Many scholars see entrepreneurs as action-oriented individuals who use rules of thumb and other mental heuristics to make decisions, but who do little systematic planning and analysis. In this new article, Deepak Sardana and I argue that what distinguishes successful from unsuccessful entrepreneurs is precisely that the former vary their decision-making styles, sometimes relying on heuristics and sometimes relying on systematic analysis. In our proposed framework, successful entrepreneurs assess their level of expertise and the level of ambiguity in a particular decision context and then tailor their decision-making process to reduce risk. Download the article here.
Strategy research at its core tries to explain sustained performance differences among firms. This article argues that one, out of the many, ways to create a productive marriage between strategy research and historical scholarship is to carry out historically informed comparative studies of how firms and industries gain and lose their competitive position. While much of current strategy research adopts a large N hypothesis testing mode with the implicit assumption that one discovers generalization just like a Newtonian law such as F=m*a that applies across all space and time, an historically grounded methodology starts from the opposite direction. It assumes that a process or event may be idiosyncratic and therefore seeks to establish with detailed evidence that a 2nd (and later 3rd, 4th, ...nth) process or event is indeed similar before generalizing across observations. The article argues that the field of strategy would benefit from allocating more effort on building causal generalizations inductively from well-researched case studies, seeking to establish their boundary conditions. It articulates a comparative research program that outlines such an approach for the arena of industry and firm evolution studies. Download Article.
Tim Devinney and Donald Siegel write in their recent editorial of the Academy of Management Perspective (Feb2012, Vol. 26 Issue 1, p 6-11):
Hubbard and Vetter (1996) estimated that fewer than 5% of management studies are subject to any published form of replication, and when this occurs it invariably refutes the initial research. (p.7)
Reference: Hubbard, R., & Vetter, D. E. (1996). An empirical comparison of published replication research in accounting, economics, finance, management, and marketing. Journal of Business Research, 35(2), 153–164.
In Herb Simon’s obituary, the Pittsburgh Post-Gazette reports:
He had hoped to use mathematics to give the social sciences the same rigor as such hard sciences as physics and chemistry, but found that a frustrating experience; even with the new machine called a computer that was available at Carnegie Tech, it seemed that something was always missing when human factors were translated into numbers.
Maria Konnikova rearticulates this point in Scientific American.
The 9th Atlanta Competitive Advantage Conference had a panel to celebrate the publication of Nelson and Winter’s 1982 landmark book. The panel included Sid Winter, Connie Helfat, L.G.Thomas III, and myself. As part of my reflections, I offered a citation analysis to demonstrate the influence of the book with data. I went on to explain that there is a tension between the goals of IO economics and strategic management and argued that Nelson & Winter’s focus on firms doing innovations is a way to resolve this tension. Finally, I called for more research that examines the the relative role of population level selection versus firm-level adaptations in industrial change.
Download: Slides from Presentation
Andy Henderson and his coauthors have done us a great service. They are analyzed last decades to find a list of firms whose superior performance cannot be explained by randomness.
Although sustained superior firm performance may arise from skillful management or other valuable, rare, and inimitable resources, it can also result from randomness. Studying U.S. companies from 1965–2008, we benchmark how long a firm must perform at a high level to be confident that it is something other than the outcome of a time-homogeneous stationary Markov chain defined on the state space of percentiles. We find (a) the number of sustained superior performers in Compustat, measured by ROA and Tobin’s q, exceeds the number of false positives we would expect to be generated by such a process; yet (b) the occurrence of false positives is often enough to fool many observers, so (c) the identification of sustained superior performers requires particularly stringent benchmarks to enable valid study.
Read Full Article
Click on More to see the list of firms.
