According to W. Edwards Deming, American companies require nothing less than a transformation of management style and of governmental relations with industry. In Out of the Crisis, originally published in 1982, Deming offers a theory of management based on his famous 14 Points for Management. Management's failure to plan for the future, he claims, brings about loss of market, which brings about loss of jobs. Management must be judged not only by the quarterly dividend, but by innovative plans to stay in business, protect investment, ensure future dividends, and provide more jobs through improved product and service. In simple, direct language, he explains the principles of management transformation and how to apply them.

Out of the Crisis

The resource-based view of the firm attributes superior financial performance to organizational resources and capabilities. This paper develops the concept of IT as an organizational capability and empirically examines the association between IT capability and firm performance. Firm specific IT resources are classified as IT infrastructure, human IT resources, and IT-enabled intangibles. A matched-sample comparison group methodology and publicly available ratings are used to assess IT capability and firm performance. Results indicate that firms with high IT capability tend to outperform a control sample of firms on a variety of profit and cost-based performance measures.

A resource-based perspective on information technology capability and firm performance: an empirical investigation

We develop a contingency view of process management's influence on both technological innovation and organizational adaptation. We argue that while process management activities are beneficial for organizations in stable contexts, they are fundamentally inconsistent with all but incremental innovation and change. But dynamic capabilities are rooted in both exploitative and exploratory activities. We argue that process management activities must be buffered from exploratory activities and that ambidextrous organizational forms provide the complex contexts for these inconsistent activities to coexist.

Exploitation, Exploration, and Process Management: The Productivity Dilemma Revisited

As a potential theory, the elemental resource-based view (RBV) is not currently a theoretical structure. Moreover, RBV proponents have assumed stability in product markets and eschewed determining resources' values. As a perspective for strategic management, imprecise definitions hinder prescription and static approaches relegate causality to a “black box.” We outline conceptual challenges for improving this situation, including rigorously formalizing the RBV, answering the causal “how” questions, incorporating the temporal component, and integrating the RBV with demand heterogeneity models.

http://lib.cufe.edu.cn/upload_files/other/4_20140522031922_Is_the_Resource-based_%E2%80%9CView%E2%80%9D_a_Useful_Perspective_for_Strategic_Management_Research%20(1).pdf

Is the Resource-Based “View” a Useful Perspective for Strategic Management Research?

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

How can organizations put dynamic capabilities into practice? This article focuses on the power of organizational design, showing how managers can harness new organizational forms to build a capacity for sensing, shaping and seizing opportunities. Fast-moving environments favor open organization and self-organizing processes that quickly convert individual capabilities into actionable collective intellect. However, such self-organizing processes require managers to design and execute them. Using Valve Corporation as a case example, this article shows how new design principles—such as polyarchy, social proofs, and new forms of open organization—allow organizations to build dynamic capabilities for sustained innovation in dynamic environments.

Designing Organizations for Dynamic Capabilities

Strategy research explains why some firms outperform others, typically using profit rates, shareholder returns, and other continuous dependent variables. This paper investigates winning as the dependent variable, as measured by distributions of annual industry leadership in profits and returns to investors. This shift in dependent variable introduces alternative null models of competitive parity, including skew distributions derived from the natural sciences, and empirical distributions from nonbusiness domains such as chess, politics, sports, and beauty pageants. An empirical study of 20-year leadership in U.S. industries shows that performance distributions in business follow statistical power laws resembling those in natural phenomena, and closely resemble distributions found in sports, politics, and other nonbusiness domains. The results support a presumption of persistent performance advantages in business, but show that business outcomes are indistinguishable from outcomes in the wider scientific and competitive landscape, and are amenable to explanation using relatively simple heuristics. The paper shows how the choice of null model shapes firm performance explanations, and explores the consequences of a more inclusive approach to null models in strategy research.

/pdf/varieties-of-competitive-parity-55eostbzgn.pdf

Varieties of Competitive Parity

Professor Arend's critique raises fundamental epistemological issues for strategy research, particularly the concern that pragmatist philosophy forecloses access to objective truth and scientific progress. This response discusses the empiricist underpinnings of pragmatism, and addresses Professor Arend's specific concerns about the connections between competitive advantages and firm performance.

Strategy without ontology

Total Quality Management (TQM) has become, according to one source, `as pervasive a part of business thinking as quarterly financial results,' and yet TQM's role as a strategic resource remains virtually unexamined in strategic management research. Drawing on the resource approach and other theoretical perspectives, this article examines TQM as a potential source of sustainable competitive advantage, reviews existing empirical evidence, and reports findings from a new empirical study of TQM's performance consequences. The findings suggest that most features generally associated with TQM-such as quality training, process improvement, and benchmarking-do not generally produce advantage, but that certain tacit, behavioral, imperfectly imitable features-such as open culture, employee empowerment, and executive commitment-can produce advantage. The author concludes that these tacit resources, and not TQM tools and techniques, drive TQM success, and that organizations that acquire them can outperform competitors with or without the accompanying TQM ideology.

Total Quality Management as Competitive Advantage

This special issue explores the impacts of behavioral strategy on management practice Behavioral strategy can best contribute to management practice by shifting its focus from individual decision biases to the design of behaviorally informed decision processes at the level of the firm This introduction identifies three types of organizational decision processes, shows how they interact with individual and group biases, and proposes a model showing how managers can design and deploy these processes to shape the strategy of the firm It then introduces the articles in this special issue and discusses their contributions to the future of behavioral strategy

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Thomas C. Powell

Papers

Designing Organizations for Dynamic Capabilities

Varieties of Competitive Parity

Strategy without ontology

Total Quality Management as Competitive Advantage

Behavioral Strategy and the Strategic Decision Architecture of the Firm