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WP 12-01

Johann Peter Murmann. The Co-Development of Industrial Sectors and Academic Disciplines

Keywords: University-Industry Linkages, Historical Case Studies, Synthetic Dyes, Biotechnology.

Abstract:

The paper presents a model that conceptualizes the development of academic disciplines and related industries as intimately linked. The model predicts that the relative strength of a national industry which has a significant input of science or engineering knowledge is causally related to the strength of the nation’s relevant science or engineering discipline and vice versa. The model also applies to smaller (regional) or larger (supranational) geographic units. On the national level, the model predicts that over longer periods, a nation cannot remain weak in one domain and strong in the other. The two domains will either become both strong or both weak. The model identifies the conditions when government intervention is likely to be effective and when not. A historical case study of synthetic dyes from 1857 to 1914 illustrates how these positive feedback processes led Germany and Switzerland to become strong both in organic chemistry and the dye industry, while Britain and France declined in both domains and the U.S. remained relatively weak in both domains for the entire period. An additional shorter case study of biotechnology supports the prediction of the model.

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WP 11-01

Hong Jiang, Murmann, Johann Peter. Regional Institutions, Ownership Transformation, and Migration of Industrial Leadership in China

Keywords: Institution, Ownership Structure, Regional Growth.

Abstract:

Scholars have emphasized the gradual ownership transformation of enterprises as a key driver of the Chinese economy’s unprecedented growth. However, little work has been done on the issue of whether this transformation process takes place evenly across the various regions in China. This paper describes the important role of regional institutions in shaping the ownership-based competitiveness of local enterprises and the migration of industries across regions. In the case of the Chinese synthetic dye industry, the passing of leadership from state-owned enterprises (SOEs) to collectively owned enterprises (COEs) and then to private enterprises (PEs) was accompanied by a concurrent leadership migration from one region to another. The paper contends that this simultaneous occurrence was not accidental. Four institutional constraints—the degree of central supervision, the local labor arrangements, the local social welfare provision, and the degree of ambiguity in property rights—retarded the rise of new ownership forms in the previously dominant regions. This gave other regions the opening to take over leadership positions by providing a more favorable institutional context for new ownership forms. These findings are likely to apply to all of the Chinese manufacturing industries that existed prior to 1978 and that subsequently did not experience significant technological changes and were not highly protected by the government.

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WP 10-01

Johann Peter Murmann, Deepak Sardana. Successful Entrepreneurs are Not Risk Takers: Toward a Theory of Entrepreneurial Decision Making

Keywords: entrepreneurial decision making, entrepreneurial risk-taking, performance, new ventures, theory.

Abstract:

Many scholars see entrepreneurs as action-oriented individuals who use rules of thumb and other mental heuristics to make decisions, but who do little systematic planning and analysis. We argue that what distinguishes successful from unsuccessful entrepreneurs is precisely that they vary their decision-making styles, sometimes relying on heuristics and sometimes relying on systematic analysis. In our proposed framework, successful entrepreneurs assess their level of expertise and the level of ambiguity in a particular decision context and then tailor their decision-making process to reduce risk.

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WP 07-02

Sylvain Lenfle, Carliss Baldwin. From Manufacturing to Design: An Essay on the Work of Kim B. Clark

Keywords: Product Development, Design Theory, Industry Evolution.

Abstract:

The interdisciplinary research of economist Kim Clark, former dean of Harvard Business School and now President of Brigham Young University-Idaho, occupies a unique place in management scholarship. This paper reviews his research contributions over almost thirty years. Throughout his career, Clark has brought fresh insights to old questions and opened up new territories of research. He helped to replace Frederick Taylor’s scientific management principles with the dynamic concepts of continual learning and learning organizations. He showed how product development could be actively managed for greater efficiency and effectiveness. He developed a theory of the embedding of knowledge in organizations, which he used to explain why established firms often fail in the face of “seemingly minor innovations.” He showed how changes in the modular structure of products and processes could bring about fundamental change in the structure of industries. Finally, in Clark’s later works, he built bridges from design theory to user innovation, transaction- and knowledge-based theories of the firm, and strategy.

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WP 07-1

Joonas Jarvinen, Antti Sillanpaa. The Evolution of Evolution: A Bibliometric Study on Evolutionary Research

Keywords: Evolution, Bibliometrics, Co-citation analysis.

Abstract:

In this study, we map the structure and evolution of evolutionary research related to the fields of management, economics, and sociology. Our bibliometric study investigates documents evolutionary researchers have cited in the past 20 years. The results indicate how Nelson & Winter (1982) has remained as the most important reference since the rapid expansion of evolutionary research between 1991-1995. In addition, we find that studies related to ecology have lost their earlier influentiality, while studies related to innovation and resources have gained more popularity among evolutionary scholars.

