Order Outsourcing and Management now by clicking on your favorite book retailer: Amazon, Barnes & Noble orPalgrave, or through your local bookstore. In the UK, order directly from Palgrave.
Outsourcing has implications beyond the obvious transfer of jobs to other countries, or the use of metrics to manage external providers. We are in the middle of an economic transformation that has no precedent for a hundred years. Before this new era plays out in the decades ahead, outsourcing will not only reshape organizations into something entirely new, but it will rehape management styles as well. Large organizations can no longer tolerate the Bozo-CEO or Stream-of-Consciousness Manager. The same discipline that outsourcing imposes on external organizations will turn itself back on traditional hierarchical organizations and change things forever. Are you prepared for the real new economy?
Buckle your seatbelt, Dorothy, because Kansas is going bye-bye.
For the latest about how services outsourcing will impact management styles, click here.
"Tunstall has produced a framework for outsourcing that takes management theory to a different plane. Today's business leaders need to understand how to lead their businesses in this rapidly globalizing economy and learn how to take advantage of lower cost offshore talent, leverage new technology to integrate critical data for decision-making, and prepare their company for an economic slowdown and aggressive foreign competition. Outsourcing and Management brings clarity to today's outsourcing quagmire and makes it more than clear that the successful manager of tomorrow cannot afford not to embrace the business benefits of outsourcing and be wary of the pitfalls of not adopting the right global sourcing model for his company - where it is full-scope outsourcing or some other discreet captive model. Managers who choose to ignore these issues will be destined for career failure - this book provides a must-read for everyone operating in today's business climate."
"There's something wrong with the world. You don't know what it is, but it's there. Like a splinter in your mind, driving you mad."
-Morpheus in the movie, "The Matrix"
Thomas Tunstall, Ph.D. is currently co-chair for the Dallas Chapter of the International Association of Outsourcing Professionals (IAOP) and a former senior manager with BearingPoint (KPMG Consulting), a leading international consulting firm. His background includes work in economic and strategy development, accounting controls and procedures, budgeting, revenue management, process reengineering, statistical analysis, forecasting and operational implementation. He has extensive international experience including stints in Afghanistan, Zambia, Kenya, Brazil, Argentina, Mexico, El Salvador, and is well versed in issues involving public policy and economic development.
Prior to joining BearingPoint (then KPMG) in 1999, Dr. Tunstall was the business development manager for Everest Group, an outsourcing advisory firm where he was responsible for a range of projects. He possesses a deep understanding of outsourcing and governance issues, including a doctoral dissertation on those topics. Dr. Tunstall holds a B.B.A. in Marketing from the University of Texas at Austin, an M.B.A. in Operations Management, and a Ph.D. in Political Economy from the University of Texas at Dallas.
Advance Praise for "Outsourcing and Management"
“One of the most extensive reviews of organizational management and the outsourcing movement. Regardless of what side of outsourcing your company resides, this book will help you better understand and prepare for the continued trends in outsourcing and market pricing.”--John Holloran, President, Axis Leadership Group, LLC
“Tunstall has gone back to first principles to explore the current state of management thought by using a rich academic and historical context that is at the same time remarkably accessible. Tunstall puts to work his experience in both the public and private sectors to tell a story that needs to be heard. Outsourcing and Management will be the handbook for intelligent organizational managers in the new economy of the 21st century.”--Professor Euel Elliott, Ph.D., Associate Dean of Academic Programs, University of Texas at Dallas. Co-editor of Chaos Theory in the Social Sciences and Nonlinear Dynamics, Complexity and Public Policy
“Tunstall elucidates key organizational dynamics in today's challenge for corporate survival, if not prosperity, in global markets that are morphing enterprises from product-driven to service-driven organizations.--William B. Bierce, Outsourcing Attorney, Bierce & Kenerson, New York NY
