William R. Childs. The Texas Railroad Commission: Understanding Regulation in America to the Mid-Twentieth Century. College Station, Texas: Texas A&M University Press, 2005. x+323 pp. ISBN 1-58544-452-9, $35.00.

In his new book, The Texas Railroad Commission: UnderstandingRegulation in America to the Mid-Twentieth Century, historianWilliam Childs explores the history of regulation in the contextof one of the most interesting state commissions in the UnitedStates. He provides a counterpoint to many economists’narrow analysis of regulation on the basis of efficiency. Regulation,he says, has to be understood as a social, cultural, and politicalphenomena operating within the federalist framework     

CHAMPIONS OF CHANGE AND STRATEGIC SHIFTS: THE ROLE OF INTERNAL AND EXTERNAL CHANGE ADVOCATES*

Change advocates who participate in the process of strategy-making can play an important role in enabling organizational adaptation. To examine the nature of this role, this article investigates the influence on strategic shifts of two such participants - new members of the top management team and management consultants. Empirical findings suggest that managers see these two types of change agents as having two different kinds of influence on strategic shifts. Specifically, the change agent role of management consultants is viewed as one that creates pressure for change by helping to shape new managerial perspectives of the environment. In contrast, the change agent role of new members of the top management team is viewed as one that counteracts inertial forces that may block the implementation of change. These results suggest that management consultants may be much more useful in stimulating changes in the ways executives think about their environment than they are in implementing radical strategic changes. To overcome institutional resistance to extreme strategic shifts, organizations may need to resort to stronger political and symbolic actions, such as promoting or hiring new top executives in key leadership roles.     

Movements, bandwagons, and clones: Industry evolution and the entrepreneurial process

