Posts filed under ‘– Foss –’
Bridging O&M and orgtheory.net?
| Nicolai Foss |
The chaps over at orgtheory.net routinely refer to O&M as their “evil twin.” We have so far resisted this characterization (more the “twin” than the “evil” part, to be sure), but perhaps they’ve got a point. After all, O&M is heavily tainted by Austrian economics; orgtheory.net seems to subscribe to important tenets in the emerging “economic sociology”; and, as Gertraude Mikl-Horke points out in a recent paper, “Austrian Economics and Economic Sociology: Past Relations and Future Possibilities for a Socio-Economic Perspective,” AE and econ soc are closely related in a number of respects: there is a strong thematic overlap and the treatment of some key constructs (uncertainty, interpretation, dynamics . . . ) is strikingly similar. OK, admittedly, her key source for AE insights is NYU/George Mason Austrianism (think O’Driscoll and Rizzo) and more Misesian Austrians may balk at the links Mikl-Horke establishs, but at any rate this is an interesting Aufforderung zum Tanz. (more…)
Langlois and Lien Join the O&M Team — and Foss Is Back
| Nicolai Foss |
Since its inception in April 2006 Peter and I have been running this operation as a two-man show (with the help of some terrific guest bloggers). Peter has been the main man for the past several months, because of the time-consuming bureaucratic nightmares that I have been immersed in. The rumours that have been spreading about my virtual death are, however, exaggerated, and I will make a comeback attempt here at O&M.
Furthermore, while Peter and I enjoy writing about our own idiosyncratic interests, we think the time is right to broaden O&M’s scope by adding some permanent bloggers to the team. So, we’re pleased to announce that our longtime friends, collaborators, and former guest bloggers Dick Langlois and Lasse Lien have agreed to come on board.
Langlois is professor of economics at the University of Connecticut and adjunct professor of strategy and business history at the Copenhagen Business School. He writes on the theory of the firm, organizational boundaries, technology, the economics of institutions, the history of economic thought, and economic methodology.
Lien is associate professor of strategy and management at the Norwegian School of Economics and Business Administration (NHH). He works in corporate strategy with an emphasis on diversification, mergers and acquisitions, and strategic positioning.
Welcome, guys!
MDE Special Issue: Frontiers of Strategic Management Research
| Nicolai Foss |
Managerial and Decision Economics has become a favorite journal of mine. It has a strong econ orientation, to be sure, but the journal stresses econ that is relevant, readable, and right. In other words, there is lots of applied microeconomics, transaction cost economics, etc. Moreover, over the last few years MDE — presumably as a result of Margie Peteraf’s tenure as co-editor — has become very much of an econ-based strategic management journal, not like the Journal of Economics and Management Strategy, to be sure, but more economics-oriented than the Strategic Management Journal.
The most recent issue(s — issue 2 and 3 are bundled into one special issue) features a string of excellent papers under the heading “Frontiers of Strategic Management Research,” edited by Peteraf and Catherine Maritan. Several of the papers should be of interest to the O&M readership. For example, Kyle Mayer (with Janet Bercovitz) continues to work with his information technology service contracts dataset, this time looking at the influence of inertia on what contract clauses that are included in these kind of contracts. Maritan and Robert Florence engage in a nice modelling exercise, modelling strategic factor markets in a way that seems quite different from earlier attempts (e.g., by Rich Makadok). Michael Jacobides builds an interesting argument, linking foreign direct investment to the investing firm’s embeddedness in value chains in the home country and value chain conditions in the host country. And, of course, there is the usual handful of alliance articles. A great special issue. Highly recommended.
The Industry Analysis/Positioning Dominance Myth
| Nicolai Foss |
Until the advent in the mid-1980s of the resource-based view in the writings of Barney, Wernerfelt, Rumelt, etc. industry analysis and positioning ruled the roost in the strategic management, right? Many expositions of the brief history of strategic management make this claim (and I have done so myself on many occasions). There is a certain dramatic quality to the story, á la from external to internal analysis, a swinging pendulum, etc., a story of controversy between opposed positions (“Porter vs. Barney”), etc.
