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Business StrategyManaging Uncertainty, Opportunity, and Enterprise$

J.-C. Spender

Print publication date: 2014

Print ISBN-13: 9780199686544

Published to Oxford Scholarship Online: April 2014

DOI: 10.1093/acprof:oso/9780199686544.001.0001

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(p.296) Appendix D Further Reading

(p.296) Appendix D Further Reading

Business Strategy
Oxford University Press

My chapters have some footnotes that can lead interested readers onwards. This appendix casts a wider net to catch some of the stuff I have personally found interesting and influential. The English-language management literature is huge and I must apologize for my ignorance of the important work in Japanese, Spanish, French, Russian, Chinese, or German. As well as the field’s volume, its variety tempts authors to stuff their pages with citations and commentary that would take the reader years to wade through. I have resisted the urge, in part because some well-mannered books with extensive bibliographies already exist, such as R. M. Grant (2010) Contemporary Strategic Analysis (7th edn), Chichester: John Wiley & Sons, or N. J. Foss and P. G. Klein (2012) Organizing Entrepreneurial Judgment: A New Approach to the Firm, Cambridge: Cambridge University Press. They have done it more effectively and thoroughly than I can.

The choices below are intended to open up my book’s genesis to those who find it intellectually interesting. First and foremost, a subjective or agentic approach is not part of mainstream management thought—however much it deserves to be—so putting together a case for it calls for some selectivity. Nor is language paid much attention. Hundreds of books crowd for attention, so my choice will seem haphazard to some who know the literature. Beyond our field’s core canonical works (five), I have arranged my choices in disciplinary sections. This is simply a rhetorical device to emphasize that my principal departure from the mainstream is philosophical or, more specifically, epistemological. It goes back to my Ph.D. and Industry Recipes: The Nature and Sources of Managerial Judgement, Oxford: Blackwell.

Readers who do not wish to study epistemology directly—it is an entire branch of philosophy—might best get traction by getting a fix on mainstream positivism’s epistemology and methodology. Positivism is a huge hydra, but Kolakowski is reliable. With some sense of positivism in hand the importance of Knight’s work becomes clear as it tilts the analysis of value creation out of positivism’s reach. So the philosophizing comes first and helps identify the need for some non-positivist approaches. There is the interpretive or sense-making approach and Weick is this field’s giant. As the reader knows, positivist approaches tend to ignore time because their explanatory logics turn on equilibrium, determinism, and causal mechanisms. Perhaps the most fundamental feature of non-positivist approaches is the way “lived time” rather than clock time is made central, so that the future is unknown, something to be created through our agency. Much of the thinking here goes back to Bergson, a difficult read but adequately handled in some (p.297) introductory texts, such as Kolakowski’s. Note there have been major shifts in professional attitudes towards epistemology since WW2—Theodore Porter is good on this. Rationalism has permeated all manner of discourse, especially business and management education. The work of Backhouse and others is helping raise business scholars’ awareness that the results may have been more destructive than productive—but that is for another book. Ironically, though, it helped squeeze rhetoric out of education—yet the reader knows that purely rational argument (logos alone) cannot work when confronting Knightian uncertainty. I have found McCumber’s work particularly useful.

Once time and uncertainty are taken seriously, it becomes clear that history’s methods can complement the time-free “scientific methods” of positivism. So the second section deals with history. The abstractions of mainstream economic theorizing have little to say to managers (as Coase and Ning note in my book’s epigraph) so I merge the history of applied economics with the history of commerce. I focus on the private sector, the value-creating core of our democratic capitalism. The historical work here varies enormously. The reader can distinguish commentary that has little grounding in the data on which historians thrive, old files, letters, etc. versus that which has involved a lot of that, maybe more than the reader cares for. But this is what leaves good historians in a doubting mood, knowing they cannot ever know for certain what happened and that that goal is a positivist tic, peripheral to an exploration of the human condition and its boundless complexities. The reader also needs to be cautious about “history” that is written for the express purpose of packaging the author’s ideology. Such contrived history can lead to truly poor work as, for instance, J. Appleby (2010) The Relentless Revolution: A History of Capitalism, New York: W. W. Norton. Scholarly work on the history of capitalism has been recently energized by history-based critiques of Weber’s well-known tale of the Protestant ethic. A recent study, I. S. Akçomak, D. Webbink, and B. ter Weel, B. (2012) Why Did the Netherlands Develop So Early? The Legacy of the Brethren of the Common Life, The Hague: CPB Netherlands Bureau for Economic Policy Analysis, picks up on earlier suggestions that literacy rather than religion was the driver of European capitalism. The argument carries a strong message for us today as we ponder the impact of our declining educational infrastructure.

