My Research

This is really a short intellectual biography, a messy work in progress. It is not a clear statement of intent or a definitive listing of my academic projects or papers. These can be found on my resume and elsewhere, such as Google Scholar and ResearchGate.

I came into the BSchool game as an ex-Navy, ex-engineer, ex-banker, ex-computer sales-person, and so on i.e. with experience of management – of managing and being managed – but little experience of talking about it in a systematic manner.

I was able to bring my research question with me – rather than having to find one during my studies. It seems most PhD researchers find their research question in the literature – the marginal contribution – or are given one by their research supervisor. This is not my story. I focused on trying to understand my own experiences as a manager – specifically to get beyond naïve notions of rational decision-making. Indeed one of the principal impulses to become an academic was my sense that the decisions being made in my engineering company (Rolls-Royce) were not strictly rational; they seemed in an entirely different universe that I did not understand.

My thinking/bafflement took on shape as I found and read into Frank Knight’s notion of uncertainty and his intuition that the human response to uncertainty lay at the heart of business, profit, and thus of managing. My ideas were also shaped by reading Herb Simon. Only later did I sense, and then research, his connection to Knight. I also began the long process of reading and re-reading Chester Barnard.

My PhD process was agonizing – for others as well as for me – taking over 8 years. Yes, it was seen as ‘a contribution’ and won an important award; but it was only the beginning of my personal project.

My research crystallized slowly into the pursuit of a ‘theory of the firm’ that differed from and was epistemologically ‘richer’ than those found in microeconomics or mainstream organization theory (OT). It would be dynamic, time-full rather than abstract and time-less.  It would embrace Knightian uncertainty rather than dismiss it. Many management researchers presume certainty is accessible, thus characterizing uncertainty as an impediment, a defect in our knowledge of the certain. Hence my work would not be ‘theory’ in the conventional positivist sense.

It took me forever (40+ years) to clarify my approach to the core management question/mystery – the creation of economic value. This is not sociology’s core question, the creation of social order among atom-like individuals, the push-back against the disruptive impact of the Enlightenment. Nor is it psychology’s puzzle, the construction and maintenance of the self in the face of experiencing beyond the self.  Nor is it epistemology’s core question which is “What is human knowledge?”

More to the point, it is not economics’s core question – about which there is much debate between, say, the Marshall, Robbins, and Friedman positions. Knight, of course, felt economics was about choosing how to organize society to maximize the economic benefits of inter-individual cooperation, capturing the benefits of the division of labor.

The academic’s principal task is to express hir intuition in language (systematic or symbolic) that conveys the intuition to others more precisely than the previously available language allowed. Academics are engaged in language games. ‘Contribution’ means advancing the language-game. Empirical evidence is simply one kind of language – albeit ‘prioritized’.

I believe the business school community’s current languages (theories) offer little place for the discussion of economic value-creation – a contentious claim that hinges on my assumption that economic value emerges from imaginative engagement with Knightian uncertainty. It is not the result of rigorous design and operational efficiency, which are about lessening losses rather than creating gains.

It follows that value-creation cannot be expressed rigorously since Knightian uncertainty is its fons et origo. Thus there can be no rigorous ‘theory of the firm’. Economic value is never fully determinable – like ‘price’ in a perfect market. Questions about economic value indicate the limits and dynamics of our situation’s heterogeneity/uncertainty (hence Simon’s attachment to ‘bounded rationality’).  It follows that business managers who feel they ‘know’ the processes of economic value-creation ‘tacitly’ from their practice see little benefit in formalizing their knowledge, squeezing out their intuition. Chester Barnard struggled mightily with the paradox that if you express the business’s processes precisely you silence value-creation.

My ‘contribution’ (discovery) was that the mystery might be illuminated by moving from level to level – a bit like Dante’s descent – establishing lower-level distinctions as one moves ‘downwards’ towards some fundamental, ‘micro-foundational’ activity at the level of the individual. For some, such as the ‘Austrian’ economists, this limit is the individual’s ‘choosing’ – expressible, perhaps, because it is rational.

For me it is opposite – an ‘act of imaginative judgment’ that ‘resolves’ a particular instance of Knightian uncertainty.  Lately I have begun to see how imaginative practice bridges the gap between the general and the particular that Aristotle indicated in Ch 6 of the Nicomachean Ethics.

The first step of my ‘contribution’ was to shift the analysis ‘downwards’ – from the general to the particular towards where value is created, one act (transaction) at a time.  I abandoned the idea that firms were instantiations of some generic/universal category – an assumption underpinning most of our community’s discourse. To whit, most OT and strategy researchers presume firms or organizations ‘exist’ and share characteristics that can be uncovered using rigorous ‘scientific’ methods (i.e. positivist methods applied to samples drawn from populations of firms).  I do not believe any firm’s most crucial characteristics are either shareable or discoverable. Can we ever pin down what makes an artist great, or how Picasso differs from Rubens or Warhol? Management is an art form, perhaps the most central one in our capitalist society.

