Thursday, June 24, 2010

Micro-foundations Conference at Helsinki

Dr. Hari Bapuji

During the last weekend (June 19-20), I took part in a small and unusual conference. The Micro-level Origins of Organizational Routines and Capabilities (MOORC) conference was held in Suomenlinna, a UNESCO World Heritage site. It was attended by a little over thirty participants, including keynote speakers. The unique nature of the conference was evident right from the place where we stayed in Helsinki to the fact that we all took a ferry to reach to Suomenlinna and return to Helsinki.

In all, a total of 10 papers were presented by speakers. What surprised me most was that nearly every paper presented was an empirical paper. The methods used ranged from case studies to surveys, through archival research, experiments, and simulations. I will not go into the details of these papers for two reasons: (i) I will not be able to do justice to that exercise given the format of this post, and more importantly, (ii) these papers are under review and I do not have permission to write about them. So, let me focus on the broad contours of the discussion at the conference and share my own thoughts.

For a few years now, Teppo Felin, Nicolai Foss and their colleagues have been arguing that management researchers need to study the micro-foundations of the phenomenon that they are interested in. Simply put, micro-foundations is about the elements of a phenomenon and the interaction between them that gives rise to the phenomenon. In other words, if someone is researching the effect of product innovation on organizational performance, the research should focus first on what is innovation, who innovates and how innovation occurs. Then, one needs to study how these different elements interact to give rise to superior performance. This might sound like how research should be done, but that is not how it has mostly been done. In general, researchers tend to examine the relationship between innovation and performance, without adequate consideration to how and why innovation occurs.

As I think back, the agenda of the conference was well-captured by the keynote speeches. Michael Cohen argued that the micro-origins of routines and capabilities lie in habits, that rely on memory and perception. In other words, the focus should be to understand what happens in the minds of individuals as they encounter and perceive things. Geoff Hodgson cautioned against an excessive focus on individuals and suggested that relations between individuals should also be given an equal consideration, if not more. Taking the level of analysis to the supra-individual level, Linda Argote suggested that research be directed at the transactive memory system that combines an individual’s specific knowledge with the meta knowledge of others in the organization. Doing empirical research on what happens in the mind or in the collectives of individuals is not an easy task and requires considerable effort, resources, and more importantly, creativity on the part of researchers to design new methods. Towards this direction, Maurizio Zollo shared the empirical challenges he faced in his research that spans neurological and cognitive factors as well as the social factors that affect action and performance. In short, the conference was about trying to understand what the micro-foundations of routines and capabilities are and how to empirically study them.

No matter which direction the research on micro-foundations might take, I believe that it will be a good thing because it will focus on how things evolve and effect organizations. For example, it is good to know that innovation leads to better performance, but it will be better to know how to create innovations and even better to know what type of innovations lead to better performance and why. Such inquiry will not only be exciting to the researchers, but will also be more useful to managers because the research can then really shed light not only on what to do, but how to do and why.

Here are a couple of photos from the conference:

Thursday, June 10, 2010

Passion in Research

By Dr. Suhaib Riaz.

What place does passion have in academic research, particularly in business disciplines? Perhaps a lot. Paul Shrivastava of Concordia University, speaking at the largest conference of business academics in Canada a couple of weeks ago, put it this way (paraphrased): “Passion and enthusiasm are the only things that will save us as academics, not methodologies or more regression analysis.”

While the theme was Sustainable Business, the issues he raised are rooted deeply in almost all business research and deserve careful attention.

On the need for Holistic Research:
“Academic research on sustainability is doomed to failure because of research being conducted in silos. The business academics working in this area typically follow the science research model, which is to narrow down and look deep. However, we need holistic thinking. We need to step outside the business schools. We also need to look at the arts approach – arts are integrative and capture knowledge of a different kind.”

On Journal Dictatorship:
“In particular, we need to step out of the modes of Strategic Management Journal or Academy of Management Journal (mainstream business academic journals) that have for thirty years dictated our life. It is not sufficient to write in academic journals where citations in any case are very few. It is mindless to be doing that when there are such immediate and serious problems facing the world.”

Friday, June 4, 2010

McDonald’ Shrek Recall: More Questions than Answers

By Dr. Hari Bapuji.

McDonald’s has recalled 12 million Shrek-themed glasses today because the designs on them contain cadmium. In no time, questions have been raised in the digital world about where they were made. While this might be an important question to ask, what concerns me is the number of questions that are left unaddressed in this recall.

In any recall these days, it is common to highlight the country of manufacture (mostly China) and point fingers at that country. Let us first clear that before moving to other important questions. These glasses were made for McDonald’s by Arc International, a French private company that is a leading producer of glassware. These were manufactured in the U.S., not simply imported from China. Arc has manufacturing facilities at Millville, NJ. Some argued that the paint may have come from China, but we can wait to hear more on that from Arc before any judgment is passed.

What surprises most, however, is the lack of clear information in this recall. Or rather, conflicting information being provided by the recall notice and McDonald’s. A recall has been announced by McDonald’s “in cooperation” with the CPSC. So, one could fairly assume that there exists some potential harm. But, McDonald’s believes “the Shrek glassware is safe for consumer use.” Further, McDonald’s asserts that the glasses are “in compliance with all applicable federal and state requirements at the time of manufacture and distribution” – that time was just last month. So, the question is: are the glasses safe or not?

The CPSC also does not appear to give any better information. A spokesman for the agency does not specify the amounts of cadmium, but only that they were slightly above the protective level currently being developed by the agency, but far less than the children’s metal jewelry that CPSC recalled earlier. That’s all right, but what are the limits and what is the amount of cadmium present in these glasses? In other words, how safe are these glasses? To add further to the confusion, Arc International says that it stands behind all its products and see the recall as an internal decision by McDonald’s.

That McDonald’s has recalled 12 million units (a very large number) should not come as a surprise because they generally put into circulation a lot of toys and such products, perhaps much more than any leading toy company. But, McDonald’s has often been praised by analysts for escaping the earlier lead metal problem when a number of large companies issued recalls. Surprisingly, what they escaped in China seems to have caught them in the U.S. I wonder what organizational systems and processes (or lack of them) have caused this. Was it that they were less careful in the U.S. than they were in China?

It is commonly believed that lead, cadmium and such heavy metals are not easily available in the US and certainly not present in the paint. But this recall and another recall for excess lead earlier this year raises questions on this notion that heavy metals in products are present only in those made in China and other such developing countries.

Recently, The CPSC chairman asked the Asian manufacturers to make sure that cadmium and other heavy metals are not substituted for lead. Yes, cadmium seems to have become the new lead and it should be dealt with in the same manner in which lead was dealt with a couple of years ago. But, in the process, it is important that clear information be given to consumers and other stakeholders so that the unnecessary frenzy does not accompany recalls. It is only in the absence of such frenzy that the reasons for recalls and the role of companies can be discussed in a productive manner so as to improve consumer product safety.

* Dr. Hari Bapuji is an Assistant Professor at the Asper School of Business, Winnipeg, Manitoba. Dr. Bapuji’s recent research on Toy Recalls received worldwide media attention and has been published in several prominent outlets.