Global Strategy - blog

Every time you step into edge.org you find something absolutely fabulous. This time, EDGE offers two hard core presentations closely related to Glostra visions. First, the founding father of theoretical treatment of path dependence and complexity in economics, Brian Arthur offers his view on technological change. Arthur's treatment of technology is closely related to research in dominant designs yet is far more comprehensive. What is more, it offers a philosophical understanding of what technology is, and how it evolves. If Arthur's speech does not offer any insights to strategic management of technology, the fault is not his. See the video interview and text here.

Universities are (certainly) not isolated from societies. The links are, at least, two kinds. First, the number and breadth of universities (e.g. as measured by teacher per potential student ratio) is primarily a function of the size of suitable population (i.e. how many literate inhabitants between ages 18-25 exist), wealth of the society (as measured by GDP per capita), and a number of more fuzzy factors such as policy decisions and international competition. Second, university education and research have certain functions in economic growth (which is needed for a larger number of professorships, for instance). Most noteworthy, universities educate a large number of individuals for different tasks in the society. What kind of education is given / needed is mostly a random process: as the future needs can not (logically) be forecasted it makes sense to produce excess capacity which may be needed in some future situation. For example, the investment to maintain certain humanistic areas such as languages is relative low vis-à-vis a situation in which those skills would be needed but no process would exist (I guess the CIA faced this problem after the September 11th 2001). In any case, individuals with a university education percolate into various tasks in administration, business, educational sector etc.; then, somewhat mystically, higher education emerges as an antecedent for economic growth. Similarly, the research conducted at universities may result in concrete improvements of knowledge and technology; at least most research is not harmful for societal development (yet see this: Reflections on a Crisis). And if we believe in Lucas, in a century or so, all economies would be equally rich with a large-scale university system (or similar) in each.

In strategic management literature, the human capital implicated in a firm's employees has already for a couple of decades been considered as an important strategic resource (or asset) for a firm. Obviously, in "knowledge economy", the value of this particular type of knowledge has become increasingly important, especially in knowledge-intensive and creative industries (such as financial services, IT, or biotechnology)

When national governments and politicians make decisions about economic policies, they often shape the viability of businesses at the industry level.

The arguments presented against "Lex Nokia" become increasingly odd (see also my earlier blog entry).

The protection of corporate intellectual properties is an important issue for any firm, and particularly so for globally operating high-tech companies. Unfortunately, part of the firm's challenge is to prevent its own employees  from leaking corporate information and secrets to competitors. Even if it was only a fraction of a firm's employees -- perhaps 1-5% -- who might have the unfortunate predisposition to make leaks under certain conditions, the challenge is real.

Facing the "need" to bailout the country's Finance Industry as well as Auto Industry, politicians and industrymen in the US are puzzled over an important question: To which direction one should next take the industry corporations, as the bailout monies effectively give the government control over them ? This debate is -- for sure -- interesting also to other national governments which are struggling with their own finance and other industries (such as that of Finland with its pulp & paper industry).

In November last year, I criticized the logic with which some people calculated the valuation of Facebook corporation to be 15 billion dollars (see an original article as well as a further comment and a related article). I suggested that perhaps the fundamental value of this corporation could more realistically lie between 3-5 billion. Now, an interesting new piece of analysis arrived today: Valleywag news site calculated Facebook's current value to be 2-3 billion.

Imperial College has far less exciting high profile speakers in the areas of business and social sciences than its UK peers. However, this week I had the opportunity to see a lecture by Daniel Goleman (of the emotional intelligence fame) who one of our professors had convinced to speak at the Imperial while traveling to London for some conference. By co-incidence, I had also taught half a session (60 minutes) on ethics in strategic management -- something the business school accreditation bodies are insisting on. These occasions provoked me to write my first blog post here.

An interesting question to GloStra is how firms can or should adapt their strategies according to the societies in which they operate.