What Does the Success of Tesla Mean for the Future Dynamics in the Global Automobile Sector?

After reading Jacobides, MacDuffie, and Tae (2016), the success of Tesla in launching a new automobile company in a crowded sector puzzled us. Jacobides, MacDuffie, and Tae (2016) had convinced us that developing the capabilities to become the manufacturer of a complete, safe automobile system would be quite difficult. Researching the development history of Tesla, we have pieced together the key features of how Tesla achieved its successful entry into the automobile sector. From this we have concluded, based on the development time and costs associated with the Tesla Model S, that a well-funded company could develop a new electric vehicle (EV) from scratch and move it into production within 3 to 5 years, by spending $1–2 billion of capital for design, development, and manufacturing. Without a doubt, increasing production to the levels of mass producers would take much longer, but the Telsa example demonstrates that new entry into the industy has become feasible. Tesla’s trajectory, from start-up on the brink of bankruptcy to a company mass producing electric vehicles within 5 years, raises important questions about the future of the global automobile sector. What would prevent Apple and Google, two companies that clearly have the resources to fund $2B in R&D, from entering the market and contesting fiercely with the dominant OEMs such as GM, Ford, VW, Mercedes, and Toyota? There are already many ventures in the Chinese electric automobile sector, such as BYD, Qiantu, NIO, and many more. Inspired by the success of Tesla, why would Chinese software and internet giants such as Tencent and Alibaba not enter this large market given that Tesla did not have prior experience and was able to get a successful car ready for sale within 5 years? In this perspective piece, we offer our reflections on the implications of the success of Tesla for the dynamics of the global automobile sector. We will appraise the chances that Chinese firms will for the first time become leading players in pushing the frontier of automotive technology, a goal that has eluded them over the past 30 years despite massive government efforts to create strong home-grown auto companies.

Download Article: G. Perkins and J.P. Murmann, “What Does the Success of Tesla Mean for the Future Dynamics in the Global Automobile Sector?” Management and Organization Review, 2018

There are three commentaries on our articles that make for a very spirited debate.


J.P. MacDuffie, “Response to Perkins and Murmann: Pay Attention to What Is and Isn’t Unique about Tesla” Management and Organization Review, 2018.

H. Jiang, F. Lu, “To Be Friends, Not Competitors: A Story Different from Tesla Driving the Chinese Automobile Industry” Management and Organization Review, 2018.

D. Teece “Tesla and the Reshaping of the Auto Industry” Management and Organization Review, 2018.


Finally, Liisa Välikangas provides an introduction to the “Forum on Tesla and the Global Automotive Industry”  Management and Organization Review, 2018.


Tesla

Useful if you consider submitting to AMJ: Editorial Statement by Current Editor of AMJ

I just read the editorial statement of the current editor of AMJ. If you would like to write about big problems that managers are facing in a scholarly way, AMJ may be a great outlet.

Gerry George writes:

A compelling way to frame a study for theoretical contribution is by asking questions on important anomalies or patterns that are intriguing, useful, and nonintuitive. In an earlier editorial with Jason Colquitt, I suggested that we need to explore “Grand Challenges” in management (see the June 2011 “From the Editors” [vol. 54: 432–435]). The principle is to pursue bold ideas and adopt less conventional approaches to address significant, unresolved problems. Not all our studies understandably will be grand, nor will they all challenge conventional wisdom, but considering the relative importance and scale of a problem will likely make a study more relevant to managers, and make it more interesting for our readers. There are multiple ways by which manuscripts can be better positioned for a theoretical and empirical contribution using a problem focus (Alvesson & Sandberg, 2011; Pillutla & Thau, 2013; also see the October 2011 “From the Editors” [vol. 54: 873–879]). What is important to recognize is that this team places emphasis on how a central research problem or question is articulated. Bringing organizational problems to the forefront would ease the burden on vaguely scripted “Managerial Implications” sections of manuscripts (Bartunek & Rynes, 2010).

My editorial team will look for clearly articulated problem statements or research questions motivated by managerial challenges. This problem-based focus shifts the emphasis away from motivating articles using pure theories to tackling important problems through an enriched theoretical lens. For example, Hekman and colleagues (Hekman, Aquino, Owens, Mitchell, Schilpzand, & Leavitt, 2010) motivate their study on gender and racial biases in customer satisfaction surveys by emphasizing the importance of the managerial problem that a 1 percent change in customer satisfaction creates a 5 percent change in return on investment. Understanding the scale and scope of the problem and asking the right question takes primacy over the deftness of theoretical manipulation using constructs, moderators, and moderated mediators. We prefer manuscripts that emphasize how constructs provide a coherent explanation of the phenomenon rather than framing and motivating studies by adding untested moderators and mediators. Such an effort would rightly dissuade authors from identifying smaller “gaps” in the literature and shift the discussion to managerial, organizational, and societal problems that need to be addressed.

Read the Full Editorial

Touchstones: Examples of Excellent Papers

Empirical Papers
Here are examples of excellent papers that I encourage people to use as touchstones and imitate when written small-n or case study papers.

Danneels, E. (2011). “Trying to become a different type of company: dynamic capability at Smith Corona.” Strategic Management Journal 32(1): 1-31.

Mirabeau, L., & Maguire, S. (2014). From autonomous strategic behavior to emergent strategy. Strategic Management Journal, 35(8): 1202-1229.

Miller, R., M. Hobday, T. Leroux-Demers and X. Olleros (1995). “Innovation in Complex System Industries: the Case of Flight Simulation.” Industrial and Corporate Change 4(2): 363-400.

Murmann, J. P. (2013). “The Coevolution of Industries and Important Features of their Environments.” Organization Science 24(1): 58-78.

Siggelkow, N. (2002). “Evolution toward Fit.” Administrative Science Quarterly 47(1): 125-159.


On Method
Here are some methodological texts that I found particularly useful in helping me refine my case study design skills.

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A Conversation with Malcom Gladwell

Peter Capelli recently interviewed Malcolm Gladwell for Knowledge@Wharton. Gladwell talks about the relationship of what he does to academic research and makes this interesting observation.

The sad fact about being a writer is that in a good year, you have five good ideas. It is not like it is every day; it is more like every two months. But you do become alert to that theme. When you are writing a book, you are assembling little bits of evidence and then figuring out which ones are relevant and which ones are secondary.


Read full conversation here.

For every Social Scientists: Mattias K. Polborn translates an Ancient Letter from the Editor

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.

Jeffrey Meyers on Writing Habits

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.