GloStra Blog Entries

Marketing science as technology? Notes on the Winter AMA conference

jukka.luoma@aalto.fi — Wed, 22 Feb 2012 00:00:00 +0100

The tension between scientific rigor and practical relevance is an innate characteristic of management discourses. These discussions are not going to go away any time soon because management scientists (will always) occupy two worlds: the business world and the world of science. The Winter American Marketing Association (AMA) 2012 Conference, in St. Petersburg, Florida, provided interesting discussions around this theme from a marketing perspective.

Winter AMA conferences are among the most essential ones for marketers who follow the North-American research tradition. All the big names are there. The conference included many interesting panels that touched upon the issue of rigor vs. relevance.

Before going further into the discussions, it is useful recognize the difference between technology and science. According to Keys (1989: 754), science aims at "producing explanations of how parts of the system work which in total provide a coherent framework of understanding." Technologies, on the other hand, are man-made, physical or abstract systems that can be useful in solving specific problems. Thus, rigor vs. relevance and technology vs. science dimensions are not the same thing, although they are interconnected.

In the big names' panels, some of the discussions concerning the marketing discipline focused on the problem of rigor vs. relevance while others were more concerned with the technology vs. science dualism. The following is my recollection and interpretation of the discussions. (The usual disclaimer applies: The panelists should be credited for the insights and I am to be blamed for possible errors and misrepresentations of the original thoughts.)

1. Marketing is not relevant enough. Some people seem mostly worried about the practical relevance of academic marketing research. In a panel called "Rigor vs. Relevance in Marketing Research", Kusum Ailawadi, V Kumar, Donald Lehmann and Gary Lilien were in agreement. The practical relevance of the discipline has to be increased (or at least sustained). Several measures to achieve this were suggested. Compulsory internships during doctoral programs, requiring practical business experience before entering PhD programs, changing the tenure track systems so that they better accommodate practical impact (not only citations) were mentioned as possibilities.

2. There is a danger that marketing is reduced to a technology. In the "Rigor vs. Relevance" panel, the discipline's collective theory-developing capabilities-which have been criticized for decades (see, Biggadike, 1981; Ketchen & Hult, 2011)-were not seen as an issue. In contrast, in the "Crafting Impactful Theory and Theory Articles" session, the panelists were not so concerned about practical relevance but over the fact that scholars are not taking theory forward enough. The panelists were Peter Dickson, Ajay Kohli, Bob Lusch and Jagdip Singh. Especially Peter Dickson and Bob Lusch were worried that marketing researchers are just developing new methods to (mathematically) model consumer/marketer behavior rather than truly challenging ways of understanding marketing and markets.

Dickson lamented that marketers lack a processual understanding of how marketing and markets work which allows others (e.g., strategy, organization theory, economics) to steal "our discipline, bit by bit" as I recall him putting it. Lusch argued that the marketing discipline is still too much tied to the equilibrium model of neoclassical economics. Indeed, a large proportion of the strategic marketing literature is based on the resource-based view which, in turn, draws heavily on the analysis of markets as systems that are in equilibrium (Foss, 2003). Any problems with the foundations of the marketing discipline, Lusch said, are not going to be solved by making more and better applied research. Instead, the solution is to develop theory that challenges old assumptions and builds theory on new, perhaps more useful assumptions.

To me, the second concern seems more serious than the first. The fact that marketing (or some other management discipline) is considered a science makes it separate from the world of practice. And, the separateness is exactly what makes business r [...]

Inertia is good for you: an individual perspective on organizational inertia

jukka.luoma@aalto.fi — Wed, 22 Feb 2012 00:00:00 +0100

In the TV Series How I Met Your Mother, one of the characters, Marshall, a young lawyer, leaves his friends at a bar one night by saying:

All right, guys, I have to go. I have a big meaningless stack of paperwork I have to get off my desk to make room for tomorrow's big meaningless stack of paperwork. But, it's all worth it because I know that I'm making the world a...place.

Sound familiar? This is surely a caricature of work in large, bureaucratic organizations but tells us something about how organizations work. Inertia characterizes organizations of today (and of yesterday). This increases their reliability and efficiency. However, according to some studies and everyday discourse about work and organizations, inertia kills creativity, increases frustration and reduces job satisfaction and experiences of meaningfulness. Of course, there is plenty of popular and academic management literature which then tells managers to somehow unleash the creativity of organizational members. At the same time, other streams of literature (e.g., population ecology) have shown that unleashing creativity in organizations can also be dangerous. However, there are some theoretical reasons why individuals--not only the collective--can benefit from the rigid organizational structures of work.

According to Hannan and Freeman's (1984: 151) definition, inertia refers to the fact that "organizations respond relatively slowly to the occurrence of threats and opportunities in their environments." Their seminal paper, published in American Sociological Review, they argue that "modern world favors collective actors that can demonstrate or at least reasonably claim a capacity for reliable performance and can account rationally for their actions." (ibid.: 153) These forces favor organizations that exhibit high inertia.

From the individual's perspective, inert organizations are action-resisting systems. By this I mean that any random idea, proposal or action is mostly likely going to be blocked by the organization. Probably every one has experienced this. This can make organizational life is boring and raise sentiments that individual talent is not appreciated. Human potential goes to waste. Even in creative industries, predictable, high-volume output is preferred over individual freedom and serendipitous inventions and ideas.

