September 2004 Archives

It doesn't seem so long ago that I was commenting on a recent edition of the JME (well actually it was a couple of months). Anyway, I'm just reading the latest edition 28(5), that is a special edition on problem based learning.

The editors' introduction, Citing Gijselaers and Woltjer, talks about the different ways of knowing that seem to apply to novices and experts. They say:

... novices tend to organise their knowledge representations around the specifics of the problem, where as experts move to the more abstract level to see the general principles.

How true this rang with my own experience. In my classes Business policy & strategy and Management theory & practice, (and to a lesser extent _Organisation & Management), I constantly see students anchoring on the details of a problem and finding it hard to work with the more abstract concepts. My experience has been that the more abstract a concept is, the bigger a 'lever' it is, and the more universal it is. Alas, I've never found a satisfactory way to get this across, and I suppose it is to be expected as it is hard to shift one's anchor (there are some strong links here to sense-making etc).

I had a really good class in MGMT 101 this morning, they were animated and talkative (in a good way). I wonder how much that was a consequence of having them all sit together at the front of the class.

Marie Wilson once reminded me of the difference that occurs in class dynamics as a result of how spread out the students are.

Anyway, one of the things that I don't think I made clear today, was the relationship between the Trait Approach to leadership and the music I was playing (O Superman -- see below for the details).

In a glib way, the trait approach presupposes that one either has, or doesn't have, the necessary characteristics to be a great (or heroic) leader. Alas, there are so many organisations and so few 'heroic' leaders -- that is to say, from the trait approach, perhaps the world doesn't have enough supermen/superwomen.

Actually, it is interesting to compare and contrast the Trait Approach to leadership with Jim Collins' ideas of Level 5 leadership. Although the traits are different between the two, one is still left wondering where these 'heroes' are going to come from.

References

I think one of the most powerful readings of the course, particular at this point in time (with the Commerce Comission, take-overs, insolvent firms, firms who are just realising that they might not win) is the one that is indicated in the Black Book (and in the Red Book?) by:

Also see website- http://www.jimcollins.com (Confronting the brutal truth)

Alas, out of all the journals I've read today, only one person seems to have made use of it (in fact no one else even mentioned it). Which is strange, because last semester, I'm pretty sure that most people read it (and it was 'advertised' much the same way). Is it a matter of timing -- were there just too many other things happening? Perhaps you could let me know for next time.

Anyway, I recommend the reading to you.

(Oh, BTW, everytime I read this article I'm reminded of the Vietnam veteran in Pulp Fiction)

In a thoughtful comment CR says:

...students in the course can't really be reasonably expected to have a detailed knowledge of competition law and hence we rely on what DPE say...

and I would agree with that; it would be unreasonable of DPE to expect students (commerce students?) to have detailed knowledge of the everyday law that governs commerce in New Zealand (Hmm, that sounds strangely wrong when I say it).

However, what I don't accept is that we have to/need to tell students everything -- producing "a guide on those [real world concepts] that are included (and their exact definitions as they apply to the game) in the black book" is wholely unrealistic. Part of what happens, in the simulation, and in the real world, is that we figure out what we don't know.

When I first came to New Zealand, I went to a meeting at New Zealand Post in Wellington. I parked my car just outside their building. The meeting went well, but when I left the building, at 4:30, I couldn't find my car. It was gone. As I looked around I round I say a sign - I'd seen it before, but I wondered if it was connected to my disappearing car. It said, "Clearway, Mon-Fri, 4:00pm - 6:00pm". I'd seen the sign when I parked, but we didn't have clearways at that time in the UK, so I didn't know what it meant. I was wrong. I shouldn't have parked there. Eventually, I tracked down the company that had towed my car, paid the fines, and got my car back. It was my own fault. I accepted my mistake. It was one else's fault. I didn't feel I was hard done by. Actually, I was sorry that I had probably caused some traffic problems. If I didn't understand the signs I should have asked. I didn't go around saying "Before I entered this New Zealand they should have told me everything about it". Rather, I learnt my lesson (and learned more about the NZ Road Code), and moved on.