“This is really two books in one – it provides a solid foundation for understanding how and why the digital economy will mandate outsourcing techniques as a platform around which new management structure will evolve – and it does a superb job of detailing the foibles of traditional management styles that come under attack as a result. For the intelligent manager seeking to understand why current management structures do not seem to be working – this is a must-read!--Richard Eastman, CEO of The Eastman Group, Irvine CA
“Tunstall has written a well-reasoned book that draws on his real-world consulting skills as well as his complete command of the perspectives of well-known authorities on management practices. It is essential reading for the managers of tomorrow's networked organizations.”--Professor Don McCubbrey, Director of the Center for the Study of Electronic Commerce at the Daniels School of Business, University of Denver
Chapter Co-Chair Dr. Thomas Tunstall, Ph.D. addressing the audience at the inaugural meeting of the Dallas Chapter of the International Association of Outsourcing Professionals
Chapter 1 The High Level Framework 1. Whyte, William H.The Organization Man, New York: Doubleday (1956). 2. Peters, Tom and Robert Waterman. In Search of Excellence, New York: Harper and Row (1982). 3. Maccoby, Michael, The Gamesman, New York: Simon and Schuster (1977). 4. Peters, Tom. The Pursuit of WOW!: Every Person’s Guide to Topsy-Turvy Times, New York: Random House (1994). 5. Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations, Ann Arbor: Oxford University Press (1776). 6. Smith, Adam. The Theory of Moral Sentiments, D.D. Raphael and A.L. MacFie, eds., Oxford: Oxford University Press (1759). 7. Ameriks, Karl and Desmond Clarke. “Introduction: The Nature of Smith’s Moral Theory,” in The Theory of Moral Sentiments, Adam Smith, ed., Cambridge: Cambridge University Press (2002) vii–xxiv. 8. Coase, Ronald. “The Nature of the Firm,” Economica, 4 (1937) 386–405. 9. Lacity, Mary and Leslie Willcocks. “An Empirical Investigation of Information Technology Sourcing Practices: Lesson From Experience,” MIS Quarterly, 22:3 (September 1998) 363–408. 10. Roth, A.E. “On the Early History of Experimental Economics,” Journal of the History of Economic Thought, 15 (Fall 1993) 184–209. 11. Mero, Lazlo. Moral Calculations: Game Theory, Logic and Human Frailty, Springer-Verlag: New York (1998). 12. Kim, W. Chan and Renee Mauborgne. “Value Innovation: The Strategic Logic of High Growth,” Harvard Business Review (January–February 1997) 103–12. 13. Markides, Constantinos. “Strategic Innovation,” Sloan Management Review, 38:3 (Spring 1997) 9–23. 14. Peters, Tom and Robert Waterman. In Search of Excellence, New York: Harper and Row (1982). 15. Collins, Jim. Good to Great, New York: Harper Collins (2001). 16. Kopecki, Dawn. “New Fannie Mae Violations Surface,” Wall Street Journal (September 29, 2005) A1 17. Kaplan, Robert and David Norton. “The Balanced Scorecard: Measures That Drive Performance,” Harvard Business Review, 70:1 ( January-February 1992) 71–9. 18. Tayntor, Christine B. Six Sigma Software Development, Boca Raton: CRC Press (2003). 19. McTeer, Robert. “Letter from the President,” Annual Report, Federal Reserve Bank of Dallas (2003)1–2. 20. Baily, Martin Neil and Diana Farrell. “Breaking Down Barriers to Growth,” Finance and Development, 43:1 (March 2006) 23–27. 21. Xu, Jianyi, Matthew Spielelman, Robert H. McGuckin, III, Yaodong Liu and Yuan Jiang. “China’s Experience with Productivity and Jobs,” The Conference Board, Report No. R-1352–04-RR (June 2004). 22. Baily, Martin Neil and Diana Farrell. “Breaking Down Barriers to Growth,” Finance and Development, 43:1 (March 2006) 23–7. 23. Cox, Michael W. and Richard Alm. “Have a Nice Day,” Annual Report, Federal Reserve Bank of Dallas (2000) 1–3. 24. Hammer, Michael and James Champy. Reengineering the Corporation: A Manifesto for Business Revolution, New York: Harper Collins (1993). 25. Blaug, Mark. Economic Theory in Retrospect, 4th edition, New York: Cambridge University Press (1985). 26. Cohen, M.D., J.G. March, and J. Olsen. “A Garbage Can Theory or Organizational Choice,” Administrative Quarterly, 17 (1972) 1–25. 27. Collins, Jim. Good to Great, New York: Harper Collins (2001). 28. Magretta, Joan. What Management Is, New York: The Free Press (2002). 29. Rousseau, Denise M. “Is There Such a Thing as ‘Evidence-Based Management’?,” Academy of Management Review, 31:2 (April 2006) 256–69. 30. Pfeffer, Jeffrey and Robert I. Sutton. Hard Facts, Dangerous Half-Truths and Total Nonsense, Boston: Harvard Business School Press (2006). 31. Tunstall, Thomas. “Telecommunications Policy Study for the State of Alaska”: http://www.state.ak.us/itg/telecommstudy.pdf (accessed November 2002) p. 47.