While it is intuitive to think that inertia is a sacrifice by the individual to the collective, I think there are reasons to think otherwise as well. Here is an incomplete list of speculations:

According to Levinthal and March (1993), most truly novel ideas are bad. Humans have a tendency to be overly optimistic which will cause them to take action that should not be taken. Therefore, without the action-resisting property of organizations people will act on ideas which are not likely to be viable.

As a result, the work load of the individual can exceed his or her abilities. According to research, humans tend to underestimate the accumulation of things, probably including future workloads. Therefore, new projects are started too often because people are poor estimators of future workloads.

With a lot of ongoing projects, the individual's cognitive burden increases. This leads to emotional anxiety and, over time, to reduced cognitive processing capacity.

Given the ability of inertia help individuals avoid the problems described above, organizational inertia supports feelings of moral and intellectual competence. In inert organizations, failures can be attributed to the lack of support by subordinates, peers, bosses and organizational structures. "I have all these wonderful ideas but this stupid organization does not allow me to implement them." Perhaps when the individual is freer to act, it becomes more difficult to attribute error to structures or other people.

To sum up, even though inertia breeds frustration, it counters some cognitive biases that can be undesirable from the individual's perspective, and supports the individual's positiv [...]

Quantitative management research: torture or interrogation?

jukka.luoma@aalto.fi — Wed, 25 Jan 2012 00:00:00 +0100

In recent times, there has been a lot of discussion about the questionable practices of scholars, universities and publishers. In a related fashion, the economist Ronald Coase once said that "if you torture the data long enough, Nature will confess." He referred to a common research practice of flexibly changing one's model, collecting more data and using different measures until you find interesting and publishable results; it is likely that at some point you will find statistically significant results purely by chance. For a qualitative researcher, flexibility is a good thing. In fact, going back and forth between data and theory is the primary mode of doing qualitative research. However, in quantitative research, flexibility is somewhat counter-intuitively considered a bad thing. Let me explain.

It is a common convention in research that when identifying relationships between variables (e.g., employee turnover and profitability), one has to report the likelihood that the relationship found in a single study is due to chance. When there is only a small (typically, five percent) probability that the relationship is the product of chance it is called statistically significant. If your results are statistically significant, according to conventions, you have then provided empirical evidence that supports your theoretical argument. The problem is that the reliability of statistical significance itself depends on the analysis process. As shown in a recent article in Psychological Science, and quoted by the strategyprofs.net blog:

"If a researcher, running a particular experiment, does not find the result he was expecting, he may initially think ‘that's because I did not collect enough data' and collect some more. He can also think ‘I used the wrong measure; let me use the other measure I also collected' or ‘I need to correct my models for whether the respondent was male or female' or ‘examine a slightly different set of conditions'. Yet, taking these (extremely common) measures raises the probability that what the researcher finds in his data is due to sheer chance from the conventional 5% to a whopping 60.7%, without the researcher realising it."

(You can see the original article for a more thorough discussion, but basically the reason is that if there is a 5 percent chance that your results are wrong and you test two models and pick the one which supports your claims better then there is a 9.75 percent chance that you are wrong.)

By being "flexible" in the data collection and analysis process, the statistical significance of the results is biased. This makes it difficult for the reader to assess the plausibility of the empirical evidence provided by the researcher to support his or her argument. This is why flexibility is bad in quantitative research. The aforementioned article in the Psychological Science suggests that researchers should aim to remove flexibility from the data collection and analysis and disclose whatever flexibility is left in the process. This allows the reader to better assess how reliable the claims of statistical significance truly are. Similar concerns about the validity of management research were raised by William Starbuck in his entertaining book The Production of Knowledge.

However, there is another twist which often goes unnoticed. The foregoing discussion illustrates what I think is quite common: Researchers usually worry about statistical significance (e.g., the probability of finding a correlation between two variables when there really is no correlation) rather than what is called statistical power (e.g., failure to detect a correlation when there actually is one). The latter is also often quite likely and very serious. Consider for example the fact that management and strategy researchers typically measure things with error rather than perfectly. Even when doing simple correlations, measurement error increases the chances of finding non-significant relationships between variables which actually correlate.

Many real-life situations are such that the error of omitting an effect may be just as bad as erroneously attributing one. In technical terms, statistical power may be as important as statistical significance. Suppose that we want to find out whether carbon dioxide emissions induce global warming. Surely, it is important to have some degree of certainty that the two variables are related (statistical significance). However, failure to recognize that they are related (lack of statis [...]

Competitive dynamics of presidential election

jukka.luoma@aalto.fi — Wed, 18 Jan 2012 00:00:00 +0100

The presidential election nears in both Finland and the US. Simultaneously, I have spent the last month in Darden School of Business campus and the city of Charlottesville (VA) where I have been exposed to a good deal of consumer goods/services advertising US style. Incidentally, in presidential campaigning and consumer goods advertising, there is a similar cross-country difference between Finland and the US. Finnish advertising and presidential election campaigning makes far less direct references to the rival than the equivalent US campaigning. I do not think you see many ads like this in Finland.

What are the consequences of more direct rivalry where actions are aimed directly at hurting the opponent? From a theoretical, information processing perspective, making direct references to the rival intensifies competition both directly and in-directly. First, by making direct references to the rival, the focal actor provides a cue for the rival to respond. Second, direct references to rivals reduce the cognitive burden of comparing the companies' products (candidates' opinions). This should ease the consumer's (voter's) decision process, intensifying competition between the firms (candidates).

