The economic modeling of strategy process: ‘clean models’ and ‘dirty hands’

We argue that our model of learning in alliances ( Khanna, Gulati and Nohria, 1998 ) is an economic model of strategy process. We discuss implications of this view for the strategy process vs. content debate, for the appropriate testing of models of strategy process, and for the role of economics in helping understand strategy process. We propose that the ‘clean models’ from economics and ‘dirty hands’ of traditional process inquiries offer research designs that are complementary rather than incompatible ( Hirsch, Michaels and Friedman, 1987 ). Copyright © 2000 John Wiley & Sons, Ltd.     

Differentiation strategies in ‘stalemate industries’

Empirical studies conducted at the Institut de Recherche de l'Entreprise (Lyon, France) show that, in ‘stalemate industries’ (cf. the BCG's typology, 1981), differentiation strategies are effective and profitable alternatives to the usual strategic recommendations. The knowledge of customers' behavior shows up several opportunities for differentiation, hidden by some kind of ‘strategic presbyopia’. Total quality or ‘zero default’ strategy (product quality regularity, punctuality of deliveries, quick response to unexpected orders, quick and correct answers to requests, short delivery times) is the major opportunity for differentiation. Such strategies are compatible with a low-cost position; excellent companies which succeeded in building this ‘total advantage’ (diferentiation + low cost) over their competitors enjoy the highest market share growth and profitability.     

‘Compunications’: a policy agenda

There are four points which are especially useful in understanding the evolving world of computers and communications in the USA.¹ The first is that the information industries, which were separate and distinct as recently as a decade ago, are now tightly intertwined and in turmoil. Second, the demands and stakes of individual consumers are undergoing significant changes. Third, there are great economic and political stakes in the information world. Finally, the stance of the US government in general is marginally adequate, at best, to cope with the turmoil.     

BUYER POWER AND THE ‘WATERBED EFFECT’*

When a buyer is able to obtain lower input prices from a supplier, is it possible that other buyers will have to pay more for the same input as a result? Is this bad for consumers? We present a model that analyzes the conditions under which the asymmetric exercise of buyer power can lead to consumer detriment through raising other buyers' wholesale prices (the ‘waterbed effect’).     

The ‘Flexible Firm’: Strategy and Segmentation

This paper draws together and provides further analysis of two research projects commissioned by the Department of Employment, with a focus on employers' labour use strategies in Britain. It seeks to place on a firmer statistical basis arguments about the presence and growth of the ‘flexible firm’, and it draws also on case-study data to explore some of the issues relating to flexibility and strategy. Our conclusions are that there has been a marked absence of strategy in this area, and reasons for this are explored, as are the implications for gender and segmentation in the labour market.     

From ‘Entering into a Firm’ to ‘Entering into a Profession’: An Anthropological Approach to Changing Personhood in Japan

Drawing on extensive ethnographic fieldwork, the article uses discourse analysis to examine the social dynamics involved in the construction of personhood in Japan. While the gap between powerful discourse and lived reality is a well‐documented phenomenon, there is little systematic empirical research on how to integrate individual and social levels of analysis in this process. By contrasting discourse from above and from below, the article illuminates power asymmetry and the resulting tension between discursive freedom and social exclusion among disadvantaged groups.     

‘The Magnificent 7[am]?’ Work‐life articulation beyond the 9[am] to 5[pm] ‘norm’

This article focuses on the work‐life ‘balance’ challenges of those who work in organisations that operate beyond standard hours. The concept of work‐life articulation is utilised to examine the experiences and practicalities of attempting to reconcile the, often competing, demands of employment and family life. Qualitative research was conducted in two private sector businesses and one‐third sector organisation in the UK during the onset of the 2008 financial crisis. The findings reveal increasing competitive pressures, efficiency drives and work intensification. ‘Business needs’ are prioritised over care responsibilities, and in the private sector organisations there is declining flexible working with a reassertion of the management prerogative. This article contributes to current debates over work‐life ‘balance’ and highlights variable, changeable and unpredictable working time arrangements that permeate non‐standard hours, which creates additional complexities and challenges for family time schedules and routines.     

Porter's ‘competitive advantage of nations’: An assessment

Porter's Competitive Advantage of Nations is an important book which bridges the gap between strategic management and international economics while contributing substantially to both. Porter's analysis of the impact of national environment on international competitive performance demonstrates the potential for the theory of competitive strategy to rescue international economics from its slide into refined irrelevance, while simultaneously broadening the scope of the theory of competitive strategy to encompass both the international dimension and the dynamic context of competition. Nevertheless, the breadth and relevance of Porter's analysis have been achieved at the expense of precision and determinancy. Concepts are often ill defined, theoretical relationships poorly specified, and empirical data chosen selectively and interpreted subjectively.     

‘Determinants’ of organizational performance: An interdisciplinary review

The paper contains a review and evaluation of empirical and case studies on the performance of whole enterprises. Research from a diverse array of academic disciplines and research traditions is included. The central focus is on identifying factors that influence organizational performance, and discussing implications for future interdisciplinary research and the strategic management of contemporary organizations.     

PLATFORM COMPETITION WITH ‘MUST‐HAVE’ COMPONENTS*

In platform‐component systems with indirect network effects, some ‘must‐have’ components are so popular with consumers that they create large, discrete indirect network effects when they become available on a platform. For example, ESPN is a must‐have component of cable TV platforms. This paper examines how platform market structures determine exclusive versus non‐exclusive contracts between platforms and components. It shows that a component provider is more likely to sign exclusive contracts with a single platform if its popularity is high, the platform market share difference is large, and cross‐platform indirect network effects are low.     

From ‘embrace and change’ to ‘engage and change’: trade union renewal and new management strategies in the UK automotive industry?

This article focuses on the relationship between the introduction of new management techniques (NMTs), trade union responses and employee attitudes in the automotive industry in the UK. In contrast to a prevailing pessimistic prognosis for the survival of traditional industrial relations in the 'new management' environment, unions remain as an independent and dissenting force. Paradoxically, one of the significant features driving union recovery has been the opportunities presented by the very nature of NMTs themselves which, among other things, have opened the possibility for increased local autonomy.     

The optimal degree of diversification in ‘high-tech’ firms*

The literature on innovation and investment contains two contradictory strands. One emphasizes investment diversification as a form of risk reduction. The other emphasizes specialization as a way to exploit economies of scale and learning effects. The literature is surveyed and a simple model of optimal specialization is developed to clarify the issue. Comparative static results are presented.     

Social Partnership or a ‘Complete Sellout’? Russian Trade Unions’ Responses to Conflict

In 1990 the former communist trade unions in Russia adopted a programme of social partnership, the aim of which was to defend their members’ interests during transition while also maintaining social peace. But critics of social partnership within the union movement argue that it amounts to little more than an excuse for inaction. To examine whether social partnership represents a departure from the collaborationist habits of the Soviet past, I examine 33 case studies of conflict at enterprise level conducted between 1999 and 2000. This analysis reveals considerable continuity with Soviet practice.     

A ‘Copernican Revolution’ in French Industrial Relations: Are the Times a’ Changing?

In 1998 and 1999 France passed the sixth and seventh laws in seventeen years affecting working time. They offered financial incentives to firms signing collective agreements that created or protected jobs and cut the legal working week from 39 to 35 hours from 1 January 2000. Early evidence suggests that while their direct job creation effect is limited they are moderating wage settlements and leading to more flexible working patterns. In this paper I situate the new hour laws within the long historical tradition of state political intervention over working time and argue that this remains a key element in reforming French industrial relations.