Chapter 2 Governance Options 1. Poppo, Laura and Todd Zenger. “Testing Alternative Theories of the Firm: Transaction Cost, Knowledge-Based, and Measurement Explanations for Make-or-Buy Decisions in Information Services,” Strategic Management Journal, 19 (1998) 853–77. 2. Shelanski, Howard A. and Peter G. Klein. “Empirical Research in Transaction Cost Economics,” in Firms, Markets, and Hierarchies, Glenn R. Carroll and David J. Teece, eds., New York: Oxford University Press (1999) 89–118. 3. Klein, Benjamin, Robert G. Crawford, and Armen A. Alchian. “Vertical Integration, Appropriable Rents, and the Competitive Contracting Process,” Journal of Law and Economics, 21 (October 1978) 297–326. 4. Oxley, Joanne E. “Appropriability Hazards and Governance in Strategic Alliances: A Transaction Cost Approach,” Journal of Law, Economics, and Organization, 13:2 (October 1997) 387–409. 5. Malone, Thomas W. The Future of Work: How the New Order of Business Will Shape Your Organization, Your Management Style and Your Life, Boston: Harvard Business School Press (2004). 6. Sterngold, James. Burning Down the House: How Greed, Deceit, and Bitter Revenge Destroyed E.F. Hutton, New York: Simon and Schuster (1990) 26–34. 7. Malone, Thomas W., JoAnne Yates, and Robert I. Benjamin. “The Logic of Electronic Markets,” Harvard Business Review, 67:3 (May-June 1989) 166–170. 8. Cheung, Steven N.S. “The Transaction Costs Paradigm: 1998 Presidential Address, Western Economic Association,” Economic Inquiry, 36 (October 1998) 514–21. 9. Magee, Stephen P. “The Optimum Numbers of Lawyers: A Reply to Epp,” Law and Social Inquiry, 17 (Fall 1992) 667–93. 10. Klein, Benjamin, Robert G. Crawford, and Armen A. Alchian. “Vertical Integration, Appropriable Rents, and the Competitive Contracting Process,” Journal of Law and Economics, 21 (October 1978) 297–326. 11. Kraemer, Kenneth and Jason Dedrick. “Strategic Use of the Internet and e-commerce: Cisco Systems,” Strategic Information Systems, 11 (2002) 5–29. 12. Ricardo, David. The Principles of Political Economy and Taxation, London: Guernsey Press (1817). 13. Van der Meer-Kooistra, Jeltje and Ed G.J. Vosselman. “Management Control of Interfirm Transactional Relationships: The Case of Industrial Renovation and Maintenance,” Accounting, Organizations and Society, 25 ( January 2000) 51–77. 14. Niven, Paul. Balanced Scorecard Step-by-Step: Maximizing Performance and Maintaining Results, New York: John Wiley and Sons (2002) 145–78. 15. Meyer, Marshall W. Rethinking Performance Measurement, New York: Cambridge University Press (2002) 51–80. 16.Bernheim, B. Douglas and Michael D. Whinston. “Incomplete Contracts and Strategic Ambiguity,” American Economic Review, 88:4 (September 1988) 902–32.
Chapter 3 Organizations Over Time 1. D’Aveni, Richard and David J. Ravenscraft. “Economies of Integration versus Bureaucracy Costs: Does Vertical Integration Improve Performance?” Academy of Management Journal, 37:5 (October 1994) 1167–207. 2. Weill, Peter and Jeanne W. Ross. IT Governance: How Top Performers Manage IT Decision Rights for Superior Results, Boston: Harvard Business School Press (2004) 1–24. 3. Ghoshal, Sumantra and Peter Moran. “Bad for Practice: A Critique of the Transaction Cost Theory,” Academy of Management Review, 21:1 ( January 1996) 13–48. 4.Venkatraman, N. and John C. Henderson. “Real Strategies for Virtual Outsourcing,” Sloan Management Review, 40:1 (Fall 1998) 33–48. See also Keen, Peter and Mark McDonald. The eProcess Edge: Creating Customer Value and Business Wealth in the Internet Era, Osborne/McGraw-Hill: New York (2000). 