Author Archive

sentenced to life in prison

For those who followed the “survivor murder trial” post below, there has been a verdict and I can say a few words about the case. A 19 year old mother was charged in the death of her 5 month old baby. I would not wish this experience on anyone (especially the autopsy pictures of brain injuries on a baby). 

At 18 years of age, the mother became pregnant from boyfriend #1. However, in the 7th month, he moved out of the state to take a job. He tried to get her to move but instead, she took up with boyfriend #2 — a 45 year old who lived with his grandmother. Boyfriend #2’s grandmother would only allow the mother in the house when boyfriend#2 was there. While living with boyfriend #2, she hitched up with boyfriend #3 and went out with him while boyfriend #2 watched the baby. Indeed, her alibi was that she was supposedly having sex with boyfriend #3 parked in front of the house when the injuries took place. The next day she and boyfriend #2 brought the baby to the hospital after the baby had been dead for hours. Further examination revealed that the baby had old healing injuries including a broken arm, a burn on his hand, and a skull fracture. This was in addition to the acute head injury that led to death.

After 6 hours of deliberation, we (the jury) found the mother guilty on 6 of 9 counts including felony murder. She received a mandatory life sentence (30 yrs before parole). Here is the brief article about the verdict:

We discussed each count and carefully analyzed the evidence. Indeed we found some inconsistencies that did not seem apparent to the attorneys.

The process worked. Which is why I raised the question about implications for decision processes in firms.

Written by RussCoff

July 20, 2008 at 2:13 pm

survivor murder trial

As you may know, I am writing from the jury room of a murder trial. If you had to assemble a group to make a really important decision (life or death consequences), would you:

  • Actively avoid including people who have any professional expertise relevant to the decision?
  • Actively avoid people who had any direct experience with similar situations?
  • Prohibit them from talking with each other about the decision until all of the evidence has been presented?
  • Allow them to hear evidence/fact and take notes — do not give them copies of any transcripts or other materials/evidence to review?
  • Do not allow decision-makers to take their notes home (e.g., to reflect and review what they had heard)?

Organizations can surely take a hint from the justice system…

Written by RussCoff

July 15, 2008 at 7:47 pm

Posted in uncategorized

murder, creative entrepreneurship, and fragmented fields

Ok, so the murder teaser only refers to the fact that I am writing from the jury room of a murder trial. Of course, now that I have your attention, I can’t disclose any details lest I bring down the fury of “Deputy Love” (yes, that’s his real name). However, this does push one to think about group process…

My latest indulgence is a study (with Jill Perry-Smith) that digs deep into the micro context of how entrepreneurial teams develop creative business ideas. It seems obvious that creativity requires a process of variance generation and one of winnowing down the alternatives to those that are both novel and viable (e.g., a Darwinian process). However, this reflects is a fairly new strand of work in the literature. Previously, the brainstorming folks studied variance generation (# of ideas) as the outcome variable and separately the creativity researchers studied the creativity of the idea that was ultimately selected. Naturally, the two communities largely ignore one another…

It turns out (in our study) that groups that generate lots of variance differ greatly from those that select creative alternatives. Generation requires a playful/excited mood where selection of novel solutions requires a calm/peaceful mood. In contrast, a dense group (tightly knit/strong social ties) results in fewer ideas generated but the alternative selected will tend to be more novel.

Thus, entrepreneurial teams may either fail to generate enough alternatives or they may leave their most creative solutions on the table. Many entrepreneurial teams have a hard time managing the transition between generating and selecting. In some cases, it may require changing the composition of the group. In others, a simple group process intervention may have the desired effect.

From a strategy and organization standpoint, my interest is that this may help us understand why serial entrepreneurship is fairly rare and why repeat entrepreneurial success (akin to a dynamic capability) may be hard to imitate. This would seem to open the black box of isolating mechanisms just a bit without using amorphous terms like “causal ambiguity.” Neither the entrepreneurship nor the strategy literature seem to dig very deep on these issues.

My journey raises a question that I would pose to you. How far into the macro can we dig and still retain some degree of cohesiveness in the field of organization studies. Fragmentation is clearly a barrier to advancing organization science but crossing boundaries is no party with reviewers…

Written by RussCoff

July 14, 2008 at 6:31 pm

Posted in uncategorized

rent appropriation and methodological individualism

I am probably most known for my work on rent appropriation from competitive advantages so let me first start with a tight link between that work and Teppo’s work on methodological individualism (I’m sure you’ve already gotten an earful on this ;-).

I cannot consider seriously the notion that rent might accrue to a “firm” – this does not seem to be a meaningful question. Some would, no doubt, argue that this is the central proposition of the strategic management literature. It reminds me of the adage that organizations don’t behave, people do. Thus, within the firm, rent may be appropriated by any of the stakeholders – of which shareholders are but one group. For the most part, theories of competitive advantage do not seek to explain when, specifically, shareholders will appropriate rent. And yet, we would not, by and large, expect to observe rent in measures of organizational performance unless shareholders realize the rent (since the rent would otherwise be appropriated as expenses – before measures of accounting residuals are calculated).

Lately, I have been exploring a much more fundamental question that is closely linked to org theory and the recent discussion here on life cycles. We know that strategic capabilities do not emerge instantaneously. Rather they are developed and acquired over time (see Helfat and Peteraf’s 2003 SMJ article). As such, those stakeholders involved in assembling the capability have time to prepare for its eventual emergence while others are very much in the dark.

This means that rent appropriation activities may often precede the actual generation of rent as parties are organizing and assembling the requisite resources. For example, the organizational form that is selected in which to embed a new capability reflects concerns about the desired rent appropriation regime as well as the efficient governance structure. Indeed, stakeholders regularly make tradeoffs among these factors.

Perhaps an example would be illustrative. Tony Fadell is the entrepreneur who developed the iPod. Haven’t heard of him? There’s good reason. Apple doesn’t want his story to be told. He left his job designing digital audio players for Phillips Consumer electronics to start his own company (Fuse Systems) to develop his idea for a player with a better software interface that worked with an online music store. He chose this form despite the obvious fact that Phillips had valuable complementary assets that could make the vision easier to achieve. Only when he failed to raise sufficient funding did he seek support from Phillips, Realmedia, and finally Apple Computer. When Steve Jobs was very enthusiastic, he asked Fadell to lead the 30 member iPod design team. However, Fadell remained an independent contractor (an externalized transaction) presumably because this gave him added negotiating leverage. Once the project was successful, he renegotiated his employment and has since been promoted to be the Sr VP in charge of the iPod/iPhone division. While his compensation has not been disclosed, between mid 2006 and mid 2008, Fadell sold Apple stock valued at $20,044,924, exercised options valued at $8,891,593, and was granted additional stock options valued at $9,220,000. While this $38M is clearly not all of the compensation he has received for his role in the development of the iPod, it would appear that he has shared in its economic success.

In sum, I would find it hard to tell the story of the emergence of the iPod as though the only organizational design concerns the best way to assemble resources and design efficient (least costly) governance structures. For one thing, there are a number of key stakeholders – efficient for whom? The ultimate organizational form is a negotiated outcome from interested parties. It may not be the ideal for any one stakeholder. Finally, all of this shifts over time (including the organizational form) as the capability lifecycle unfolds over time.

Given this, I would ask, what is the most promising direction for organization theory to develop?

Written by RussCoff

July 8, 2008 at 4:16 pm