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Commitment to an Emerging Organizational Field, Institutional Entrepreneurship, and the Perception of Opportunity: An Enactment Theory
Get PDFGiven an indifferent institutional environment, ongoing commitment to an emerging organizational field is critical. We build and test an enactment theory of commitment that holds that commitment is driven by institutional entrepreneurship, specifically actions to educate stakeholders, but that this factor is mediated by perception of an opportunity that rests on beliefs in industry attractiveness, superior products and services, and the likelihood of disruptive exogenous change. We illustrate this theory with findings from surveys of energy efficiency and renewable energy businesses. The results highlight the central role of actions to educate stakeholders. When an institutional domain is not yet fully established, the effect of entrepreneurs' actions to educate stakeholders is not just external, but has an important inward function of bolstering the entrepreneurs' ongoing commitment to the emerging field
Not Doomed to Death: A Map of Small Firms' Business Models in the Italian Textile Apparel Industry
Get PDFArnaldo Camuffo
International Motor Vehicle Program
Cambridge, MA 02139
and
Bocconi University
Milan 20136, Italy
[email protected]
And
Roberto Pozzana
University of Padua Padova 35123, Italy
[email protected]
And
Andrea Vinelli
University of Padua
Padova 35123, Italy
[email protected]
And
Laura Benedetti
Società per gli Studi di Settore
Rome 00143, Italy
[email protected]
The New Economy Business Model and Sustainable Prosperity
Get PDFWith its startup firms, vertical specialists, venture capital, and highly mobile labor, the New Economy business model (NEBM) is one that remains dominant in the United States, and it is one that many national policy-makers and corporate executives around the world seek to emulate. At the same time, within the United States, it is a business model that has been associated with volatile stock markets, unequal incomes, and unstable employment, including the insecurity associated with the offshoring of high-skill ICT jobs. Gone is the collective security that the corporatist Old Economy business model once offered its employees. In its place is a far more individualized relation between employer and employee. The employment and incomes of even the most highly educated members of the US labor force are now much more susceptible to the pressures and vagaries of “market forces” than they were a few decades ago. In particular, global labor markets and national financial markets now exert preponderant influences on the conditions of high-tech employment in the United States. If we define “sustainable prosperity” as a state of economic affairs in which growth results in stable employment and an equitable distribution of income, then the prosperity of the US economy would appear to be unsustainable. There is a need to understand the organizational and industrial dynamics of NEBM if only to determine how the tapping of its innovative capability might be rendered compatible with more socially desirable outcomes
Cognitive Skills Explain Economic Preferences, Strategic Behavior, and Job Attachment Among Truckers
Get PDFEconomic analysis has said little about how an individual’s cognitive skills (CS's) are related to the individual’s preferences in different choice domains, such as risk-taking or saving, and how preferences in different domains are related to each other. Using a sample of 1,000 trainee truckers we report three findings.
First, we show a strong and significant relationship between an individual’s cognitive skills and preferences, and between the preferences in different choice domains. The latter relationship may be counterintuitive: a patient individual, more inclined to save, is also more willing to take calculated risks. A second finding is that measures of cognitive skill predict social awareness and choices in a sequential Prisoner's Dilemma game. Subjects with higher CS's more accurately forecast others' behavior, and differentiate their behavior depending on the first mover’s choice, returning higher amount for a higher transfer, and lower for a lower one. After controlling for investment motives, subjects with higher CS’s also cooperate more as first movers. A third finding concerns on-the-job choices. Our subjects incur a significant financial debt for their training that is forgiven only after twelve months of service. Yet over half leave within the first year, and cognitive skills are also strong predictors of who exits too early, stronger than any other social, economic and personality measure in our data.