WP 05-1

Johann Peter Murmann, Koen Frenken. Toward a Systematic Framework for Research on Dominant Designs…

Keywords: Dominant Designs, Evolution of Artifacts, Architecture of Complex Systems, Product Life Cycle.

Abstract:

The concept of a dominant design has taken on a quasi-paradigmatic status in the analysis of the link between technological and industrial dynamics. A review of the empirical literature reveals that a variety of interpretations exist about some aspects of the phenomenon such as its underlying causal mechanisms and its level of analysis. To stimulate further progress in empirical research on dominant designs, we advocate a standardization of terminology by conceptualizing products as complex artifacts whose technological evolution proceeds in the form of a nested hierarchy of technology cycles. Such a nested complex system perspective provides both unambiguous definitions of dominant designs (stable core components which can be stable interfaces) and the inclusion of multiple levels of analysis (system, subsystems, components). We introduce the concept of an operational principle and offer a systematic definition of core and peripheral subsystems based on the concept of pleiotropy. The paper concludes with a discussion of how our proposed terminological standardization can stimulate cumulative research on dominant designs.

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WP 03-2

Giovanni Gavetti. Evolutionary Theory Revisited: Cognition, Hierarchy, and Capabilities.

Keywords: Firm Capabilities, Cognition, Simulation Methodology ..

Abstract:

Building on a field study of Polaroid’s transition from analog to digital imaging, this article identifies important lacunae in evolutionary research on capabilities. It argues that this research has focused excessively on the emergent, quasi-automatic nature of capability development, thus neglecting the role of cognition and deliberation. Furthermore, because it conceives capabilities as developing “from below,” this view grants no role, or a very restricted role, to influence from the top and therefore underplays the role of organizational hierarchy in capability development. This paper begins to fill these twin gaps. The field study grounds the development of an agent-based simulation model that focuses on processes of cognition and experiential learning at different levels of an organizational hierarchy. The model shows how these processes differ by hierarchical level, how they interact, and how corporate executives can influence these interactions. This conceptual apparatus allows me to build theory at two levels. On the one hand, I delineate the traits of a micro-foundation for research on capabilities that addresses these lacunae. On the other hand, I shed light on the role of corporate executives in the development of capabilities and, more broadly, in strategic decision-making.

WP 03-1

Johann Peter Murmann. The Coevolution of Industries and Academic Disciplines.

Keywords: Coevolution, Industry Analysis, Development of Science. .

Abstract:

Based on a five-country historical case study of the synthetic dye industry and the discipline of chemistry, the paper argues that academic disciplines, like industries, change through variation, selection, and retention processes. Using a comparative historical method and drawing on inductive evidence spanning a 60-year period, the study clarifies how national industries and academic disciplines coevolve as a result of mutualistic causal processes that work alongside well-known competitive processes. The analysis identifies three causal processes as being responsible for the coevolution of national industries and national academic disciplines: the exchange of personnel between industrial firms and academic organizations, the formation of commercial ties between the two social arenas, and lobbying by each on the other’s behalf. In both social arenas, the exchange of personnel affects the variation, selection, and retention processes, whereas the formation of commercial ties affects only the variation and selection processes, and lobbying affects only the selection processes.

WP 02-2

Richard N. Langlois. The Vanishing Hand: the Changing Dynamics of Industrial Capitalism.

Keywords: Industrial Organization, Markets, Managerial Hierarchies.

Abstract:

In a series of classic works, Alfred Chandler challenged the prediction (implicit perhaps in Adam Smith’s account of the division of labor and the Invisible Hand) that economic growth would always lead to finer market decentralization. In the late nineteenth and early twentieth centuries, Chandler showed, the visible hand of managerial coordination replaced the invisible hand of the market. Many would argue, however, that the late twentieth century witnessed an organizational revolution at least as important as the one Chandler described. In that epoch, Smithian forces clearly outpaced Chandlerian ones. This paper is a preliminary attempt to explain why: to provide some theoretical insight into the organizational structure of the new economy. The basic argument - the vanishing-hand hypothesis - is this. The managerial revolution Chandler chronicled was the result of an imbalance between the coordination needs of high-throughput technologies and the abilities of contemporary markets and contemporary technologies of coordination to meet those needs. With further growth in the extent of the market and improvements in the technology of coordination, the central management of vertically integrated production stages is increasingly succumbing to the forces of decentralization.

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WP 01-4

Johann Peter Murmann. Introductory Chapter to “Knowledge and Competitive Advantage: The Coevolution of Firms, Technology,

Keywords: Competitive Advantage, Coevolution, Industry Analysis.

