Check out this fantastic short video in which Professor Bill Cooke of the University of York (UK) School of Management talks about why the history of management should be incorporated into management research and teaching. The animated graphics in the video look great. Congratulations to his employer for allocating the funds to produce a video with such high production values.
Stephanie Decker, Christina Lubinski, and Dan Wadhwani have established a new blog devoted to historical approaches to studying organizations. Here is the short description:
In recent years a number of scholars from around world have hosted seminars, events at conferences, published articles and books and run research projects and networks in this field. This website and blog aims to be a hub on which we can publish our ongoing activities and publications, and exchange ideas and comments, for those involved in the network or for those just curious about this line of research.
I’m very happy that this blog has been created. I’m looking forward to seeing what sort of content and publishing rhythm the authors develop.
A conference titled “The Global 1860s” is currently (15 to 17 October) being held at Princeton.
The long 1860s witnessed an extraordinary sequence of global developments. Massive conflicts rocked the Americas, Europe, South Asia, and parts of the Caribbean and the Pacific world, while even regions relatively untouched by warfare—such as North Africa, Russia and Japan—experienced momentous political transformations. Simultaneously, the decade saw major shifts in science, communications, art, economics, and the politics of gender. This conference brings together scholars from many different areas of expertise to discuss how far there was a “global 1860s”—and what this might mean.
A few days ago, Angus Deaton of Princeton was awarded the Nobel Prize for his research on poverty, health, and development. The Dwight D. Eisenhower Professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs and the Economics Department at Princeton University. This prize is clearly richly deserved, as Deaton’s books and articles contain important insights into fundamental issues. His research is overviewed here, here, here, and here. Deaton’s Google Scholar profile (53,937 citations) is here.
Deaton’s many publications include a recent piece in the Review of Austrian Economics, “On tyrannical experts and expert tyrants”. Here’s the thing. The RAE is currently ranked a mere 1 in the Association of Business School’s Journal Quality Guide, a ranking system used for assessing job applications and job performance in management schools in the UK and some other European countries. Given that a Nobel Laureate has recently published in this journal, it is likely that the ranking of the RAE will increase in the next version of the ABS journal guide.
University of Liverpool Management School
The archivists of the HSBC group have produced a wonderful series of videos to commemorate the 150th anniversary of the bank. These videos are aimed at a variety of external stakeholders as well as the bank’s worldwide workforce. As someone who has published academic research on HSBC’s history, I was really impressed by the way in which these videos strike the right balance between accessibility to the general public and the display of detailed historical knowledge.
HSBC’s investment in these high-quality videos was obviously substantial, which means that the bank’s senior managers see the firm’s long history as a strategic asset. As I looked at these videos, I was reminded of the paper by Suddaby, Foster, and Trank (2010) that demonstrated that “rhetorical history” can be an important source of competitive advantage for firms because rhetorical history is often inimitable. If Bank X attracts customers by lengthening its hours of service, it is pretty easy for Bank Y to do the same. Bank X is then back to square one. To be sustainable, a firm’s source of competitive advantage needs to be something that is difficult to copy. An old bank that uses its heritage is marketing has an important competitive advantage that newer rivals necessarily lack.
It is worthwhile pausing to think about the implications of this insight for banking strategy in the face of rapid technological change. The core function of any bank is financial intermediation. A great deal has recently been written by academic and popular authors about how new technologies have the potential to increase the competitive pressures on banks by allowing borrowers and lenders to cut out the middleman. Think of P2P lending. There is even a weekly podcast called Breaking Banks on the subject. Some authors suggest that disintermediation will soon destroy banking as we know out or at the very least reshape the entire financial system. It is true that banks have certain fixed costs that their nimbler, online-only peers don’t have. However, old banks such as HSBC have a key advantage in the fact they have a long history they can point to in their communications with depositors, employees, regulators, and other stakeholders.
Anyone who wishes to learn more about the recent history of the bank should read The Lion Wakes: A Modern History of HSBC by David Kynaston and Richard Roberts.
Suddaby, R., Foster, W. M., & Trank, C. Q. (2010). Rhetorical history as a source of competitive advantage. Advances in Strategic Management, 27, 147-173.
Professor Edward L Queen, who is the Director of Ethics and Servant Leadership Program at Emory University, is clearly a smart guy and accomplished scholar. He has authored some important scholarly works on US religious history. Unfortunately, he has also published a highly problematic article on the VW scandal in the New Republic. The article, “Business Schools Breed Unethical Businessmen An ethicist explains why the Volkswagen scandal didn’t shock him” basically blamed the amoral curriculum taught to generations of MBAs in the United States for the ethical lapses that led to the scandal about emissions rigging that has engulfed the German automaker .