I would hope that all of the students I spoke to about price-fixing would agree that I was unambigous in saying 'pricing-fixing would not be tolerated'. Some of those students would have heard that in Exec Meetings. Some of them would have heard it during one or more of the summits. Some of them would have heard it in one-on-one discussions. So, there is a pool of people out there who know that price fixing will not be tolerated (whatever that means). In the 'real world', even here in New Zealand, there have been a number of price fixing cases in the local news. (Let alone, Eron is the USA.) So, perhaps, some students had also read about price-fixing in the press.

So, I think there were enough clear signs around.

If any of those students was unclear as to what price-fixing looks like, why it is important in a market based economy that prices are not fixed, or what are the penalities for price-fixing (either in the simulation or in the real world), they did not make themselves known to me. I have no idea what responsibilty they took to clarify the matter and what responsibility they accept for what happened.

Likewise, mechanisms, against monopolistic behaviour (e.g. takeovers that would lead to dominate market positions) are built into the simulation, and yet, not a single student have ever questioned me as why they are there.

To often we rely on learning by our mistakes (see the Kolb Cycle), but we don't always have to 'suffer' that way -- we can notice the signposts and ask what they mean.

The reliance on the Commerce Act, in DPE's 'Commerce Commission', was not as a source of detail; Our intent was to make people think, we should have known all of this. Rather, it was to show that we wheren't being arbitary in our actions -- that it was really a serious problem, not just in the simulation but also in the real world.

Finally, I wonder, if any team in Brazil wins, and gets the 5 per cent; will any other team believe that they won it fairly (despite the penalty).

Let us suppose there there exists a small town, which has two bakers. Currently, the bakers sell their bread for $1.50 per loaf. Both bakers have been in the business a long time, and their cost structure for bread is pretty much the same. It costs them $1.00 to produce a loaf. So, their profit per loaf is 50 cents. Each baker sells the same number of loaves (800) each day. So, in total, each baker is making $400 in profit per day.

After doing some (very good) market research, one of the bakers discovers that dropping the price by 10 cents, will increase sales by 30%. The competitor's sales will decrease by a similar amount. In other words, if one baker drops the price, they will sell 1040 loaves and by making a profit of 40 cents each loaf, the baker will get $416 in profit. Of course, the other baker is now only selling 560 loaves, and making $280 dollars.

Should both bakers drop their price to $1.40 then there will be no change in the number of loaves sold by each baker (800), and their total profit will be $320.

So, should either baker drop the price of bread?

In the original prisoner's dilemma if there was only one change to sell bread then the 'best' thing either baker can do is drop their prices. However, if there are likely to be repeated rounds, then the baker should wait and see if the other baker drops their price.

Of course the problem becomes more complex when there are more bakers in the town -- with many bakers, breaking ranks can lead to the classical economics situation of the "tragedy of the commons".

But, I feel, that at the heart of these type of situations is the issue of trust. Can we trust our competitor to do the right thing? And yet... and yet classical market theory seems to be based on people acting in their own (self) interest.

As an aside, has anyone tried the 100 prisoner's problem ? I'm surprised this hasn't shown up in BCG interviews yet (or has it?).

Some relevant law

27.Contracts, arrangements, or understandings substantially lessening competition prohibited

1. No person shall enter into a contract or arrangement, or arrive at an understanding, containing a provision that has the purpose, or has or is likely to have the effect, of substantially lessening competition in a market.
2. No person shall give effect to a provision of a contract, arrangement, or understanding that has the purpose, or has or is likely to have the effect, of substantially lessening competition in a market.
3. Subsection (2) of this section applies in respect of a contract or arrangement entered into, or an understanding arrived at, whether before or after the commencement of this Act.
4. No provision of a contract, whether made before or after the commencement of this Act, that has the purpose, or has or is likely to have the effect, of substantially lessening competition in a market is enforceable.

And

30.Certain provisions of contracts, etc, with respect to prices deemed to substantially lessen competition?

