Posts filed under ‘– Foss –’
We Happy Danes
| Nicolai Foss |
As indicated by the World Map of Happiness Denmark is #1 in the World in terms of happiness — and appears to have held that position for about three decades. Here is a great tongue-in-cheek paper that explains this fact in terms of such factors as hair color and prowess in sport. The paper concludes:
Our analysis points to two explanatory factors. The Danish football triumph of 1992 has had a lasting impact. This victory arguably provided the biggest boost to the Danish psyche since the protracted history of Danish setbacks began with defeat in England in 1066, followed by the loss of Sweden, Norway, Northern Germany, the Danish West Indies, and Iceland. The satisfaction of the Danes, however, began well before 1992, albeit at a more moderate level. The key factor that explains this and that differentiates Danes from Swedes and Finns seems to be that Danes have consistently low (and indubitably realistic) expectations for the year to come. Year after year they are pleasantly surprised to find that not everything is getting more rotten in the state of Denmark.
We Luddites
| Nicolai Foss |
In permanent shock since he learned that I own but never use a cellular phone (a middle-management tool if there ever was one!), my co-blogger often argues that I am a Luddite, and claims that this, rather than my significantly higher teaching and administration load, accounts for my relatively low blogging frequency (guess who is also maintaining the more technical aspects of O&M?). I plead partly guilty to the charge, but wish to point out that there are much great sinners than me. Enter NYU Professor and prominent Austrian Mario Rizzo. (more…)
Christmas Reading
| Nicolai Foss |
Not much is usually happening during Christmas, so why not engage a bit in the narcissistic (and non-creative) blogger’s delight — the “what I am reading at the moment” list:
1. Charles C. Ragin and Howard S. Becker, eds. 1992. What is a Case? Exploring the Foundations of Social Inquiry. This is a collection, mainly by thoughtful (in fact, extremely thoughtful) sociologists (yes, they do exist) on the methodological/ philosophical foundations of qualitative research, a subject that I have become increasingly interested in.
2. Yoram Barzel. 2002. A Theory of the State. As the resident Barzel fan here at O&M, I have surely waited too long before I began reading this book, published back in 2002. Barzel applies his highly original ideas on property rights economics to the state. However, the result strikes me as less original than Barzel’s other work.
3. Steve Berry: The Templar Legacy. Yes, I do have a weakness for this kind of templar pulp (this one comes endorsed by Dan Brown, so you know it is going to be bad). The Templar Legacy is one of the better ones (certainly better than this one). And parts of the story takes place in Denmark. I have toyed with writing a Templar novel myself. The title? Frank Knight’s Templars.
4. Rodney Stark. 1996. The Rise of Christianity: How the Obscure, Marginal Jesus Movement Became the Dominant Religious Force in the Western World in a Few Centuries. I enjoyed The Victory of Reason and this one is perhaps better. It is certainly less speculative, its reasoning seems stronger.
Steyn on Government Failures of Fighting Terrorism
| Nicolai Foss |
My favorite conservative commentator, Mark Steyn, has these acute observations on how private entrepreneurship may trump government action in the fighting of terrorism:
Most of what went wrong on September 11 we knew about in the first days after. Generally, it falls into two categories:
1. Government agencies didn’t enforce their own rules (as in the terrorists’ laughably inadequate visa applications.
or
2. The agencies’s rules were out of date — three out of those four planes reached their targets because their crews, passengers and ground staff all blindly followed the FAA’s 1970 hijack procedures until it was too late, as the terrorists knew they would.
… But on the fourth plane, they didn’t follow the seventies hijack rituals. On Flight 93, they used their cell phones, discovered that FAA regulations weren’t going to save them, and then acted as free men, rising up against the terrorists and, at the cost of their own lives, preventing that flight carrying on to its target in Washington. On a morning when big government failed, the only good news came from private individuals. The first three planes were effectively an airborne European Union, where the rights of the citizens had been appropriated by the FAA’s flying nanny state. Up there where the air is rarified, all your liberties have been regulated away: there’s no smoking, there’s 100 percent gun control, you’re obliged by law to do everything the cabin crew tell you … For thirty years, passengers surrendered their more and more rights for the illusion of security, and, as a result, thousands died. On the fourth plane, Todd Beamer and others reclaimed those rights, and demonstrated that they could exercise them more efficiently than government” (pp. 184-85, America Alone).
