The Entrepreneurial State: An Ownership Competence Perspective

Academics, pundits, and policymakers have recently called for a stronger governmental role in the economy to tackle social issues such as inequality and grand challenges like global warming. Despite a general recognition among economists and management scholars that government efforts to guide and control innovation or subsidize private entrepreneurs have failed to yield results, these calls also describe an entrepreneurial state in which bureaucrats, not entrepreneurs, direct not only basic research but also applied technological development. Building on the notions of economic competence and ownership competence we argue that even well-intentioned and strongly motivated public actors lack the ability to manage the process of innovation, especially under Knightian uncertainty. As stewards of resources owned by the public, government bureaucrats do not exercise the ultimate responsibility that comes with ownership. Moreover, government ownership of firms and labs and government intervention in the management of privately owned assets hampers the competitive process of putting ownership of innovative firms and projects in the hands of individuals and groups with higher levels of ownership ability. We suggest that ownership competence differs systematically between public and private actors, particularly around innovation, with important implications for innovation policy

Global mobility of professionals and the transfer of tacit knowledge in multinational service firms

Purpose: The use of expatriates to transfer individual and organizational know-how and knowledge is a practice widely used by multinational enterprises (MNEs). However, for service firms, the mobility of employees across national borders depends on the commitments made by countries under the General Agreement on Trade in Services (GATS). In particular, the Mode 4 form of supply under GATS can limit the ability of professionals to enter a particular country and can restrict the intra-organizational transfer of knowledge in multinational service firms. The purpose of this paper is to investigate how MNEs attempt to overcome these barriers and transfer knowledge through their global network. Design/methodology/approach: Using Nonaka and Takeuchi’s SECI model of knowledge transfer, the authors study the intra-organizational knowledge transfer practices of an Indian multinational service firm. Semi-structured interviews were conducted with 20 key informants involved with the organization. Findings: The company uses global teams to transfer tacit knowledge and facilitates inpatriation through an internship program that helps the firm overcome nationality requirement that restricts the movement of their managers to other countries, which in turn limits their ability to transfer knowledge in the intra-organizational setting. The company uses the services of a not-for-profit youth organization that helps recruit interns for the program and also facilitates the relationship with the Indian Government, which provides support for this initiative by reducing barriers to entry for the interns. Originality/value: This study takes the unique approach of studying barriers to movement of professionals and a firm’s strategic response. It identifies the pressures and barriers that companies face in the global economy and highlights the role of government agencies and other stakeholders in facilitating or restricting the transfer of knowledge within a firm’s international network. The paper articulates the implications for policy and practice, and a future research agenda

Combining purpose with profits

Is it possible for a company to strive for a higher purpose while also delivering solid profits? Some have argued that pursuing goals other than making money means, by definition, spending on things that aren't profit-maximizing. Others have countered that by investing in worthwhile causes the company is doing something intrinsically valuable that will generate a long-term payoff to all parties. In the authors' view, the important question is not whether there is some tension between purpose and profits; there is. Instead, the question to ask is: How can the tension between purpose and profits best be managed? This article is based on research that the authors conducted over the last five years looking at the organizational challenges involved in managing two different objectives at the same time. The authors describe how goal-framing theory provides an understanding of why pursuing "pro-social" goals which the authors define as goals that involve working toward common causes that go beyond just making money and staying in business creates a stronger motivational basis for working in organizations than does pursuing self-interest goals that emphasize financial gain or personal enjoyment. The authors' research identified many companies with a clear sense of purpose, typically expressed as a set of pro-social goals such as putting employees first or investing in local communities. In the majority of cases, there was no discernible impact on the way employees actually behaved; however, the authors also found a small number of highly successful companies whose pro-social goals seemed genuine. Using examples such as Svenska Handelsbanken, Tata Group and HCL Technologies, the authors argue that there are a few organizing principles that help a company sustain its sense of purpose over time while still achieving a solid level of profitability. For example, they observe that pro-social goals need supporting systems within the company if they are to stick. Even with such supporting systems, however, the authors note that it is quite common to see executives bowing to short-term financial pressures

Absorbing the Concept of Absorptive Capacity

The purpose of this Perspective Paper is to advance understanding of absorptive capacity, its underlying dimensions, its multi-level antecedents, its impact on firm performance and the contextual factors that affect absorptive capacity. Nineteen years after the Cohen and Levinthal 1990 paper, the field is characterized by a wide array of theoretical perspectives and a wealth of empirical evidence. In this paper, we first review these underlying theories and empirical studies of absorptive capacity. Given the size and diversity of the absorptive capacity literature, we subsequently map the existing terrain of research through a bibliometric analysis. The resulting bibliometric cartography shows the major discrepancies in the organization field, namely that (1) most attention so far has been focused on the tangible outcomes of absorptive capacity; (2) organizational design and individual level antecedents have been relatively neglected in the absorptive capacity literature; and (3) the emergence of absorptive capacity from the actions and interactions of individual, organizational and inter-organizational antecedents remains unclear. Building on the bibliometric analysis, we develop an integrative model that identifies the multi-level antecedents, process dimensions, and outcomes of absorptive capacity as well as the contextual factors that affect absorptive capacity. We argue that realizing the potential of the absorptive capacity concept requires more research that shows how “micro antecedents” and “macro- antecedents” influence future outcomes such as competitive advantage, innovation, and firm performance. In particular, we identify conceptual gaps that may guide future research to fully exploit the absorptive capacity concept in the organization field and to explore future fruitful extensions of the concept

The Entrepreneurial State: An Ownership Competence Perspective

Academics, pundits, and policymakers have recently called for a stronger governmental role in the economy to tackle social issues such as inequality and grand challenges like global warming. Despite a general recognition among economists and management scholars that government efforts to guide and control innovation or subsidize private entrepreneurs have failed to yield results, these calls also describe an entrepreneurial state in which bureaucrats, not entrepreneurs, direct not only basic research but also applied technological development. Building on the notions of economic competence and ownership competence we argue that even well-intentioned and strongly motivated public actors lack the ability to manage the process of innovation, especially under Knightian uncertainty. As stewards of resources owned by the public, government bureaucrats do not exercise the ultimate responsibility that comes with ownership. Moreover, government ownership of firms and labs and government intervention in the management of privately owned assets hampers the competitive process of putting ownership of innovative firms and projects in the hands of individuals and groups with higher levels of ownership ability. We suggest that ownership competence differs systematically between public and private actors, particularly around innovation, with important implications for innovation policy