A New Manifesto for Management

Ghoshal, Bartlett, & Moran

Image of Corporations

Changing perceptions and assumptions. Greed. Social Irresponsibility. Maximize Shareholder Value through

unethical means. Ranked lowly. Made a movie about the corporation which

suggests that corporations are schizophrenic.

New Assumptions

Modern societies are not market economies. Growth of firms and economies is a function

of managerial quality (Resource Based View). New Moral Contract.

Competitive Disadvantage

Operating efficiencies leading to mutually destructive competition.

Hollowing of America through offshoring. HP from value creation to operating

efficiencies. Geneen’s Monkey.

Strategy-Structure-Systems.

Tyranny of Theory

Porter’s Competitive Positioning. Industrial Organization Economics. Build barriers to competition.

Williamson’s Transaction Cost Economics. Organizations exist to internalize markets to

control for opportunistic behaviors. Static Efficiency (operating efficiencies). Dynamic Efficiency (value creation through

innovations).

New Perspective

Simon’s Organizational Economics. Value created through the organization of

humans collectively to create. 3M’s rule of 15%. New managerial role.

3Ps: Purpose, Process, People. No life-long employment, but competitive

employment. Shared destiny with all stakeholders. The need to regain legitimacy.

Revisiting The Complex Relationship Between Multinational Enterprises And Organizations In Transitions Economies

Paula Danskin

Berry College

Clay Dibrell

Oregon State University

Ben Kedia

University of Memphis

Research Questions

Has the relationship between Multinational Enterprises (MNEs) and State Owned Enterprises (SOEs)/Organizations in Transition Economies (OTEs) changed over time?

Has this relationship changed from one of confrontation to collaboration?

What relationships may possibly drive the changed relationship?

What are the attributes of the emerging cooperative relationship?

Background Definitions

Transition Economies Command to Market Economies.

Organizations in Transition Economies SOEs which have been privatized. Newly formed indigenous enterprises created

with an entrepreneurial perspective to support the newly privatized firms and to fill market niches (Peng & Heath, 1996; Peng, 2001).

Traditional Perspective of Conflict Theory

Confrontational mindsets of the actors (i.e., MNEs and SOEs) (Thomas, 1976; Gladwin & Walters, 1980). Actors enter the relationship with the intent to

achieve all of their objectives. Actors view the interaction as short-term and

transaction-based and regard each other with suspicion.

Actors have little regard for their behavior in terms of building a reputation.

Theory of Cooperativeness

Deutsch suggests that "the characteristic processes and effects elicited by a given type of relationship also tend to elicit that type of relationship" (1980: 65). Each actor enters with the intent that each will meet all

of its objectives. Trusts other actor. Each actor desires a reputation as a good partner.

Drivers of Change for The 21st Century

Converging markets resulting in greater globalization through increased communication and technological innovations (Casson, 1991).

Majority of world economies are in transition from one of command to market through privatization of industries and greater economic liberalization (Kotler, Jatusripitak and Maesincee, 1997).

Complementary Perspectives of Conflict and Cooperation Interest inter-dependence

Resources – maximize use of resources, ownership & development key issues.

Market Development – both sides motivated to develop market, and control is an issue.

Relationship quality Balance of short-term objectives and building

long-term relationship.

Complementary Perspectives of Conflict and Cooperation Perceived outcome stakes

MNE and OTE have different goals that may not be compatible. Need to balance of short-term and long-term objectives else stalemate.

Bargaining Power MNE shares technology and capital but

protects knowledge. OTE willing to give up control for market development.

Complementary Perspectives of Conflict and Cooperation

Implications (see handout) Each party wants to maximize their own objective

outcome but understands that both parties must achieve a satisfactory objective outcome level.

Trust is temporal. Reputation is an issue. Balance short-term objectives and long-term

relationship.

Discussion Questions

If companies are supposed to maximize shareholder value, then why is a strong focus on operating efficiencies bad?

Are corporations bad? Why? Why not? Is Ghoshal, Bartlett, & Moran’s position

naïve? Are Porter and Williamson correct? Why? Why not?

What is your position on the three Ps? Moreover, do you want to work for a company where you must compete to stay employed? In all jobs, must you compete?