Set of revision cards for all management readings

  • Created by: PJ
  • Created on: 24-03-13 12:59

Coase (1937) Supercession-price mechanism

o   Allocation of resources within firms done through firms, not prices
o   Long term contracts for certainty/avoiding costs means resource allocation dependent on buyer
o   Continues to grow until internal costs > market costs
o   Static equilibrium at the margin
o   Firms are not for the division of labour – the price mechanism would enable this
o   General Motors didn’t integrate everything, this is when external < internal transaction costs
“Direction of resources becomes dependent on the buyer”
Determinist viewpoint; contrast with voluntarism (Burrell and Morgan, 1979)
Teece (1993)
Chandler (1984)
Is direction always needed for a job?

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Williamson (1981) Transaction Cost Theory

o   Transaction costs are market failures and so necessitate firms
o   Contracts are incomplete due to bounded rationality, opportunism means agents cannot be trusted
o   Transactions characterised by uncertainty, recurrence, and asset specificity
o   Greater asset specificity – bilateral agreement – single firm is better (incentive to work at optimal level/internal differences easier to resolve/knowledge of relevant information)
o   Late 19th Century: forward integration directly related to degree of asset specificity
o   Would then lead to backward integration and maybe R+D
o   Efficient boundary = core functions plus that it is cheaper to make than buy
o   Contracts are costly to write/enforce. Misunderstandings. Complexity = incomplete
o   In technologically simple industries, there is limited room for cost-cutting.
“But for bounded rationality, all economic exchange could be efficiently organised by contract”
“governance structures that have better transaction cost economising properties will eventually displace those that have worse”
Determinist (Burrell and Morgan, 1979)
Teece (1993)
Chandler (1987)
Doesn’t have to be forward integrating and does this still apply now?

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Chandler (1984) Integration, Throughput, Growth

o   Management created in rail and telegraph, quickly spread to private sector
o   Technology allowed mass production, economies of scale in capital-intensive industries.  Efficiency required throughput which required management
o   Large firms began to integrate forward (certainty over throughput/wholesaler had no incentive for service/specialised knowledge)
o   New technology meant large MES and monopoly/oligopoly tendency; once one firm moved all did
o   America reached managerial capitalism at turn of century because of fast-growing market
o   Britain evolved into it as old industries declined and cartels broke up
o   Japan had late industrial revolution but implemented others’ techniques more effectively
o   Germany had slow market so took advantage of others’ growth through capital production
“As late as the 1840s, with very few exceptions, owners managed and managers owned”
“Such coordination could not happen automatically”
“Thus Britain continued until WWII to be the bastion of family capitalism”
John (1997)
(Winner, 1985)

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Teece (1993) Chandler’s Three-pronged Investment

o   1. Plants: economies of scale and scope.  2. Vertical integration forwards into marketing and distribution.  3. Management
o   First-mover advantages exist (pre-emption/learning)
o   American competitive managerial capitalism; bigger faster than UK because of market size, culture, and illegal cartels
o   British Personal Capitalism; simple products allowed for family management, mergers not rationalised
o   German Cooperative Managerial Capitalism
o   Industrial revolution provided a conducive environment for growth but was insufficient in itself
o   Criticises Chandler in that the advantages of scale and scope are not available to everyone
“Chandler’s implicit thesis is that firms and markets evolve together to shape industrial outcomes”
“The British bias for small scale management operation and personal management was a significant handicap”
John (1997)
Winner (1985)

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John (1997) Chandler’s visible hand: criticisms

o   Chandler claimed managerial development came from America and that Britain suffered because it was slow in taking it up
o   Biased – American himself, related to DuPont’s
o   Only focused on what actually occurred, not what might have occurred
o   Encouraged treatment of firms as main unit of analysis and so marginalised other aspects
o   Creation of a national market may have had a greater effect than it is given credit for
o   Deterministic wrt effect lower workers could have on the organisation
o   Isolated businesses and managers; critics have tried to place his work in a broader context
o   Baldwin locomotive works never had 3 Pronged Approach but was worth 200m in 1917, however was subsequently destroyed after competition with General Motors.
o   Chandler only studied big business thus provides skewed account of American economic development.
o   Cochran talks about the importance of American culture which Chandler ignores
“Especially controversial has been Chandler’s neglect of the political dimension of economic development”

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Hart (1995) Corporate Governance by the market

o   Corporate governance issues arise when there is a conflict interest that cannot be resolved through contracts because of high costs and incompleteness
o   Shareholders too great in number and deficient in knowledge to manage on day to day basis
o   Governance of management is a public good amongst shareholders so there are free-riders
o   Mechanisms: board of directors (interests vs. knowledge), proxy fights (free-riders), large shareholders (too influential/underperform), debt enforces efficiency
o   Govt. may pass laws but firms are unique; firms can control themselves in free markets so it is better to persuade than to force
“The case for statutory rules is weak”
Davis (2005)
Roe (2000)

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Schleifer and Vishny (1997) Separation of finance

o   Financiers sink funds and relinquish control; lack of knowledge and free-rider problem leave management with high levels of discretion
o   Managers will act in their own best interests (pet projects/empire-building/exploiting stock options through information release/entrenching) and incentive pay may not be sufficient
o   Finance occurs without governance because of reputations and “excessive investor optimism”
o   Legal protection is necessary but insufficient; OECD principal of loyalty
o   Large investors avoid free-rider problem but can be too influential; ought to have same incentives as minority shareholders
o   Debt vs. equity
o   USA, Germany, and Japan combine large shareholders with legal protection and this separates them out
“Corporate governance deals with the agency problem; the separation of finance and management”
Roe (2000) – political environment is a precondition to dispersed ownership firms, laws to protect minority shareholders can only arise after such firms have been created

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Roe (2000) Social Democracy - ownership

o   Social democracies do not want to maximise shareholder wealth, so do not try to minimise agency costs and actually increase costs of controlling managers
o   Social democracies encourage management to favour shareholders over employees (German codetermination/laws favour incumbent employees/ease of hiring encourages expansion/difficulty of hiring discourages risk-taking/social and psychological atmosphere/employee rights/strong incentive pay refuted on ethical basis
o   Sweden and Germany are social democracies with strong protection for minority shareholders but still have block-ownership; political situation is a prerequisite
o   Empirical evidence shows social democracies correlate with concentrated ownership
o   Social democracy destroys the necessary reassurance of loyalty of managers to dispersed shareholders
“Social democracy and concentrated ownership mutually reinforce one another”
“Sweden is a high-trust society, yet ownership remains concentrated”
Schleifer and Vishny (1997)

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Davis (2005) Social constraints on contracter

o   Efficient markets hypothesis states that financial markets are informationally efficient and so provide greatest information to shareholders.
o   Contractarian approach sees managers as trying to maximise shareholder wealth to raise stock prices
o   Social aspects undermine functionalist contractarian approach; ignore social structure/politics
o   Governance techniques may be a separation of rhetoric from practice; managers trying to show their incentives are aligned with shareholders simply to avoid outside criticism
“Faith in EMH is the bedrock of the contractarian approach”
“Rational ignorance”

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Zysman (1994) Institutions and trajectories

o   Institutional structure can only be defined in a historical structure, we define individual incentives/constraints through institutions, market logic arises from institutions, trade competition is the interaction of market logics
o   Market logics affect long term growth of economy; that of a dominant nation can influence others
o   Institutions evolve more slowly than organisations, as a solution to problems; rooted in policy, not efficiency
o   Humans are not rational, failures occur, innovation is inherently uncertain so not maximising – innovation leads to trajectories independent of but influenced by institutions
o   Institutions define interests that drive behaviour
“Technology is a socially created constraint”
“Economists tend to see institutions through the lens of the rational actor”
“Simple proposals that US firms should use German or Japanese solutions are misplaced”

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Taylor (1911) Scientific Management

o   We worry about wasting scarce resources; this should include labour
o   3 principles: substitution of a science from the individual judgement of the workmen, scientific selection and development of the workmen and cooperation of the management and workers so they work in accordance with the scientific laws.
o   Managers ought to ensure max. prosperity through efficiency via developing and enforcing a science for each task, create a comp. advantage for the firm and so pay can rise
o   Individual worker cannot understand science behind the task, so each workers task must be planned for by management and given a time frame
“Maximum prosperity can exist only as the result of maximum efficiency”
“The man handling pig iron is too stupid properly to train himself”
McKenna (2006) – Taylor’s one best way would ultimately become “a professional cul-de-sac”
Thought experiments rather than empirical data
Ignores social aspects of employment
If there is a science behind each task then enforcing it cannot provide a sustained competitive advantage, since it can be imitated (Barney, 1993) – in fact Taylor recommends that it be replicated

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Mintzberg (1990) Myths about management

o   Traditional view of managers is that they plan, organise, coordinate, and control
o   In reality, they make flexible plans that are held in their mind, focus only superficially on tasks since they are busy, find it hard to delegate, prefer soft oral communication to hard data
o   Academics have therefore focused on firms, not managers
o   Managers use status to collect information
o   Management can be neither science (not technical enough) nor profession (no body of knowledge)
o   Introspection is vital: an effective manager understands his roles
o   What manager does is based a lot on judgement and intuition.
“No job is more vital to our society than that of the manager”
Study involved only five CEOs and all in large American firms
Resource dependency view (Christensen, 1997)

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Pietrykowski (1995) Social control in Fordism

o   Flexible systems used vertical and spatial disintegration, Ford used vertical integration (mass production but spatial disintegration (village industries)
o   Three views for decentralising production: to stabilise incomes of rural communities who provided demand necessary for mass production; avoid internal diseconomies of scale; avoid unionisation of workers
o   Neoclassical theory: transaction costs made spatial decentralisation cheaper
o   NeoMarxist theory: costs are the outcome of social conflict, Ford wanted to control workforce
o   Division of labour deskilled labour process and separated skilled (drivers of unionisation) and unskilled labour; Gender and skill taken into account to create a docile workforce
o   Inter-plant newspaper encouraged workers to bond with the identity of the firm, not that of the union
“Village industries represented an attempt to combine mass production with flexibility”

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Barker (1993) Control in teams

o   Weber’s iron cage of bureaucracy: a form of social domination; red tape slows organisations; over-rationalised; impersonal indirect form of control
o   Simple – Technological – Bureaucratic – Concertive
o   Control is always contentious as there must be some subordination of desires
o   1. Consolidation and value consensus (formulate values, cooperation through shared values, common values create pride and ownership)     2. Emergence of normative rules (new members mean the subjective becomes objective, rejected by new members as they did not create them, conforming to norms becomes a matter of “human dignity”)              3. Stabilisation and formalisation of rules (further rationalised until as concrete as bureaucracy, more powerful since underlying principles lay with employees’ shared values)
o   Not a bureaucracy because power lies with workers and rules are embedded in social norms, but therefore more difficult to fight and so peer control is more effective
“Entrapment in the iron cage is the cost of concertive control”
Qualitative, “open-ended questions”