For the past five to six decades, epigones of Milton Friedman have been emphasizing that the only duty of a corporation is return on investment (regularly ignoring his caveat of doing so within the law and social norms).
This lesson, drilled into generations of business school graduates, now drives tsunamis of corporate malfeasance. Data regularly demonstratesthat business school students are more likely to cheat on examinations and assignments than their peers, although–and this is of interest for the Volkswagen case–they are closely followed by engineering students.
There is certainly an element of truth in some of the claims of Professor Queen. Indeed, his New Republic piece echoes ideas that were published in an academic journal by the late Sumantra Ghoshal. Professor Ghoshal’s 2005 essay on the pernicious social consequences of some of the theories that management schools teach to future business executives has been frequently cited and has had an impact on the management school curriculum. Ghoshal’s seminal essay was particularly critical of agency theory and the belief that the sole function of a company is to make money for its shareholders. One could argue that the reform of the management curriculum in the last decade, which has included more teaching about business ethics, has been inspired in part by Ghoshal’s paper.
While Edward L. Queen’s article is not completely out of left field, there are several problems with his attempt to link the insights of Ghoshal to the case of Volkswagen.
First, it presents a caricature of business education in the United States, the UK, or any of the other countries with education systems I’m familiar. Very few management schools nowadays preach the Milton Friedman view that a company’s sole function is to maximize shareholder value. Indeed, most business schools try to expose students to rival stakeholder theory of how companies ought to operate. Business ethics has become an increasingly important part of the curriculum since the Enron scandal. Many business schools professors now teach something called the Triple Bottom Line (people, planet, and profit), meaning that managers need to balance the interests of shareholders, other stakeholders, and the environment. The fact that an op-ed on the VW scandal by three tenured professors at Canada’s oldest business school (Tima Bansal, Michael King, and Gerard Seijts of the Richard Ivey School of Business) uses the term “the triple bottom line” suggests that ethics are part of the mainstream management school curriculum.
Second, while I am open to the possibility that the amoral theories of management that Anglo-American business schools began to teach in the late 1970s likely contributed the business scandals of recent decades (e.g., Enron), the argument for this thesis is still largely circumstantial. Moreover, Professor Queen’s piece in the New Republic overlooks the fact the VW’s now departed CEO Martin Winterkorn has a PhD in metallurgy and does not have an MBA or indeed any other degree in management. Like many business leaders in Germany, Winterkorn never attended any business school, German, US or otherwise. He studied science, then learned management on the job. It is agreed by all concerned that Winterkorn was himself blameless and had no knowledge of the scam some VW engineers were running. We don’t yet know the identities of the culpable individuals, but once their names have been published, it will be easy for journalists to find out where they were educated and whether they were ever exposed to the morally corrosive ideas that Professor Queen alleges is a staple of mainstream management education.
——–
Ghoshal, S. (2005). Bad management theories are destroying good management practices. Academy of Management learning & education, 4(1), 75-91.
Readers of this blog may know that I am interested in the emerging Judgement-Based View of Entrepreneurship (JBV) see here. However, I’ve had a hard time assembling a comprehensive list of all of the papers in which researchers apply the JBV to empirical research. In fact, it’s hard to find any. I know that the JBV is a new framework, but I was hoping to find some papers that operationalize it. Can my readers help me to find some?
A bit of background: the JBV framework has been outlined by Nicolai Foss and Peter G. Klein in a series of influential journal articles and a recent book with Cambridge University Press. There was recently a forum in the Journal of Institutional Economics on the JBV, which was also discussed at a session on entrepreneurship theory at the AoM in Vancouver. In developing the JBV, Foss and Klein uniteed a number of different intellectual traditions. Their most important debts are to Frank Knight, from whom they took the emphasis on judgement, and the Austrian School of Economics, from which they took hostility to quantitative research approaches and a view of human action that combines methodological individualism and subjectivism. Foss and Klein present the JBV as a challenge to the dominance in entrepreneurship research and entrepreneurship journals of the opportunity-discovery view associated with Shane and Venkataraman (2000). The opportunity-discovery view, which was stated in formal terms in an influential paper by Shane and Venkataraman argues that entrepreneurship research should centre on three investigative questions: why, where, when, and how do entrepreneurial opportunities arise; why is it that certain individuals are better able to discover these opportunities than other individuals; and how do entrepreneurs go about taking advantage of the opportunities they have discovered (Shane & Venkataraman, 2000: 218).
The opportunity-discovery framework now appears to be one of the standard, go-to paradigms for the researchers who publish in entrepreneurship journals. Shane and Venkataraman (2000) has been cited over 8000. Foss and Klein point out that the opportunity-discovery paradigm has come under attack from a variety of directions. Foss and Klein suggest that since the opportunity-discovery framework used to study entrepreneurship has been demonstrated to be theoretically unsound, it is a time for a new framework, which they call the JBV.
