The Social Psychology of Organizations.

The 2008 crash has left all the established economic doctrines - equilibrium models, real business cycles, disequilibria models - in disarray. Part of the problem is due to Smith’s "veil of ignorance": individuals unknowingly pursue society’s interest and, as a result, have no clue as to the macroeconomic effects of their actions: witness the Keynes and Leontief multipliers, the concept of value added, fiat money, Engel’s law and technical progress, to name but a few of the macrofoundations of microeconomics. A good viewpoint to take bearings anew lies in comparing the post-Great Depression institutions with those emerging from Thatcher and Reagan’s economic policies: deregulation, exogenous vs. endoge- nous money, shadow banking vs. Volcker’s Rule. Very simply, the banks, whose lending determined deposits after Roosevelt, and were a public service became private enterprises whose deposits determine lending. These underlay the great moderation preceding 2006, and the subsequent crash.

The Economic Institutions of Capitalism

Social Psychology of Organizations

The Study of Man. By Michael Polanyi. Price, $1.75. Pp. 102. University of Chicago Press, 5750 Ellis Ave., Chicago 37, 1959. One subtitle to Polanyi's challenging and fascinating book might be The Evolution and Natural History of Error , for Polanyi is at pains to expunge what he believes to be the false notion contained in the contemporary view of science which treats it as an object and basically impersonal discipline. According to Polanyi not only is this a radical and important error, but it is harmful to the objectives of science itself. Another subtitle could be Farewell to Detachment , for in place of cold objectivity he develops the idea that science is necessarily intensely personal. It is a human endeavor and human point of view which cannot be divorced from nor uprooted out of the human matrix from which it arises and in which it works. For a good while

Personal Knowledge: Towards a Post-Critical Philosophy

Service-dominant logic continues its evolution, facilitated by an active community of scholars throughout the world. Along its evolutionary path, there has been increased recognition of the need for a crisper and more precise delineation of the foundational premises and specification of the axioms of S-D logic. It also has become apparent that a limitation of the current foundational premises/axioms is the absence of a clearly articulated specification of the mechanisms of (often massive-scale) coordination and cooperation involved in the cocreation of value through markets and, more broadly, in society. This is especially important because markets are even more about cooperation than about the competition that is more frequently discussed. To alleviate this limitation and facilitate a better understanding of cooperation (and coordination), an eleventh foundational premise (fifth axiom) is introduced, focusing on the role of institutions and institutional arrangements in systems of value cocreation: service ecosystems. Literature on institutions across multiple social disciplines, including marketing, is briefly reviewed and offered as further support for this fifth axiom.

Institutions and axioms: an extension and update of service-dominant logic

Administrative Behavior: A Study of Decision‐Making Processes in Administrative Organizations

This paper discusses some developments in the theory of the organizational capabilities of the business enterprise. Antecedents are recognized, and some promising new developments and areas for future research are identified. The role of managers in the economic system is highlighted and discussed within the context of economic and organizational research. Suggestions for future developments of dynamic capability research involve employment of evolutionary and behavioral theories.

Dynamic Capabilities and the Role of Managers in Business Strategy and Economic Performance

Extending Teece's landmark 1986 article, we consider how innovators benefit from value appropriation and creation. We elaborate on value appropriation, first by pointing out the importance of "industry architectures", i.e. sector-wide templates that circumscribe the division of labor; and second, by treating complementarity and factor mobility as distinctive components of cospecialization. This allows us to qualify Teece's prediction, by positing that firms can create an "architectural advantage" in terms of high levels of value appropriation without the need to engage in vertical integration. Such architectural advantage comes about when firms can enhance both complementarity and mobility in parts of the value chain where they are not active. We then elaborate on value creation by indicating how actors can benefit from investing in assets that appreciate because of innovation, which suggests that firms can benefit from encouraging imitation while investing in complementary assets. We also consider how investment in complementary assets changes the scope of the firm and thereby the development of capabilities that support future innovation. Finally, we provide an integrative guide that explains how firms should manage their position along the value chain to capture returns from innovation, thus extending and qualifying Teece's (1986) original predictions and prescriptions.

Benefiting from Innovation: Value Creation, Value Appropriation and the Role of Industry Architectures

Benefiting from innovation: Value creation, value appropriation and the role of industry architectures

This paper discusses the intellectual roots of the dynamic capabilities framework. We draw on insights from Edith Penrose as well as others in order to help explain the essence of the business enterprise, and how it can escape the zero profit trap. We see the business enterprise as being in part a product of its own history, but not completely so. Managers can shape outcomes and are not completely trapped by prior decisions and investments. We call this `evolution with design', leaving room for both evolutionary processes as well as intentional design. This conclusion is consistent with Penrose's contributions to the theory of the firm.

Mie Augier

Papers

Administrative Behavior: A Study of Decision‐Making Processes in Administrative Organizations

Dynamic Capabilities and the Role of Managers in Business Strategy and Economic Performance

Benefiting from Innovation: Value Creation, Value Appropriation and the Role of Industry Architectures

Benefiting from innovation: Value creation, value appropriation and the role of industry architectures

Strategy as Evolution with Design: The Foundations of Dynamic Capabilities and the Role of Managers in the Economic System