Interestingly, when competition gets tougher, you need more resources to keep up. Over time, this drives out small competitors leading to an industry with few large players. This, according to many strategy researchers, increases the likelihood of direct head to head of competition. And coincidentally, the political arena of Finland is less concentrated than the equivalent US system. This, of course, raises the chicken-or-egg problem (the answer is egg): Is the US two-party system due to aggressive campaigning or is the aggressive campaigning due to the two-party system?

But politics aside, the story shows how head to head rivalry can be understood as a self-fulfilling prediction. This and many other phenomena that strategy scholars study are often equally constructed in people's minds as they are out there. Which is just re-stating what Joseph Porac and colleagues said some two decades ago.

Rigor of relevance

juha-antti.lamberg@tkk.fi — Wed, 18 Jan 2012 00:00:00 +0100

An interesting dimension in management science is that the science part is largely in marginal role as a source of management ideas. In comparison, think about medical doctors who would use TV series as a source of knowledge, or engineers who would read science-fiction when designing a bridge? Does not sound good?

In business management all opinions are legitimate as long as they are seen as refreshing and innovative. Anyone can be a management guru, new management fashions emerge on regular basis, and respectable organizations built their visions on knowledge that has no empirical support. In quite many ways, the management of large organizations relies on faith as much as knowledge. As we have considerable amount of scientific knowledge on management and organizations, good questions is why that knowledge is only selectively used in daily managerial practice?

First, science and practice of management are two separate systems both functioning from distinct and separate logics. Science aims to generate general theoretical models that explain phenomena in organizations whereas practice of management focus on solving specific problems embedded in unique contexts. As a consequence, rigor can never be relevant – and is very rarely seen as such. Second, practice needs faith more than knowledge. That is, most of the 'scientific truths' in management field are rather discouraging in the face of setting things right in real organizations. On the contrary, the most popular management fashions (in the recent year's Blue Ocean strategy, dynamic capabilities, re-engineering etc.) cannot stand any empirical test yet they offer hope for modern organizations. The poor scientific quality does not matter in the use of these knowledge packages. In fact, the whole idea within popular management knowledge and management fashions is that the given answers are ambiguous, oversimplified, clearly articulated, and persuasive in their newness. Most of management fashions are rather harmless: more entertainment than serious business. However, things get more complex if public authorities take seriously the non-scientific entertainment or ideologically produced isms (remember that a large part of international business schools are religious by nature). Things get complex because even the silliest ideas widespread rapidly when sponsored by powerful civil servants and politicians. One of the recent influential mega-trends is entrepreneurship.

Most economists acknowledge that there is a fixed amount of entrepreneurship in all societies. The only thing that varies is how all the entrepreneurial activity is channeled. If institutional environment is functional, entrepreneurs may operate in business and industrial production thus generating economic wealth for the whole society. Likewise, poor institutional system motivates criminality and other wealth destroying activities. This is something we know. And we have Soviet Union and other communist economic systems that demonstrated how important it is to allow individuals to act as entrepreneurs. Yet when entrepreneurship is promoted to be an important part of education in schools, professional schools, and universities we have an ideological program – not something that would rely on scientific facts on the causal link between entrepreneurship and economic growth. What we have is a gigantic educational experiment. Generations are educated in entrepreneurship without any knowledge how that would affect societal development as whole. This is as dangerous as any other ideological program has been and an example what happens when political elites believe they have knowledge when they in reality have just believes.

I guess it would be naïve to expect (even public) management be based on scientific knowledge. Actually it is rather impossible as management scholars are generally more interested in explaining management than offering normative statements. What would be beneficial, however, would be to safeguard universities and schools from the ideological programs of political elites – would they be too anti-entrepreneurial as in the 1970s or too entrepreneurial as today. Strong academic autonomy, education based on scientific facts, and open minded development of educational goals are the ways healthy and prosperous societies are built.

Social dynamics of 18th century academia

mirva.peltoniemi@tkk.fi — Wed, 20 Apr 2011 00:00:00 +0100

Frederick V (1723-1766), King of Denmark, financed the first Western expedition to Arabia in 1761-1767. This is what Thorkild Hansen's (1962) account of the project taught me about the social dynamics of the 18th century academia.

1. If people in high places dislike you, you will never get published.

2. Zeitgeist determines the value of scientific results. There are no universal criteria.

3. Professorships are granted in complex networks of favors and political actions. A person is first chosen for a task, he is given a professorship, and his selection is then justified by him being a professor.

4. People from different fields do not get along. But this is relative. In a group of biologists, a zoologist and a botanist are too different to work together, but in a group of natural and social scientists they get along just fine.

5. Research projects take twice as long to complete than originally planned. Very little of the initial enthusiasm and interest are left at the time of completion.

How much have things changed since the 18th century? One of the members of the Danish expedition planned to poison the others with arsenic. That one at least is a bit passé, I would say.

On the ideological roots of business school education

juha-antti.lamberg@tkk.fi — Wed, 30 Mar 2011 00:00:00 +0100

After watching the London School of Economics and Gaddafi family case (see e.g. http://www.independent.co.uk/news/education/education-news/lse-embroiled-in-row-over-authorship-of-gaddafis-sons-phd-thesis-and-a-15m-gift-to-universitys-coffers-2226894.html) someone may question the objectiveness and scientific independence of universities at more general level too. And for good reasons.