As the rate of innovation increases, organizational environments are becoming faster and more complex, posing greater challenges for organizations to adapt. This study argues that the concept of coevolution offers a bridge between the prescient adaptationist and ex post selectionist perspectives of organizational change to account for the increasing rates of change. The mutual causal influences in a coevolutionary relationship help explain why competing sets of firms or individual firms can capture dominant shares in product markets. Using a comparative historical method and drawing on evidence from five countries over a 60-year period, this paper inquires how precisely coevolutionary processes work in shaping the evolution of industries and important features of their environments. It identifies—in the context of the synthetic dye industry—three causal mechanisms (exchange of personnel, commercial ties, and lobbying) and suggests how they acted as levers on the fundamental mechanisms of evolution. Understanding the levers is important for managing change in a world that is increasingly becoming coevolutionary, requiring managers to focus more on the emergent, system-level properties of their environments. Download Article.
Scholars have emphasized the gradual ownership transformation of enterprises as a key driver of the Chinese economy’s unprecedented growth. However, little work has been done on the issue of whether this transformation process takes place evenly across the various regions in China. This article describes the important role of regional institutions in shaping the ownership-based competitiveness of local enterprises and the migration of industries across regions. In the case of the Chinese synthetic dye industry, the passing of leadership from state-owned enterprises (SOEs) to collectively owned enterprises (COEs) and then to private enterprises (PEs) was accompanied by a concurrent leadership migration from one region to another. The article contends that this simultaneous occurrence was not accidental. Four institutional constraints—the degree of central supervision, the local labor arrangements, the local social welfare provision, and the degree of ambiguity in property rights—retarded the rise of new ownership forms in the previously dominant regions. This gave other regions the opening to take over leadership positions by providing a more favorable institutional context for new ownership forms. These findings are likely to apply to all of the Chinese manufacturing industries that existed prior to 1978 and that subsequently did not experience significant technological changes and were not highly protected by the government. Download Article
Mattias K. Polborn writes: Preface
I have recently found an ancient scroll, written in Reformed Egyptian, in my crawl space. It turned out to be a rejection letter from the editor of an ancient scientific journal, Geometrica, addressed to Ptolemaeus of Alexandria, the famous geographer. It is a remarkable document that shows how little scientific publishing has changed since ancient times.
Before proceeding to the full translation provided below, the critical reader may wish to ask how this document came into my basement. While details remain clouded in mystery, there are some strong indications that the document is genuine. Specifically,
• it was found in mid-America, the prime location where Reformed Egyptian docu- ments are found;
• after I completed the translation, the original document mysteriously vanished without a trace;
• the document contains sentences that are almost verbatim the same as written much later by different people who definitely had no knowledge of the text in my basement.
Read full letter here.
In this article, I present a strategy for designing relational databases with the program FileMaker Pro (FileMaker) to study the histories of individuals and organizations. The approach facilitates efficiency in inputting data and flexibility for constructing statistical analyses from the rawdata. The key feature of the strategy is to define the basic unit of observation in the database in terms of an agent, an event, and a date. Given that programs such as FileMaker can easily sort data by agent and date, once one structures the data correctly, he or she can construct well-ordered event histories for agents, even if the researcher enters the data in an unordered fashion. By using events that happened to an agent at a particular time as the basic unit of observation, one maintains maximum flexibility to do statistical analysis that aggregates basic data in different ways. This article illustrates the power of the approach by outlining ways to analyze changes in geographic distances between two events marking the life histories of chemists. Download Article.
I participated in a workshop bringing together Business Historians and Evolutionary Economists at Trinity College in Dublin. Overview information on the workshop and the presentation slides have been posted in the Economic-Evolution.net discussion forum.
Frank Furedi has written a very thoughtful essay on the problems with current peer review system in science. In my view, the issues are a lot more serious in the social sciences where is much harder to formulate non-trivial general laws and make precise predictions that can be proven or disproven. The natural sciences require replication before something is accepted. There is very little exact replication in management research for example. Theories are accepted on very tenous grounds and when you write a paper that contradicts existing paradigms your data is not going to persuade your peers who have a vested interested in the status quo. Read Furedi’s Essay.
Update 28. June 2010:Interesting Problem Case in Economics: Copy URL into your browser: http://www.handelsblatt.com/politik/nachrichten/no-comment-please;1446947
CM: Having written 43 books, including more than 20 biographies, you’re nothing if not prolific. What’s your work routine?
