Knowledge that Transforms

Research in transition economies like China has sought and found explanations for strategic behaviour based on institutional and other social processes, leading to descriptions of China's emerging business system as ‘network capitalism’. This paper argues, however, that organizational capabilities and transaction costs are increasingly important influences on strategic choice as economic reforms proceed. An in‐depth case study of one firm's behaviour in two different asset markets – R&D and distribution in the Chinese pharmaceutical industry – illustrates fundamental differences in firm strategies for securing these assets. To account for this variety and move beyond the homogeneity implied by prior research, we propose a framework for differentiating the transition trajectories for different types of complementary assets. We propose conditions under which all three perspectives – institutional and social structure, organizational capabilities and transaction costs – predict similar trajectories and firm strategies, but different decision processes, and when their predictions differ.

This paper outlines the economic reform process being undertaken in China and the subsequent partial closure and radical down‐sizing of the state‐owned enterprise sector. Redundancies arising out the restructuring process have eroded the state‐worker contract of the iron rice‐bowl. This has resulted in growing and sometimes violent labour unrest. The planned workforce projections until the end of the year 2000 suggest that the numbers of redundancies has increased, adding to China’s ‘surplus labour’ problem. A critical issue is thus whether the Chinese government, together with state‐enterprise management, can contain potential future labour and civil unrest using its present methods.

Using a sample of 90 US–China manufacturing joint ventures, this study empirically tested a grounded‐theory model of the antecedents and the effects of the structure of parent management control in international joint ventures. The results suggest that competitive and cooperative dynamics occur simultaneously between joint venture partners. On one hand, the relative bargaining power between the partners, derived from the negotiation context and from contributing critical resources to the venture, respectively, is a determining factor in management control; and the level of operational control exercised by a partner over the venture has a positive effect on the extent to which this partner's strategic objectives are achieved. On the other hand, the quality of the interpartner working relationship was found to have a strong, positive relationship with the achievement of strategic objectives for both partners.

Boards of directors are coming under increasing scrutiny, both in the wake of a number of serious corporate frauds and failures and through a more general debate about the nature of corporate governance and its role in achieving national competitiveness. Though research on boards is growing, there remains a lack of empirical studies on the perceptions of directors themselves as to their role and influence in the running of organizations, and in particular the strategic process. This article responds to widespread calls for direct study of boards of directors by using a multi‐method approach involving an in‐depth examination of 51 directors of UK public companies, a survey of 121 company secretaries and four case studies of UK plcs, where multiple board members were interviewed. Through the use of a grounded methodology, this article examines the impact of boards on strategy and shows that by establishing the business definition, gatekeeping, selecting directors, and confidence building, the board influences the boundaries of strategic action. Evidence for the managerial domination of boards was slight, but the results showed support for a number of theoretical frameworks, suggesting that multiple perspectives are required to fully understand the nature of board activity.

Applying the property of learning to organizations has caused confusion. The paper develops a proposed model or framework for capturing the essential process of organizational learning, and adopts a definition of learning which is applicable to both individual and organizational learning. A discussion of emergent and planned learning enables a case to be made for the importance of understanding organizational learning in a competitive and changing environment, and for the key role of senior managers in managing this process. The theoretical orientation is the social rather than the information processing perspective in that organizational learning is reflected in the construction, modification and maintenance of beliefs; particularly the beliefs towards those stakeholders who are instrumental in achieving an organization's mission and strategic goals. Theories and concepts are explored which account for these belief systems, and for the interaction between individual and organizational learning. They include: reinforcement, modelling, mental models and sensemaking, tacit and explicit knowledge, memory and culture. The paper concludes by examining a number of concerns in the literature in the light of the assumptions and suggestions incorporated in the model. The hope is that these will provoke discussion (and initiate learning) among practitioners and academics.

The difficulty of explaining the paradoxical nature of organizational life has resulted in reductionist approaches, which present the relationships between processes as causal and linear. The relationship between training and economic performance, the contribution of training to individuals’ adaptability to change and the significance of knowledge and learning to organizational competitiveness are just some examples of the perceived linearity of the relationships between processes. The relationship between training and learning falls in the same category in that it is assumed to be very strong. This article makes a contribution to this debate by providing new insights about the relationship between training and learning. Using recent empirical findings from a longitudinal study in the Financial Services Sector, this article examines some of the basic differences between training and learning using the individual manager as the unit of analysis. These differences reveal some of the conditions that shape the relationship between training and learning. The findings from the study suggest that the relationship between training and learning may appear strong on the surface; however in essence it may be superficial and mechanistic.

The negotiation and agreement of goals for collaborations between public and non‐profit organizations is argued to be a complex and painful process. Thus, the research described in this paper used action research to explore some of the critical behaviours in such groups. Based on the two units of analysis of ‘goal ownership’ and ‘episodes in negotiation’, a categorization of types of multi‐organizational group negotiation behaviour is developed. The categories are intended to be of practical use to those seeking to ensure the success of a collaboration.

The study analyses role expectations of 104 staff from nine European country‐units within a multinational enterprise (MNE). Questions were administered to a sample of staff to elicit data on managers’ and employees’ expectations about managerial and employee roles. Following a categorization of reports and statistical analyses within and between country‐units (i.e. subsidiaries and headquarters offices), results offer substantial evidence of differential patterns of role expectations across country‐units, suggesting influences of local cultures and other societal forces. Significant differences were also found between managers and employees independent of country‐office for expectations about the managerial and employee roles. Implications for research and practice are presented and future research directions are suggested.

Scenario planning can be a useful and attractive tool in strategic management. In a rapidly changing environment it can avoid the pitfalls of more traditional methods. Moreover, it provides a means of addressing uncertainty without recourse to the use of subjective probabilities, which can suffer from serious cognitive biases. However, one underdeveloped element of scenario planning is the evaluation of alternative strategies across the range of scenarios. If this is carried out informally then inferior strategies may be selected, while those formal evaluation procedures that have been suggested in relation to scenario planning are unlikely to be practical in most contexts. This paper demonstrates how decision analysis can be used to structure the strategy evaluation process in a way which avoids the problems associated with earlier proposals. The method is flexible, versatile and transparent and leads to a clear and documented rationale for the selection of a particular strategy.

In Conversational Realities (1993), John Shotter draws on social constructionist suppositions to conceptualize management as a rhetorically‐responsive activity in which managers act as ‘practical authors’ of their social realities (pp. 148–59). From this perspective, organizations are reworked from permanent, independent social structures to relational landscapes continually shifting from the imaginary to the imagined in interactive moments. Managing is seen as an embodied and situated dialogical activity in which managers act as authors of organizational realities through their conversations. In this article, I take as my central premise, the constitutive and metaphorical nature of language, and explore the practical, enacted aspects of Shotter's concept of authorship. Specifically, I suggest authorship may relate to how managers attempt to construct a sense of who they are, create a shared sense of features of their organizational landscape, and how they may move others to talk or act in different ways through their dialogical practices. I draw on research conversations with managers to explore how everyday poetic talk may be crucial to the process of constructing self, realities, and meaning. This ‘reconstruction’ of management practice offers both a different way of thinking about managing and potential dialogical resources which may allow managers to author or construct organizational experiences in more deliberate ways.