In fact, a major part of recognized universities have a strong resource-based link to some ideological principal. Specific cases are the Jesuit and Opus Dei business schools which control a large share of highest business education globally. Another question is to what extent it matters if you conduct your research and teaching in a school dedicated to Jesuit ideology? I would say it does matter – a lot. First, the religious business schools have an explicit ideological agenda which directs teaching in a number of highly respected institutions (see http://www.iajbs.org/?_m=members-full). Second, the ideological basis of these schools does not offer a universally accepted or applicable worldview but rather one that is narrowly designed from the interests of religious fundamentalists. Third, there is a correlation between the research content and the ideological basis of these schools. For example, it is not a coincidence that the faculty of the Jesuit schools is especially active in two fields of management research: business ethics and strategic management. Emphasis on business ethics comes rather naturally as it is the primary interest of Jesuits to distribute ethical principles as they define them. The recent emphasis on ethical issues in management has even strengthened the power of this ideological ‘meta-project’ as practically all business schools are obligated to include business ethics in their teaching portfolios. Ergo Christian-type ethical principles are increasingly distributed in all types of business schools. In strategic management, the Jesuit background seemingly affects the ways scholars emphasize human agency. That is, against all we know about evolution of industries and firms, we have a group of scholars who explicitly argue for the value of intentional choices in the capturing of competitive advantage (or whatever). Think about, for example, resource based view. The whole theoretical apparatus is built on the idea that management with foresight captures value from the production factor market as they have superior knowledge about what happens in the future. This is a creationist argument par excellence, and has nothing to do with the scientific knowledge produced in our field but also in other sciences.

A less serious side note comes from the educational background of me and countless other Finns. Namely, a famous book series, "Tales of a field surgeon" used to belong to the reading experiences of almost all Finns (at least in the 1970s). The book has multiple contents yet one specific story line is the deep suspicion against – well – Jesuits. Topelius frames Jesuits as nihilistic murderers and schemers (in the 17th Century context) who aimed to destroy the well-being of the Scandinavian Protestant countries (actually 17th Century Scandinavia was far from being the happy “Shire” as visualized in Topelius writing). The take away from this may be that some issues just are imprinted in our thinking. Like suspicions related to Jesuits.

The Grass Is Singing

mirva.peltoniemi@tkk.fi — Thu, 17 Mar 2011 00:00:00 +0100

While backpacking through Thailand I read Doris Lessing's debut novel The Grass Is Singing published in 1950. It is about the interaction of white farmers and their black workforce in colonial Africa. I realised that there are striking similarities between colonial farming and the Thai tourism business.

Colonialists treated natives as children. Grown men were called ‘boys' and it was the duty of the white man to develop their characters and to institute a proper work ethic. In Thailand Western tourists see Thai people as juvenile and treat them with patronising benevolence. "Oh how nice that the girl is running her own noodle kiosk! We should buy something to support such a nice little venture!"

The animosity between whites and blacks in colonial Africa was fuelled by both sides making insulting remarks of the other in their own language. Knowing that you are being ridiculed is bad enough, but not knowing the specifics makes it worse. In Thailand I saw Finnish tourists expressing a level of contempt towards local border officials, for example, that they would never dare in Europe. However, it runs both ways. My better half and I are both tall even by Finnish standards. This was a source of continuous amusement for the locals especially in elevators. I think that people in general fail to realise the extent to which communication is non-verbal.

In colonial Africa relations among white men and black women were commonplace and quietly tolerated. Relations among white women and black men were taboo. In Thailand relations among male tourists and local women are commonplace to say the least. In addition to the straight-up by-the-hour services, there is the girlfriend scene. This means that a woman receives gifts and is wined and dined for behaving as the man's compliant girlfriend for the vacation. A grey panther and a 20-year-old local girl is a very common sight at beaches and in restaurants. I have never seen a Thai man with a non-Thai woman.

As another piece of light beach reading I enjoyed The Social Contract by Jean-Jacques Rousseau. His fundamental tenet is that men should act according to principles that are good for the society as a whole even when these are against their personal interests. Duty should go before physical impulse and this transforms "a stupid and ignorant animal into an intelligent being and a man" (p. 19). Observing the Thai skin trade the conclusion is that Western men see Thais as a whole different from the one that they are a part of. People tend to prefer a system in which their children or the neighbours' children do not need to make living through prostitution. Somehow they still manage to rationalise enjoying the fruits of another system where this exactly takes place.

Apart from the similarities between colonial Africa and the Thai tourism business, there is one noticeable difference. In Africa only native men worked for the white farmers either in the fields or as ‘houseboys'. In Thailand it is the women who appear to be doing most of the heavy lifting in terms of cooking, cleaning, laundering and entertaining. Simone de Beauvoir argues in The Second Sex that gainful employment is the only way to make women equal to men. I guess that will work only once no citizen is rich enough to buy another and no citizen is poor enough to be forced to sell themselves. That is one of Rousseau's thoughts about equality and I guess we can extend that to women even though Rousseau made it clear that only men are citizens.

Nokia-Microsoft Alliance: Theoretical Perspectives

juha-antti.lamberg@tkk.fi — Thu, 17 Feb 2011 00:00:00 +0100

When Nokia and Microsoft announced their alliance in software development business the first impression was that this is ugly as incest. Nokia would abandon some its core assets and Microsoft would provide its so far marginal Windows Phone 7 as the main platform for Nokia’a smart phones? What is more, the MEEGO operating system or at least the MAEMO was almost functional when it was sidelined from Nokia’s strategy? The blog scene offers much better technological and managerial analyses of the pact so it does not make sense to compete in that front. Couple of interesting notions from organizational theory may still be warranted. Let’s see how Glostra’s basic assumptions correspond with the deal:

1. Evolution is blind: logically, no firm / actor may have foresight This is the case: no one knows how good or bad the decision was. The only thing that in reality has happened is the announcement and consequent volatility in the financial market and media. Why this is the case is explained by industry dynamics and organizational inertia – the next two assumptions.