JM: I work every day— it’s important to keep up momentum—from 9:30 to 1 in the morning and from 7:30 to 11 in the evening. In the afternoons I recharge by playing tennis (inexpensive psychotherapy), taking long walks, frequenting bookstores, going to the Cal library, and wandering around San Francisco. I do research and interviews with family and friends for six months. I then write by hand on yellow pads, type three pages a day and 100 pages a month on the computer, and finish a 400-page book in four months. Finally, I spend two more months revising.
When I’m done, I follow the example of my longtime friend, Iris Murdoch, who began her next novel the day after completing the previous one. (More momentum.) While the editor is reading my typescript, I do the research and write a ten-page proposal that secures the contract and advance for my next book.
From California Monthly.
Drake Bennett of the Boston Globe is reporting on the soul searching that is going on the field of economics and finance after the professions inability to foresee the crisis.
THE DEEPENING ECONOMIC downturn has been hard on a lot of people, but it has been hard in a particular way for economists. For most of us, pain and apprehension have been mixed with a sense of grim amazement at the complexity of what has unfolded: the dense, invisible lattice connecting house prices to insurance companies to job losses to car sales, the inscrutability of the financial instruments that helped to spread the poison, the sense that the ratings agencies and regulatory bodies were overmatched by events, the wild gyrations of the stock market in the past few months. It’s hard enough to understand what’s happening, and it seems absurd to think we could have seen it coming beforehand. The vast majority of us, after all, are not experts. But academic economists are. And with very few exceptions, they did not predict the crisis, either. Some warned of a housing bubble, but almost none foresaw the resulting cataclysm. An entire field of experts dedicated to studying the behavior of markets failed to anticipate what may prove to be the biggest economic collapse of our lifetime. And, now that we’re in the middle of it, many frankly admit that they’re not sure how to prevent things from getting worse.
Trying to imitate high-status Newtonian physics, management scholars over the past fifty hear have tried to formulate general laws about the behavior of organizations. In his statement after the passing of the $700 billion bailout of the financial industry, Paulson in my view correctly emphasized that the salient fact about most industries is the diversity and not the sameness of firms within them.
I don’t know anyone who has come in contact with Charles Tilly and who was not inspired by him. For those who have never met him, here are wonderful tributes to this exemplary scholar.
Social Science Research Council Tribute Website
Tributes by Scholars
NY Times Obituary
Traditionally most researchers working with printed data sources have entered data by hand to convert it into electronic format. If a research project involves large amounts of data from similarly formatted sources – for example, when one tries to create a longitudinal database of directory information spanning many years – entering this data by hand is a very labour intensive and tedious task. We wanted to automate the coding of printed directory information in order to cut down the time it takes to transfer this information into electronic data. Once the data is in electronic format, it can be further analysed with a plethora of software packages ranging from Microsoft Excel, FileMaker, SAS and SPSS, depending on the needs of the particular researcher. The purpose of this technical paper is to share with other scholars in a clear and practical way the methods we developed for automating the coding of printed information. Download article.
Over 150 people came to the Power of Richness PDWs at each of the last three Academy meetings, drawing from many different divisions and interest groups. With the demand for the workshop running so strong, Diana Day and I will try to organize an All-Academy PDW for the next meeting Annaheim. The format this past year proved very successful for learning how to do qualitative research well. The first part of the 2008 PDW will feature again a panel of leading qualitative scholars (Jane Dutton, Royston Hinnings, Martha Feldman and Ann Langley ), who will offer their insights qualitative research can help us ask the right questions. The second part of the workshop will have parallel sessions designed for people beginning or developing qualitative research and those trying to publish qualitative research. Participants in the second part can have small group discussion with panelists, attend at least two of several tutorials, or sign up for a paper feedback session with experience scholars. For more up-to-date information on this Qualitative Research PDW, interested parties should go to our website PDW 2008 where we will post new information as the specifics of the PDW (tutorials subjects and leaders chosen), working paper discussion leaders, etc.