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Womack, Jones and Roos (1990) Fordism

o   Craft production came before mass production – highly skilled workforce, low volume, unreliable and inconsistent
o   Interchangeable parts reduced need for training and increased efficiency before moving assembly line
o   Assembly line and low-skill workforce necessitated overseeing roles
o   Ford distrustful of others thus vertical integration but controlling nature eventually strangled projects
o   Ford didn’t mind high turnover but raised wages to prevent unionisation; workers saw job as permanent and so monotony became less bearable
“The workers on the line were as replaceable as the parts on the car”
“Taking the idea of the division of labour to its ultimate extreme”

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Jensen and Murphy (1990) how not much pay

o   Stock ownership effective but declining, CEO pay no more variable than that of salaried/hourly employees
o   1. Substantial stock ownership (direct “feedback effect”; large firms can’t).  2. Link pay to performance (“low ability and risk-averse candidates” do not want these pay schemes, talented CEOs do).  3. Make real the threat of dismissal (BUT organisation specific capital of CEOs makes replacement difficult/performance of firm is long run)
o   Unrealistic for CEOs to actually own huge share of company stock
o   Govt. requires public disclosure of CEO pay: compensation committees give in to peer pressure so are not perfect agents for shareholders, capping CEO pay implies a floor and destroys concept
o   Talent drain as people perceive there is less skill in the job
o   Non-monetary rewards should vary with performance, however very hard to do this. These are also the rewards that will most likely incentivise CEO’s to work against shareholder interests
“Whatever the metric, CEO compensation is independent of business performance”
“Low-ability and risk-averse candidates” – ignores possibility that talented candidates may have little risk tolerance
Noise in performance measures (Roberts, 2004), may make stable pay schemes more attractive
Are the increases in incentive, and therefore increases in risk-taking, a good thing?

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Pfeffer (1998) Myths about pay

1.       Labour rates = labour costs (costs include productivity)
2.       Cutting labour rates cuts labour costs (cutting rates leads to higher turnover and lower productivity)
3.       Labour costs are a significant proportion of total costs
4.       Low labour costs are a good competitive strategy (they can easily be replicated so are not sustainable)
5.       Individual incentive compensation is the best way to motivate individual and increase performance (undermines teamwork, employees think personality, not performance, is being rewarded)
6.       Employees work for money (pay must reinforce other managerial techniques)
“[low labour costs are] the least sustainable way to compete”
“The literature argues that extrinsic rewards diminish intrinsic motivation”

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Khurana (2002) Charismatic CEOs

o   “Fundamental attribution error”: easier to attribute success/failure to an individual than to social/political/historical circumstances
o   Boards overlook non-charismatic CEOs, narrowing down selection; often already top CEOs elsewhere
o   Destabilises organisations; visionary images that run counter to the traditional values of the firm, organisation finds it difficult to return to roots
o   Charisma is more socially constructed than thought
o   Little empirical evidence that charismatic CEOs lead to better firm performance
“The widespread quasi-religious belief in the powers of charismatic CEOs is problematic”
 Murphy and Zabojnik (2004) provide an alternative explanation as to why external CEOs are hired

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DiPrete et al. (2010) Benchmarking and leapfroggin

o   Pay for performance model: pay is opp. cost of individual, set by the market, contractarian approach
o   Managerial power theory: wages are greater than opp. cost due to firm-level corporate governance failures; rent extraction is explained by power coupled with weak governance structures
o   Economic sociology: governance failure on level of one firm becomes part of environment of other firms, firms set pay levels by analysing pay of peer groups aspirational peer groups mean effects of leapfrogging propagate through system, peer groups can be non-reciprocal and SEC requires them to be disclosed
“Rent capture by one CEO produces a higher benchmark that other CEOs can point to as the market ‘price’”
It may be that pay for performance has increased and so pay itself has risen (Jensen and Murphy, 1990)

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Roberts (2004) Agency Theory and incentives

o   Individuals bear neither the full cost nor the full benefit of their actions.  Actions are not directly observable so contracting can’t fix it.  Actions are taken by the most knowledgeable individual so difficult to determine incentives
o   Inducing cooperation involves incentives based on joint effort but this allows for free riders and effort is rationally underprovided (e.g. stock based pay)
o   Performance measures can be manipulated to increase pay whilst decreasing value of organisation
o   Make motivation intrinsic by making results of efforts clear; culture an vision; high commitment schemes
“Closely monitoring behaviour and explicitly rewarding it, particularly financially, may undermine trust”

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Kerr (1995) reward A pay B bad

o   Organization hoping for one thing but rewarding a different thing. E.g. organization can hope for long-term growth but reward quarterly earnings, hope for teamwork but reward individual efforts.
o   Causes of this are because of a fascination with an objective criterion, overemphasis on highly visible behaviours, emphasis on equity rather than efficiency.
Points made through example rather than evidence

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Murphy and Zabojnik (2004) Hiring outside CEOs

o   Changing role of management
o   Technology makes firm-specific knowledge readily available to outsiders
o   General skills have market value.  Hiring from outside increases competition and so increases pay
o   Managerial power theory claims inside CEOs will earn more than outside ones because of close ties with board but this has shown to be false

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David and Strang (2006) Composition- consultancy

o   Start of a boom is dependent on circumstance
o   During a boom there is a rise in the number of generalist consultants as they are used to entering new markets quickly, can implement quickly, and managers are impatient and naïve.  Lack of firms with relevant expertise because it takes time to acquire
o   During a bust client urgency diminishes, managers become more cautious as they gain experience so firms without relevant expertise have fewer opportunities, firms return to technical roots
o   Management theory may influence strategies, but consultants determine practical implementation; generalist firms badly implementing strategies may lead to their bust
“Widespread but superficial implementation”
“The demand-side combination of inexperience, urgency, and herd behaviour is a powerful one”
Not simply consultants that create boom/bust – it would happen anyway (Strang and Macy, 2001)

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Strang and Macy (2001) Adaptive emulation, success

o   Rational model is over-rationalised whilst contagion model is under-rationalised; adaptive emulation combines both, where firms infer efficiency from implementing and looking back, if successful, stick, if unsuccessful, search amongst peer group and emulate
o   Cognitive and social bias towards success is self-reinforcing: initial success through luck, subsequent success through converts
o   Even when looking purely for performance, not mimicry, fads occur because they seek to learn from limited information
o   Lock ins on sub-optimal points – e.g. QWERY keyboard over DVORAC.
“adaptive emulation generates faddish cycles”
“even worthless innovations can spread in a population of performance-driven actors”
“Consultants advertise their winners, not their also-rans”

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Denrell (2003) Under-sampling of failure

o   Success bias in sampling affects learning process
o   Failure is undersampled: economic process (failures don’t survive), social bias, when searching for best practice we look at successful firms only
o   Variables unrelated to success in the full sample may appear to be in the biased one (e.g. risk-taking/focused strategies/strong culture/tight organisational structure)
o   Variables necessary for survival but not conducive to further performance are overlooked
o   Causality and randomness further weaken the link between performance and characteristics
“Unrepresentative group of survivors”
“Observers of organisation can be expected to have systematically biased theories”

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Wilensky (1964) Process of professionalization

1.       Do it full time
2.       Education and training
3.       Association and peer review
4.       Consciously define the task
5.       Formal code of ethics embodies rules
6.       Legal regulation may help but not a necessity
o   There is an argument that everyone is becoming a professional because of techniques supported by theory (it is the strength of the link that matters), continuous salaries (not always an indicator, e.g. doctors) and unions pushing for rights
o   Professions are technically based and require systematic learning over long periods, norms are adhered to, the vulnerable/ignorant client is more important than the supplier; professional acknowledge weaknesses and refer to others
o   Barriers to professionalization: bureaucracy prevents autonomy; optimal base of knowledge neither too large nor too small; pure client-orientation
o   Professional knowledge is to some extent tacit
“The service ideal is the picot around which the moral claim to professional status revolves”
Process is too formalised and detached  (Abbott, 1988)
Occupations based on natural sciences actually easier to professionalise
Code of ethics matters only in the extent to which it strengthens a jurisdictional claim (Abbott, 1988)

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Abbott (1988) Jurisdictions defining professions

o   Jurisdictional claims are exclusive since they assume both social and cultural control; they can be made in law or to the public at large.  Claiming allows a chance at professionalization; the occupation must be one through function too.
o   Sequence of diagnosis, inference, and treatment, defines the profession.
o   Professionals try to subordinate others through their use of abstract knowledge – objective tasks will resent this, but subjective ones cannot
“Jurisdiction is the defining relation in professional life”

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McKenna (2006) Management consultancy Profession

o   In the 90s a merging of theory and practice implied professionalization and higher moral standards, but may have been merely to increase status and individual consultants were still suspect
o   Regulation cleared a jurisdictional vacancy for consultancy, and consultants presented themselves as a profession, but could not professionalise: language could not make up for poor credentials; firms chose to individually set standards; did not have to be professional to be successful, worried they might not identify the next new fad
o   Opposite of transaction cost when deciding whether to employ external advisors, if the problem is brief, specialized and nonrecurring, then it makes sense to employ.
“Commitment to a higher moral purpose”
“Ultimately failed to professionalise”

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Meyer and Rowan (1977) Insti. Rational social norm

o   Prevailing theories of organisations assume they function according to their formal structure
o   Rational social norms, held by society as a whole, become formalised in the form of impersonal institutions, which cannot be affected by the individual
o   Institutions cause firms to adopt practices based not on efficiency, but on external legitimisation; organisations become isomorphic with social structures; adapt to concepts but also shape them
o   Innovating organisations bear costs in the form of lost legitimacy; adhering organisation more likely to thrive
o   Rules of institutionalised organisations may conflict with efficiency or each other.  Overcome this through decoupling structure from activity and confidence/good faith (avoidance, discretion, overlooking etc.)