However, the idea of the dominance of industry analysis/positioning/market power is a complete myth says Phil Bromiley (here and in a chapter with Lee Fleming in this book). Bromiley seeks to demonstrate this by simply checking the contents of strategic management’s leading journal, the Strategic Management Journal. As he concludes, “Even a casual perusal of the tables of content of the Strategic Management Journal demonstrates that industry analysis never formed more than a small fraction of strategic management scholarship” (p. 86, in The Behavioral Foundations of Strategic Management.
However, while Bromiley certainly has a point, industry analysis may well have been dominant in teaching. And the fact remains that Porter’s 1980 tome, Competitive Strategy, is among the most cited references in strategic management.
Jeffrey Pfeffer in the Lion’s Den
| Nicolai Foss |
Management theory heavy-weight and über-econ-basher Jeffrey Pfeffer (cf. these posts) makes an appeareance in the Fall 2007 issue of . . . the Journal of Economic Perspectives — admittedly a rather “open” journal, but still one of the house journals of the American Economic Association. (more…)
Hayekian Knowledge Arguments: An Epistemic Fallacy?
| Nicolai Foss |
A small handful of papers have become highly influential in economics as well as in management and organization research. One such paper is Friedrich Hayek’s 1945 essay, “The Use of Knowledge in Society,” a paper that emerged in the context of the debate on the viability and efficiency of planned resource allocation on the societal level (i.e., socialism) that raged among academic economists in (particularly) the inter-war period. Hayek famously argued that planning confronts inherent knowledge-based constraints, and these constraints are certainly binding at a scale of activity that makes comprehensive overall management/planning of economy-wide resource allocation deeply inefficient. Many modern management thinkers have echoed this argument, arguing that “traditional” authority relations are increasingly challenged by the (increasingly) dispersed nature of knowledge.
However, at least when applied to authority in firms the Hayekian knowledge argument arguably misconstrues the nature of managerial authority, because it is based on an epistemic fallacy. (more…)
Jay Barney to Become Honorary Doctor at CBS
| Nicolai Foss |
At a ceremony on April 4., a honorary doctorate will be bestowed upon Professor Jay B Barney by the Copenhagen Business School. Jay will be in excellent company; earlier honorary doctors at CBS include Oliver Williamson and James March. (more…)
Reviewing Your Friends
| Nicolai Foss |
Sometime ago I received a request from the Academy of Management Review to review a paper that I immediately recognized, having read it in an earlier version. I informed the editor that I couldn’t do the review because I knew the identity of the authors. About a month later I met one of the authors. I told her that I had been asked to review one of her papers, but had declined, to which she replied: “You should have done the review! We would’ve liked to have that paper in the AMR.” I confess to being somewhat baffled by all the implicit assumptions in this reply (i.e., the paper was actually of good quality, I would have recommended it, etc.), but also by its flagrant disrespect for the principle or ideal of anonymity in reviewing. (more…)
More on Property Rights and Strategic Management
| Nicolai Foss |
The economics of property rights in the tradition of Ronald Coase, Armen Alchian, Harold Demsetz, Steven Cheung, Winston Bush, Eirik Furubotn, Yoram Barzel, John Umbeck, Dean Lueck and Doug Allen is a very minor voice in the conversation of strategic management scholars. Although the EPR is basically generalized micro-economics (mostly done verbally), it does employ terminology and develops insights that lie outside the domain of economics knowledge of most strategy scholars. (more…)
BYU-Utah Winter Strategy Conference
| Nicolai Foss |
The BYU-University of Utah Winter Strategy Conference 2008 ended a couple of hours ago here in Sundance. Before I embark upon my 23-hrs trip home, I offer some fresh impressions.
As usual I was struck by the difference in the overall quality level relative to comparable arrangements in Europe. I submit that it would not be possible to make a similar conference in Europe (with only Euro scholars participating). The research that was presented was top-notch, the presentation skills that were exercised were impressive (Brian Silverman should seek alternative employment as a stand-up comedian), and the organization was just perfect. Add to this the magnificent surroundings of Sundance and the result is essentially conference perfection. The only possible critique that might be raised is that there was a significant, and in IMHO excessive, diversity in terms of the subjects, research methods, etc.