2. Industry is a necessary cause of firm performance.

What Nokia does or does not is actually irrelevant considering what happens in other firms and among consumers. More or less anything may happen: new superior operating systems, sharply declining prices, sharply rising prices, new alliances, the de jure pact will never be signed etc. Thus, by deciding that Nokia will maintain its core activities in telecommunication business was a relevant choice which actually marginalizes the question of who makes the necessary operating system.

3. Continuity is beneficial. Organizational inertia creates business opportunities, enhances learning, maintains legitimacy and reduces transaction costs (search, bargaining, protection)

Continuity is not only beneficial but it also means that large organizations change extremely slowly. Even if someone makes a ‘strategic decision’ it does not mean that it would determine what actually happens in the organization. Classic case in this respect is Intel Corporation (reported in numerous Burgelman publications) in which middle-managers eventually made the decisions that over time emerged as the official strategy of Intel. Similarly, if something unexpected happens inside Nokia (like a new superior product with some other OS as Microsoft) Nokia’s strategy will change. The bottom line is that all organizations are highly inert and thus dependent on the capabilities and knowledge that are historically constructed. As long as the majority of individuals continue their daily work, and as long as certain structures survive, changes in the overall direction of the organization are rather marginal.

4. Variation, selection and retention are key evolutionary mechanisms that operate in the industry context:

Conceptually, VSR framework explains all the above processes. Inside an organization, these three processes cannot be frozen as any modern organization build its innovativeness on the fact that without new things emerging there is no competition necessary for development. The official strategy is just a text.

5. A key strategic choice is the decision on market focus (narrow vs. wide).

In this respect, nothing has changed for quite some time. Nokia has always operated with a generic strategy that aims to attract as many consumers as possible. If it can do this by focusing on one OS would be unexpected. More likely, in the following years the number of OS repertoire will stay the same or increase.

Key message is that organizations just do not change overnight. Then another question is how wise it is to claim otherwise.

How could mergers improve innovativeness: Clans of the Alphane Moon

juha-antti.lamberg@tkk.fi — Mon, 07 Feb 2011 00:00:00 +0100

It is slightly depressing that Philip K. Dick as a pulp fiction writer and drug addict consistently beats any (at least many) management scholar when it comes to insightfulness in how organizations actually work. Take for instance ‘Clans of the Alphane Moon' published in 1975. Besides the usual PKD themes (divorce, overall panopticon features of the society etc.) the novel focuses on a moon inhabited by pathological psychopaths. Due to a war between terra and Alphanes the moon has been largely isolated for over twenty years. Over the years the different mental disorders have bifurcated to several clans which largely live separated yet collaborate through an informal council. The clans are:

1. Manics: the technologically superior group;
2. Paranoids: best in administration;
3. Hebephrenics: the most overarching understanding of the universe "gazed with vacuous silliness";
4. Polymorphic schizophrenics: the creative members of the society "producing new ideas".

In the novel, the clans are characterized as follows:

"Hebephrenics at all of their stages of deterioration…grinning without comprehension, even without real curiosity…manic-depressives, who, in their manic phase, could be highly destructive. The destructiveness of the manics would be limited to impulse; at the worst it would have a tantrum-like aspect. However, with the acute paranoid systematized and permanent hostility could be anticipated. The paranoid possessed an analytical, calculating quality."

" To Dan Mageboom she said, 'According to my theory the several sub-types of mental illness should be functioning on this world as classes somewhat like those of ancient India…the hebephrenics, would be equivalent to the untouchables. The manics would be the warrior class…the paranoids would function as the statesman class; they'd be in charge of developing political ideology and social programmes…the simple schizophrenics – they correspond to the poet class although some of them would be religious visionaries. Those with polymorphic schizophrenia simplex would be the creative members of the society, producing new ideas’ Mageboom said, 'How would it differ from our own society on Terra?'"

As usual the novel does not result in anything concrete. The original reason to visit the moon again was to find technological ideas:

"It's entirely possible that in twenty-five years a society of mentally ill people may have come up with technological ideas we can use, especially the manics – that are most active class. I understand they're inventive. As are the paranoids."

In that respect, manics really had invented different types of new technologies yet the book offers no indications of further use (like commercialization) of these artifacts (except sudden violent acts by manics). As the novel is rather loose when it comes to deepening of the original idea of social experimentation it would could be stimulated with, for instance, the following alternative story-lines:

1) All clans would get extra resources, and their performance would be measured with patents or similar metrics.
2) Some clans would get extra resources while others would get nothing.
3) Three clans (manics; paranoids; schizophrenics) would merge + get extra resources.
4) All the three above mentioned (PKD was an expert in parallel worlds).
5) A performance competition with all four alternatives – what produces the best outcome.

Vendimia

tuomas.kuronen@aalto.fi — Tue, 07 Sep 2010 00:00:00 +0100

After spending considerable time inside in the company of books and mostly theoretical articles, one may easily become a bit of a book-worm. That is, lose the 'touch' on things. The world (I said it, uh) becomes something not only seen through theoretical glasses, but one in which theory really matters, almost all the time. Therefore it was a real delight to actually do something, for once (articulated in structuralist-mythological language this 'doing' could be expressed as something like a series of utterances in a zero-order language). The task was to take part in this year's vendimia.