5.Drucker, Peter F. “The American CEO,” Wall Street Journal (December 30, 2004) A8. 6. Simon, Herbert. Administrative Behavior, 3rd edition, New York: The Free Press, Macmillan Publishing (1976). 7. Chandler, Alfred D. Strategy and Structure: Chapters in the History of American Industrial Enterprise, Cambridge, MA: M.I.T. Press (1962). 8. Caballero, Ricardo J. “The Macroeconomics of Specificity,” Journal of Political Economy, 106:4 (1998) 724–67. 9. Cusumano, Michael A. “How Microsoft Makes Large Teams Work Like Small Teams,” Sloan Management Review, 39:1 (Fall 1997) 9–20. 10. Malone, Thomas W. The Future of Work: How the New Order of Business Will Shape Your Organization, Your Management Style and Your Life, Boston: Harvard Business School Press (2004). 11. Drucker, Peter F. “The Age of Social Transformation,” The Atlantic Monthly (November 1994) 53–80. 12. Greenwood, Jeremy. “The Third Industrial Revolution: Technology, Productivity, and Income Equality,” Economic Review, Federal Reserve Bank of Cleveland, 35:2 (1999) 2–12. 13. Norton, Seth W. “Information and Competitive Advantage: The Rise of General Motors,” Journal of Law and Economics, 40 (April 1997) 245–60. 14. Chandler, Alfred D. Strategy and Structure: Chapters in the History of American Industrial Enterprise, Cambridge, MA: M.I.T. Press (1962). 15. Araskog, Rand V. The ITT Wars, New York: Henry Holt and Company (1989). 16. Maremont, Mark, John Hechinger, and Karen Damato. “Amid Enron’s Fallout, and a Sinking Stock, Tyco Plans a Breakup,” Wall Street Journal ( January 23, 2002) A1. 17. Forelle, Charles. “Tyco Looks to Increase Its Value,” Wall Street Journal (November 17, 2005) A6. 18. Canback, Staffan, Phillip Samouel, and David Price. “Strategy and Structure in Interaction: What Determines the Boundaries of the Firm?,” Industrial Organization, http://129.3.20.41/eps/io/papers/0303/0303003. pdf (Accessed on March 17, 2003) 1–7. 19. Markowitz, H.M. “Portfolio Selection,” Journal of Finance, 7 (March 1952) 77–91. 20. Silverman, Rachel Emma, and Ken Brown. “Five Companies: How They Get Their Numbers,” Wall Street Journal (January 23, 2002) C1. 21. Prahalad, C.K. and Gary Hamel. “The Core Competence of the Corporation,” Harvard Business Review, 90:3 (1990) 79–91. 22. Quinn, James Brian and Frederick G. Hilmer. “Strategic Outsourcing,” Sloan Management Review, 35:4 (Summer 1994) 19–31.
Chapter 4 The Black Box Exposed 1. Buckley, Peter J. and Mark Casson. “Economics as an Imperialist Social Science,” Human Relations, 46:9 (September 1993) 1035–53. 2. Coase, Ronald. “The Nature of the Firm,” Economica, 4 (November 1937) 386–405. 3. North, Douglass C. “Transaction Costs, Institutions, and Economic Performance,” Occasional Papers, International Center for Economic Growth: San Francisco, 30 (1992). 4. Madema, Steve G. “Coase, Costs, and Coordination,” Journal of Economic Issues, 30:2 ( June 1996) 571–78. 5. Pratten, Stephen. “The Nature of Transaction Cost Economics,” Journal of Economic Issues, 31:3 (September 1997) 781–814. 6. Dyer, Jeffrey H. “Effective Interfirm Collaboration: How Firms Minimize Transaction Costs and Maximize Transaction Value,” Strategic Management Journal, 18:7 (1997) 535–56. 7. Cox, W. Michael, John V. Duca, and Richard Alm. Productivity Gains Showing Up in Services, Southwest Economy, Federal Reserve Bank of Dallas, 6 (November–December 2004) 1, 5–8. 8. Downs, Larry and Chunka Mui. Unleashing the Killer App: Digital Strategies for Market Dominance, Boston: Harvard Business School Press (1998). 9. Casson, Mark. “The Nature of the Firm Reconsidered: Information Synthesis and Entrepreneurial Organisation,” Management International Review, 36 (1996) 55–95. 