National Embeddedness of German Managers‘ Organizational Know-How in the Inter-War Period (1918 – 1939). - A Cross-Country Inquiry - Erich Frese Cologne University Academy of Management Annual Meeting Montreal 2010

2 German Managers‘ Inter-War Org. Know-How Frese AoM 2010 Level of organizational know-how in large German companies ( ) Organizational Know-How: Capability to meet new organizational challenges with successful structural solutions developed by own effort 1. Object of Inquiry

3 German Managers‘ Inter-War Org. Know-How Frese AoM 2010 German and U.S. managers are guided by the same cognitive organizational paradigm (systems engineering) Managers perceiving and solving organizational problems are exploiting the available know-how with different degrees of intensity  Prevalent organizational structures often do not indicate the national state of organizational know-how Country-specific factors influence managers‘ exploitation of given organizational know-how  Which organizational theories contribute to explain national differences in the exploitation of given organizational know-how? 2. Key Notions of Inquiry

4 German Managers‘ Inter-War Org. Know-How Frese AoM 2010 Measuring different levels of organizational know-how  ordinal, not cardinal scale (G USA)  paradigmatic benchmark: exploitation of given rules (systems engineering)  identifying given, but not exploited org. know-how Cross-country validity of systems engineering  elaborating the cognitive structure of systems engineering  assumed coordination and motivation effects  proving the cross-country dominance of systems engineering (Fig. 1) Empirical foundation of theoretical reasoning sample of companies (Du Pont, General Motors; I.G. Farben, Siemens)  no own archival work  literature covering the inter-war period  literature and interviews covering the post-war period 3. Methodological Requirements

5 German Managers‘ Inter-War Org. Know-How Frese AoM 2010 Fig. 1 Prevalent Org. Structures of Large U.S. Companies Org. Paradigms of U.S. Managers Reference Model Country-specific Features of Large German Companies Prevalent Org. Structures of Large German Companies Legend: AB B reconstructed from A AB proof of conceptional correspondence AB consideration of A when conceptional correspondence is proved

6 German Managers‘ Inter-War Org. Know-How Frese AoM 2010 Differentiating factors explaining prevalent German organizational structures Culture: self-efficacy of acting (planning)  basic theory: perceived locus of control (Rotter 1972) Institutional rules: pressure for acting  basic theory: adaptive behavior (Cyert & March 1963) Personal traits: professionalizing of acting  basic theory: power and influence (Thompson 1967) Differentiating factors and profit seeking behavior (Fig. 2) Comprehensive model: country-specific determinants of organizational structures (Fig. 3) 4. Country-specific organizational Factors Shaping large German Companies

7 German Managers‘ Inter-War Org. Know-How Frese AoM 2010 Fig. 2 Profit Seeking Behavior Position of Profit Goal Aspiration Level for Profit Goal Personal Traits Self-Containment Technical Goals Institutions Self-Containment Co-operative Goals Culture Planning Scepticism Institutions Market Regulations Legend ABAcausesB Legend ABAcausesB

8 German Managers‘ Inter-War Org. Know-How Frese AoM 2010 Fig. 3 Culture Self-efficacy of Planning Capabilities Personal Traits Influence of Technicians Profit Seeking Behavior Institutions Market Affinity of Institutional Rules Organization Structure Legend AB A causes B

9 Shape of prevailing organizational structures (G  USA) competence system: similar level of sophistication control system: rudimentary state of German company-wide planning systems State of German planning systems and level of org. know-how Prevalent state does not indicate substantial deficits in organizational know-how  increasing post-war competition intensified exploitation of available (mostly inter-war) organizational know-how  in early post-war times systems engineering was still the dominating paradigm German Managers‘ Inter-War Org. Know-How Frese AoM Main Results