My thesis (Industry Recipes Blackwell 1989) blundered around but successfully separated firms into ‘industries’ of distinctive language. The research question was the source of this heterogeneity. Plus I made managers’ knowledge central to the firm – rather than thinking firms could be described by the metrics typical of our research literature. Here I followed Edith Penrose’s dismissal of the market’s valuation of ‘resources’ and her intuition that the firm’s essence was its management’s knowledge of ‘the services’ its resources might provide .

This shift from the general towards the specific began a 20-year exploration of ‘the firm’ as ‘a body of knowledge’. Not all agree the potential of knowledge management (KM) lies in escaping the positivist presumption that ‘knowledge’ is exemplified by ‘theory’, that the only important knowledge is ‘scientific’, that the subjective element must be squeezed out. KM is not about treating ‘knowledge’ as a tricky-to-measure competitive ‘asset’.

My thesis treated the firm as a semi-person, a member of a Knightian uncertainty resolving community, sharing some values and tacit knowledge with others in the industry. The next step was ‘down’ from the industry level to that of the construction and deployment of the body of knowledge constituting the firm – its dynamic representation. This view was laid out in my Business Strategy: Managing Uncertainty, Opportunity, and Enterprise, Oxford 2014. The firm, I claimed, can usefully be grasped as an idiosyncratic language that axiomatizes the boundaries or constraints to the firm’s practice and meaning. Strategizing is the practice of generating and applying this language. A strategy is an actionable language. The firm is a rhetorical artifact, the meaning of its bundle of assets, tangible or intangible is generated internally, not externally in ‘markets’. The firm’s essence is the language generated and deployed to help those involved make sense of the situation – and its past and future.

My current work steps down from the level of the firm’s language towards the micro-process/es of constructing meaning. My technique is ‘associationist’, shifting away from an imaginative entrepreneur confronting uncertainty directly as, say, a painter might when confronting a blank canvas, and towards two or more imaginative actors jointly confronting a problematic situation.

The impulse to this step came from researching the history of transaction cost economics. The firm-as-language emerges via the agent/persons interacting and negotiating new order. I read Coase’s Social Costs (1960) paper this way, that negotiation between actors may lead to more economic value than any ‘designer’ can achieve.

Approaching these matters from a different direction, I have long been interested in the history of management education, i.e. the history of how the ways in which we talk about firms and managing them have changed over the centuries. This illuminates the interplay of levels of analysis. Our present view is that researchers are under pressure to NOT descend towards the firm’s micro-foundations. How come, since this means ignoring the entrepreneurial imagination?

Historians of rhetoric show its popularity has waxed and waned over the centuries. Yet it has always lain at the core of training for society’s leaders, i.e. leadership is a rhetorical activity. At bottom, management education is training into a business oriented sub-set of rhetoric, into persuasion within the context of business – ranging from top-down to bottom up, from being driven by the numbers to having ‘a vision’.

The history of rhetoric shows how ‘science’ has become today’s preferred language of persuasion, ‘facts’ and ‘evidence’ are preferred to ‘mere opinion’. In spite of several centuries of this methodological strategy we have no proven science of firms, economic activity, or of managing.

Instead of being obsessed with the rigor-relevance debate and how it might be resolved, the history of management education shows it has often been impelled by societal disaster, appearing ready-to-hand in the political process of reconstruction.  The first purpose built business school was Maquis de Pombal’s following the Lisbon earthquake in 1755.  Today’s sense of the curriculum emerged from Cameralism, itself part of the processes of recovering from the Thirty Years’ War.

In the  US management education was shaped by the processes of reconstruction after the Civil War.  The initial moves were shaped by the Illinois Industrial League, whose efforts led to the Morrill Act of 1862 and the land-grant universities. Joseph Wharton became the Director of the Industrial League as it spread beyond Illinois. Being America’s leading monopolist, he established his school in 1881 to contest the free enterprise teaching in most other US economics departments.

Likewise, after WW2 US reconstruction pushed the ideology of ‘the scientific method’ into most US university social science, especially into US business schools via the 1959 Foundation Reports. The current interest in entrepreneurship and leadership is a long-delayed pushback.

The history of the US business school is also illuminated by the waxing and waning of interest in ‘business ethics’. Being concerned with ‘managerial values’ business ethics contrasts the norms and subjectivities of managerial action with the abstractions and objectivities of a ‘science of managing’. The business ethics discussion is often driven by the desire to discuss managerial failure and malfeasance. But it also shows the absence of a theory of economic value-creation i.e. of the firm.

Clearly, if we think of the firm as a rigorously designed machine its managers are ruled by the facts, not their ethics. The only ethical issues are about the machine’s use in its social and economic context. Business ethics is another term for ‘strategizing’. On the other hand if we think the firm is a ‘community’ the ethical issues within the firm do not differ from those in its context – which is fine but means we only confuse ourselves by putting the label ‘business’ on ‘ethics’.

Hence my focus, to point towards a ‘theory of the firm’ that embraces both science and ethics.