Reasons for my enthusiasm were manifold. Not only is it quite unusual for a stranger to be even able to participate in the wine harvest, but I also had an organisational interest of the process. So, right after the sunrise off we went to the finca. The day started with a crash course of the grapes, how to cut them, how to feel them, how to pick the rotten ones out, and so on... Not a surprise to anyone, the highest authority onsite was an old woman who had the accumulated practical wisdom over several decades of winemaking, who would subtly but keenly observe everyone's vintage skills.

Us newbies, of course, messed something up. Despite our careful effort, we managed to confuse the slightly over-ripened ones with the rotten ones (only to be corrected not-so-subtly), but all in all, I think it worked out fine. Additional workforce enabled them to do the task in just a few hours, instead of the whole day.

This whole process got me thinking of the role of our holy scripture, the organisation theory in organising real situations and individuals. I'm not going to say it had absolutely nothing to it, but still I saw some poignant conflicts with our textbook ideals and the practice of drinking beer for breakfast. Still it worked, everyone smiling. What exactly is the point of talking about concepts such as 'practical wisdom' or 'performativity' (just to pick out two, no theoretical discrimination!)? I'm 100% sure that the grandmother, who, according to our theories, lived out many focal aspects of both of those mentioned theoretical concepts and related literatures, would have neither understood nor cared about a word. Moreover, in the small challenges we came across during the day (grape siloing machine did not work and others) I realised I had absolutely nothing to say. All I could do was to trust the experts, most of them having an elementary school background, and loads of experience in wine-making, of course.

Yes, I can come back home, take my 3g-modem, connect again with the world and talk all I want about it, but up the hill, surrounded by the vines, I was a complete tourist. I remember James March saying in HBR interview that: “If a manager asks an academic consultant what to do and that consultant answers, then the consultant should be fired.” Nevertheless, until now I've been in the belief that the academic consultant might know at least something or have a helpful theoretical insight which could bring the process further. The problems, however, were either trivial (fix the machine), or demanded expertise (this is the right kind of smell), which left no room for theoretical commentary. Should I have had at least something to say? Or is it just me?

Aalto Troopers

juha-antti.lamberg@tkk.fi — Tue, 07 Sep 2010 00:00:00 +0100

Aalto University’s (www.aalto.fi) aim to be a ’top university’ or a ’leading university’ has created a fair amount of anxiety among current faculty. That is, the goals are clear yet the means are either unrealistic or obscure. E.g. to reach University of Turku (www.utu.fi) in Shanghai rankings we should publish at least three times more ISI listed articles than we do today. Anyone can make judgments of how probable this is.

Yet, now Aalto University has opened its recruiting policy (http://www.aalto.fi/fi/about/careers/). The advertisement text is rather shallow but the below picture is clear enough in its message: Aalto needs super-humans a’la Starship Troopers (http://www.imdb.com/title/tt0120201/):

"Newsreel announcer:Young people from all over the globe are joining up to fight for the future.
Soldier #1:I'm doing my part.
Soldier #2:I'm doing my part.
Soldier #3:I'm doing my part.
Young kid dressed up as a soldier:I'm doing my part too.
[Soldiers laugh]
Newsreel announcer:They're doing their part. Are you? Join the Mobile Infantry and save the world. Service guarantees citizenship.”

Strategic Management of Declining Industries - A Literature Review

jasu.koponen@tkk.fi — Mon, 16 Aug 2010 00:00:00 +0100

Authors:Koponen, Jasu and Arbelius, Heikki (2009)Download file:Strategic Management of Declining Industries - A Literature Review (Bachelor's Thesis)

The abstract

Declining industries are an important part of developed economies – for example in 1977 a tenth of US manufacturing output was accounted for by industries whose output had shrunk over the preceding ten years (Ghemawat and Nalebuff 1990). As declining demand for a product is often related to demographic changes (e.g. Harrigan 1980), the slowing and eventually negative population growth in the Western countries will cause a decline in demand in industries that supply goods to a local market. Despite the previous and expected occurrences, little research has been carried out in this field. The purpose of this study is to draw together what management scholars have stated about managing organizations in declining industries. The study is confined to decline that is caused by factors external to the organizations and that is not related to short term variations or discontinuities such as recessions, and is thus to some extent irreversible.

Three approaches to decline were identified in the literature review: normative management literature, exit patterns and organizational ecology. We present what each category has to say about the behavior of declining industries and try to integrate the knowledge from all categories where possible. A unified framework of all three perspectives is presented.

Geoffrey Hodgson: The Mirage of Microfoundations

jasu.koponen@tkk.fi — Mon, 21 Jun 2010 00:00:00 +0100

The Micro-origins of Organizational Routines and Competencies conference held last weekend in Suomenlinna, Helsinki, brought together top-researchers of the field to discuss the individual-level (beliefs, preferences, expectations, or abilities, characteristics) and aggregational (social interactional dynamics) factors that play a central role in the origins of organizational routines and capabilities.

The conference featured many prominent speakers, with keynotes given by Michael D. Cohen (University of Michigan), Geoffrey Hodgson (University of Hertfordshire), Tammy Madsen (Santa Clara University), Maurizio Zollo (Bocconi) and Linda Argote (Carnegie Mellon University). The most heated conversation (one might almost call it a debate) arose from Hodgson's keynote, where he basically challenged the whole notion of micro-foundations as a basis for organizational research and theorizing. The video below shows Hodgsons keynote and the discussion and debate that followed, with Teppo Felin (Marriot School, BYU) as discussant and defender of the micro-perspective.