Entrepreneurship research has paid insufficient attention to the context in which new businesses are started. Consequently, efforts to identify factors that consistently lead to entrepreneurial success have failed. This is because what works in one context will not necessarily work in another. Even worse, factors that lead to success in one context may lead to failure in another.This article addresses this problem by drawing from the concept of industry evolution to identify three broad but distinct organizing contexts—emerging, growth, and mature industries—and demonstrating how each context presents a different set of entrepreneurial challenges. An industry is defined not as a group of firms producing close substitutes, but instead, as a group of firms of the same organizational form. Industry evolution is understood therefore as the diffusion of an organizational form, with emerging, growth, and mature stages corresponding to the creation, exploitation and erosion of competitive advantage. Defining an industry in this manner makes it possible to overcome the problem of shifting industry boundaries and enables us to distinguish between entrepreneurial activities that shake up existing industries by creating new and competing organizational forms and entrepreneurial activities that replicate well-known organizational forms and drive an industry toward equilibrium. It also enables us to draw from the work of industrial organization economics, strategy, and population ecology.Entrepreneurship is defined as the creation of new organizations and is viewed as a context-dependent social process. New organizations are enacted as critical stakeholders change their behaviors in ways that allow the organization to emerge. The process is successful when the short-term existence of a new organization is no longer at risk. A typological theory of entrepreneurial success is developed by examining how the fit between context and four other critical dimensions cause successful foundings. The theory is multiplicative and probabilistic. It is multiplicative in that all dimensions need to fit for a founding to be successful. Poor fit in any one area can lead to failure. It is probabilistic in that the better the overall fit, the better the odds of success.In addition to context, the dimensions we examine are entrepreneurial networks, entrepreneurial confidence-building behaviors, the motivation of stakeholders, and organizational structures and strategies. In terms of entrepreneurial networks, we examine whether entrepreneurs have weak-tie or strongtie networks, and whether their networks are homogeneous or include subgroups that are unrelated. In terms of confidence-building behaviors, we explore the use of informal (e.g., repeated personal interaction) versus formal (e.g., contracts) mechanisms. With respect to stakeholder motivations, we ask whether stakeholders are driven by social or instrumental motivations. In terms of structure and strategy, we consider two issues. First, we explore whether the emerging organization is market or hierarchy based, and we consider the extent to which the organization is innovative versus imitative. We argue that these various dimensions come together in three logical configurations, that we label movements, bandwagons, and clones.EMERGING INDUSTRY ORGANIZING: MOVEMENTSMovements are the organizing processes through which new organizational forms are created. Pioneers of new forms of organizations have unique personal networks that enable them to see the potential of bringing the factors of production together in new combinations. They have strong ties to two or more nonoverlapping networks. To succeed, they must overcome problems associated with lack of legitimacy. Theentrepreneur is joined by highly committed stakeholders who are motivated by social factors. Belief in the venture's success is achieved through informal confidence building, such as incremental personal exchange and third-party reputation. In this manner, stakeholders develop personal familiarity with the form and make positive assessments about the entrepreneur's competence and trustworthiness. The organizing structure is market based with participant commitments being secured through flexible, cooperative agreements. The strategic emphasis is on innovation and experimentation. The belief in the importance and viability of the new organizational form serves as a loose ideology for controlling and coordinating the actions of participants.GROWTH INDUSTRY ORGANIZING: BANDWAGONSBandwagons are organizing processes that seek to exploit the potential of a newly legitimated form. The strategic challenge at this stage is to prosper newly legitimated form. The strategic challenge at this stage is to prospeamidst rapid growth and change. The successful entrepreneur has an extensive network of high status individuals that can be tapped to quickly mobilize resources within a narrow window of opportunity. Stakeholders are motivated less by social factors, than by a desire to secure the benefits of being early movers. Formal confidence-building mechanisms dominate. In an effort to achieve efficiencies, develop sources of competitive advantage, and preempt the competition, more value-chain activities are developed in house. The strategic posture remains entrepreneurial; however, more emphasis is placed on following the example of other firms.MATURE INDUSTRY ORGANIZING: CLONESClones are the organizing processes that replicate existing forms and incorporate all that has been learned about a given industry and type of business. Strong competition along with stable demand and technology make it difficult to find a source of competitive advantage in a mature industry. At this stage, the successful founder is someone with extensive industry knowledge and contacts who is capable of extracting operating efficiencies and/or identifying some underserved market segment. Expected returns are modest and stakeholders need to be motivated partly by social factors. However, the large amount of information now available about the form and the market itserves enables stakeholders to base their participation decisions on a rational assessment of expected future benefits. Given increased experience with the form, the relationships between the organization and its stakeholders are more predictable and as a consequence, subject to greater formalization. Models exist showing how to structure theserelationships, facilitating greater use of more specific contracts and guarantees. With tight margins and the need for efficiency, greater use is made of hierarchy in an attempt to manage costs. These same highly competitive conditions also make mistakes very expensive. The organization needs to draw upon the knowledge that others have learned about the form. Consequently, it adopts a more conservative strategic posture and is less likely to deviate from established practice.IMPLICATIONS FOR FUTURE RESEARCHIf we are ever to understand what leads to entrepreneurial success, we must pay more attention to the context in which organizing occurs. Our typology suggests that fundamentally different processes may be at work at different stages of industry evolution. In addition to empirically testing our theory, an opportunity exists to reexamine the existing entrepreneurship literature through a new conceptual lens, asking how our interpretation of the research would differ if context was considered explicitly. Our theory also has the potential to inform questions about the role of organizational foundings in the diffusion of competitive advantage and to examine the impact of.founding conditions on long-term strategic adaptation.     

FORGING THE IRON CAGE: INTERORGANIZATIONAL NETWORKS AND THE PRODUCTION OF MACRO-CULTURE

This article examines how organizations participate in shaping the cultural environments of the nations that they inhabit. Cultural environments, we argue, emerge in a primarily unintended fashion as a consequence of routine, network interactions among organizations in four overlapping yet analytically distinct sectors: government, the mass media, educational institutions, and the business community. Differences in the structure of these national networks condition dynamic patterns of change in nations’cultural environments. In highly centric national networks, government will tend to dominate the production of cultural environments. In less centric networks, other institutional sectors play more commanding roles.     

IMPORTANT DIMENSIONS OF STRATEGIC ISSUES: SEPARATING THE WHEAT FROM THE CHAFF*

Decision-makers in organizations use dimensions implicitly or explicitly to sort strategic issues. This article compares the dimensions implied by three literatures and dimensions generated by an empirical study. While some similarities are identified, there are striking differences between what the literature assumes and what dimensions decision-makers in the NY/NJ Port Authority use to sort issues. Implications for theories of decision-making and interpretation in organizations are discussed.