1. Without limiting the generality of section 27 of this Act, a provision of a contract, arrangement, or understanding shall be deemed for the purposes of that section to have the purpose, or to have or to be likely to have the effect, of substantially lessening competition in a market if the provision has the purpose, or has or is likely to have the effect of fixing, controlling, or maintaining, or providing for the fixing, controlling, or maintaining, of the price for goods or services, or any discount, allowance, rebate, or credit in relation to goods or services, that are?
   1. Supplied or acquired by the parties to the contract, arrangement, or understanding, or by any of them, or by any bodies corporate that are interconnected with any of them, in competition with each other; or
   2. Resupplied by persons to whom the goods are supplied by the parties to the contract, arrangement, or understanding, or by any of them, or by any bodies corporate that are interconnected with any of them in competition with each other.
2. The reference in subsection (1)(a) of this section to the supply or acquisition of goods or services by persons in competition with each other includes a reference to the supply or acquisition of goods or services by persons who, but for a provision of any contract, arrangement, or understanding would be, or would be likely to be, in competition with each other in relation to the supply or acquisition of the goods or services.

Of course for all the details one should read the whole Act, which is available at the Public Access to Legislation project. Perhaps one of the most interesting sections is S.80 which discusses the pecuniary penality, and S.82A which dicusses

Finally,

98.Commission may require person to supply information or documents or give evidence?

Where the Commission considers it necessary or desirable for the purposes of carrying out its functions and exercising its powers under this Act, the Commission may, by notice in writing served on any person, require that person?

1. To furnish to the Commission, by writing signed by that person or, in the case of a body corporate, by a director or competent servant or agent of the body corporate, within the time and in the manner specified in the notice, any information or class of information specified in the notice; or
2. To produce to the Commission, or to a person specified in the notice acting on its behalf in accordance with the notice, any document or class of documents specified in the notice; or
3. To appear before the Commission at a time and place specified in the notice to give evidence, either orally or in writing, and produce any document or class of documents specified in the notice

Lisa and I went to the Maidment Theatre last night, and saw Who's afraid of Virgina Woolf.

I enoyed the movie when I saw it, but I enjoyed the play even more.

Whilst the whole caste were good, I think that Hera Dunleavy deserves a special mention. She gave an powerful performance in the role of Honey. I don't really remember Honey in the movie, but I'll never forget Hera as Honey -- a very moving performance. Bravo!

I was talking with Nigel Haworth today, and he pointed me towards an essay on improving our use of the English language by George Orwell. As far as I can tell, the piece is long out of copyright, so I have reproduced it here.

I subscribe to a number of email lists, which is probably passé in this era of RSS, but anyway, one of the lists I regular read is MG-ED-DV, the management education and development list of the Academy of Management. Last week, one of the postings was by Fred Nickols and pointed me to a review of the following book:

Nisbett, R. E. (2003). The geography of thought: How Asians and Westerners think differently ... and why. New York: The Free Press.

Having read the review, I really wanted to read the book, and so -- having navigated the vagaries of Voyager saying the book was missing, I finally managed to get (and read) a copy. It was well worth it.

There are few books that really change the way in which one views the world, but, for me, this is one of those books. I am already trying to change a number of things based on the insights this book presents. But what are these insights?

I won't try and summarise the book here; instead, I'll just highlight some parts that stood out for me.

The history of the Greeks on one hand, and the ancient Chinese on the other; the way in which language is structured in most Indo-European languages compared to the context driven approach of East Asian languages feeds into two different ways of seeking the world -- and not just metaphorically seeing but literally seeing. For example, show two similar pictures, Westerners will typically see more changes in characteristics of the distinct objects that make up the pictures e.g. they will see that an aeroplane has its landing gear down in one picture but not in the other. East Asians, are more likely to notice the change in relationship between things, e.g one aeroplane is close to another than in the other picture. East Asians are more likely to notice, and attend to, the difference in contexts of situations; Westerners are less likely to do so.