According to Foss and Klein, the JBV starts with “the need for individuals to make decisions about the future without access to a formal model of decision rule, as would apply to situations of ‘rational’ behavior under probabilistic risk.” Since entrepreneurs are unable to apply formal models in making judgements about particular ventures, they must use the intuition, gut feeling, or some other heuristic. At its core, the JBV is a subjectivist theory of entrepreneurial discovery, which holds that the entrepreneur’s subjective “mental model” or vision of the future should be the primary object of study by entrepreneurship scholars (Foss et al, 2008, 80). Proponents of subjectivist research have argued that the study of “entrepreneurs’ subjective perceptions and knowledge may help us to better explain and predict the path that firms will take in the course of decision making under uncertainty” (Kor et al., 2007, 1194).
The JBV, which was developed by Foss, Klein, and Kor, has been further refined by Godley and Casson (2014), who introduce a new term, “the diagnostic entrepreneur.” Diagnostic entrepreneurs serve a function similar to that of a medical doctor or other expert in that they find solutions when consumers are unable to diagnose their own problems or are, in some cases, unaware that they have a problem that requires a solution. Godley and Casson write that the markets for “novel complex and sophisticated products” are often inefficient, since “it is not only difficult to explain to a customer how the novel product may help them, but it is also possible to persuade a customer without a problem that they do in fact need a novel product.” In effect, they argue that diagnostic entrepreneurship is particularly important in sectors of the economy in which rapid technological change has produced widespread uncertainty and ignorance on the part of the consumers. In such cases, it is up to entrepreneurs to diagnose the problems and create solutions.
I’ve read the theoretical papers by Foss, Klein, Godley, and Casson with great interest. However, I would be really interested in seeing how people have gone about applying the JBV in empirical research. In particular, I’m curious to know about research methodology and the types of data sources people have used to apply/test/refine the JBV.
Please post your suggestions for future reading below. Many thanks in advance.
Business History (BH) has announced a call for papers for a Special Issue on “The Brand and its History: Economic, Business, and Social Value” The guest editors are Patricio Sáiz and Rafael Castro, Universidad Autónoma de Madrid (Spain)
“For this special issue, we expect contributions to clarify how firms conceived branding strategies, whether they adapt or not (and how) to new market conditions, how international legal issues affect branding activity, how other agents beyond the firm (communities, consumers, regions) faced trademarking, and how studies on collective marks, certification and quality marks, and appellations of origin may complete our current knowledge. Contributions are also invited to develop new studies on domestic trademark tendencies, international comparisons, or case studies based on significant trademark-related sectors such as food, beverages, and tobacco; consumer chemical products; and luxury goods”
Therefore, we are interested in submissions focused on historical research and longitudinal analysis related to the following themes:
Long-term brand management.
Trademarks and international trade.
Legal and institutional issues on trademarking
Appellations of origin, geographical indications, certification marks, and collective trademarks.
Private-label products vs. manufacture brands
Historical development of brand communities.
Trademark and brand struggles.
For further information of possible topics and questions see the full call at: http://explore.tandfonline.com/cfp/bes/fbsh-brand-history or directly contact patricio.saiz or rafael.castro AT uam.es.
The deadline for submissions is January 31, 2016.
VW Interior Photo by
Ralf Roletschek
Taken from Wikimedia Commons
One dimension of the Volkswagen scandal that hasn’t received enough attention is the role of Intellectual Property rights in enabling VW to get away with cheating for so long. According to Vox’s admirably clear explainer of the scandal,
Meanwhile, the VW scandal raises another issue surrounding car regulations, as Alex Davies explains at Wired. Modern-day cars feature complex computer systems and software. And, right now, this software is protected under the 1998 Digital Millennium Copyright Act — it’s illegal to fiddle with the software. The ostensible rationale is to make it harder for consumers to tamper with emissions controls. But these protections also make it harder for independent researchers to scrutinize that code and identify problems. Some experts have proposed DMCA exemptions to allow researchers to test and evaluate these engines, but so far automakers and the EPA have resisted this. Presumably, if those exemptions had existed, Volkswagen’s deception might have been caught sooner.
For more about the role of excessively strong Intellectual Property rights in contributing to Dieselgate, see reports in Scientific American, the Electronic Frontier Foundation. and Autoblog.
This scandal should make consumers realise that a substantial portion of the purchase price of a car is for the software inside it. (Think about it– until my lifetime software wasn’t protected by IP laws). Perhaps the scandal will cause citizens to think more critically about our existing Intellectual Property regime.
Financial Times YouTube channel recently carried a video about the implications for firm strategy of the increasing importance of IT in the automotive sector. It’s certainly worth checking out.
The Past Speaks 