In terms of the presentations some of the highlights were these: (more…)
The SMG in EMR
| Nicolai Foss |
The latest issue of the European Management Review features an article (here, scroll down to “Project Report”), “Knowledge Governance in a Dynamic Global Context: the Center for Strategic Management and Globalization at the Copenhagen Business School,” which details the history of said Center (SMG). I happen to be the Director of the SMG. The article tells a rosy story of a talented cohort of CBS PhD students whose careers followed convergent paths, eventually leading to the establishment of the SMG, and raves about the ambitions and current accomplishments of the members of the Center. Oh, did I mention that I am the author of the article?
More on Opportunity Discovery and Entrepreneurial Judgment
| Nicolai Foss |
Peter and I (well, mostly Peter) have often contrasted the Knightian notion of entrepreneurial judgment with other notions of entrepreneurship, mainly Kirzner’s concept of alertness (here). In “Entrepreneurship: From Opportunity Discovery to Judgment” (download from this page), we provide what is no doubt the definitive statement on the issue. The paper is a draft of chapter 2 in our forthcoming book, Entrepreneurial Judgment and the Theory of the Firm, and constructive criticism is most appreciated. Here is the abstract:
Entrepreneurship has become a fast-growing subfield in management research, and is increasingly appearing in economics, finance, and even law. We survey a number of approaches to entrepreneurship in the economics and management literatures, and argue that modern research in this area need to be focused around ideas from Austrian economics and Frank Knight on entrepreneurial judgment. We critically discuss the recent opportunity discovery literature in management, and argue that it has partially misunderstood the Austrian origins of the theory, and fails to adequately distinguish between opportunity identification and opportunity exploitation.
UPDATE: You can also download the paper from SSRN.
Off to Sundance
| Nicolai Foss |
Teppo Felin has been raving about the BYU-University of Utah Winter Strategy Conference, and I decided to accept an invitation for this year’s conference which takes place at the Sundance Resort. I am off tomorrow, and should arrive after about 17 hours of travel (sigghhh!). The program (which doesn’t seem to be online) looks magnificent with talks by Michael Tushman, Dan Levinthal, and Brian Silverman, and panels with Jay Barney, Joel Baum, Jackson Nickerson and other illustrious people in the strategic management community. The conference seems to be relatively small (max. 50 people) and largely Euro-free (with the exception of Gino Cattani and yours truly), which means clear and focused. I will offer some thoughts here on O&M on what I hear at the Sundance conference.
Entrepreneurship and Capital Theory
| Nicolai Foss |
Suppose all capital were what Robert Solow called “Shmoo” (after a Lil’ Abner cartoon; check this for some Shmoo info), that is, a homogenous substance. In such a world, the (intertemporal) coordination problem deals only with selecting the intensity of the input services that must be supplied over time to match consumer preferences. All capital assets are substitutes, so there is no path-dependence. Asset prices are presumably instantaneously equilibrated. In such a world, there are no coordination problems and no Misesian “calculation” problems. Many decision problems disappear as there are no costs of inspecting, measuring, and monitoring the attributes of capital assets. Decision makers do not reach the bounds of their rationality. In sum, a world of homogeneous capital is a world where there nothing (or very little) for entrepreneurs to do. (more…)
Queer Economics?
| Nicolai Foss |
An earlier post in the O&M Readers’ Favorite, the Pomo Periscope Series, concerned “queer economics.” Many commentators took issue with the association between pomo and queer, and they may well be right, so I will refrain from making that association here. I was, however, quite baffled about the queer/economics connection, failing to see any, but I think I may now be understanding what it is about (namely, codes).