CCSM 2006
| Nicolai Foss |
The Copenhagen Conference on Strategic Management 2006 ended late Wednesday with a wine reception and entertainment by a local (very local) jazz group, “Professors’ All-Stars.” Jay Barney observed that I should be up playing with the band, “playing the trombone. You are a trombone kind of person.” I still have to deconstruct that one!
Apropos Jay his opening talk was a hilarious performance and the great fun event of the conference, but in general, there were many good laughs, fine discussions, and many excellent papers.
I realize that quite a number of the conference participants are regular O&M readers, so this is probably an excellent place to thank once again all who participated. This year’s conference was quite significantly better than last year’s conference, and the average paper quality was above that of other conferences that could be mentioned, the likely exception being Rich Makadok’s Atlanta Competitive Advantage Conference.
Awards — Cont’d
| Nicolai Foss |
OK — this will be my last entry on the economics of awards. Promise. Here goes:
We usually take awards to be non-material in nature. In his work on awards, Frey explicitly makes this point by assuming that awards are non-material kinds of compensation (here and here).
Frey does note, however, that sometimes awards are accompanied by money. Indeed, we are all familiar with those pictures in the newspaper of a happy prize recipient presenting a 2,5 x 1 meter cheque with the amount of money very clearly visible.
Thus, note that non-material compensation in the form of awards may have material implications. A distinction, such as a Knighthood bestowed upon a businessman may conceivably do good things to his business, because it may allow him to access networks he could not access earlier and influence decision-makers in favourable ways. A Nobel Prize winner can afterwards enter the highly lucrative lecturing circuit. Many books are advertised on the basis of their winning prestigious awards which of course also impacts the income of the prize winner/author. Etc. (This kind of reasoning is akin to Lerner and Tirole’s discussion of motivation in open source production). (more…)
Who Are (Really) the Cheese-Eating Surrender-Monkeys?
| Nicolai Foss |
My co-blogger is very fond of France, the French, etc. (And me? Well, I have actually lived there ;-)). In a recent post, Peter cited the familiar neo-con characterization of the French as “cheese-eating surrender-monkeys.” Here is Mark Steyn reflecting on who the real CESM are:
I’ve never subscribed to that whole “cheese-eating surrender-monkeys” sneer … As a neo-con warmonger, I yield to no one in my contempt for the French, but that said, cheese-wise I feel they have the edge. … In America, unpasteurized un-aged raw cheese that would be standard in any Continental fromagerie is banned. Americans, so zealous in defense of their liberties when it comes to guns, are happy to roll over for the nanny state when it comes to the cheese board. … The French may be surrender-monkeys on the battlefield, but they don’t throw their hands up and flee in terror just because the Brie’s a bit ripe (pp. 181-182 in America Alone, Regnery Publishing, 2006).
France may be the most commie nation in the World, but CESM they ain’t!
Awards in Firms?
| Nicolai Foss |
This is the third post on the economics of awards (see here and here), prompted by Bruno Frey’s recent work on the subject.
When we think of awards, most of us can easily come up with examples from public hierarchies, the military, sports, and volunteering, humanitarian and religious organizations, where awards are bestowed upon employees or members, or to public organizations/the state/the monarch bestowing awards upon citizens.
The only example that comes immediately to mind from for-profit organizations is that of employee-of-the-month awards. (more…)
CCSM 2006
| Nicolai Foss |
In case you have been wondering why O&M star blogger, Peter Klein, has only blogged once over the last couple of days — unheard of in the history of O&M — here is part of the reason: Peter is on his way to the Copenhagen Conference on Strategic Management which will begin tomorrow (Tuesday), organized by the Center that I direct here at CBS.
The CCSM will feature several great speakers, such as Jay Barney, Rich Makadok, Yves Doz, Peter Lorange, Alan Rugman, and my co-blogger. It is the second time we are doing the CCSM. The format is to have about 70-80 participants with high-quality papers.
Not only is my co-blogger joining me for the CCSM, guest blogger Lasse Lien will also be in Copenhagen for the event. Lasse has promised to deliver some real-time blogging from the conference.
More on Awards
| Nicolai Foss |
In his work on awards (see below), Bruno Frey tells a sophistiscated story of how awards function by providing “soft,” extrinsic motivation and help to solve agency problems that more conventional instruments cannot solve. However, casting awards in a purely motivational framework arguably leaves out some possible economic functions of awards. (more…)
Price as a Signal of Quality
| Nicolai Foss |
Here is the evidence.