When and Where: Friday, August 8, from 1:00 to 5:00 pm, Anaheim, California
Presentation slides from the event are now posted. Please click on this link.
Chinese scientists have carried out a powerful meta-analysis and created new knowledge about the chemical pathways that lead to addiction. Can social scientist imitate this model? I am not sure. But certainly we should strive to do so.
Dr Wei therefore ran her 396 genes through a database of all known pathways to see which involved several enzymes encoded by those genes. She found 18 that were involved in addiction to at least one type of drug. Five, however, were common to all four types, and these five pathways therefore look as though they are at the core of the process of addiction. Three of the five were already under suspicion. Dr Wei’s result provided strong statistical evidence to back up what had just been hunches. Two other pathways, however, had not previously been considered as being involved in addiction. The existence of these five central pathways helps explain a lot about addiction. First, it gives weight to the belief that some people are more susceptible to all sorts of addiction than others are. That contrasts with the thought that addictions are substance-by-substance phenomena, though the two ideas are not mutually exclusive since changes in the 13 substance-specific pathways clearly also result in addiction.
Full story is available at Economist.com.
This is an excellent piece that shows how important it is to actually understand how IQ measures are constructed. Any empirical researcher can learn from the New Zealander who showed how much the alleged genetic intelligence is socially constructed. Read NONE OF THE ABOVE: What I.Q. doesn’t tell you about race.
Charles Tilly is one of the most innovative and productive social scientists alive. His research know-how should be passed on to the next generation of researchers, not only to those who are fortunate to take his classes at Columbia University. With the approval of Tilly, Sekou Bermiss and I made electronically available all his writings on methodology. You can search this archive by key word and topics. Go to: Tilly on Methodology Archive
The large crowds that came to the Power of Richness PDWs in Atlanta and the year before in Hawaii have convinced us there is significant demand in the Academy for learning how to do qualitative research well. This year we will build on the success of our two previous qualitative methods PDWs and create an even more ambitious PDW. The first part of the PDW will feature a panel of leading qualitative scholars (John Van Mannan, Steve Barley, Andy Hargadon, and Bill McKelvey), who will offer their insights about how to craft qualitative research papers. The second part of the workshop will have parallel sessions designed for people beginning or developing qualitative research and those trying to publish qualitative research. For more up-to-date information on this Qualitative Research PDW, interested parties should go to our website PDW 2007 where we will post new information as the specifics of the PDW (tutorials subjects and leaders chosen), working paper discussion leaders, etc.
When and Where: Friday, August 3, from 1:00 to 5:00 pm at Marriot Liberty Ballroom C.
Presentation slides from the event are now posted. Please click on this link
David Warsh tell the story of how the idea of increasing returns that was already present in Adam’s Smith’s Wealth of Nations transformed academic economics in the 1980s. Read Paul Krugam’s review in the New York Times.
Gladwell writes: In “Why?” (Princeton; $24.95), the Columbia University scholar Charles Tilly sets out to make sense of our reasons for giving reasons. In the tradition of the legendary sociologist Erving Goffman, Tilly seeks to decode the structure of everyday social interaction, and the result is a book that forces readers to reexamine everything from the way they talk to their children to the way they argue about politics. Read the full review in the New Yorker.
Inspired by the large number of participants at the “The Power of Richness: The Why, When, Where and How of Qualitative Research Methods” PDW in Honolulu, Diana Day and I (Peter Murmann) decided to organize a follow-up workshop on qualitative methods at the academy meeting in Atlanta. The workshop will again have a stellar group of scholars presenting their ideas about how to make qualitative reseach powerful. The confirmed presenters are: Kathy Eisenhardt (Stanford), Mauro Guillen (Wharton-U. of Pennsylvania), Sara Rynes (Editor of AMJ), Nicolaj Siggelkow (Wharton-U. of Pennsylvania), John Wagner (Associate Editor of ASQ), Karl Weick (Michigan). More details about the workshop will as we are getting closer to the event.