In a recent article in Intelligent Life, a new Economist-sponsored internet-based outlet, Queen’s College (NY) professor Evan Zimroth discusses John Maynard Keynes’ early sex life. That Keynes in his younger years was very actively practicing his homosexuality is no secret (Austrians will recall a famous Margit von Mises anecdote). It is also well known that Keynes kept a meticulous “sex diary,” but apparently he kept a second — coded — one. The main part of Zimroth’s article is an attempt to break the code. Note: the article may be a bit too strong for some people.
(Thanks to Lasse Lien for the pointer).
Special Issue of JEM on Thomas Schelling
| Nicolai Foss |
Nobel Prize winner (2005) Thomas Schelling makes social science come alive. He has contributed fundamental insights to game theory (e.g., the notion of a focal point, the importance of commitment, early insights in the epistemic conditions of Nash equilibrium, signaling, etc.) and to the understanding of social dynamics (e.g., the famous 1971 checkerboard segregation model; early insights in “critical mass” and “tipping”). He is among the founders of game-theoretic conflict theory.
Schelling has an amazing knack for drawing fundamental lessons from simple illustrations. He rarely uses advanced mathematics, he is more interested in processes than in equilibrium states, and substantial parts of his work is accessible to the educated layman (e.g., this one and this one). He is quite an unusual social scientist.
The latest (Dec.) issue of the ever-interesting Journal of Economic Methodology features a Symposium on Thomas Schelling edited by Abu Rizvi (who, in other journals and volumes, has published some of the most penetrating meta-theoretical work on game theory). (more…)
Klein in Wikipedia
| Nicolai Foss |
Yes, that’s right: Some Klein fan has penned an entry on my esteemed co-blogger. Note, however, the warning at the bottom of the page: “This article lacks information on the notability of the subject matter.”
Workshop on Performativity and Finance
| Nicolai Foss |
We have blogged occasionally on performativity and related issues here at O&M (e.g., here), though by no means with the frequency of the chaps at our evil twin, orgtheory.net (here is a sample of their 1,206 posts on the subject).
Daniel Beunza (Columbia) and Yuval Millo (LSE) are organizing a workshop 28-29 April on performativity and finance, one of the main areas of applications of the performativity concept. The title of the workshop? Well, “From Bodies to Black-Scholes” (what else?). (more…)
“Let’s Write a Paper”
| Nicolai Foss |
I have noticed that an increasing number of colleagues build up and afterwards desperately try to manage increasingly large portfolios of paper projects. It is very common to have paper portfolios that encompass more than 20 ongoing projects. At any rate, that’s about the size of my own current portfolio.
I have also noticed that a lot of these paper ideas don’t seem to ever come to be written, or, at best exist in a fragmentary form. I can relate many anecdotes (some from personal experience!) relating to substantial regret over set-up costs (aka pissing your would-be co-author off). It is possible that this may increasingly become a management problem, certainly on the level of the individual scholar, but perhaps also on the level of university managers (mainly dept. heads).
The question is: Is this (personally and socially) wasteful? The basic problem is that in order to end up with a suitable amount of published papers a certain amount of exploration is necessary. Co-authoring papers is a Hayekian discovery process. It is pretty hard, perhaps particularly for younger, unexperienced colleagues, to make reasoned decisions on how many papers one should initiate and with whom (given the costs of experimentation, i.e., set-up costs, the risk of ruining your reputation, etc.). Reputation mechanisms work imperfectly. Big, but lazy, guys may exploit this, hoping for the rookie to do the job. Problems of procastination and melioration may complicate the decision problem. Etc.
From another point of view, however, not much has really changed. Whereas scholars in the past may have spent much time discussing research issues over the lunch table, etc., the publication pressure that most of us are subject to nowadays means that many discussions that would previously have simply ended over the lunch table are now turned into paper ideas. If that is the case, the process appears much less wasteful — and, importantly, in need of less intenvention by well-intentioned, but (naturally!) misguided university bureaucrats.
Thank You, David!
| Nicolai Foss |
Many thanks to David Hoopes for guest blogging at O&M. David has contributed some excellent blog posts which are among the most viewed ones on the site (particularly this one). We hope David will continue to visit O&M in the future and post comments. Thanks, David, for allowing us to benefit from your fertile mind.
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