This plays out in other ways too. Westerners have a history and a culture of debate such that:

Western rhetoric, which provides the underlying structure for everything from scientific reports to policy position papers, usually have some variation of the following form:

• background;
• problem;
• hypothesis or proposed position;
• means of testing;
• evidence;
• arguments as to what the evidence means;
• refutation of possible counter arguments; and
• conclusion and recommendations

[This is also the structure of much of University work and of academic journal articles -- students doing Business policy & strategy and those who know the Minto Method, will be familiar with such structures]

I feel that it will probably come a surprise to most Westerners that such a "linear rhetoric form" is not well know or practised in East Asia. Rather, there is a quest for the Middle way which seeks to find a path through conflicting/paradoxical positions.

This lack of understanding and practice of rhetoric plays it self out in the class room during exercises requiring participation. The demand lectures make (such as myself) is for students to play out the rhetoric--to expose their stepwise thinking--and yet such analytic thought is the antithesis of East Asian holistic thought that seeks to encompass the whole (rather than by dissection). Thus, material is often understood by East Asians in a non-verbal manner which makes class discussion and debate almost impossible. For example, one researcher:

had people speak out loud as they solved various types of problems. This had no effect on the performance of European Americans. But the requirement to speak out loud had a very deleterious effects on the performance of Asians and Asian Americans. ... its practical implications are very important. How should one educate Asians and Asian Americans in American classrooms? Is it a form of "colonisation" to demand that they perform verbally and share their thoughts with their classmates? Would it have the effect of undermining the skills that go with a holistic approach to the world? Or is it merely common sense to prepare them for a world in which verbal presentation skills, even if it might be difficult to achieve them, will come in handy? ... the cognitive aspects of holistic, dialectic approaches to reason .. are so embedded in perception, philosophy, and even temperament that is seems doubtful that much in the way of change could be achieved. But I would be delighted to be proved wrong.

If I believe this, then I must necessarily try and change my teaching practice. Thus my initial response to this, is to restructure some of Business policy & strategy and I'm still considering what might be helpful in __Management theory & practice_.

Other interesting effects of the differences between Westerners and East Asians is the fact that many "culture-fair" IQ tests may not be so culture neutral. If East Asians are more sensitive to the relationship between things and their context, as opposed to the Western approach of categorising everything, then some IQ test are just plain unfair (e.g. those tests that are based on picking things that are the same as a previous sequence).

One early example in the book illustrates why this is a problem. Students were given a pyramid made from cork and told that it was a 'Dax'. They were then asked to select from a range of other objects which were also Dax. Most Westerners picked objects that were also shaped like a pyramid. But, most East Asians picked objects that were made from cork.

Anyway, enough said for now. I'm sure I'll return to this book as I continue to reflect on it.

Defining a field:
"identify communities of organizations that participate in the same meaning systems, are defined by similar symbolic processes, and are subject to common regulatory processes" (Scott, 1994, 71)
"those organizations that, in aggregate, constitute a recognized area of institutional life: key suppliers, resource and product consumers, regulatory agencies, and other organizations that produce similar services and products" (DiMaggio, P. J., & Powell, 1983, p. 143)
"a field may be defined as a network, or a configuration, of object relations between positions" (Bourdieu & Wacquant, 1992, p. 97)
"a socially constructed structured space in which agents struggle" (Wacquant, 1992, p. 17)

How do fields change? According to Powell (1991) there are three ways:

1. Changes emanating from the periphery of the field
2. The failure of isomorphism to regulate firms choices
3. Political or legal upheavals that redefine the boundaries of the field

Furthermore, Scott (2000) suggests that transformation of a field arises from:

1. Changes in the relationships between firms
2. Boundary changes of existing firms
3. The arrival of new populations
4. Changes in the boundaries of the field itself
5. Changes in the governance structures of firms

References

Paula Jarzabkowski (2004) has recently had one of articles published in Organization Studies. Her article is based on an earlier working paper she wrote a few years ago. Good on her for getting it in to a tier-one journal. As it happens, Paula will be visiting the department in November and will be giving a couple of seminars. If you're interested in strategy (and who isn't), then I would commend her seminars to you.