When and Where: Friday, August 11, from 1:30 to 4:30 pm at the Atlanta Marriott in International 4
Update March 17,2006: The workshop is being sponsored by virtually all divisions of the Academy: BPS/HR/MED/MOC/MSR/OB/ODC/OMT/ONE/PNP/PTC/SIM/CAR/CM/
ENT/GDO/HCM/IM/MC/ and RM.
Visit the Discussion Forum for the Event where you can now download the presentation slides from the workshop.
Together with two Finish scholars, Juha-Anti Lamberg and Jari Ojala, I started a comparative study of the paper and pulp industry. Human beings have been making paper from various raw materials for thousands of years. But in 1804 a Frenchman invented a continous paper machine revolutionized the manufacturing and started the modern paper making industry.
The goal of our project is to study shifts in competitive advantage from one country to the next and from firm to firm during the last 200 years. We are starting our comparative analysis looking at Britain, Germany, Finland and Sweden. Our long-term plan is to study all the major paper producing countries in the word. If you are interested in participating in this study, contact us.
Warren Bennis and James O’Toole just published an article in the Harvard Business Review that I wholeheartedly agree with. It is very fun to read because they are well-informed and don’t shy away from stating some unpleasant truths. Good business schools have room for theoreticians, scientific empiricists, and practice oriented scholars.
On January 26, 2005 I delivered the Stanley Reiter Award Lecture. The Reiter award is named for Stanley Reiter, Charles E. and Emma H. Morrison Professor of Managerial Economics and Decision Sciences at Kellogg. It is presented to a Kellogg faculty member whose paper is judged by a panel of Kellogg professors across disciplines to be the best paper written in the preceding four calendar years. I received the award for my book Knowledge and Competitive Advantage: The Coevolution of Firms, Technology and National Institutions. You can also read the text of the lecture by clicking on “More” button or by downloading it as a Word file. Alternatively, you can watch a video (58 minutes) of the lecture with Real Player here: Lecture Video. If you watch the video, you should download the Slides that I presented during the lecture but which are not visible in the video.
Participate in the workshop on Qualitative Methods the Academy of Management in Hawaii, Friday afternoon from 1:00 to 4:00, August 5, 2005. The Panelists are: Robert Burgelman, Diana Day, Deborah Dougherty, Charles Galunic, Johann Peter Murmann, Gabriel Szulanski, and Klaus Weber.
Visit the Discussion Forum for the Event where much additional information will be posted.
I am a big fan of explanations of social phenomena that set forth the precise causal mechanisms that produce them. This book edited by Peter Hedstroem and Richard Swedberg provides a very good introduction to the approach. You can download the overview chapter here: Social-mechanism.pdf Click on “More…” for a Table of Contents.
The author of Guns, Germs, and Steel considers why some societies collapse when faced with environmental or political catastrophe, while others soldier on. Malcom Galdwell has published a useful review of the book in the New Yorker .
A hefty percentage of American corporations use personality tests as part of the hiring and promotion process. The tests figure in custody battles and in sentencing and parole decisions. “Yet despite their prevalence-and the importance of the matters they are called upon to decide-personality tests have received surprisingly little scrutiny,” Paul writes. We can call in the psychologists. We can give [people] a battery of tests. But will any of it help? Read more of Malcom Gladwell’s revealing New Yorker Article.
John Searle’s book is a must-read for every social scientist. Searle makes the important distinction between observer independent facts (the sun exists independently of any human being observing it) and oberserver dependent facts (money does not exist unless people agree that a sheet of paper is worth a particular amount). This distinction, in my view, lies at the core of what makes natural sciences different from the social sciences.
Important Workshop at AOM ‘04: Participate in the workshop on Adaptation vs. Selection in Industry Change organized by Jan Rivkin and myself. Panelists are: Bill Barnett, Clayton Christensen, Anita McGahan and Will Mitchell.
Paul Romer gave an interesting interview in Reason Magazine describing in non-technical terms on how ecnomic growth comes about.