Update I: I have a few copies left of this book. I am offering it at the competitive price of 195 Pounds. First come, first served.
Update II: Here is another ridiculously under-priced offer.
Update III: In a more serious vein, what is the economics behind these prices? Not even a hardcore Foss sycophant would pay almost 200 quid for my 1994 collection of essays. Are they phishing for that Japanese university library that just must have a complete collection of books on Austrian economics (cf. Joe Mahoney’s comment)?
Bruno Frey on Awards
| Nicolai Foss |
Bruno Frey is one of those economists who make economics fun. Like economists such as Yoram Barzel, Gary Becker, and, of course, Stephen Levitt, he has a great intuition for applying economics to new areas where nobody has hitherto thought of taking it.
Like George Akerlof, but unlike Barzel, Becker and Levitt, Frey is, however, not that satisfied with the behavioral core of mainstream economics, mainly because it tends to provide an impoverished treatment of human motivation. Thus, he is no Becker-style economic imperialist (or, at least, the charicature thereof), but on the contrary is quite attentive to relevant insights in, particularly, psychology. Whereas numerous economists have taken an interest in the cognitive dimensions of psychology research — as witness the recent explosion of interest in nanoeconomics — Frey’s interest in psychology has been more concerned with motivational issues. Thus, quite a lot of Frey’s enormous (and enormously impressive) production has been devoted to pushing the boundaries of economics by taking seriously psychology ideas on social comparison processes, intrinsic motivation, etc. His work with Margit Osterloh on the motivational foundations of knowledge sharing in organizations will be familiar to many readers of this blog.
Frey has recently started a new research program, namely research into the function of awards (see here and here). (more…)
The October Issue of the AMJ
| Nicolai Foss |
The October issue of the Academy of Management Journal is the best in a very long time. It contains at least three articles that 1) are excellent and 2) should be of direct interest to O&M readers. They are:
- Rekha Krishnan, Xavier Martin and Niels G Noorderhaven. “When Does Trust Matter to Alliance Performance?”. One of the few empirical studies that takes seriously the Williamsonian distinction between behavioral uncertainty and environmental uncertainty.
- Kyle J Mayer and Robert M Salomon. “Capabilities, Contractual Hazards and Governance: Integrating Resource-based and Transaction Cost Perspectives” (WP version here). The latest paper in a small but expanding literature that empirically integrates TCE and RBV. Argues that strong internal technological capabilities may ease outsourcing.
- Stephen J Carson, Anoop Madhok, and Tao Wu. “Uncertainty, Opportunism, and Governance: The Effects of Volatility and Ambiguity on Formal and Relational Contracting.” Clearly distinguishes between the effects of ambiguity and the effects of volatility on opportunism, and compares the effectiveness of relational and contractual governance with respect to constraining opportunism under these two situations. Interesting that Madhok seems to be coming full circle round to TCE.
Another Irritating Practice
| Nicolai Foss |
OK — here I go again: Another jeremiad related to the institutions of publishing in the learned journals (for other O&M jeremiads on this subject, see here, here, here, here, and here).
Recently, I received a paper from two very bright assistant professors at one of the top Euro BSchools. They happily informed me that their paper had now been accepted for a top journal, and that, knowing that I took an interest in the issues that the paper dealt with, they were happy to forward the accepted paper to me. (more…)
An Organizational Routines Bloffer
| Nicolai Foss |
Here is a blog offer: Teppo Felin and I have written “Organizational Routines: Historical Drift, A Course Correction, and Future Directions,” and if you mail me at njf.smg@cbs.dk, I will be happy to send you a copy. Here is the abstract:
Organizational routines and capabilities have become key constructs not only in evolutionary economics, but more recently also in business administration, specifically strategic management. In this essai we discuss the historical origins of the notion of routines, and highlight some of the theoretical and definitional drift associated with the notion of routines over time. In parallel we also explicate some of the underlying theoretical problems of routines (and related concepts); problems such as the lack of clarity on the origins of routines, and the more general need for micro-foundations. We argue that individual-level considerations deserve more attention in extant work — we in effect call for a course–correction in work on organizational routines — and we argue that evolutionary economics and strategic management should aim to build micro-foundations related to understanding the origins of routines.