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Porter (1979) Five forces shaping competitive str

1.       The threat of new entrants – barriers to entry; industry growth; expectations of incumbents’ reactions (past experience/resources available)
2.       Bargaining power of suppliers – concentrated; industry is not an important customer, unique/differentiated product (switching costs)
3.       Bargaining power of customers – concentrated, posing a threat of backwards integration, price sensitive (homogeneous products, high price relative to income, quality not important)
4.       Threat of substitutes – improving price-performance pay off
5.       Jockeying for position – many firms of equal size/power, slow growth create market share fights, high fixed costs gives incentive to cut prices, high barriers to exit
Easy formulation but difficult implementation – wish based strategy (Kay, 1993)
Very functionalist, ignores idea that the firm to some extent enacts its own environment (Morgan, 1986; Burrell and Morgan, 1979)

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Prahalad and Hamel (1990) Core competencies

o   Faults of the Strategic Business Unit system: if core competencies are “collective learning in the organisation” then defending autonomy of SBUs hinders their development; focus on price/performance which is short run only so risk losing core competencies; encourages decentralisation and focus on end products; SBUs may develop core competencies but not share; bounded innovation
o   Strategic architecture: must transcend SBUs and develop core competencies, forcing managers to bid for them reminds them they are firm resources, “working across organisational boundaries”
o   Leads to low cost innovation and adaptation to market change LR, provides access to new markets, they are difficult for competitors to imitate
o   Western companies risk under-developing them by focusing too much on SBUs and SR performance
“In the core competencies underlying them, disparate businesses become coherent”

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Barney (1991) Resource-based view

o   Traditional framework (e.g. Porter, 1979) assumes firms in an industry have identical strategic resource control, and resources are mobile so if firms were heterogeneous wrt resource control it would be SR only, in reality resources are mobile and firms can be heterogeneous wrt resource control
o   Comp. advantage occurs when a firm is using a value-adding strategy not currently being implemented by others, it becomes sustained when that strategy cannot be duplicated
o   For a resource to have the potential to develop a sustained competitive advantage it must be: valuable (realise opportunities/neutralise threats); rare; imperfectly imitable (unique historical conditions, socially complex, causally ambiguous link between resources and advantage); no common equivalents
o   Firms can’t expect to purchase competitive advantage
“[firms are] intrinsically historical and social entities”
Although critical of Porter (1979), falls into same functionalist trap, assuming that resources are only valuable if they neutralise threats or realise opportunities

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Kay (1993) Distinctive capabilities - comp. advan

o   Successful strategies exploit a distinctive capability; need to identify existing ones because difficult to create, not wish-driven.  Successful strategies don’t imitate and can’t be imitated.
o   Architecture: every individual is replaceable but the whole is more than the sum of its parts; relational over contractional to prevent imitation; if value is added by an individual the benefits will ultimately flow to them; the cooperative ethic; e.g. Japanese structure
o   Reputation: particularly important when quality matters but cannot be assessed; can be gained through commitment or staking a reputation gained elsewhere
o   Innovation: difficult to create comp. advantage through it because of uncertainty, cost, and ease of replication; need to use another capability to generate sustained comp. advantage; may not create comp. advantage but lack of innovation will destroy it
o   Strategic assets are not a distinctive capability but can still create a competitive advantage (monopolies)
“what can be written down can be reproduced”
“There can be no greater competitive advantage than the absence of competitors”
Claims a competitive advantage held for a long period of time is a sustained comp. advantage – inconsistent with Barney (1991)

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Teece et al (1997) Dynamic Capabilities

o   Strategy models exploiting power include Porter (1979), those emphasising efficiency: resource based perspective (Barney, 1991) and dynamic capabilities
o   Dynamic capability is the ability to redefine and develop core competencies in order to adapt to a changing market
o   Ought not to be imitable, but should be replicable
o   Too much strategizing leads to under-investment in core competencies and ignorance of dynamic capabilities, thus harming LR comp. advantages
“An organisation cannot improve that which it does not understand”

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Brews and Hunt (1999) Why planning beats learning

o   Previous studies have been inconclusive
o   Concludes a positive relationship between means specificity/ends specificity and performance in stable environments
o   No negative relationship between means specificity/end specificity and performance in an unstable environment
o   Formal, specific planning may be required before strategies can be successfully implemented
“[performance measures] are clearly associated with specific planning, regardless of environment”
“Unstable environments may force the development of planning capabilities”
Strategic ends scale on questionnaire is comparable to Weber’s iron cage of bureaucracy.
Self-selection skews results since only firms aware of strategy will volunteer, but formal strategy may be different from practice (Meyer and Rowan, 1997)

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Wernerfelt and Karnani (1987) Tech Trade-Offs

o   There exist two main strategy trade-offs: act now with uncertainty vs. act after problem is resolved; focus resources vs. spread resources for flexibility
o   Thus three choices: act now and focus; act now and spread; act later
o   More attractive to act now when there are first mover advantages, low risk aversion, and ability to influence resolution of uncertainty, more competitors
o   More attractive to focus resources when economies of scale, low risk aversion, ability to influence resolution of uncertainty, more competitors
o     Relatively bigger firms can afford to wait and focus
o   Firms who focus should do so on strengths and weaknesses if strong, but if weak should base focus area on choices of stronger firms
“The strategic context of a firm is always uncertain”
Acknowledges analysis assumes trade-offs cannot be escaped and that no empirical evidence is provided
Fails to explicate on definitions of “market” or “competitors” – may be very subjective
Assumes focusing firms can identify their strengths and weaknesses (Mintzberg, 1994)

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Pascale (1996) The Honda Effect

o   Japanese believe a single strategy excludes peripheral vision and often work out the formula of their America counterparts’ strategies and exploit their inflexibility.  They prefer continuous dialogue to top-down planning
o   BCG report portrays Honda as having had a specific plan, using Japanese position to “redefine” the US market, exploiting their competitive advantage
o   In reality, Honda directors recount learning process, Honda and Fujisawa unique individuals, technology came after demand for innovation, supercubs by chance, nicest people campaign from UCLA undergrad
o   Western thought tries to impose a “purposive rationality” on actions and overlook emergent aspects
“produced more paper than insight”
“In truth, we had no strategy other than the idea of seeing if we could sell something in the US”
“[Honda’s] motivation was not primarily commercial”

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Mintzberg (1996) Honda = Learning > Planning

o   Learned on-site in USA: formal rational process would have eliminated super-cubs as a non-starter, rational man is often incorrect
o   Conception of a strategy is unique so there is no formula but we do need formal techniques for implementation; we currently emphasise planning too much, we need synthesis.
o   Need to conceive strategy informally before it can be formally implemented. 
“While we run around being ‘rational’, they use their common sense”

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Goold (1996) In favour of the BCG report

o   Managerial as opposed to historical, designed to help managers conceive strategies likely to work
o   Practical, as strategy ought to be
o   Industry could not afford trial and error, Honda could because it was small
“unrepentant synthesiser”
Being managerial does not involve ignoring history (Mintzberg, 1996)

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Rumelt (1996) Honda - 3 strategy views

o   BCG account: exploitation of competitive advantage.  Japanese long term focus on market share, as opposed to UK focus on short-term profits, looks at industry economics and failure of UK to exploit this
o   Pascale’s account: The Honda Effect.  Better product but no targeting, learning over planning
o   Prahalad and Hamel: core competencies in engines.  Long-run intent, directed diversification.
o   All assume myopia (Pascale in Honda, others in the UK motorcycle industry).  None have sufficient proof.
“The key element of controversy is intentionality”

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Mintzberg (1994) Critique of design school of stra

o   Underlying premises: controlled, conscious thought process, single strategist, simple and informal in order to be in one mind, unique strategy from creative design, fully formulated then made explicit/articulated
o   Strategic change involves risks so strengths and weaknesses cannot be predetermined.
o   Structure determines strengths/weaknesses which determines strategy which determines structure, can’t claim strategy ought to take precedence
o   Underestimates structure and environment in assuming managers can act freely
o   Articulation best in stable environments as can breed resistance to later change.  Assumes informed formulator and stable environment
o   The more complex the firm, the less applicable it is
“thinking and action must proceed in tandem”
Ansoff (1994)

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Ansoff (1994) Critique of Mintzberg (1994)

o   Mintzberg fails to notice increasing turbulence of environment: in stable environments you can learn and develop; in turbulent environments successful firms use strategies discontinuous from their previous ones.   Firms using emergent strategies find themselves beaten by those planning
o   Mintzberg sees strategy as descriptive, when it is in fact prescriptive
o   Rational beats existential: faster decision-making, starts response early, eliminates non-starters
“The model becomes a chain of cognition-trial-cognition-trial ad infinitum”

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Mintzberg et all (1998) Critique of Planning

o   Planning became a “virtual religion” and little empirical research was done into its effectiveness
o   Decomposing the planning process into small steps with checklists and techniques; referred to as planning but inevitably comes down to control
o   Assumes knowledge of future and stability whilst process unfolds
o   Assumes managers are detached, Mintzberg (1990) believes they must be immersed
o   Strategic planning replaces rather than enhances intuition.  Strategy formulation must be subtle to be innovative.
“Because analysis is not synthesis, strategic planning has never been strategy making”

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Kay (1993) Rationalist school of strategy

o   Firms want to plan for future, but this only becomes strategy when multiple outcomes are considered
o   Chandler claimed structure then strategy
o   Wish-based strategies have easy formulation but difficult implementation; but formulation and implementation ought to be inextricable
o   Managers want to have direction, so rational beats emergent
“planning is not strategy”
“Structure is itself a determinant of strategy”

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Lusch (2007) The development of marketing

o   “to market” model: historically, buyer and seller were separate and there was a shortage of supply; marketing was getting goods to consumers; tangibles were seen as source of value and marketing useful only in adding time/place/possession
o   “marketing to” model: More developed and efficient economies mean the issue is now stimulating demand rather than filling it; focus on satisfying the customer; shift from societal to managerial perspective; focus on satisfying customer; but intrusive nature can be overwhelming and so consumers choose to avoid it all
o   “marketing with” model: customers are made into endogenous, operant resources (produce effects, dynamic, and intangible) as opposed to exogenous, operand resources (performed acts, static, and tangible); value is cocreated.
 “Marketing was being viewed with increasing disdain” [1964-2004]
“Collaborating with customers to cocreate value”

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Brynjolfsson, Hu and Smith (2006) The long tail

o   The wide variety of products that the internet has made available to consumers and that they value more highly than the lower prices
o   Supply-side drivers: lower costs because  warehouses rather than shop space; can aggregate demand  with no geographic restrictions so don’t have to cater only to mainstream; lower production costs for niche products (printing on demand, lower search costs for f of p); innovation lowers costs (digitalised products)
o   Demand-side drivers: provision of active and passive search tools to prevent overwhelming consumers with choice; passive search tools use revealed preferences; sales distribution far more even over internet
o   Second-order effects: positive feedback loops; niche products become viable/profitable, creating incentives for their production and design
o   More niche markets appear and consumers develop more specific tastes; consumers openly share information online; destroys incentive to invest in previously mainstream goods
“Consumers are led even further down the long tail”

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Rappaport (2007) Models of advertising

o   Internet was first an extension of interrupt and repeat, but there is now a tipping point centred on relevance
o   “on-demand”: consumers are now able to reject advertising without reducing consumption, so marketers can’t just create a brand, need to stimulate media interest around it too – aggregate preferences
o   “engagement”: develop an emotional connection between brand and consumer; occurs within a social context that influences it; centred around relevance
o   “service”: look from consumers’ viewpoints; increase engagement by providing information; technology allows you to offer personal information at low cost
o   Privacy not kept for intrinsic value, but reputation
“It would be an error to think that control has fully shifted to the consumer”
On-demand model assumes control over media consumption is synonymous with control over advertising consumption. 