10. Cheung, Steven N.S. “The Transaction Costs Paradigm: 1998 Presidential Address, Western Economic Association,” Economic Inquiry, 36 (October 1998) 514–21 11. Carroll, Glenn R., Pablo T. Spiller, and David J. Teece. “Transaction Cost Economics: Its Influence on Organizational Theory, Strategic Management, and Political Economy,” Firms, Markets, and Hierarchies, Glenn R. Carroll and David J. Teece eds., New York: Oxford University Press (1999) 60–88. 12. Guelpa, Fabrizio. “Corporate Governance and Contractual Governance: A Model,” Rivista Internazionale di Scienze Sociali, 2 (1998) 73–90. 13. Gates, Bill. The Road Ahead, London: Penguin (1996). 14. Jensen, Michael C. and William H. Meckling. “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure,” Journal of Financial Economics, 3 (1976) 305–60. 15. Norton, Seth W. “Information and Competitive Advantage: The Rise of General Motors,” Journal of Law and Economics, 40 (April 1997) 245–60. 16. Fama, Eugene F. “Agency Problems and the Theory of the Firm,” Journal of Political Economy, 88:2 (1980) 288–307. 17. Mikesell, John L.Fiscal Administration, 5th edition, Belmont, CA: Thompson Wadsworth (1998). 18. This very calculus demonstrates one reason most outsourcers—IT outsourcers in particular—will refuse to reply to an RFP (Request for Proposal) solicited by anyone below executive management level. Department heads often lack sufficient objectivity to give the outsourcer a fair hearing. Responses to RFPs are expensive for outsourcers to produce. Development of these large documents consumes significant resources. The outsourcer will not provide responses to requests that offer such a low probability of a win. 19. Dewan, Sanjeev, Steven C. Michael, and Chunk-ki Min. “Firm Characteristics and Investments in Information Technology: Scale and Scope Effects,” Information Systems Research, 9:3 (September 1998) 219–32. 20. D’Aveni, Richard and David J. Ravenscraft. “Economies of Integration versus Bureaucracy Costs: Does Vertical Integration Improve Performance?” Academy of Management Journal, 37:5 (October 1994) 1167–207. 21.New York Times Business Section, March 29, 1997. 22. Leibenstein, Harvey. “Allocative Efficiency vs. ‘X-Efficiency’,” American Economic Review, 56:3 ( June 1966) 392–415. 23. Ibid. 24. Meyer, Marshall W. Rethinking Performance Measurement, New York: Cambridge University Press (2002). 25. Well, okay. Sometimes this does occur. If so, it should be a red flag to management. The most qualified people leave, when out-packages get offered in a downsize exercise. They know they have other options outside the organization. This scenario is not beneficial to the organization overall. It is almost always the dregs that want to stay behind when attractive out-packages get offered. 26. Quinn, James Brian and Frederick G. Hilmer. “Strategic Outsourcing,” Sloan Management Review, 35:4 (Summer 1994) 19–31. 27. Jorgenson, Dale W., Mun S. Ho, and Kevin J. Stiroh. “Will the U.S. Productivity Resurgence Continue?” Current Issues in Economics and Finance, Federal Reserve Bank of New York 10:13 (December 2004) 1–7. 28. Keynes, John Maynard. The General Theory of Employment, Interest, and Money, Orlando: Harcourt Brace (1936). 29. Vedder, Richard K. and Lowell E. Gallaway. Out of Work, New York: New York University Press (1997). 30. Lewis, William. The Power of Productivity: Wealth, Poverty, and the Threat to Global Stability, Chicago: University of Chicago Press (2004) 50–79. 31. Fama, Eugene F. “Agency Problems and the Theory of the Firm,” Journal of Political Economy, 88:2 (1980) 288–307.
