel III is one of the most thoughtful consultant-thinkers out there. His work (with John Seely Brown) on productive friction and dynamic specialization is very inspiring, and I have benefited from it when recently starting up an empirical project on how major Danish firms are changing corporate strategies towards dynamic specialization. Hagel runs a nice blog, EdgePerspectives that is worth taking a look at. I particularly liked his discussion of Bill McKelvey’s work on the differences between Gaussian and Paretian worlds.
Geoff Hodgson on Methodological Individualism
| Nicolai Foss |
Geoff Hodgson is no doubt a very thoughtful economist. I admire much of his work. But I have always been disturbed by a sustained theme in his writings: His relentless criticism of methodological individualism. To me, MI is “trivially correct,” to paraphrase Jon Elster, and I have viewed Hodgson’s critiques as bizarre and idiosyncratic, particularly because I have not thought that he provided any good reasons to reject MI.
However, the Journal of Economic Methodology has just published a very interesting piece by Hodgson, “Meanings of Methodological Individualism,” in which he offers some serious reasons why MI is problematic (and perhaps more than that). Hodgson argues that MI are surrounded by a number of ambiguities: 1) It is unclear whether it is intended to be something that is specific to “pure economics” or to the social sciences in general; 2) it is unclear whether MI is about social ontology or about social explanation, and 3) it is unclear whether it refers to “explanation in terms of individuals, or indivuals alone.”
Now, 1) doesn’t really seem to me to be an ambiguity. While indeed Schumpeter, the inventor of the term, thought of MI as something that applied to pure economics alone, it is quite clear that modern proponents of MI think of it as applying generally to the social sciences. 2) is a red herring, for while MI is about explanation it is rooted in the ontological argument that only individuals act. (more…)
Brilliant But Neglected Articles
| Nicolai Foss |
Because markets for science hardly work perfectly, a certain number of papers that are truly excellent will tend to be overlooked. The scientific community may collectively commit Type 1 errors, or may simply overlook certain papers because they were published at a time when the interests of the community were elsewhere, or were published in obscure journals, or in non-English languages, etc. etc. (more…)
Beards
| Nicolai Foss |
Here are some Great Beards in Philosophy. Robert Aumann could join that club. So could my M.Sc. thesis committee member, the late Karl Vind. Both arguably contributed (almost) as much to analytical philosophy as to economics. The only management scholar with a comparable beard I know of (or at least remember) is R. Edward Freeman. Sid Winter and Michael Cohen come close, however. Are beards over-represented among philosophers and under-represented among economists and management scholars? Why?
Michael Cohen on Routines
| Nicolai Foss |
In the field of organization studies, Michael Cohen is a towering figure. What he says is listened to. In a recent Essai in Organization Studies (yes, in case you didn’t know, Org Studies belongs to the same continent as Michel de Montaigne; pretentious, nous?), Cohen talks about the inspiration he has gained from American pragmatist philosopher John Dewey. He mentions that, somewhat to his surprise, he has found out that he is far from unique in his Dewey interest. Another Dewey-reader with interests similar to Cohen’s is Sid Winter; in his recent bashing of methodological individualism at the DRUID conference, Winter enlisted Dewey among the enemies of MI. (more…)
Management Journal Impact Factors 2006
| Nicolai Foss |
The new journal impact factors for 2006 are now available from the ISI Web of Knowledge (here). Consider the journal list within “management” or “business” (the former includes information system journals, the latter includes marketing journals). (more…)
That Yearly Narcissist Exercise
| Nicolai Foss |
OK, let’s pretend that you are in fact interested in what I plan to read this summer. All the other bloggers pretend, so why not? In other words, it is time for the yearly book-reading showoff/narcissist exercise (the social purpose of which may mainly be to let you inform the rest of the readership of the great books you will read — so please comment). So, here is what I plan to peruse in my two weeks of summer vacation starting on Friday: (more…)
Routines or Practices?
| Nicolai Foss |
I am growing increasingly skeptical of the extremely popular and influential notion of routines, a central construct in large parts of management, notably organization and strategic management, and in evolutionary economics. My problems with the construct are these (among others):
1) There are still no clean definitions around of “routine.” Proponents of the routine notion sometimes delight in pointing out that it took transaction cost economics almost 4 decades to arrive at its unit of analysis, dimensionalize it, etc. However, with respect to TCE it was only when the unit was finally decided on, defined and dimensionalized that real progress beyond Coase (1937) began to take place. Those who work with routines have not been so patient, and have not hesitated to introduce all sorts of derived concepts. Thus, capabilities are often defined in terms of routines, so that something undefined is defined in terms of something badly defined.
2) Although no clean definitions seem to exist, different views of routines are proffered in the literature. Indeed, there has a notable drift in the dominant conception of routines, from the standard operating procedures of Cyert and March to the emergent/undesigned, collectively held, largely tacit routines of Nelson and Winter.
3) Routines are (partly because of 1)) too often used as a catch-all category that aims at capturing everything (at any level of analysis) about an organization that has some degree of stability/permanence. For example, the much cited “organizational learning” paper by Levitt and March (it has a whopping 1,655 hits on Google scholar) includes everything from individual-level heuristics (“rules of thumb”) to corporate strategy under the routine heading. (more…)
Signal Extraction Problems: Recommendation Letters
| Nicolai Foss |
Some kinds of recommendation letters need careful interpretation. A letter written for a student to help him or her study abroad usually doesn’t need much interpretation. But a letter written by a colleague for a colleague to a colleague is a different matter. One reason is that writers of recommendation letters differ. Some express themselves very directly, others more indirectly. The same words mean different things to different people. “Solid research” may mean “boring and unimaginative” to one person, but may mean, well, “solid” to another person. (more…)
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