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Scott-Morton (2006) Internet - consumer surplus?

o   Lower costs on traditional sales because less information required and convenient supply channel
o   Innovation – digitalised or complementary products
o   Price comparison tools allow consumers to be price-sensitive; compare at no cost, sharpening competition
o   Disutility from advertising less that utility form timely relevant information provision – time efficiency
o   Corporate response: internet firms free-ride on services provided by real ones; businesses try to increase costs of switching to internet because it reduces their profits; matching increases effective durability and so increases price; price differentiation
“Can help consumers arbitrage”
“Minority consumers of all kinds are likely to benefit disproportionately”

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Levitt (1972) Production-line approach to services

o   All firms provide services, but some class themselves as such and this has hindered their progress/efficiency
o   Service employees fail to act rationally: historical connotation of ritualism; lower status obeying orders.
o   Thus, only option is to increase effort, whereas manufacturing looks for solution within the problem.  As long as we see service as individualistic, we will only look at increasing effort rather than efficiency
o   Reason for McDonald’s success is that they think as manufacturers; remove all discretion from employees
o   Service is seen as residual, so has less respect and so lower performance, we must stop distinguishing. 
“Service thinks humanistically, and that explains its failures…manufacturing thinks technocratically, and that explains its successes”
“Everybody is in service”
Roth and Menor (2003) call for research to validate the claim that “everybody is in service”
Fails to account for employees displaying genuine emotion (Sutton and Rafaeli, 1999)
Autonomy is necessary for professionalization (Wilensky, 1964)

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Roth and Menor (2003) service operations mngment

o   Currently SOM research is conducted through a POM lens; very few SOM articles in POM publications: problems don’t easily submit to normative analysis; SOM sub-discipline legitimacy questioned; fragmented
o   The service strategy triad: target market, service concept, and service delivery system determine service encounter  - AKA consumer satisfaction
o   Service concept is currently poorly defined.
o   Sasser et al (1987): when buying a service the consumer interacts with its creation; when buying a product only the product itself counts
“There is still much that remains to be understood about the science – and art – of service management”
We don’t need a SOM research agenda; we need to apply POM to services.  Calling for a SOM research agenda simply exacerbates the problem by distinguishing yet further between operations and services (Levitt, 1972)

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Pine and Gilmore (1998) The experience economy

o   Experience economy it still developing so currently they are merely wrapped around services; to get their full benefit we must see them as a distinct progression
o   Exist only as part of the person who experienced them; memorable to those who have been engaged by them; interaction between staging and mind
o   Once managers begin to explicitly charge for experiences, their quality will increase
o   Passive vs. active participation and absorption vs. immersion.
o   Requirements for memorability: theme; positive cues; eliminate negative cues; memorabilia; use all 5 senses
“a distinct economic offering”
“Experiences are inherently personal”
Sample is only of successful firms; may be subject to under-sampling of failure and so “systematically biased theories of organisations” (Denrell, 2003)
Checklist of requirements implies anyone can do it and so it cannot create a sustained competitive advantage (Barney, 1991)

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Hines et al. (2000) Making/Purchasing a strategy

o   Origins in 1980s recession meaning costs could not be passed so looked for other ways to reduce costs, and obsession with Japanese supply chain management
o   Partnership approach means purchasing must be seen as strategic – transitional model
o   1. Flat pricing (adversarial relationships, passive, and price focus). 2. Total cost focus (cost rather than quality). 3. Supply-side management (competition rather than cooperation).  4. Strategic sourcing (cooperation rather than involvement).  5. Network and relationship management (mutual development – expensive and high trust required)
“How the rest of the firm sees purchasing [is] an extremely important factor”
Fails to justify claim that purchasing personnel are becoming more professional – dismissive
Claims that trend for reliance on a few suppliers is support for this transition, but this may be due purely to different input requirements as qualitative demand for output changes

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Macbeth and Ferguson (1994) Partnership sourcing

o   No longer firms competing against firms, but supply chains against supply chains
o   Firms add value (from consumers’ view, not the firm’s) through transformations in the supply chain: any process adding cost but not value should be eliminated but such supra-power rarely exists
o   Relations are not unidirectional and the customer can only be the greatest force if their requirements are felt all the way back through the supply chain
o   Information is power: managers may withhold/distort but only do so from those next in line; information sharing requires trust developed through actions
o   Reducing supply chain waste, e.g. buffers or goods inwards inspection through relationships
o   The partnership will develop together
“not merely words”

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Helper and Sako (1995) Exit/Voice Rel. in Japan

o   Exit: short term with little trust or information flow
o   Voice: long term, commitment in the relationship
o   Voice relationships result in higher performance
o   Japanese firms gave multiple responses implying threat of exit used to maintain voice relations
o   Convergence with US firms moving more toward voice relations and Japanese firms toward exit ones
o   Claim superior performance of Japanese in automobile industry is due to voice relations
Study limited to Japanese firms in the auto industry – may be less applicable across nations or industries
Criteria for measuring success (customer rewards received, ability to adopt JIT without a cost increase, and market share growth) are very specific

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Sako (1996) Suppliers’ Associations in Japan

o   Seen either as a cartel, used to increase profits, acts as an unfair advatage and so ought to be broken up, (but pre-tax profits less for members) or as redundant, existing out of inertia, rather than benefit (but empirical evidence shows valued by customers and suppliers themselves)
o   Used for diffusing new technologies/innovative practice.  Mutual development and horizontal learning
o   R&D is lower for members perhaps due to free-riding or fear of information leaking
“suppliers value mutual learning from other suppliers as much as learning from their assemble-customer”
Only eleven automobile firms and purely in Japan – ability to generalise is therefore limited.

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Burnes and New (1997) Ptnershp at oper/strat lvl

o   Partnership sourcing often falls short of the picture painted of it: rhetoric used to cover up adversarial negotiation
o   “effective collaboration” better since it encompasses both conflict and cooperation
o   At strategic level, relationships entered into if in the interests of both firms; partnership language may act as a barrier on this level, distribution of costs and benefits need not be equal
o   At the operational level a strong partnership exists, characterised by trust, openness and mutual dependency.  This is necessary but insufficient
o   Once strategic ground rules have been established they move to the operational level as part of the relationship and cease to belong to management
“effective collaboration”

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New and Mitropoulos (1995)

o   Organisations are moving away from short-term adversarial tactics and toward longer-term management of relationships and networks
o   Morphology is dubious – if the network cannot be drawn is the use of the metaphor correct?
o   Must ask ourselves whether the network is viewed purely form the perspective of the firm or is it an objective reality in which all firms participate
o   How do firms with conflicting views interact?
o   Overlaps in terminology and enthusiasm clouds thinking and hinders accuracy
“An academic abstraction”
“Firms are presumed to be able to create and then manage their own networks”
“The network label carries with it a tacit moral advantage”

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Latour and Woolgar (1986) ethnography of the lab

o   The artificial reality objectively referred to by scientists has been created by inscription devices. 
o   The tendency to think of inscription devices as evidence is misplaced, they in fact create the reality
o   The inscription devices make possible the phenomena but must be forgotten afterwards.  Persuading others of a fact makes it one through addition/subtraction of modalities.
o   There is a mythology in which cultures’ activities and practices sit that is taken for granted
“Others are persuaded that they are not persuaded”
“It is not simply that the phenomena depend on a certain material instrumentation; rather, the phenomena are thoroughly constituted by the material setting of the laboratory”
Authors recognise that caution should be taken in generalising scientific study from this single case

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Kuhn (1970) Paradigms Science

o   Historically, there was typically no paradigm, and so early research was just fact-collecting.  A body of belief, not currently implicit in the facts, must be found and applied to form a basis for future research
o   Normal science is the articulation of a paradigm: if the paradigm is a promise, normal science is its realisation; it is inflexible, forcing nature into predetermined boxes; puzzle-solving
o   It’s in unprecedented results that actual discoveries lie as they question the fundamental assumptions of the paradigm.
o   Science is not accumulative, but works in paradigms
o   Science is based on the assumption that the scientific community knows what the world is like
o   Science seeks to find a new application of a paradigm or to increase the precision of an application that has already been made
“There is no standard higher than the assent of the relevant community”
You can never demonstrate a paradigm shift since your thinking will be constrained within your current paradigm. 

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Latour (1987) Black boxes and trials of strength

o   Labs construct reality to the extent that they can resist trials of strength: the author becomes a mouthpiece for the inscription device and the dissenter is confronted by all that the scientist is speaking for so must be willing to challenge a result that has previously been unquestioningly accepted
o   The trial of strength of the dissenter determines who’s view is more or less subjective/objective
o   New objects are shaped by importing old ones in their reified form – creating black boxes
o   Double think: when in controversy, nature is the final consequence (relativists); when settled, nature is the cause (realists).  Same argument holds for society
“Nature is not directly beneath the scientific fact”
“Nature settles only the settles claims”
“weak rhetoric, becoming stronger and stronger as time passes”

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Orlikowski (2010) Perspectives on technology

o   Absent Presence: technology overlooked by researchers, taken for granted with a focus on people
o   Exogenous Force: technology is an “autonomous driver of organisational change”.  Given ontological preference; positivist research approach; assume technology can be applied and work the same everywhere.
o   Emergent Process: Human action is given ontological preference; technology is “socially defined and socially produced”. 
o   Entanglement in Practice: supported by Orlikowski; a relational ontology that gives preference to neither technology nor human action. 
“An ontology of separateness”

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Christensen (1997) Sustaining/Disruptive Tech

o   Original technology mudslide hypothesis, that leading firms fail because they find it hard to keep up with the fast pace of technological change, was disproven
o   Two types of development: sustaining performance via incremental developments along an S-shaped trajectory, established firms are leaders here.  Disrupting technologies, redefining performance, usually technologically straightforward but along a different trajectory
o   Leading firms were capable of developing disruptive technologies but since these were not initially what customers desired they failed to commit to them – customers demanded incremental improvements - S-Curves
o   Lends weight to resource dependency model, implying managerial role is merely symbolic.
o   But managers can either convince others that the new technology is more important than incremental change, or can embed new technology among consumers that need it (second is easier)
o   Successful firms have harnessed, rather than fought, the forces of resource dependency.
“Held captive by their customers”

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Barley (1986) Technology- occasion for structuring

o   Focus on technology as hardware equipment
o   Technology as an intervention into the relationship between human agents and organizational structure which potentially changes it
o   Technology was a trigger that occasioned certain social dynamics that led to anticipated and unanticipated consequences (such as increased decentralisation in his study)
o   Some features of technology are socially constructed but Barley does not allow for the physical modification of technology during use
“Technologies do influence organisational structures in orderly ways, but their influence depends on the specific historical process in which they are embedded.”