Chapter 5 External Governance 1. Lee, J.A.N. Computer Pioneers, Los Alamitos, CA: IEEE Computer Society Press (1995). 2. Bayers, Chip. “The Ultimate Management Team,” Wired Magazine, 10.01 (January 2002) 77–8. 3. Levin, Doron P. Irreconcilable Differences: Ross Perot versus General Motors, New York: Penguin (1989). 4. The company that Herman Hollerith formed (Tabulating Machine Company) later merged with three other companies in 1911. In 1924, it became known as IBM. Austrian, Geoffrey D. Herman Hollerith: Forgotten Giant of Information Processing, New York: Columbia University Press (1982). 5. Loh, Lawrence and N. Venkatraman. “ Diffusion of Information Technology Outsourcing: Influence Sources and the Kodak Effect,” Information Systems Research, 3:4 (December 1992) 334–58. 6. Strassmann, Paul. The Squandered Computer, New Canaan, Connecticut: The Information Economics Press (1997). 7. Palvia, Prashant C. “A Dialectic View of Information Systems Outsourcing: Pros and Cons,” Information and Management, 29 (1995) 265–75. 8. Siems, Thomas F. “Beyond the Outsourcing Angst: Making America More Productive,” Economic Letter, Federal Reserve Bank of Dallas, 1:2 (February 2006) 1–8. 9. Klein, Benjamin, Robert G. Crawford, and Armen A. Alchian. “Vertical Integration, Appropriable Rents, and the Competitive Contracting Process,” Journal of Law and Economics, 21 (October 1978) 297–326. 10. Grossman, Sanford J. and Oliver D. Hart. “The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration,” Journal of Political Economy, 94:4 (1986) 619–719. 11. New technologies change things all the time. Satellite, DSL, and terrestrial wireless create intermodal competition that blur the traditional boundaries between the entertainment, information, and communication delivery vehicles. These new options make the cable industry look less like a natural monopoly every day. (See http://www.state.ak.us/itg/ telecommstudy.pdf, p. 30.) Accessed in November 2002. 12. Zupan, Mark A. “The Efficacy of Franchise Bidding Schemes in the Case of Cable Television: Some Systematic Evidence,” Journal of Law and Economics, 32 (October 1989) 401–56. 13. Bendor-Samuel, Peter. Turning Lead Into Gold, Provo, UT: Executive Excellence Publishing (2000). 14. DiRomualdo, Anthony and Vijay Gurbaxani. “Strategic Intent for IT Outsourcing,” Sloan Management Review, 39:4 (Summer 1998) 67–80. 15. Moore, Randy A. The Science of High-Performance Supplier Management: A Systematic Approach to Improving Procurement Costs, Quality, and Relationships, New York: Amacom (2002). 16. Davenport, Thomas H. “The Coming Commoditization of Processes,” Harvard Business Review, 85:6 ( June 2005)101–8. 17. Banker, Rajiv, Gordon B. Davis, and Sandra A. Slaughter. “Software Development Practices, Software Complexity, and Software Maintenance Performance: A Field Study,” Management Science, 44:4 (April 1998) 433–50. 18. As a footnote to the story, some of the related software development by the outsourcer was to take place in a northern U.S. state in the winter months. The outsourcer asked the communications company if it would receive relief from the terms of the agreement in the event of the programmers were unable to travel to the development site due to snow or inclement weather. Since the communications company would lose revenue on a late implementation with or without snow, management told the outsourcer that it would not receive any relief (the communications company retorted that the outsourcer might consider relocation of the development effort to a warmer climate). 19. EDS 10K Filing for the fiscal year ended December 31, 2004. 20. Cringley, Robert X. “A Lose-Lose Situation: Sometimes IT Integration Just Isn’t Worth the Trouble,” in Cringley PBS Column, March 18, 2004 at http://www.pbs.org/cringely/. 21. Klein, Benjamin, Robert G. Crawford, and Armen A. Alchian. “Vertical Integration, Appropriable Rents, and the Competitive Contracting Process,” Journal of Law and Economics, 21 (October 1978) 297–326. 22. Davenport, Thomas H. “The Coming Commoditization of Processes,” Harvard Business Review, 85:6 ( June 2005) 101–8. 23. Jones, S.R.H. “Transaction Costs and the Theory of the Firm: The Scope and Limitations of the New Industrial Approach,” Business History, 39:4 (October 1997) 9–26. 24. Hagel, John. Out of the Box: Strategies for Achieving Profits Today and Growth Tomorrow through Web Services, Boston: Harvard Business School Press (2002). 25. Porter, Michael E. “Attitudes, Values, Beliefs and Microeconomics of Prosperity,” Culture Matters: How Values Shape Human Progress, Lawrence Harrison and Samuel Huntington, eds., New York: Basic Books (2000) 14–28.