Geoffrey Hodgson: The mirage of microfofoundations

Glostra-TV launch today at 18:00

jasu.koponen@tkk.fi — Tue, 20 Apr 2010 00:00:00 +0100

Hi,

Glostra-TV launches its first ever broadcast ‘Competitive Aggressiveness as an Obsession: A Critical Reading of Competitive Dynamics Literature’ tomorrow at 1800 in this address:

http://www.glostra.fi/bootcamp2010/

Some technical problems are expected yet the program will be truly authentic ‘science goes camp’ experience. Welcome!

Best regards,

Juha-Antti Lamberg

Professor in Strategic Management

Institute of Strategy and International Business

Helsinki University of Technology

Finland

The way to better performance in a university

juha-antti.lamberg@tkk.fi — Tue, 30 Mar 2010 00:00:00 +0100

Relative to my recent critical account of public sector strategizing it is fair to offer at least some guidelines of what practical steps would be necessary for better performance in academic research and teaching. The key points deal with organizational architecture, strategic repertoire, personal development, and managing the past-present-future (illusory) continuum. Brought to the context of my own university, these would be the immediate actions I would undertake having the power:

1) Organizational architecture. Contrary to the strategy jargon in management textbooks, structure does not follow strategy – but other way round. Especially, in an environment in which the only meaningful outcome is the quality and innovativeness of research and teaching it is totally unnecessary maintain any extra constraints and boundaries. Lean and mean, thus, would be an optimal solution. In the Aalto context, light central administration could easily manage 50 research groups (each including 4-7 full professors) without any intermediate organizational layers. Add heavy incentives to focus on quality and the lean structure would allow research groups to do their natural tasks in research and teaching instead of allocating resources to manage the current 4-5 hierarchical layers between the focal activities and top management. New research groups could easily emerge, and less successful could be terminated with considerable ease compared to the current system.

2) After setting the structure and incentives, the only proactive way to nudge university’s evolutionary path is to recruit (and maintain) talents. With an ‘exit’ option (equally so with the research groups) taking risks would be possible and even necessary in the hunt of the ‘new-new’ things that world-class research requires (BTW: contrary what the Finnish special interest groups have argued, the three universities already were in world-class with more than one respect).

3) Although the research groups are needed for administrative purposes and in organizing teaching programs, the key production unit in any university is an individual professor, and her/his formal/informal research team. Consequently, a rapid improvement of quality and productivity would require massive supportive intervention that would engage all Aalto professors. As the previous research assessment was conducted at the level of departments (which is silly), we would actually need research assessment + mentoring of all 300 Aalto professors. 3 top scholars outside the Finnish borders working with one professor for two or three days should help to fine-tune skills and future prospects, and even save the careers of some of the more exhausted individuals. The message here is: the only meaningful way to accelerate learning and capability development is to concentrate on individuals instead of artificial administrative units.

4) Because we do not have the ‘psyche’ abilities (same with the SIG people), only way to prepare for future challenges is to (a) allow variation in research focuses and teaching offering; and (b) maintain ‘slack’ . That is, programs and projects that have no immediate function are desperately needed.

What can universities learn from business (when it comes to strategizing)?

juha-antti.lamberg@tkk.fi — Fri, 26 Mar 2010 00:00:00 +0100

As an occasional observer and sometimes an adviser in public sector strategy processes, one may easily ask to what extent business strategy is applicable in the strategic management of, for example, universities? Or to be more specific: what kind of strategic management would be of any help in public sector strategizing? The specification is important as (a) firms generally are a rather bad benchmark for any activities meant to last longer than three years. A statistical fact is that most for-profit firms die young; die painfully; or otherwise cease to exist. In this sense, there is not much to learn from the sudden success stories which may be explained more by random evolutionary processes than skillful strategic thinking. Even less we may learn from the constant failures of small and large firms. Also, what organizations optimize (profit, survival, efficient public good production) already makes for-profit organizations entirely different relative to non-profit organizations. The specification is also important because (b) strategy practices differ considerably from firm to firm. To keep things simple: there is two ways (bad and good) for strategic management. (1) many firms still follow 'old-school' strategy based on belief that top management have super-human skills in seeing into future, and acting accordingly. This 'old-school' approach respects strategic planning, control, heavy administrative processes, and other activities meant to hamper innovativeness and emergence. From a performance and survival perspectives, this approach is like flipping a coin because we still not have managers with those super-human qualities (called as 'psyches'’ in science fiction).

On the contrary, the inherent problems in decision-making and strategy implementation in 'old-school' strategic management have catalyzed the emergence of highly sophisticated intra-organizational evolutionary techniques such as corporate venturing or automated budgeting systems that facilitate progress and innovativeness needed in the marketplace. This (2) type of strategic management represents the most recent wave in strategizing valuing variation, emergent processes, fine-grained interventions, architectural solutions (=structure+ incentives), and other things positively affecting business performance. Key mechanism in this 'modern-school' is survival competition inheriting to evolutionary thinking in social sciences. Now, the problem lies here: in the field of public administration, these techniques of innovativeness and renewal do not come naturally as organizations partaking in the production of public goods are ill-suited to use a competitive mechanism.

Despite the fundamental difference between business firms and public administration, the managerial ideas of the former field have crept into the latter. In the last couple of decades, European public administration has faced both corporatization (i.e. adaptation of private sector management techniques and ideologies of efficiency) and increasing homogenization of practices across national borders. Widely known problems in renewal programs have demonstrated that managing organizational dynamics without the competitive mechanism inherent in modern strategic thinking is extremely challenging.