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Winner (1985) The politics of Technology

o   Social scientists prefer to see humans as political and technologies as neutral – exogenous force perspective
o   Technical arrangements can be forms of order: Moses’ bridges on Long Island; technology is not always for efficiency but for human motives; we overlook the idea that technological design may have involved a political thought process
o   Inherently political technologies: designs without flexibility, choosing them is tantamount to choosing a form of political life; moral reasoning becomes obsolete, irrelevant, and subordinate to the practical necessities the technology determines; people change their behaviour to adapt to technology even if against their political views
“Technologies are ways of building order into our world”
As appealing as Winner’s argument concerning Moses’ bridges is, little support is provided for this conjecture

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Grint and Woolgar (1997) Configuring the user

o   Users are free to interpret technology, but only within an appropriate context.  This context does not exist in isolation from the machine, but is defined by the social relations that create the machine itself
o   We have a tendency to choose between social or technological determinism: this dichotomy ought to be transcended to relate to reality
o   The constitution of the machine offers certain interpretations for users, so users are configured y technology and the way in which it is presented to them
o   Reverence for the technology is symbolised by casing
o   When we talk of impact we are forced to arbitrarily distinguish between the technical and non-technical: they must be seen together to understand how a technology is formed.
o   Users are often wrong: only see incremental developments, and so managers are needed
“In buying a technology one necessarily buys into the social relations which both accompany and constitute it”
“It is the company’s view which defines users’ future requirements”

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Daft and Weick (1984) Scanning, interpretation

o   Most empirical research perceives organisations as static, when in fact they interact with the environment through the process of interpretation
o   Interpretation is not just on the individual level, but is based on coherence of strategic-level managers
o   Scanning (data collection) – interpretation (data given meaning) – learning (action taken)
o   Two factors explaining differences in organisational interpretation: extent to which management sees environment as analysable, and the extent to which the organisation intrudes into its environment in order to understand it
o   Environmental assumptions: the acts of questioning is influential in determining the outcome
o   Organisational intrusiveness: passivity is interpreting within accepted limits
“The interpretation may shape the environment more than the environment shapes the interpretation”
“The organisation may to some extent create the external environment”
Phrases such as “when the environment is subjective”  create confusion as to whether the subject matter is being approached from a  functionalist or interpretivist perspective

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Weick (1993) Sense-making Mann Gulch

o   Sensemaking: reality is continuously constructed form people’s attempts to create order and to retrospectively account to themselves and others for previous actions in a rational manner – organisations help in this by providing meaning and contextual rationality
o   Four sources of resilience: improvisation and bricolage (Doge’s escape fire); virtual role systems; the attitude of wisdom (knowledge and ignorance develop together, oughtn’t to be over-confident nor over-cautious); respectful interaction creates inter-subjectivity
o   Structure and meaning interact in a feedback loop that amplifies deviation – collapse of one can lead to a cosmology episode, where people feel the universe is no longer rational
“Minimal organisations…are susceptible to sudden losses of meaning”
“Interrelated collapse of sensemaking and structure”

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Clegg and Hardy (1996) Organisations, organisation

o   There is no certainty as to what organisations are.  The way in which researchers choose to represent organisations in their work are not attributes of the organisation, but the result of the interaction of conversations: conversations create a space in which the organisation is created
o   Knowledge of the organisation is affected by the underlying assumptions of the researcher
“Organisations as empirical objects; organisation as theoretical discourse; and organising as a social process”
Acknowledge that their interpretation must necessarily be unique

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Morgan (1999) Equity, Loyalty,brand affinity

o   Affinity is composed of authority, identification, and approval.  Affinity and functional performance create brand equity.  Brand equity and price create total utility
o   Authority: heritage, trust, innovativeness; “the perception of a brand and what it stands for”
o   Identification: branding through shared values, consumer believes the brand cares for them, nostalgia, relevance
o   Approval: prestige, acceptability, endorsement, tacit peer approval, about meeting social need
o   The value line plots equity against price; rating value for money doesn’t tell you where you are on the line, ought to evaluate them separately. 
o   Loyalty is created not on absolute value of proposition, but in comparison to alternatives but man is not always rational and so doesn’t always choose best available option (inertia)
“Individuals interpret relative brand values in the light of their own constraints”

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Holt (2006) The origins of branding

o   Branding began as a means of assuring quality to customers; only in late C19th did it develop into something social, sophisticated, and individual, as opposed to collective
o   Branding is now perceived to be a vital part of strategy, although somewhat ignored by academics
o   Creates a social need – valuable to the extent that it enters the public domain, contributing to and becoming embedded in society but this makes it less under the control of the firm
o   Once a critical mass relies on it (when people count on branding to contribute to social life), economic rent can be made
o   Rationalisation of global supply chains has made it increasingly difficult for firms to garner a sustainable advantage in their product
o   Brands work by moulding existing ideologies to serve the needs of capital
“Today, branding is a core activity of capitalism”
“Generates profits by creating and then exploiting various sorts of social dependency”

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Fournier (1998) Consumer-brand rltionshp patterns

o   Brand-consumer relationships are composed of reciprocal exchange and purposive interaction, but the brand is only in the minds of consumers and the actions of managers
o   Relationships provide meaning, they are socially contingent, dynamic, developing phenomena
o   Traditional: classic brands, stability in commitment, gender biased, contingent on society’s expectations at the time
o   Postmodern: fragmented, highly individual, disposable
o   Transitional: caught between traditional and postmodern, indicative of identity crisis, largely superficial portfolios
o   Relationships disintegrate either because not maintained or forcefully broken (environmental stress or consumer’s “perception of neglect” by brand)
o   Consumer’s experience with brands often not that predicted by the managers manipulating the brand
“the brand has no objective existence at all”
“Consumers do not choose brands, they choose lives”
Case study of three women – too narrow to make meaningful generalisations

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French and Raven (1959) Bases of power

o   Power defined in terms of social influence, and influence in terms of change.  O is able to exert power on P because of some enduring relation
o   Internalisation of social norms merely makes external influence now dependent on internal values
o   Reward: dependent on probability/magnitude
o   Coercive: will always be dependent (unlike reward), must prevent P from leaving field entirely
o   Legitimate: “oughtness”, internalisation of values, often authoritative but not always so, dependent on cultural values and acceptance of social structure
o   Referent: identification, both O and P may be unaware of it
o   Expert: expertise evaluated both in absolute and relative terms, “halo effect” may occur
o   Attempting to exert power outside its range will diminish it
Authors acknowledge they are only examining first-order effects

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Pfeffer (1998) Sources of power

o   In order to measure power we need to know what would have happened had the power-holder not intervened.  Foresight is not power but can give the impression of it and is needed to identify power
o   Only in contested decisions can relative power be assessed through outcomes, but power plays are often hidden.  Can use symbols of power but these are often lagged indicators, could talk to people but may produce a power system where none exists
o   Power is derived from the ability to convince others that your task is important: dependency (must also be legitimate); providing resources creating dependency (absorption of slack resources); coping with uncertainty; strategies to ensure irreplaceability; affecting the decision process
o   Social constructivist view argues that what is critical to the organisation is “a matter of social definition”, but
“The realities of the environment ultimately intrude, even if with some delay”

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Robbins (2003) Bases of power

o   Power is a function of dependency
o   Formal power: coercive, reward, and legitimate (includes, but is broader than, coercive and reward)
o   Personal power: expert, and referent (charisma, identification)
o   Politics is converting power into action: resources are scarce and groups have divergent interests, hard to find objective criterion for resource allocation so politics inevitable
“Power is a natural process”
“Politics is a fact of life in organisations”

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Morgan (1986) Sources of power

o   Every individual is trying to defend task, career, and extramural interests, pursuit of divergent interests makes politicking inevitable: organisations are not rational identities with a single goal but are networks of individuals
o   Conflicts are resolved through power.
o   Sources: authority (“effective only to the extent that it is legitimised from below”); control of scarce resources; control of decision process; technology (organisations quickly become dependent”)
o   The ability to cope with uncertainty is implicit in all power employed
o   Unitary: formal authority seen as the only legitimate power base, do not allow for politicking, believe in a coherent and integrated organisation
o   Pluralist: understands the importance of retaining conflict
“organisational choice always implies political choice”
“Organisation is intrinsically political” 
“Leadership ultimately involves an ability to define the reality of others”
“rationality is always political”
Use of the metaphor may over-estimate extent of power plays in organisation (Morgan)

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Johnson and Gill (1993) Perspectives on power

o   Power can be non-zero sum (and so unitary) or zero-sum (and so either pluralist or radical)
o   Unitary: all member depend on same resources and so there is no conflict inherent in the organisation; the exercise of power benefits everyone in the organisation; power is limited to authority (ignores use of power by others)
o   Pluralist: conflict is inevitable, but compromise can be reached through power (radicals accuse pluralists of ignoring consistent power inequalities) – strikes?
o   Radical: “society and its institutions are characterised by a confrontation between fundamentally opposed and irreconcilable class-based interests”; power is not equally distributed and is therefore a bad thing
o   Lukes’ (1974) three dimensions of power: control; defining what is debated as a decision; A making B want what B wants
o   The management prerogative: managers are constantly seeking to legitimise their right to manage, as legitimisation may be necessary before control can occur

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Brown (1994) The discourse history of culture

o   Power and politics claim that organisations act irrationally; culture studies can be seen as a development of this
o   No current consensus as to definition; tends to be metaphor vs. objective entity
o   Culture is a “pattern of beliefs, values, and learned ways of coping with experience” developed over organisational history and manifested in arrangements and behaviours
o   “superficial manifestations” (essentially the entire environment), expressing beliefs, values, and attitudes, beneath which lie ethical codes, which in turn are determined by basic assumptions
o   Espoused culture is not always culture in practice
o   Organisations are fragmented into sub-cultures
o   Falls on is rather than has side of culture debate
“National cultural differences may help to shape organisational design and behaviour at the local level”