Chapter 6 The Global Perspective 1. Lewis, William. The Power of Productivity: Wealth, Poverty, and the Threat to Global Stability, Chicago: University of Chicago Press (2004). 2. “Things Have Changed.” Written and performed for the movie Wonder Boys by Bob Dylan. Dylan won the 2000 Academy Award for Best Original Song. 3. It should be noted that while insurance companies implement techniques such as remote diagnosis, in-country market forces remain underutilized as a force, to better manage costs. Methods employed in domestic markets rely too much on blunt tools such as heavy-handed regulation or coalitions of insurance providers. The picture starts to look very different once healthcare providers start operating outside these constraints. Look at the costs for elective procedures, which may not be covered by health insurance. Cosmetic surgery (e.g. breast augmentation, liposuction) presents a good example. Costs continue to come down all the time because consumers must pay for these surgical treatments out of their own pocket. They tend to shop for the best price-value provider in the healthcare marketplace. Providers are spurred to find ways to become more efficient. 4. Feenstra, Robert C. and Gordon H. Hanson. “Globalization, Outsourcing and Wage Inequality,” American Economic Review, 86 (May 1996) 240–45. 5. Fairbanks, Michael and Stace Lindsay. Plowing the Sea: Nurturing the Hidden Sources of Growth in the Developing World, Cambridge, MA: Harvard Business School Press (1997). 6. Greider, William. One World, Ready or Not: The Manic Logic of Global Capitalism, New York: Simon and Schuster (1997). 7. Ricardo, David. The Principles of Political Economy and Taxation, London: Guernsey Press (1973). 8. Cheung, Steven N.S. “The Transaction Costs Paradigm: 1998 Presidential Address, Western Economic Association,” Economic Inquiry, 36 (October 1998) 514–21; see also Deavers, Kenneth L. “Outsourcing: A Corporate Competitiveness Strategy, Not a Search for Low Wages,” Journal of Labor Research, 18:4 (Fall 1997) 503–19. 9. Schumpeter, Joseph. Capitalism, Socialism and Democracy, New York: Harper and Brothers (1942). 10. Cox, W. Michael and Richard Alm. “The Churn: The Paradox of Progress,” Annual Report, Federal Reserve Bank of Dallas (1992) 4–9. 11. Chast, Roz. “All-But-Completely Unskilled Labor,” Harvard Business Review, 76:1 ( January-February 1998) 109. 12. Useem, Jerry. “Churn, Baby, Churn,” Inc. Magazine: The State of Small Business (May 1997) 25–32. 13. Rajan, Raghuram and Luigi Zingales. Saving Capitalism from the Capitalists, New York: Crown Business (2003). 14. Casson, Mark. “The Nature of the Firm Reconsidered: Information Synthesis and Entrepreneurial Organisation,” Management International Review, 36 nSPEISS (1996) 55–95. 15. Casson, Mark. “Institutional Economics and Business History: A Way Forward,” Business History, 39:4 (1997) 151–72.
Chapter 7 Management Style 1. Evans, Philip B. and Thomas S. Wurster. “Strategy and the New Economics of Information,” Harvard Business Review, 75:5 (September–October 1997) 71–82. 2. Caves, Richard E. and Ralph M. Bradburd. “The Empirical Determinants of Vertical Integration,” Journal of Economic Behavior and Organization, 9 (1988) 265–79. 3. Dyer, Jeffrey H. “Effective Interfirm Collaboration: How Firms Minimize Transaction Costs and Maximize Transaction Value,” Strategic Management Journal, 18:7 (1997) 535–56. 4. Levy, David T. “The Transactions Cost Approach to Vertical Integration: An Empirical Examination,” Review of Economics and Statistics (1985) 438–45. 5. Frank, Robert H. and Philip J. Cook. The Winner-Take-All Society: Why the Few at the Top Get So Much More Than the Rest of Us, New York: Free Press (1995). 6. Barker III, Vincent L. “Traps in Diagnosing Organizational Failure,” Journal of Business Strategy, 26:2 (2005) 44–50. 7. Weber, Max. Selections in Translation, Runcinman, W.G. ed., New York: Cambridge University Press (1978). 8. Rein, Irving, Philip Kotler, and Martin Stoller. High Visibility, New York: Dodd, Mead and Company (1987). 9. Pfeffer, Jeffrey and Robert I. Sutton. Hard Facts, Dangerous Half-Truths and Total Nonsense, Boston: Harvard Business School Press (2006). 10. Pulley, Brett. “The Boss, Out of Control,” Forbes, 178:6 (October 2, 2006) 42. 11. Peter, Lawrence J. and Raymond Hull. The Peter Principle, New York: William Morrow and Co. (1969). 12. Sterngold, James. Burning Down the House: How Greed, Deceit, and Bitter Revenge Destroyed E.F. Hutton, New York: Simon and Schuster (1990). 13. Finkelstein, Sydney. “When Bad Things Happen to Good Companies: Strategy Failure and Flawed Executives,” Journal of Business Strategy, 26:2 (2005) 19–29. 14. Levin, Doron P. Irreconcilable Differences: Ross Perot versus General Motors, New York: Penguin (1989). 15. Tuck School of Business at Dartmouth. “Learning from Mattel,” Case Study No. 1–0072 (2002). 16. Burrough, Bryan and John Helyar. Barbarians at the Gate: The Fall of RJR Nabisco, New York: Harper-Collins (1991).