Badly Needed: Research Into Meetings In Organizations
| Nicolai Foss |
Ahhhh! Today was my last day as member of the Academic Council (or Senate) of the Copenhagen Business School. As Denmark has the most undemocratic university legislation in the world (with the possible exception of North Korea) and the whole university system is socialized, all decision-making power is in actuality concentrated in the hands of the President and the Dean. This means that bodies such as the Academic Council have nada real decision-making competence. Knowing this, the members should be expected to get the meeting done as quick as possible, and go back to serious business, that is, research and teaching. Not so! One endless and essentially pointless debate followed another.
Which makes me wonder: Given that incredible amounts of time in organizations, public as well as private, and often involving absolute key employees, are spent in meetings, why do we see so very little serious (non-pomo) academic research into the phenomenon of meetings in organizations? (more…)
Levels Issues II — Do Levels Exist?
| Nicolai Foss |
As I indicated in my earlier post on levels issues in social science research, I am confused by these and I suspect that many others are also confused. Perhaps this merely reflects my lamentable lack of serious philosophical training, and it is therefore with very considerable hesitation that I venture into issues of ontology, explanation, and causation that pertain to levels of analysis. (In fact, the following to some extent has the character of a bleg).
Do levels of analysis exist? Well, obviously levels of analysis only exist in our models. Still, there may be some stuff reality that is “like” our analytical levels. If so, is there some kind of mapping from the levels of analysis of our theoretical accounts to the levels (conceivably) existing in social reality? Or, are levels (of analysis) “merely” methodological devices — features of our model — that are not necessarily mirrorred by anything in reality? (more…)
The Collected Works of Armen Alchian
| Nicolai Foss |
It has been said that “Armen Alchian’s output may be sparse and informal, but it has been among the most influential.” Still, his “virtuoso work on neoclassical price theory” has been sufficiently voluminous that his collected works run 1,620 pages!
The two volumes that contain all these pages were published in November by Liberty Fund at the ridiculously low price of $15 for the set. Over the years Liberty Fund has published an unbelievable amount of true classics in economics, law, history, philosophy and classical liberal scholarship in general at absolute bargain prices. (more…)
Who Really Cares?
| Nicolai Foss |
Danish party politics is essentially all a variation on one basic theme. Thus, we have extreme left social democrats, less lefty social democrats, middle-of-the-road social democrats, and conservative social democrats. The conservatism of the latter, currently in power, lies in their wish to keep the total tax burden at its current level (which given the recently announced Swedish tax cuts will make Denmark the World leader in income taxation). The other social democrats essentially wish to let the tax burden increase, and few see any problems with a marginal tax rate that goes into the 70s and beyond. All in the name of equality, of course.
Recently, the minister of social affairs made a major faux pas that upset virtually everyone. She argued that economic equality should not be seen as an independent policy goal. Her political life barely survived the media turmoil that immediately arose. The predictable “jungle law,” “heartless market mentality,””egoistic conservatism,” etc. labels were applied to the minister’s apostasy. The moral outrage was immense.
Enter Arthur C. Brook’s Who Really Cares? The Surprising Truth About Compassionate Conservatism which I am reading at the moment. It amounts to a frontal, data-based attack on the ideology that underlies redistributionism, that is,”in lieu of statist redestribution, nobody would really care for the poor, and most certainly not conservatives and libertarians.” (more…)
Foss, Klein, Kor, and Mahoney on Entrepreneurship
| Nicolai Foss |
As readers of O&M will know, Peter and I are highly sympathetic to subjectivist economics, mainly Austrian economics, and both take an interest in entrepreneurship and the theory of the firm. Yasemin Kor is an expert on the RBV and top management, and former O&M guest blogger Joe Mahoney is, of course, an expert on the RBV and the theory of the firm. This makes, we think, for an excellent author team. Thus, we have collaborated in writing a paper, “Entrepreneurship, Subjectivism, and the Resource-based View: Towards a New Synthesis.” Here is the abstract:
This paper maintains that the consistent application of subjectivism helps to reconcile contemporary entrepreneurship theory with strategic management research in general, and the resource-based view in particular. The paper synthesizes theoretical insights from Austrian economics and Penrose’s (1959) resources approach, arguing that entrepreneurship is inherently subjective and firm specific. This new synthesis describes how entrepreneurship is manifested in teams, and is driven by both heterogeneity of managerial mental models and shared team experiences.
Enjoy!
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