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Grint (1995) Perspectives on culture

o   Heterogeneous practice (Humans and non-humans and culture as practice): culture does not objectively exist but must be constantly recreated, boundaries must be imposed
o   Homogeneous practice (humans only and culture as practice): the enlightenment; culture associated with knowledge and so confined to humans, boundaries to discriminate elite from masses, exclusionary
o   Homogeneous meaning (humans only and culture as meaning): culture seen as a unifying force, counter-culture movements and conflicts are ignored, culture is not possessed but rather the organisation is its culture, boundary between action and thoughts is blurred since thoughts are needed to make sense of actions “behavioural change is cultural change”
o   Heterogeneous discursive practices (humans and non-humans and culture as meaning): cannot isolate culture as it cannot exist independently, so must examine it in context; the issue is not whether boundaries are real, but whether they are made real; truth is in the eye of the beholder, but some are more powerful than others, culture is created through management’s accounts and representations of ‘reality’, the meaning of ritual depends on interpretation

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Handy (1985) Understanding Organizations

o   Cultures are affected by the events of the past and by the climate of the present, by the technology of the type of work, by their aims and the kind of people that work in them.
o   Many of the ills of organizations stem from imposing an inappropriate culture to thrive in an inappropriate climate.
o   4 types of culture: power, role, task and person
o   Power: culture depends on a central power source, they have ability to react or move quickly. Resource power is major power base, with some personal power at the centre
o   Role: This culture works by logic and rationality. Position power is main source of power. This culture succeeds when the environment is stable
o   Task: This culture is job or project orientated with the whole emphasis on getting the job done. Extremely adaptable culture where the influence is based on expert power.
o   Person: The individual is the central point. Organizations rarely exist with this culture.
o   The influencing factors: age of company, its ownership/history, size or organization, technology, goals, people
o   Faced with different factors, cultures have to adapt by: reproduction (decentralisation), differentiation, reinforcement. Those that do are more successful.

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Legge (1994) Managing Culture: fact or fiction

o   In recent years senior managers have launched a number of initiatives such as TQM, working with pride and customer care
o   Central to these initiatives is the belief that a key task of those in senior positions is to develop an organisational culture
o   The typification of Japanese management practice rests on crude stereotypes
o   Senior managers can have some influence but not necessarily so
o   It is assumed that managers attempt to change two manifestations of organisational structure: artefacts and espoused values
o   Recent studies show that cultural change initiatives appear more successful among its initiators and immediate collaborators (senior to middle managers) than further down
o   The paradox of cultural management: a small subgroup is being called upon to confront and overwhelm an existing culture that is based on morals and not the institution: questions must be raised about the ethics of such initiatives?
o   Creative tensions between different ideologies and viewpoints can stimulate individuals to think meaningfully
“the collective consensus of the organisation”
“skilfully managed organisational trauma”

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Schein (1984) New awareness of organisational cult

o   Organisational culture is the key to organisational excellence
o   Argues that we must understand the dynamic evolutionary forces that govern how culture evolves and changes
o   There are visible artefacts but also underlying assumptions that are unconscious but determine how group members perceive, think and feel
o   A set of assumptions can be patterned into cultural paradigms
o   The strength of a culture can be defined in terms of the homogeneity and stability of group membership and the length and intensity of shared experiences of the group
o   Possible for an organization to have an overall total culture on top of differing subcultures
o   Cannot be overlooked that new members do bring new ideas and do produce culture change but for culture to serve its function it must be perceived as correct and valid and taught to newcomers.
“There cannot be a culture unless there is a group that ‘owns it’”
“cultural strength may or may not be correlated with effectiveness” 
“Perpetually being formed” 
“Pervasive and ubiquitous”

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Ghoshal & Moran (1996) Critiq of Transaction Cost

o   Organisations aren’t just a substitute for structuring transactions when market fails, they have unique strengths.
o   Having control of firm does not mean opportunism does not exist.
o   Instead, there can be cycle of opportunism.
o   Organisation gives shared purpose and also ability to learn and adapt – makes most of human factors where its superiority to the market lies.
o   Transaction cost theory is static in nature

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Sheldrake (1996) Management Theory: from Taylorism

o    Taylor broke down jobs into small, basic parts and with cooperation of workers, timed and recorded them.
o   Provided more accurate information on how long jobs should take.
o   Believed in paying each worker by results.
o   Saw the relationship between capital and labour as one of mutual interest.
o   Wide view that Taylor saw workers as robots, Sheldrake disagrees.
o   Taylor was a believer in relaxation periods and breaks.
o   Taylor advocated a complete separation between the role of the operatives and that of management.
o   Importantly, he showed that expert knowledge of the technical means of production, coupled with time study and financial incentives, could substantially improve efficiency levels.
o   Taylor’s comments about Bethlehem Steel have haunted his reputation, helped portray that he only pursued efficiency.
o   His understanding of human motivation was extremely basic

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Porter (1996) What is strategy?

o   Operational effectiveness means performing similar activities better – shifting the productivity frontier outward, closer to its maximum.
o   Strategy is choosing different activities which allows for different productivity frontier.
o   Strategic positions emerge from three distinct sources: variety-based positioning (producing certain items), needs-based positioning and access-based positioning.
“Strategy is the creation of a unique and valuable position, involving a different set of activities”

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Mintzberg et al. (1998) Strategy Management

o   Organisations develop plans for their future and they also evolve patterns out of their past.
o   Strategy is a pattern – consistency in behaviour over a period of time.
o   Strategy is a plan – used to look ahead.
o   We can call one intended strategy and the other realised strategy. Intended strategies are of course not always realised, but are realised strategies always intended?
o   Thinking ahead but with adaptation to unexpected events. Strategies need to form as well as be formulated.
o   Strategy sets direction, focuses effort, defines the organization and provides consistency. However can also misguide/blind an organization, stop openness to other opportunities, define an organization too simply and also reduce creativity which thrives on inconsistency.

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Orlikowski (1992) The duality of technology

o   In the ‘hardware’ view, technology is a meaningful variable only in those organizations that employ machinery in their productive activities.
o   By aggregating task, technique, knowledge and tools into single construct – technology, interaction among these constituting components and with humans is ignored.
o   Technology is both physically and socially constructed.
o   Organizational operations can become more dependent on technology and therefore are more vulnerable to breakdowns which disrupt workflow.
o   Technology designed by the influences of managerial goals and also its use and understanding by the organization’s culture.

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Woolgar (1988) Science: The very Idea

o   There have been arguments that science is distinctive by virtue of its results, but more lately that its methodology makes it distinctive.
o   Weakness of Popper’s falsification theory is that it is based on the assumption that observations are neutral – observer’s culture, past experience all affect observations.

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Weber (1947) Defining the post-bureaucratic type

o   Bureaucracy is a means (no self-interest)
o   A discrete set of jurisdictional areas
o   A hierarchy consisting of both of the subordination of offices and of individuals, with a resulting separation of levels of planning and executing
o   A management system based on written documents and a staff of people who maintain and transmit these files
o   A stress on technical training
o   An office system comprised of general rules, which are stable, thorough and learnable
o   Bureaucratic administration means fundamentally the exercise of control on the basis of knowledge (the knowledge coming from technical training and also experience)
o   Rational authority is the rule of law – bureaucracy being the easiest way to implement the rule of law
o   Social consequences of straightforward duty without personal interests.
Bureaucracy is only a means; it has no embedded political agenda or self-interest.
Problems include the suppression of non-rational/external goals.

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Heckscher (1994) the post-bureaucratic type

o   Many critics of bureaucracy fail to distinguish between problems which are the result of badly managed bureaucracy, and those which are inherent in the model.
o   Major concepts : rationality, accountability and hierarchy
o   The key to bureaucracy is the rational definition of offices, the more specified the orders – the more confident leaders can be that their orders will be interpreted correctly, rather than being distorted by personal interests.
o   A good bureaucracy establishes positions through careful analysis of tasks to be performed. Bureaucracy is not necessarily inflexible: it can respond rapidly to demands from the top. But it means people only responsible for their own jobs
o   Bureaucratic segmentation is vital to the massive effectiveness of the structure but brings with it a set of undesirable consequences: is strategy best decided by top management without social process that uses intelligence of all? Failure to control informal organization and also the crudeness of organizational change – those lower down the chain can’t adapt smoothly and also degeneration (rules accumulate, responsibility tends to drift upwards and rules become sanctified.
“Social democracy and concentrated ownership mutually reinforce one another”
“Sweden is a high-trust society, yet ownership remains concentrated”
Schleifer and Vishny (1997)

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Adler & Borys (1996) 2 bureacracies

o   Contrasting assessments of bureaucracy as alienating to employees or as enabling them to perform their tasks better
o   Positive view means it provides needed guidance and clarifies responsibilities, easing role conflict and ambiguity therefore reducing stress
o   Negative view is the coercive nature and also the undermining of employee commitment which leads to dissatisfaction
o   It limits innovation though is effective at implementing innovation

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Brown (1995) Intro to Org. Culture

o   Interest in culture stems from 4 different sources: climate research, national cultures, HR management and conviction that rational and structural approach cannot offer full explanation of organizational behaviour.
o   National culture can change and shape organisational design at a local level – subsidiaries of same company
o   Organizations are like miniature societies with their unique configurations of heroes, myths, beliefs and values
o   Artefacts: most visual and superficial manifestations of an organisation’s culture – physical layout, material objects, language, technology, behavioural patterns, symbols, rules
o   Values, Beliefs and Attitudes
o   It is generally agreed that organisational culture can only be fully understood as the product of a historical process.
o   Organisational culture however is recognised to be able to develop and change over time
“Organisational culture refers to the patterns of beliefs, values and learned ways of coping with experience that have developed during the course of an organisation’s history, and which tend to be manifested in its material arrangement and in the behaviour of its members”

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Barney (1986) Organisational culture: c. advantage

o   3 attributes that a firm’s culture must have to generate sustained competitive advantage: culture must be valuable, must be rare and imperfectly imitable
o   Organizational culture is not a source of competitive advantage for all firms
o   Implicit in much organisational culture literature is the notion that an organisation’s culture can significantly reduce a firm’s effectiveness

