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A New Manifesto for Management Ghoshal, Bartlett, & Moran.

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Presentation on theme: "A New Manifesto for Management Ghoshal, Bartlett, & Moran."— Presentation transcript:

1 A New Manifesto for Management Ghoshal, Bartlett, & Moran

2 Image of Corporations Changing perceptions and assumptions. Greed. Social Irresponsibility. Maximize Shareholder Value through unethical means. Ranked lowly. Made a movie about the corporation which suggests that corporations are schizophrenic.

3 New Assumptions Modern societies are not market economies. Growth of firms and economies is a function of managerial quality (Resource Based View). New Moral Contract.

4 Competitive Disadvantage Operating efficiencies leading to mutually destructive competition. Hollowing of America through offshoring. HP from value creation to operating efficiencies. Geneen’s Monkey. Strategy-Structure-Systems.

5 Tyranny of Theory Porter’s Competitive Positioning. Industrial Organization Economics. Build barriers to competition. Williamson’s Transaction Cost Economics. Organizations exist to internalize markets to control for opportunistic behaviors. Static Efficiency (operating efficiencies). Dynamic Efficiency (value creation through innovations).

6 New Perspective Simon’s Organizational Economics. Value created through the organization of humans collectively to create. 3M’s rule of 15%. New managerial role. 3Ps: Purpose, Process, People. No life-long employment, but competitive employment. Shared destiny with all stakeholders. The need to regain legitimacy.

7 Revisiting The Complex Relationship Between Multinational Enterprises And Organizations In Transitions Economies Paula Danskin Berry College Clay Dibrell Oregon State University Ben Kedia University of Memphis

8 Research Questions Has the relationship between Multinational Enterprises (MNEs) and State Owned Enterprises (SOEs)/Organizations in Transition Economies (OTEs) changed over time? Has this relationship changed from one of confrontation to collaboration? What relationships may possibly drive the changed relationship? What are the attributes of the emerging cooperative relationship?

9 Background Definitions Transition Economies Command to Market Economies. Organizations in Transition Economies SOEs which have been privatized. Newly formed indigenous enterprises created with an entrepreneurial perspective to support the newly privatized firms and to fill market niches (Peng & Heath, 1996; Peng, 2001).

10 Traditional Perspective of Conflict Theory Confrontational mindsets of the actors (i.e., MNEs and SOEs) (Thomas, 1976; Gladwin & Walters, 1980). Actors enter the relationship with the intent to achieve all of their objectives. Actors view the interaction as short-term and transaction-based and regard each other with suspicion. Actors have little regard for their behavior in terms of building a reputation.

11 Theory of Cooperativeness Deutsch suggests that "the characteristic processes and effects elicited by a given type of relationship also tend to elicit that type of relationship" (1980: 65). Each actor enters with the intent that each will meet all of its objectives. Trusts other actor. Each actor desires a reputation as a good partner.

12 Drivers of Change for The 21 st Century Converging markets resulting in greater globalization through increased communication and technological innovations (Casson, 1991). Majority of world economies are in transition from one of command to market through privatization of industries and greater economic liberalization (Kotler, Jatusripitak and Maesincee, 1997).

13 Complementary Perspectives of Conflict and Cooperation Interest inter-dependence Resources – maximize use of resources, ownership & development key issues. Market Development – both sides motivated to develop market, and control is an issue. Relationship quality Balance of short-term objectives and building long-term relationship.

14 Complementary Perspectives of Conflict and Cooperation Perceived outcome stakes MNE and OTE have different goals that may not be compatible. Need to balance of short- term and long-term objectives else stalemate. Bargaining Power MNE shares technology and capital but protects knowledge. OTE willing to give up control for market development.

15 Complementary Perspectives of Conflict and Cooperation Implications (see handout) Each party wants to maximize their own objective outcome but understands that both parties must achieve a satisfactory objective outcome level. Trust is temporal. Reputation is an issue. Balance short-term objectives and long-term relationship.

16 Discussion Questions If companies are supposed to maximize shareholder value, then why is a strong focus on operating efficiencies bad? Are corporations bad? Why? Why not? Is Ghoshal, Bartlett, & Moran’s position naïve? Are Porter and Williamson correct? Why? Why not? What is your position on the three Ps? Moreover, do you want to work for a company where you must compete to stay employed? In all jobs, must you compete?

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