The problem of strategic decision-making without the help of a competitive mechanism in public administration is something that seems to be totally forgotten in the strategic management of some recent public sector strategy processes (like we witness in the Finnish university sector). That is, when the competitive mechanism and sensitivity to existing patterns of development are ignored we have a situation in which universities are managed (in strategic terms) like companies were managed 20 years ago (some are still). Thus, would it be too much to even respect the state of the art in business strategizing if one feels compelled to imitate business strategy in a university context? Or would it be better to do nothing and allow systems to heal themselves?

Chaos Management Web Tools

jasu.koponen@tkk.fi — Thu, 25 Mar 2010 00:00:00 +0100

My work and world in general are increasingly composed of zeros and ones flying here and there – a trend that I both like and resent simultaneously. I suspect all of you reading this are aware of at least the most obvious pros and cons of the internet taking over our lives, so I guess I can skip telling how life without email might actually do wonders for everyone's blood pressure, and cut straight to the point. This post is me offering a helping hand to ease the pains of everybody who spends a lot of time online doing collaborative work and needs to collect, store and share lots of different information. I hereby present thee my Top 5 chaos management tools.

1. Dropbox

In short: Dropbox lets you store and share files and folders with others accross the internet.

The Dropbox client enables you to drop/save any file into a designated folder on your computer that is then synced to any other of the user's computers with the Dropbox client. The files can also be accessed by logging into the Dropbox website, so they are available from any computer anywhere in the world (China and N-Korea may prove to be exceptions). Ideal for groups working with many files or people who tend to forget their memory sticks. Just instal dropbox on both your work and home computers, create a "Work" folder and you will always have all files with you where ever you go.

2. Evernote.com

In short: Evernote is a collection of software and services that allows users to collect, sort, tag and share notes and other miscellaneous information from different sources.

Here too, you can either access your notes and other information via an application installed on your computer or via a web browser. Again, all information is available to you where ever you go! Available both on Windows and Mac.

[video:http://www.youtube.com/watch?v=i_ncr1Ee9e8 320x265]

3. Google Docs

When working on ANYTHING involving collaborative writing, forget the usual compilation of Word+email!

4. RSS (and other feeds)

If you don't know what feeds are and what they are used for, read this. Can't be bothered (?), watch this.

5. Zotero

Zotero is a FREE, open source reference management system, which enables users to manage bibliographic data and to store web-page snapshots and other electronic objects. Like all reference management softwares, it also allows citation in text (in Microsoft Word and OpenOffice Writer) and can automatically create bibliographies in various formats (such as APA and MLA). Zotero is a Firefox add-on / plugin.

Post a comment with your favorite chaos management tools and help others out!

Regulation and Coordination in European Generic Medicines Industry: A Fuzzy Set Analysis

glostra@glostra.fi — Wed, 24 Mar 2010 00:00:00 +0100

Author: Ville Airo (2010).Download file: Regulation and Coordination in European Generic Medicines Industry: A Fuzzy Set Analysis Masters thesis, Aalto University School of Science and Technology

The global pharmaceutical industry is changing. A number of factors, like rising health care costs, indicate that the importance of generic medicines is growing. The European companies have particularly been affected by the harmonization of inner markets and changes in legislation. Therefore, the main research problem of the thesis is: what kind of business environment favors generic medicines industry. Secondary problems of the thesis discuss the industry dynamics at the European level in more detail through regulatory and other factors.

The thesis found that the two most important factors predicting the future success of the generic medicines industry consist of the generic promotion as well as the growing number of elderly people. The other four factors affecting the success consist of the competitiveness of domestic industry, public health care financing, income levels, and the level of coordination in the economic system. An in-depth fuzzy set qualitative comparative analysis (fsQCA) with the six factors revealed four distinct configurations of these factors lead to successful markets. None of the factors alone were found to be necessary for achieving success. The analysis suggests Europe could be divided into five regions that offer different challenges and opportunities for both companies and public policy makers. Furthermore, the analysis of company population shows that the carrying capacity of the competitive environment has been reached and the population density is declining. One reason for the declining number of companies is the escalating merger and acquisition activity.

The thesis supports an increased focus on micro- and meso-level analysis as proposed in the theory of “Varieties of Capitalism.” Combining set-theoretical research methods works well in this context and provides usable results. The thesis suggests companies operating in generic medicines industry the division of Europe should adjust their strategies specifically for these regions. In addition, public policy makers should utilize these regions and start harmonizing the promotion legislation in Europe to increase the overall effectiveness of markets.

Keywords: varieties of capitalism, fuzzy set methods, qualitative/quantitative comparisons, generic medicines

Tip of the Month: Be kind!

juha-antti.lamberg@tkk.fi — Wed, 24 Mar 2010 00:00:00 +0100

In ‘Holy Smoke’, a famous Jane Campion film, PJ Waters (Harvey Keitel) and Ruth (Kate Winslet) are engaged in an epic psychological struggle that eventually spoils the life of Waters yet also emotionally affects Ruth’s interpretation of life. In one central scene, PJ Waters requests Ruth to “be kind”. Linked to an academic context ‘being kind’ means respecting (a) earlier work done in the field; (b) giving value on the work of close-by faculty members; and (c) longer term academic traditions. Having good manners never hurts. However, ‘being kind’ specifically helps you to communicate with your supervisors, enhances your understanding of yourself as a part of academic continuum, and results in better research. Be kind!