Anyway, as I was reading her article, my attention was drawn to:

Mir, R., & Watson, A. (2000). Strategic management and the philosophy of science: The case for a constructivist methodology. Strategic Management Journal, 21(9), 941-953.

The abstract for Mir & Watson article goes like:

In this paper, we suggest that constructivism has the potential to inform research in strategic management. The realist paradigm currently dominates strategy research, and constructivism, a well-established tradition in the philosophy of science, is often ignored. However, a study of strategy literature and research reveals that it is drawn upon more frequently than is explicitly acknowledged. Constructivism occupies a methodological space characterized by ontological realism and epistemological relativism. Ontological realism is an important cornerstone of a field as applied as strategy, while epistemological relativism helps us explore the constructed nature of the field, where the researcher is an active participant rather than a reactor or information processor. In this paper, we demonstrate the precedents and possibilities for constructivist research in strategic management. We examine some of the existent constructivist works in the strategy literature, and point to specific techniques, including historical analysis, to demonstrate how this perspective may advance the boundaries of strategy research

For the constructivists, researchers are seen as skillful craftsmen [sic], much in the same way as strategists are seen in strategy-as-practices (no wonder Paula used this article in her work). Whilst there isn't total agreement as too the nitty-gritty of constructivism, Mir & Watson say there is agreement on six main principles, viz:

1. Knowledge is theory driven.
2. The separation of researcher and the phenomena under investigation is not possible..
3. The separation between theory and practice is not equally unfeasible
4. Researchers are never 'objective' or value-neutral
5. Research occurs within a 'community' of scholarship where mutually held assumptions are deployed to create 'conversations'.
6. Constructivism constitutes a 'methodology' [rather than a method]

It is interesting to counterpoint constructivism with realism. Citing Leplin, the authors say that realism is typified by ideas such as:

• the best theories are those that are close to the truth;
• the truth of a theory explains (and is the only explanation of) its predictive validity;
• we are moving progressively towards a true account of a phenomena
• the claims made by any theory are either true or false
• only through the deployment of 'reason' can a theory be proven or refuted

It's interesting to contrast (and compare) those views with my own about theories. So despite having some constructivist tendencies, there are still elements of realism in the way I think. Nevertheless, I do reject the notion that there are abstract universal principles¹ when it comes to research.

As it happened, I used this article as an opportunity to revisit my understanding of classic research issues of ontology² and epistemology³.

I liked the quote from Foucault that was used:

We must not imagine that the world turns towards us a legible face, which we would have only to decipher; the world is not an accomplice to our knowledge; there is no prediscursive providence which disposes the world in our favor. We must conceive analysis as a violence we do to things, or in any case as practice which we impose on them (emphasise added).

That strongly reminded me of David Thomas' es clues or cues comments.

Anyway, this will be a helpful article when I write the method chapter of my thesis.

References

Footnotes

¹ Nomothetic, by another name.

² Ontology - a theories of objects and things. More particularly, what things are knowable and what things can't be known. Main types of ontology are empiricism, rationalism, pragmatism, constructivism.

³ Epistemology - regarding the truth or falsehood of knowledge. How can we prove if something is true or false (given what we can know... ontology). I hope I've got these round the right way.

As requested, I think it was by Helen, I've opened up a discussion on Cecil to allow you to exhange ideas with one another about the up coming written case analysis of Carl Zeiss Jena (CZJ). I hope you find it useful.

If it is useful, I was wondering if you would like me to do the same thing for the remaining cases? I would imagine it would work something like this -- a student could choose to dicuss the case using the dicussion forum on CECIL or discuss the case in class. It would be one or the other, and the online discussion would have to be complete before the in class discussion. What do you think. If there is enough interest we'll talk about it in class on Monday (after the break).

Furthermore, I'm also thinking about the assessment criteria for the written case analysis. I'd like to get your ideas on that topic too.

(Of course, if you don't want to leave it until Monday, or if you'd rather write down your ideas, then leave your comments here).