These results suggest that cognitive skills affect the economic lives of individuals, by systematically changing preferences and choices in a way that favors the economic success of individuals with higher cognitive skills
Garment District Performance: S(weatshop)-Efficiency vs. I(nnovation)-Efficiency
Get PDFGarment districts have always had a form of distinctive industrial organization arising from strong agglomeration economies based on common skills and the need for direct coordination among fashion designers, manufacturers, contractors, and buyers. These local clusters of apparel-related firms are often populated by small and medium sized enterprises whose production is coordinated by large manufacturers, jobbers, or other lead firms. However, large manufacturers are disappearing from garment districts in the United States and other industrialized countries as import competition forces downsizing and business closures. Increasingly it is the smaller firms that tend to survive.
Based on field research, this paper will compare the different evolutionary paths of the economic structures, contracting arrangements, and innovation patterns in the garment districts of New York City and Cholet, France. It finds that the two districts had similar economic organizations through the early 1980s, but that they have subsequently responded in very different ways to continuing import shocks. New York City has adopted an enhanced version of its traditional hierarchical contracting mechanisms between jobbers and contractors, whereas Cholet has abandoned hierarchical contracting in favor of more collaborative relationships with external supply chains and a greater reliance on co-contracting relationships within local production networks. Both New York City and Cholet continue to draw upon standard sources of agglomeration economies, but have adopted a different set of arrangements for promoting dynamic efficiency. The experience of these two districts leads us to posit two distinctive models for improving garment district performance - a sweatshop model (S-efficiency) and an innovation model (I-efficiency). These models are fruitful for understanding the performance of other garment districts in France, Italy, and the UK that are part of our study
Security-Preparedness of Firms in U.S. Food Supply Chain
Get PDFThe growing interdependence of firms across the globe with seeming rise in the incidence of both intentional and unintentional security events (terrorism, food contamination, etc.), has exposed, and often contributed to, the vulnerabilities of many firms and their supply chain partners.
It is increasingly imperative that the firms be prepared to be able to protect and defend themselves against such security threats. With this paper we attempt to understand this preparedness, which we consider an ex ante construct, specifically for the firms in the food industry, and find a way to measure it. The highlights of this paper are (1) the unique dataset on firms in the food supply chain across U.S. detailing their security practices, (2) a novel approach to analyzing this dataset using Latent Trait Analysis that allows us to uncover the underlying strength and weakness of firms in their security practices and (3) analysis with which we are able to relate firms' security practices with firm characteristics, such as market area, supply chain scope and firm size. Our preliminary analyses reveal some interesting results on what firms do and how firm characteristics bring about differences in firms' security preparedness, ex ante. We find four distinct latent factors for explaining different facets of security preparedness, two of which are supply chain collaboration and physical security preparedness. We then also analyze the influence of firm and respondent demographics on each of the dimensions of preparedness. Firm size, supply chain scope, market area and tax status of the firm are some of the variables that emerge as important characteristics that impact security preparedness in supply chains
Electricity and Costs Under Regulation and Restructuring
Get PDFAnd
Lester Lave
Carnegie Mellon Electricity Industry Center
Carnegie Mellon University
Pittsburgh, PA 15213
[email protected]
And
Jay Apt
Carnegie Mellon Electricity Industry Center
Carnegie Mellon University
Pittsburgh, PA 15213
[email protected]
Semiconductor Capabilities in the U.S. and Industrializing Asia
Get PDFThe semiconductor industry has a rich experience with the offshoring of manufacturing and design activities. Because meaningful data about the extent of the offshoring are limited, we rely on a more qualitative analysis for our key points. We have conducted dozens of interviews with engineers and managers at numerous semiconductor and related companies in the United States, Asia, and Europe since the early 1990s. Our research also incorporates the publicly-available information in trade journals and company reports.
The paper begins in section one with a brief description of the stages of semiconductor production and our analytical framework. Section two summarizes the offshoring of activities by the industry. Section three provides a more detailed discussion of the offshoring of design. Section four compares engineer capabilities in the relevant countries of Asia, where most offshoring occurs. Section five profiles the chip industry in Taiwan, China, and India. And Section six concludes with an outlook for the chip industry in the investing and host countries
Globalization of Innovation: The Personal Computing Industry
Get PDFWhile the core innovation in the PC industry is led by major U.S. suppliers, there is a global network of components in Japan, Korea, Taiwan and elsewhere in Asia that supports system-level innovation by PC vendors who focus on incorporating these innovations into new products. High level architectural design and product management are done in-house by PC makers, while physical development and manufacturing are generally outsourced. Higher value analytical, design and management activities are usually done in the U.S. by U.S. firms, whereas the development and manufacturing of the physical product, along with the more routine product and process engineering is done in Taiwan and in China.