Over the years I have become convinced that management theorists should pay more attention to the period before the Venetian Empire (approximately 1000–1500) that gave us, inter alia, Pacioli’s double-entry bookkeeping, merchant banking, and the other things we know about commerce from Shakespeare’s Merchant of Venice or Marlowe’s Jew of Malta. More scholarly work is being done on the emergence of capitalism during the Arab Empire (approximately 600–1500). Many of the financial instruments necessary to the evolution of modern capitalism’s processes, such as letters of credit and pooled investment, were already in use during the Arab period. Europe was following rather than leading. I argue the most crucial period in European management history was the Dutch Republic (approximately 1500–1750). Here modern democratic modes of business governance displaced earlier coercive or feudal modes. The changes freed up capitalism’s rapid development as Great Britain’s and the United States’ political situations evolved. Which brings us to Schumpeter and the Austrian economists. They are especially interesting to anyone thinking about value creation (or destruction) for their analyses hinge on peoples’ prevailing expectations rather than on abstract equilibrium conditions. In many respects Penrose was a “closet-Austrian.” (p.298) I have a particular fondness for Shackle’s work, especially his last book, a truly valiant attempt to create a subjective economics.

The next section covers management directly. I see two historical backgrounds; one broad, from the time of the Dutch Republic, the other narrow, from the 1940s. The recent period is marked by significant change in the relationships between private sector capitalists, governments, the workforce, and the general public. Power and wealth disparity is the issue, not technology. Indeed our obsession with technological determinism muddies our sense of how capitalism really operates. The reader knows I see Coase’s intuition that the nature of the firm is tied up with power and its exercise within the firm as key. It leads us towards the history of employment, the empirical facts of our labor markets, and to greater regard for the strategic place of corporate law—for instance in the work of Commons, Horwitz, and Steinfeld—albeit these are widely ignored in business schools. Modern management thinking rejects the dictatorial independence that characterized much nineteenth-century thought—a period dominated by owner-managers and robber barons. The interaction between the modern firm as a defined legal entity borrowing many citizens’ rights and the broader society is being actively explored in major social debates. Many of today’s ideas about corporate social responsibility and business ethics have been in circulation since before Shakespeare’s time. But they have been re-energized, especially by Alasdair MacIntyre’s critique, as well as the post-2008 financial catastrophes. MacIntyre’s is a moral critique that stands apart from Marxism and the critiques that have fuelled “critical management studies.” McCloskey’s studies are superbly illuminating. All this work goes to the heart of the Coasian relationships within the firm and to the wider political discussion about the complex relationships between the private and public sectors. Thus critiques of the private sector from ecology and sustainability are now being added to those from politics and humanism.

The final section is on rhetoric. One of the curious aspects of rhetoric’s history is that it tends to decline when times are stable—such as during the long period of economic growth since WW2—but re-emerge like a phoenix when things get shaky. It is re-emerging today to play in many venues, especially education. There is spreading regard for the narrative or discursive studies of organizational life, though little of this takes the view developed in this book. Rhetoric is a vast field of great subtlety—as broad as human communication—and no one should claim to understand it fully. Conley provides a fine overview of its history, Toulmin and McCloskey fine introductions to its everyday practice.

As noted in the Preface I think of the following five books as our essential canon, the “must reads” that have defined our field: