Sumantra Ghoshal

Bio: Sumantra Ghoshal is an academic researcher from London Business School. The author has contributed to research in topics: Multinational corporation & Organizational structure. The author has an hindex of 60, co-authored 107 publications receiving 50822 citations. Previous affiliations of Sumantra Ghoshal include INSEAD.

Going Global: Lessons from Late Movers

Abstract: concluded, in Bassi's words, that nMeXlCO IS one of TRI's top two or three priorities." Factoring in the industry effects of distance is only a first step. A full analysis should consider how a company's own characteristics operate to increase or reduce distance from foreign markets. Companies with a large cadre of cosmopolitan managers, for instance, will be less affected by cultural differences than companies whose managers are all from the home country. In TRI's case, consideration of company-specific features made Mexico even more attractive. The company already owned more than four-fifths of its Mexican outlets and had a 38% share of the local market, well ahead of McDonald's.

Building Competitive Advantage Through People

Abstract: Forget capital; it's relatively easy to obtain nowadays. Today's scarce, sought-after strategic resource is expertise, which comes in the form of employees. Although organizations have changed mightily from the days of hierarchical, top-down management, they still have a long way to go. In addition to issues of company structure and who should be involved in strategic decision making, there are questions of how the value that companies create should be distributed, now that employees, as well as shareholders, control a scarce resource. And then there are the intangible yet crucial changes that must occur in senior managers' ways of thinking ? and in the atmosphere and culture of the company. Reorienting old-school senior managers away from capital and toward knowledgeable employees will be difficult, but Christopher Bartlett of Harvard Business School and Sumantra Ghoshal of London Business School have several recommendations for human-resource professionals, who, Bartlett and Ghoshal maintain, will be key players in the design, development and delivery of strategy. Their task is threefold. First, they must build up the company by acquiring and retaining highly skilled employees. Second, they must find a way to embed individual-based knowledge in the company, making it accessible and useful not just to one unit or one function, but to the entire organization. That is the linking task. Finally, there is the bonding task: HR managers must create an engaging, motivating and bonding culture that will attract and keep talented employees. With people in ascendancy over capital, say the authors, it is time to recall what a company actually is: a social institution designed to engage people in the achievement of a valuable and meaningful purpose.

BAD FOR PRACTICE: A Critique of the Transaction Cost Theory.

Abstract: Organizations are not mere substitutes for structuring efficient transactions when markets fail; they possess unique advantages for governing certain kinds of economic activities through a logic th...

Bad management theories are destroying good management practices

Abstract: The corporate scandals in the United States have stimulated a frenzy of activities in business schools around the world. Deans are extolling how much their curricula focus on business ethics. New courses are being developed on corporate social responsibility. Old, highly laudatory cases on Enron and Tyco are being hurriedly rewritten. “What more must we do?”, the faculty are asking themselves in grave seminars and over lunch tables (Bartunek, 2002). Business schools do not need to do a great deal more to help prevent future Enrons; they need only to stop doing a lot they currently do. They do not need to create new courses; they need to simply stop teaching some old ones. But, before doing any of this, we—as business school faculty—need to own up to our own role in creating Enrons. Our theories and ideas have done much to strengthen the management practices that we are all now so loudly condemning.

Social Capital, Intellectual Capital, and the Organizational Advantage

Abstract: Scholars of the theory of the firm have begun to emphasize the sources and conditions of what has been described as “the organizational advantage,” rather than focus on the causes and consequences of market failure. Typically, researchers see such organizational advantage as accruing from the particular capabilities organizations have for creating and sharing knowledge. In this article we seek to contribute to this body of work by developing the following arguments: (1) social capital facilitates the creation of new intellectual capital; (2) organizations, as institutional settings, are conducive to the development of high levels of social capital; and (3) it is because of their more dense social capital that firms, within certain limits, have an advantage over markets in creating and sharing intellectual capital. We present a model that incorporates this overall argument in the form of a series of hypothesized relationships between different dimensions of social capital and the main mechanisms and proces...

Toward a Knowledge-Based Theory of the Firm,” Strategic Management Journal (17), pp.

Abstract: Given assumptions about the characteristics of knowledge and the knowledge requirements of production, the firm is conceptualized as an institution for integrating knowledge. The primary contribution of the paper is in exploring the coordination mechanisms through which firms integrate the specialist knowledge of their members. In contrast to earlier literature, knowledge is viewed as residing within the individual, and the primary role of the organization is knowledge application rather than knowledge creation. The resulting theory has implications for the basis of organizational capability, the principles of organization design (in particular, the analysis of hierarchy and the distribution of decision-making authority), and the determinants of the horizontal and vertical boundaries of the firm. More generally, the knowledge-based approach sheds new light upon current organizational innovations and trends and has far-reaching implications for management practice.

Toward a Knowledge-Based Theory of the Firm

Abstract: Given assumptions about the characteristics of knowledge and the knowledge requirements of production, the firm is conceptualized as an institution for integrating knowledge. The primary contribution of the paper is in exploring the coordination mechanisms through which firms integrate the specialist knowledge of their members. In contrast to earlier literature, knowledge is viewed as residing within the individual, and the primary role of the organization is knowledge application rather than knowledge creation. The resulting theory has implications for the basis of organizational capability, the principles of organization design (in particular, the analysis of hierarchy and the distribution of decision-making authority), and the determinants of the horizontal and vertical boundaries of the firm. More generally, the knowledge-based approach sheds new light upon current organizational innovations and trends and has far-reaching implications for management practice.

The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage

Abstract: In this article we offer a view that suggests that a firm's critical resources may span firm boundaries and may be embedded in interfirm resources and routines. We argue that an increasingly important unit of analysis for understanding competitive advantage is the relationship between firms and identify four potential sources of interorganizational competitive advantage: (1) relation-specific assets, (2) knowledge-sharing routines, (3) complementary resources/capabilities, and (4) effective governance. We examine each of these potential sources of rent in detail, identifying key subprocesses, and also discuss the isolating mechanisms that serve to preserve relational rents. Finally, we discuss how the relational view may offer normative prescriptions for firm-level strategies that contradict the prescriptions offered by those with a resource-based view or industry structure view.

Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance

Abstract: This paper draws on the social and behavioral sciences in an endeavor to specify the nature and microfoundations of the capabilities necessary to sustain superior enterprise performance in an open economy with rapid innovation and globally dispersed sources of invention, innovation, and manufacturing capability. Dynamic capabilities enable business enterprises to create, deploy, and protect the intangible assets that support superior long- run business performance. The microfoundations of dynamic capabilities—the distinct skills, processes, procedures, organizational structures, decision rules, and disciplines—which undergird enterprise-level sensing, seizing, and reconfiguring capacities are difficult to develop and deploy. Enterprises with strong dynamic capabilities are intensely entrepreneurial. They not only adapt to business ecosystems, but also shape them through innovation and through collaboration with other enterprises, entities, and institutions. The framework advanced can help scholars understand the foundations of long-run enterprise success while helping managers delineate relevant strategic considerations and the priorities they must adopt to enhance enterprise performance and escape the zero profit tendency associated with operating in markets open to global competition. Copyright  2007 John Wiley & Sons, Ltd.