book

Sumantra Ghoshal on Management: A Force for Good

by Julian Birkinshaw, Gita Piramal

February 2006

Beginner

400 pages

10h 54m

English

Pearson

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Dedication
The problem with management theoryPart I Managing across bordersPart II The individualized corporationPart III The new management agenda
Companies are the engines of economic progress‘Asshole management’ is not inevitableManagement theories must be both right and goodReferences
New challenges: Mixed responsesTraditional strategic demandsRewarding efficiency in global industriesBuilding responsiveness in multinational industriesExploiting learning in international industriesStrategic challenge of the 1980s: Transition to transnationalityNeed for multidimensional strategic capabilitiesResponding to the challenge: Toward transnational capabilitiesThe organizational constraintThe critical role of administrative heritageOrganizational capability as key competenceReferences
From unidimensional to multidimensional capabilitiesOvercoming simplifying assumptionsFrom symmetry to differentiationFrom dependence or independence to interdependenceFrom control to coordination and cooptionSustaining a dynamic balance: Role of the “mind matrix”References
Interorganizational theories applied to the multinational corporationThe multinational as a network: Constructs and terminologyResource configuration in MNCsEffects of within density in national organization setsEffects of across density in the external networkCentrality and power within the multinational networkEffects of within density in national organization setsEffects of across density in the external networkLarge MNCs as differentiated networksImplications for researchBuilding a network theory of the MNCReferences

Internal differentiation in MNCs: A contingency frameworkHeadquarters–subsidiary relations as a mixed-motive dyadExchange contingencies posed by different contextsThe different structural elements of headquarters–subsidiary relationsThe structure–context “fit” in headquarters–subsidiary relationsMeasurement procedure and sampleData analysis and resultsUnivariate context–structure relationshipsDifferent types of subsidiary contextsA multivariate test of “fit”ConclusionsAppendix: Operationalization and measurement of constructsA: Headquarters-level instrument (instrument finally employed in the study)Local organizational abilities/resourcesCentralizationFormalizationNormative integrationPerformanceB: Subsidiary-level instrument (employed for pre-test)CentralizationFormalizationNormative integrationAcknowledgementsReferences
Pathologies of the inherited contextComplianceControlContractConstraintThe context for renewalDisciplineSupportTrustStretchFraming new individual behaviorsIndividualizing the corporationReferences
A phased sequence of changeA new behavioral contextSimplification: Building front-line initiativeBuilding disciplineEmbedding supportIntegration: Realigning cross-unit relationshipsCreating stretchDeveloping trustRegeneration: Ensuring continuous learningIntegrating the contextual frameMaintaining a dynamic imbalanceLeading the renewal processReferences
“Unpacking” opportunismThe concept of opportunismAttitude or behavior?What if opportunism is a variable?The self-fulfilling prophecyImplicationsThe case of social controlIn the end, markets?Control-context fitDomain biasFrom hierarchies to marketsBeyond the market-failure frameworkThe organizational advantageThe market logic: Autonomous adaptationOrganizational logic: Purposive adaptationMissing marketsDynamic efficiencyThe moral factorA theory for the organizational economyThe double hermeneuticBuilding on or starting over?References
The spinning top of the multi-business enterpriseAdding bulk for stabilityTrade-offs in designing the multi-business enterpriseThe horizontal trade-off: Autonomy vs. synergyThe vertical trade-off: Control vs. initiativeThe centrifugal trade-off: Spin vs. skinThe balance trade-off: Base vs. bulkBuilding and balancing capabilitiesStrengthening the baseReinforcing the coreAdding bulkProviding spin and skinPutting the “a” back in diversifictionReferences
Social capitalIntellectual capitalDimensions of intellectual capitalTypes of knowledgeLevels of analysis in knowledge and knowingThe creation of intellectual capitalCombination and the creation of intellectual capitalExchange and the creation of intellectual capitalThe conditions for exchange and combinationToward a theory of the creation of intellectual capitalSocial capital, exchange, and combinationExchange, combination, and the structural dimension of social capitalNetwork tiesNetwork configurationAppropriable organizationExchange, combination, and the cognitive dimension of social capitalShared language and codesShared narrativesExchange, combination, and the relational dimension of social capitalTrustNormsObligations and expectationsIdentificationSocial capital, intellectual capital, and the organizational advantageOrganizations as institutional settings are conducive to the development of social capitalTime and the development of social capitalInterdependence and the development of social capitalInteraction and the development of social capitalClosure and the development of social capitalThe coevolution of social and intellectual capital underpins organizational advantageDiscussion and implicationsNotesReferences
The pathology of satisfactory underperformanceThe dynamics of satisfactory underperformanceSatisfactory underperformance is pervasive in IndiaRadical performance improvement is possible1. High performance companies exist in “unattractive” industries2. A company can achieve outstanding performance even when its industry is shrinking3. Outstanding performance can be achieved even when competitors are much bigger and stronger4. Radical performance improvement is possible even when you are already very successful5. Charismatic leadership is not a prerequisite for radical performance improvementWhat does it take?Reference
A need for horizontal integrationFour critical components of horizontal integrationOperational integration through standardized technological infrastructureIntellectual integration through shared knowledge baseSocial integration through collective bonds of performanceEmotional integration through shared identity and meaningEntrepreneurial activity and horizontal integration co-evolveReferences
Focus and energyThe procrastinatorsThe disengagedThe distractedThe purposefulChallenge and choice
The research philosophy: Built on a respect for managersThe process: Collaboration as an art formThe person: Intense, bold, compassionate
Beware the busy manager[1]Reclaim your job[3]Going beyond motivation to the power of volition[4]Unleashing organizational energy[6]A bias for actionA desire for the seaNotes

Content preview from Sumantra Ghoshal on Management: A Force for Good

Chapter 8. Bad for practice: A critique of the transaction cost theory

<authorgroup>Sumantra Ghoshal and Peter Moran</authorgroup>

In this paper, Sumantra and Peter Moran put forward a detailed and thoughtful critique of transaction cost theory, one of the most well-known bodies of theory in organizational economics. Transaction cost theory assumes that individuals are self-interested and opportunistic in nature, and they will cheat the system if they can. It implies managers should put in place control systems and legal mechanisms to guard against such behaviour. Unfortunately, such systems often encourage the very behaviours that they are trying to curb, and as a side-effect drives out such desirable attributes as initiative and cooperation. ...