Chapter 8 New Rules for Governance 1. Skinner, C. Wickham. The Impact of New Technology: People and Organizations in the Service Industry, St. Louis: Elsevier Science (1982). 2. Eldredge, Nigel and Stephen Gould. “Punctuated Equilibria: An Alternative to Phyletic Gradualism,” in Models of Paleobiology, T.J.M. Schopf, ed. San Francisco, CA: Freeman, Cooper and Co. (1972) 82–115. 3. Claburn, Thomas. “More Than Fun and Games,” Information Week (April 17, 2006) 51–54. Also McGee, Marianne Kolbasuk. “No E-Learning Gap Here,” Information Week (April 17, 2005) 51–54. 4. Barber, Felix and Rainer Strack. “The Surprising Economics of a ‘People Business,’ ” Harvard Business Review, 83:6 (June 2005) 80–90. 5. Meyer, Marshall W. Rethinking Performance Measurement, Cambridge: Cambridge University Press (2002). 6. Reichheld, Frederick F. and W. Earl Sasser, Jr. “Zero Defections: Quality Come to Services,” Harvard Business Review, 68:5 (September–October 1990) 105–11. 7. Brimson, James A. Activity Accounting: An Activity-Based Costing Approach, New York: John Wiley and Sons (1991). 8. Palepu, Krishna G. “Predicting Takeover Targets: A Methodological and Empirical Analysis,” Journal of Accounting and Economics, 8 (1986) 3–35. 9. Edward, Ben. “A World of Work: A Survey of Outsourcing,” The Economist, 373:8401 (November 13, 2004) 1–20 (special insert). 10. Tunstall, Thomas. Firm Governance Mechanisms: An Empirical Analysis of the Determinants of Information Technology Outsourcing, unpublished doctoral dissertation, University of Texas at Dallas (2000). 11. Cox, W. Michael, John V. Duca, and Richard Alm. “Productivity Gains Showing Up in Services,” Southwest Economy, Federal Reserve Bank of Dallas, 6 (November–December 2004) 1, 5–8. 12. Brynjolfsson, Erik. “Information Assets, Technology and Organization,” Management Science, 40:12 (December 1994) 1645–62. 13. Lee, Chi-Hyon and N. Venkatraman. “New Organizational Arrangements for Information Technology Resource Leverage: Empirical Test of Value Capture,” Working Paper, Boston University (1999). 14. Hornstein, Andreas. “Growth Accounting with Technological Revolutions,” Economic Quarterly, Federal Reserve Bank of Cleveland, 85:3 (Summer 1999) 1–22. 15. Srivastava, Rajendra K., Tasadduq A. Servani, and Liam Fahey. “Market-Based Assets and Shareholder Value: A Framework for Analysis,” Journal of Marketing, 62 ( January 1998) 1–14. 16.Coyne, Kevin P. and Renee Dye. “The Competitive Dynamics of Network-Based Businesses,” Harvard Business Review, 76:1 ( January 1998) 99–109. 17. Newman, Richard J. “Can America Keep Up?,” U.S. News and World Report, 140:11 (March 27, 2006) 48–56. 18. Wolfram, Stephen.A New Kind of Science, Champaign, IL: Wolfram Media (2002). 19. Dembo, Ron and Andrew Freeman. Seeing Tomorrow: Rewriting the Rules of Risk, New York: John Wiley and Sons (1998). 20. Schelling, Thomas C. Micromotives and Macrobehavior, New York: W.W. Norton and Co. (1978). 21. Bandler, James and Charles Forelle. “Embattled CEO to Step Down at UnitedHealth,” Wall Street Journal (October 16, 2006) p. 1. 22. Mufson, Steven. “Gold-Plated Exit for Exxon CEO,” Washington Post, (April 13, 2006) D3. 23. Pfeffer, Jeffrey and Robert I. Sutton. Hard Facts, Dangerous Half-Truths and Total Nonsense, Boston: Harvard Business School Press (2006). 24. Weidenbaum, Murray L. Business and Government in the Global Marketplace, Upper Saddle River, NJ: Pearson Prentice Hall (2004) 349. 25. Simon, Herbert. Administrative Behavior, 3rd edition, New York: The Free Press, Macmillan (1976). 26. Granovetter, Mark. “Problems of Explanation in Economic Sociology,” in Networks and Organizations, Nohria Nitin and Robert G. Eccles, eds., Boston: Harvard Business School Press (1992) 25–56. 27. Rousseau, Denise M. “Is There Such a Thing as ‘Evidence-Based Management’?,” Academy of Management Review, 31:2 (April 2006) 256–69.
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