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Meek (1988) Organizational culture

o   Culture may be conceptualised as something emerging from social interaction – something an organisation is
o   It is based on shared systems of cognitions, knowledge, beliefs, symbols and meanings.
o   Both produced and reproduced through the negotiating and sharing of symbols and meanings
o   It is both a shaper of human action and the outcome of a process of social creation and reproduction
o   If culture is regarded as embedded in social interaction, then it cannot be discovered or mechanically manipulated
o   People do not passively absorb meaning and symbols, in the process of reproducing culture they may transform it
o   Leaders do not create cultures
o   Many studies gloss over inherent conflicts and important structural features of the organisation

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McClelland & Burnham (2003) Power: Great Motivator

o   Institutional managers are interested above all in power
o   Recognizing that you get things done within organisation only if you can influence the people around you leads to managers focusing on building power through influence rather than personal achievement
o   These types of managers are the most effective – the best managers are those who like power and use it
o   The need for power must be disciplined and controlled so that it is directed towards the benefit of the institution not the individual
o   Good managers need power motivation and also are high in inhibition
o   Those that need personal power and those that need to be just liked are not as good as managers
o   Power motivated managers are not necessarily authoritarian

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Lukes (1974) Power: A radical view

o   Without conflict the exercise of power will fail to show up
o   Concept of 3 dimensional power – actual, observable conflict, latent conflict and things that never actualise
o   Power at its most primitive notion is that A in some way affects B
o   Consensual authority, with no conflict of interests, is not therefore, a form of power

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Duguid (2004) Brands and Supply Chains: Governance

o   Modern supply chains in terms of formal governance are becoming more independent and in terms of geography more distant. Yet nonetheless require ever tighter coordination
o   Relevance of branding when it comes to gaining power within a supply chain
o   Dell obsessed with inventory after Moore’s Law predicted that chips would in price every 18 months and they barely survived when they were overstocked with underperforming chips
o   Vertical competition can arise in supply chains, as companies within the supply chain compete for profit

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Huge & Anderson (1988) The spirit of manufacturing

o   JIT is the core component of manufacturing excellence
o   JIT seeks to reduce the overall amount of inventory in the entire chain, from the lowest level suppliers to the end users
o   JIT is an ongoing process to improve productivity
o   This is because any small problem ripples across the supply chain as due to parts starvation, it forces all workers to correct problems as otherwise next stage of production (entire production) will be starved of parts
o   JIT and TQM represent a cultural change: it involves recognizing that inventory size reflects overall productivity and large inventories mask problems.
o   Kanban – system where parts only produced when signal is received from subsequent operations

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Cohen & Roussel (2005) Strategic supply chain Mgmt

o   Costs of carrying inventory
o   Inventory-hub strategy – employs a postponement strategy alongside an inventory hub strategy in order to limit inventory. By bottling itself the strategy allows final decisions to be delayed until sales trends are clearer
o   Configure to order and make to order allow for lower inventory but they miss out on keeping manufacturing costs low and having products in inventory to meet customer demand

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Hugos (2003) Essentials of supply chain management

o   Effective SCM requires simultaneous improvements in both customer service levels and the internal operating efficiencies of the companies in the supply chain
o   A company will focus on its core competencies and outsource the rest
o   Important for a company to clarify the requirements of the customers: quantity of product, response time customer willing to tolerate, variety of products needed, service level required, price of the product, desired rate of innovation in the product
o   Inventory management full of paradox, high stocks easy access, low stocks cheaper costs
o   Companies survive in various supply chains, companies that can create collaborative supply chains will have a significant competitive advantage

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Clark & Salaman (1998) Management Gurus

o   3 explanations of guru theory and its appeal on senior managers.
o   Old explanations based on idea that manager is passive, flow if ideas is one way
o   Alternative explanation suggests gurus’ work offer attractive conceptions of the role of managers which constitute the identity of the modern senior manager as a heroic, transformative leader

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Edwards & Nibler (2000) C Governance in Germany

o   German system of CG often thought to be more effective at addressing problems arising in large firms
o   German system emphasizes the role of banks and also there is a much higher concentration of ownership in these large firms
o   However, analysis proves that although banks may influence CG (control of proxy votes, positions on supervisory boards, provision of finance) they do not play much different role in large German firms as any other large shareholder
o   Effect of high ownership concentration has costs and benefits, think of minority owners etc.

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Roe (1994) Strong Managers, Weak Owners

o   Managers are strong and owners as weak as in US it is rare to find single shareholder with 10% stock of Fortune 500 companies.
o   Shareholders have little incentive/ability to affect policies
o   Fragmented ownership seen as consequence of scale economies
o   Modern economics appear to face trade-off between efficient firm scale and shareholder control
o   Roe argues that this may be illusory. Diffuse ownership is actually due to political choices over the last century
o   Laws and regulations passed that impeded the formation of large stockholding blocks – compared to Germany and Japan where this is common
o   Why is the US so? Important to think about

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Mintzberg (1973) The nature of Managerial Work

o   Don’t know much about what managers actually do – really general speculations used with no real descriptions
o   Classical School – Fayol + Gulick, managers all about planning doing active vague objectives which has blocked deeper understanding
o   The Great Man School – one great individual did this and that, this is idiomatic at best
o   Power School and others etc.
o   Managers actually have 10 roles (each role is observable, all action in study can be accounted for in the defined roles and the 10 roles are integrated)
o   Interpersonal roles – manager as figurehead, leader and liaison
o   Informational roles – manager as monitor, disseminator (send external information into organisation) and spokesman
o   Decisional roles – manager as entrepreneur, disturbance handler, resource allocator and negotiator

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Sharma (1997) Professional as agent

o   Examines exchanges in which firms hire professional service organizations
o   Put into agency theory perspective – very different from shareholder/manager principal-professional exchanges
o   Difference between normal and professional agent is that although they share self-interest and bounded rationality is that there is power asymmetry – the agent has a lot more knowledge
o   Restraints on agent opportunism – self, bureaucratic, client and community control
o   Agency theory in this respect is not well developed

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Winter (2000) Satisficing principle

o   Routines are primitive but capabilities are substantial in scale and significance
o   An organizational capability is something that allows an organization’s management a set of decision options for producing significant outputs of a particular type
o   When should learning stop though? When costs > benefits
o   There is a satisficing (satisfying and sacrificing) point – this concept goes against optimal capability learning
o   Where this point is depends on where/how a firm wishes to develop

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Hendry (1990) Problem with Porter's Strategy

o   Paper explores problems with teaching Porter’s generic model and its application
o   Thrust of Porter’s argument is to attain sustainable competitive advantage + above average profits firm should concentrate on one strategy, making a clear choice about advantage and scope to which is seeks this whilst avoiding being in the middle
o   Problem is like Porter’s critics say where low cost and quality go together which Porter believes are two different directions and nonexistence of overlaps
o   The idea about not getting stuck in the middle can be useful as a warning about defining market and appreciating adding customer value but his rules and restrictions don’t hold up in real life

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Quinn (1978) Logical Incrementalism

o   Logical incrementalism isn’t just muddling along, it’s a conscious purposeful and proactive way for management to lead strategy formulation
o   It involves getting workers and sections of them and their specialism and dealing with them separately. The executive must try to keep talks open so that ideas can be generated and final commitments made as late as possible
o   Effective strategy emerges from series of strategic subsystems, attacks specific class of issues, then blended incrementally and opportunistically into pattern. This is strategy. Logic for each subsystem means each can provide normative instructions
o   This management technique improves and integrates both the analytical and behavioural aspects of strategy formulation

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Braverman (1974) Labour and Monopoly Capital

o   Scientific management initiated by Taylor at start of 20th century.
o   It is about labour not technology
o   It is not a true science as it has basic, capitalist assumptions and thinks of management in terms of antagonistic social relationships
o   Work is organized to Taylorian principles and become fundamental to all work design
o   This is not the best way to do work but the best way to control labour that is bought and sold
o   Reduce human factor in work and make it more abstract
o   Revulsion of work + any Communist stuff you want
Is Taylor not about technology though?

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Galbraith (1973) Designing Organisations

o   Leaders have begun to realize that they need to understand principles and tools that would allow them to create organizations superior to their customers
o   Companies now compete in a world of temporary advantage
o   6 shapers of today’s/tomorrow’s organizations have emerged: buyer power, variety and solutions, the internet, multiple dimensions, change and speed
o   By deciding the organization design, the executive shapes the decisions of every unit
o   Organization designs that facilitate variety, change, speed and integration are sources of competitive advantage
o   Star Model – strategy, structure, processes, rewards and people
o   Organizational design is a continuous process, not a single event

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Scott (2003) Organizations: rational/formal/open

o   The subject is organizations, the verb is organizing
o   The importance of organizations – they are everywhere, but people argue that they are a source of social ills? (emergence of power elite, systematic rationalization of our lives, power of these organizations, mass media)
o   Organizations are social structures created by individuals to support the collaborative pursuit of specified goals
o   Formal versus informal organization
o   Organizations are in demand because they are durable, reliable and accountable (these are neither good or bad)
o   Simon’s theory of administrative man – not economic man. This man satisfices and seeks to pursue own self-interests without truly understanding what they are

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Weick (2001) Making sense of the organisation

o   Whenever people act, their actions may be binding if those actions occur in a context of high choice, high irreversibility and high visibility
o   Organizations begin to materialize when rationales for commitment become articulated
o   Sensemaking is an attempt to produce micro stability amidst continuing change
o   Organizations are ideal sites for committed interpretation
o   Organizations are loosely coupled fragments
o   6 key themes on organization leading to alternative to rational bureaucratic model of organization: less rationality than meets the eye, organisations are segmented, stable segments in organisations are quite small, connections among segments have variable strength, this leads to ambiguity which would reduce if connections were of constant strength
o   Implications for administration – look for small pockets of order and protect/grow them
o   Surfing metaphor + Jazz metaphor

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Abrahamson (1996) Management Fashion

o   Fads= Institutional Isomorphism
o   Management fashion setters do not force fashions onto managers, to sustain their image as setters they must lead in race to sense emergent collective preference of managers, develop rhetoric and to disseminate rhetoric back to managers before others
o   Management fashion setting: the process by which management fashion setters continuously redefine both theirs and fashion followers’ collective beliefs about which management techniques lead rational management progress
o   Fashion setters thrive or falter depending on their ability to anticipate preferences
o   When management technique becomes fashionable in a collectivity, it will diffuse rapidly across the collective.
o   Managers frustration and needs of quasi-magical methods

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Hatch (1997) Organisation Theory: Modern, Symbolic

o   3 phases of industrialisation – machines first all involved one task (often operated by women and children), second phase factory systems diffused into lots of industries which demanded parallel growth in social organisation and bureaucracy with emphasis on control, routine and specialisation, third phase is now just emerging where production catches up and overtakes spontaneous domestic demand
o   Classical, modern, symbolic-Interpretive and postmodern
o   Metaphor as Machine, Organism, Culture, Collage

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Goffee & Jones (1996) What holds the modern compan

o   Culture remains to bolster company’s identity and gives sense of direction and value, no real right culture – manager must assess and choose right one for them
o   Solidarity, Sociability: Fragmented, Networked/Mercenary, Communal
o   Culture = community – businesses are based on social interactions
o   Changing the culture is difficult but needed to build community and avoid corporate fragmentation

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Pfeffer (1981) Assessing Power in Organizations an

o   Understanding the nature of power in organisations is important because: any power-orientated strategy in an organisation needs one to appreciate the political landscape, measurement of power is important for those who research the topic, assessment of power helps in understanding how it can be used
o   Fundamental to all definitions of power is the idea that some resistance or opposition is overcome, or some action change from what it would be have been without intervention by powerful actor
o   Power can be assessed by its determinants, symbols, reputation, control of decisions, providing and provision of resources and consequences.
o   Creating resource dependence – he who has the gold makes the rules, but it takes less gold if you know the rules
o   What determines power? Both structural position and the ability to deal with critical problems and contingencies as well as the personal skills and characteristics that facilitate the proper use of those power resources.