This global division of labor has enabled U.S. firms to retain their leadership in the PC industry, as well as in key components and complementary products such as semiconductors, hard disk drives, graphics, printers, network equipment and all kinds of software. Outsourcing manufacturing and product development lowers costs while letting U.S. companies concentrate on their strengths in marketing, branding, design, product management, and distribution. It also enables faster product cycles with quicker integration of new technologies, and a proliferation of models aimed at niche markets. But innovation itself is more incremental, particularly in the dominant “Wintel” market, where the scope of innovation is constrained to variations within the standards set by Microsoft and Intel. Outside the Wintel world, Apple develops innovative PCs with higher margins, but its worldwide market share is small. Looking for growth, PC makers have moved into innovative product categories such as smart phones, handheld PDAs, portable music players and digital cameras, taking advantage of the global production networks created by the PC industry. This has resulted in some hit products such as RIM’s Blackberry, Palm’s Treo, and Apple’s iconic iPod, but success has been sporadic among traditional PC makers.
For U.S. workers, globalization has led to a dramatic decrease in manufacturing jobs in the computer industry as most production has moved offshore. Much of the associated process engineering work has moved offshore as well, yet the total number of engineers in the industry has remained stable as U.S. engineers become more productive and graduate to higher value activities. Job growth is not happening in the U.S., especially for the more routine engineering work that traditionally provided experience on the first steps of the career ladder. But without aggressive globalization, the industry might have stalled, or U.S. firms might have lost their edge to Japanese and Asian competitors as was often predicted in the early 1990s.
In order to assure continued leadership in innovation for U.S. companies, and a vital role for U.S. workers in the innovation process, industry executives and educators should identify skills needed for the dynamic, high value design and engineering work that is now done in the U.S., and take action to develop them. The key to innovation capacity lies in creating and developing talented individuals in areas such as concept design, system architecture, industrial design, and product management. For technology workers specifically, there is a great need for people who can work at the interface of engineering with computer science, or in functional terms, at the interface of hardware and software. There is also a need for people comfortable working in teams, across disciplines, and in a global environment
Return to R&D Investment and Spillovers in the Chinese Semiconductor Industry: A Tale of Two Segments
Get PDFThis study asks how a firm’s market orientation influences its returns to R&D investment and its capability to benefit from external technology opportunities brought about by the globalization of manufacturing and innovation activities. We use a panel of firm-level data on production and R&D activities to study China’s semiconductor industry. Building upon an earlier qualitative study, we find supporting evidence that this dynamic industry sector is characterized by two segments with very different market orientation: a domestically focused one with lagged technology, and a globally focused one employing advanced technology. While the former comprised the bulk of revenue and employment in the industry in 1998, the latter segment has grown substantially faster, and has now overtaken the former. We hypothesize that these two segments will differ in their R&D productivity, and ability to absorb external R&D.
We test this hypothesis by examining the productivity consequence of in-house R&D investment and spillovers for each industry R&D investment. More specifically, we hypothesize that firms in the globally oriented sectors are more likely to receive higher returns to in-house R&D investment and positive spillovers from external R&D capital, especially from multinational firms, compared with domestically oriented firms. As a result, we expect that firms with higher in-house R&D capital will be more likely to receive positive spillovers from external knowledge.
The empirical results support some but not all of our hypotheses. We find that firms in the global-oriented segment enjoy higher returns to R&D investment than those in the domestic- oriented segment and a larger positive spillover from external R&D capital. As the globally focused segment has grown to become the majority of firm activity in the industry, though, the competitive effects of more firms exporting appear to reduce the spillover benefits such firms enjoy from external R&D resources