Abstract:

This study argues that the creation of productive capabilities underlying successful firms and the institutional context surrounding firms are related through interactive, coevolutionary processes. To induce a dynamic framework for analyzing the sources of competitive advantage, I examine the processes through which German firms became dramatically more successful than their British and American counterparts in the synthetic dye industry. I specifically examine how the fortunes of synthetic dye firms have been influenced by differences in the educational systems and patent laws. I find that firms are in part successful because they develop collective strategies to mold the institutional context in their favor.

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WP 00-5

Maurizio Zollo, Sidney G. Winter. From Organizational Routines to Dynamic Capabilities.

Keywords: Organizational Capabilities, Knowledge-based Theories of the Firm, Knowledge Codification.

Abstract:

This paper investigates the mechanisms through which organizations develop capabilities in a dynamic sense (Teece, Pisano & Shuen, 1997) and reflects upon the role of (1) experience accumulation, (2) knowledge articulation and (3) knowledge codification processes in creating and constantly reshaping organizational routines.  The argument is made that dynamic capabilities originate from the co-evolution of these three mechanisms.  At any point in time firms adopt a mix of learning behaviors constituted by a semi-automatic accumulation of experience and by increasingly deliberate investments in knowledge articulation and codification activities.  Further, the relative effectiveness of these capability-building mechanisms is analyzed here in their interaction with selected features of the task to be learned, such as its frequency, homogeneity and degree of causal ambiguity.  Testable hypotheses are developed in the context of a theoretical model of dynamic capability building, and some preliminary empirical evidence in support of the arguments made is reviewed.  Finally, implications of the analysis for evolutionary economics and for the emerging knowledge-based view of the firms are discussed and an agenda for future research efforts on these issues is advanced.

WP 00-3

Louis Galambos, Jeffrey Sturchio. Science, Executive Leadership, and Business: The Multinational Gives Way to the Global Firm in Pharm

Keywords: Industry evolution, top management teams, globalization.

Abstract:

The authors conclude that in pharmaceuticals the MNE, which operates through susidiaries in a number of nations but is controlled by nationals from the headquarters country, is starting to give way to a new form of global enterprise which draws its executives as well as its employees from a wide variety of national cultures, educational systems, and business settings.  R&D and in some cases R&D leadership are internationalized.  Using a prosopographical methodology, they develop data that is consistent with the theory of evolutionary economics, which suggests that greater diversity will conduce to a more successful adaptation to a competitive environment.

WP 00-1

Joel Mokyr. Knowledge, Technology, and Economic Growth During the Industrial Revolution.

Keywords: Evolution of knowledge, economic growth, positive feedback..

Abstract:

This paper is an application of evolutionary theory to a concrete historical problem, namely explaining the timing of the Industrial Revolution in the last third of the eighteenth century. The argument is that useful knowledge (that is, knowledge and understanding of natural phenomena and regularities) constrains the form that techniques can take. It defines the central concept of an epistemic base of a technique, which describes how much of the natural forces underlying the functioning of a technique are understood. The paper then argues that despite of the widespread notion that science had little to do with the Industrial Revolution, the rapid changes in the diffusion of and access to useful knowledge as much as scientific breakthroughs, helped make the Industrial Revolution possible. In that way, the scientific revolution and the enlightenment triggered an “information revolution” that helps explain the timing of the Industrial Revolution. This view is reinforced by pointing out that the unique historical event was not just the traditional “wave of gadgets” of the 1760s and 1770s but the fact that these did not peter out in the first decades of the nineteenth century. The technological system in Western Europe, and especially in Britain, shows growing positive feedback and complementarity between techniques and the useful knowledge underlying them leading eventually to a self-reinforcing dynamic system of technological progress.

WP 99-1

Johann Peter Murmann, Ernst Homburg. Comparing Evolutionary Dynamics Across Different National Settings: The Case of the Synthetic Dye In

Keywords: Evolutionary Economics, Management and Organization Theory, Industry Evolution, Business History, Cross-national Comparisons, Synthetic Dye Industry.

Abstract:

Empirical investigations of industry evolution have flourished over the last two decades, but with the exception of Carroll and Hannan’s automobile study (1995) no one has examined in systematic fashion whether evolutionary patterns are the same in different social contexts. We present in this paper some striking dissimilarities in patterns of evolution that appear when the unit of analysis is not the entire world, but rather individual countries. These variations in country patterns (we compare Great Britain, France, Germany, U.S.A. and Switzerland) call out for an explanation and raise questions about current models of industry evolution. We identify as causal drivers behind the observed differences in country patterns: The Legal Environment, Availability of Skills, Existing Industrial Infrastructure, Economies of Scale and Scope, Technological Dynamics, and Positive Feedback Mechanisms. The article is now published in the Journal of Evolutionary Economics, Vol. 11 (2001) 177-205. 

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