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Geroski (2003) The evolution of New Markets

o   To understand what will happen we need to understand what has happened
o   Demand pull and supply push
o   Luck-based inventions don’t happen unless something causes it
o   Technological trajectory – the original breakthrough branch has many other branches, one of the offshoots may lead to a particular invention

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Lieberman & Montgomery (1988) First-mover advantag

o   Firms wish to gain advantage over competitors and thus pour investments into R&D in order to fuel a greater market share
o   Mechanisms leading to first mover advantages: technological leadership, pre-emption of assets, buyer switching costs
o   Learning curve – when technological advantage largely a function of R&D expenditure, pioneers can gain advantage if technology can be patented or maintained as trade secret
o   The disadvantages of free rider effects mean that firms may be deterred from R&D
o   Incumbent inertia – replace of technology when old tech is still growing is difficult as firm may be locked into assets and sunk costs, reluctant to cannibalise existing product lines and firms may become organisationally inflexible

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Teece (1986) Profiting from technological innovati

o   When innovators win it’s obvious why: first mover advantages is transformed into sustained competitive advantage
o   When they don’t and imitators win there are 3 reasons why innovators fail: appropriability regime (environmental factors outside of firm and market structure, design protection for instance), complementary assets (assets needs to make innovation profitable) and dominant design program
o   In a weaker appropriability regime it is more preferable to acquire the assets in-house rather than subcontract them, otherwise you’re giving another firm the ability to produce your product

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Tushman & Rosenkopf (1996) Organisational determin

o   Technologies evolve through the combination of random events, the direct action of organisations shaping industry standards and the invisible hand of multiple competing organisations
o   2 fundamental factors shaping technological uncertainty: stage of tech’s evolutionary cycle and uncertainty
o   Technological history demonstrate 3 aspects of tech evolution: technical progress is characterised by incremental change punctuated by discontinuous advance. The tech breakthroughs are most frequently driven by organizations outside the existing technological order. Tech competition suggests that advance can be driven by clear dominance. Complex systems require consensus by multiple actors so that tech subsystems are compatible
o   Technology cycle – technological discontinuity (variation), eras of ferment, dominant designs, eras of incremental change (retention)
o   Therefore a technological innovation is not solely dominant due to the merits of its features, often there are many rival products that also have similarly superior features in at least one dimension, yet they fall into the shadows.
o   Therefore it is very dependent on the context of society and its needs

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Nishiguchi et al. (1998) The Toyota Group and the

o   Together, suppliers organized to save Toyota from a devastating crisis that threatened to half operations for weeks
o   The relationships between the suppliers along with the steady but largely invisible control of a leader promote flexible and coordinated responses to crises
o   Aisin sole source of P-Valves, fire destroyed their factory
o   No contract written but firms helped because future rewards/punishments and part of lean chain which meant Toyota out of production was costly for them
o   The long term competitive advantages are based on building vertical capabilities whilst improving horizontal knowledge among suppliers

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Lee et al. (1997) The bullwhip effect in supply ch

o   Distorted information from one end of supply chain to the other can lead to tremendous inefficiencies – all kinds of costs
o   The demand order variability amplified as they moved up supply chain – the bullwhip effect
o   Causes: demand forecast updating, order batching, price fluctuations and rationing and shortage gaming
o   Counteract: avoid multi demand forecast updates (passive downstream partners), break order batches, stabilize prices by reducing frequency and level of wholesale price discounting, eliminating gaming in shortage situations
o   Bullwhip effect occurs due to rational decisions, companies can counter by thoroughly understanding causes

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Friedman (1970) The social responsibility of busin

o   Businessmen believe they are defending free enterprise by saying it’s not concerned with just profit but also social ends – that business has a social conscience
o   Businessman who talk this way are promoting socialism, undermining free society
o   Businesses cannot have social responsibility
o   Everything can be done, but for the aim of the business
o   Otherwise, manager acting in self-interest not of business
o   Might as well be civil servants who aren’t democratically elected
o   Who are managers to decide how to fight unemployment?
Exaggerations + Mistrust of Government Much?

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Lambert & Knemeyer (2004) We’re in this together

o   Supply chain partnerships have to rely on: no partnership for its own sake, a forum for frank discussion, goals and a search for compatibility
o   Expectations have to be stated for there not to be disappointment
Why does everything have to be stated? Too Short term?

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Skinner (1974) The focused factory

o   Needs to be a focus on productivity as US position in world markets begins to decline
o   4 major changes needed to shift competitive balance: see problem as ‘how can we compete’ not how to increase productivity, see problem as encompassing efficiency of the entire manufacturing organisation, learning to focus each plan on limited concise manageable goals, learning to structure policies and services so they focus on one explicit manufacturing task
o   Focused plant without ‘economies of scale’ may be better
o   Use of cost and efficiency as conventional measurements of performance of US plants is one reason they’re losing their competitive edge

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Levitt (1975) Marketing myopia and a retrospective

o   To continue growing, companies must ascertain and act on customers’ needs and desires and not assume the longevity of their product
o   The reason industries stop growing isn’t because markets are satisfied, its management’s fault
o   All about defining the industry correctly!
o   No such thing as a growth industry, only companies organised and operated to create and capitalise on growth opportunities
o   Population myth (expanding audience and profits assured), idea of indispensability and production pressures (when all effort is focused on production, marketing gets neglected.
o   Selling focuses on the needs of the seller and marketing on those of the buyer
o   Trap with market research is to not research what the consumer actually wants, but only the preferences between what's already on offer (Can throw in Honda example here)
o   Ford realised there was a market for millions of cars at $500, then built mass production around it – result not cause
o   Problem with mass production is it causes you to have narrow vision
o   Need to think of firms as buying customers
Disruptive technologies

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Barron (1995) Integrated strategy: Market and nonm

o   The field of strategic management looks both inside the firm and outside it
o   Market and non-market environments must be considered for strategy formulation
o   Market strategy could be creating value to improve economic performance whilst non market strategies can be lobbying governments for trade policies – things that improve its overall performance
o   The nonmarket environment is characterised by the four Is, Issues, Institutions, Interests and information
o   Non-market can be treated as extra force in Porter’s model or as part of each of the 5 forces
o   A nonmarket asset can provide market or competitive advantages

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Vargo & Lusch (2004) Evolving to dominant logic

o   Originally marketing characterised as decision-making activity directed at satisfying the customer at a profit by targeting a market and making optimal decisions based on the marketing mix
o   Now it has moved away from exchange theory of tangibles to have a greater focus on intangibles, like specialised skills, knowledge and processes
o   In the past, human activity was dominated by goods-centred logic and focus on operation and resources
o   Goods versus services: goods are distribution mechanisms for service provisions. A Mercedes isn’t just the functions
o   Knowledge is the fundamental source of competitive advantage
o   Enterprise consists of 3 core business processes: product development management, supply chain management and customer relationship management
o   All economies are service economies
o   The customer is always a co-producer
o   The enterprise can only make value propositions
o   Mechanistic to organismic relationships

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Jaworski et al. (2000) Market-driven/drivin market

o   Market driven refers to a business orientation that is based on understanding and reacting to the preferences and behaviours of players within a given market structure
o   Driving markets implies influencing the structure of the market and/or behaviour of the players that enhances the competitive position of the business
o   3 ways of changing the structure of the market: eliminating players, building new/modified set of players/changing the functions performed by players
o   Market behaviour can be modified by changing the mind-set of market players (customers, competitors and other stakeholders)

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Slater & Narver (1998) Customer-led/mrket orientd

o   Christensen reports how customer power contributes to the failure of leading firms during a period of industry discontinuity
o   The conclusion that developing a customer orientation is not wise under these conditions however this is contradicted by theory and recent research in marketing
o   This is because there is difference between customer-led (expressed needs, short term) and what companies need to be focusing on which is a market-orientated philosophy (goes beyond satisfying expressed needs, proactive and long term)
o   The concept that is the foundation of modern marketing theory is that an organisation’s purpose is to discover needs/wants in its target markets, and to satisfy those needs more effectively and efficiently than competitors
o   In stable markets, customer-led is okay
o   But by using probe and learn process, they also look for unserved markets which represent potential customers.
Where does short/long term end? To what extent can a business achieve this?

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Schmenner & Swink (1998) operations management

o   Microeconomic theory (observed difference in labour productivity) attributes it to higher ratio of capital to labour, newer/better capital, higher skilled labour, better technology inputs
o   Law of variability (greater variability, less productive), law of bottlenecks (eliminating bottlenecks improves productivity), scientific methods (use of Taylor), quality, factory focus
o   The theory of swift, even flow – advocates continuous, less variable nature of the flow
o   Theory of production frontiers – maximum output that can be produced from any given set of inputs
o   Asset frontier is best with those assets, performance frontier what company manages, improvement in performance leads to pareto Improvement, but change in technology leads to change in asset frontier

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Garvin (1987) Competing on 8D of quality

o   US managers know that they have to improve the quality of their products – however the concepts to improve quality have been defensive measures and narrow in scope
o   8D: performance, features, reliability, conformance, durability, serviceability, aesthetics and perceived quality
o   Company can’t go for all these factors, there is trade-off between these
o   Strategic error when company introduces dimensions of quality that are unimportant to consumers
o   Quality measures may be inadequate and need change when external environment changes
Lack of what a company can do to embrace 8D
In a sense aren’t these defensive positions?

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