This summary includes all articles needed for the course 'Comparative Country Studies'.
The following articles are included:
Week 2:
- Mapping the business systems of 61 major economies: a taxonomy and implications for varieties of capitalism and business systems research by Witt, Kabbach de Cast...
Mapping the business systems of 61 major economies: a taxonomy and implications for
varieties of capitalism and business systems research
Witt, Kabbach de Castro, Amaeshi, Mahroum, Bohle & Saez
Motivation and epistemology
- Theory: a systematic set of interrelated statements intended to explain some aspect
of social life.
- Hall & Soskice: 2 main varieties of capitalism among the advanced industrialized
economies:
o Coordinated market economies (CMEs).
Firms rely on non-market relationships to solve coordination
problems.
Ideal-typical CME: coherently complementary institutions supporting
non-market coordination.
o Liberal market economies (LMEs).
Firms rely on hierarchies and market arrangements.
Ideal-typical LME: feature coherently complementary institutions
supporting market and hierarchical relations.
o Possible existence of a 3rd type: mixed market economies (MMEs).
o Framework performs well on LME side, but has insufficient discriminatory power
for understanding institutional variations outside that category.
o Important variables are missing: role of the state, presence of social capital.
- Whitley: at least 6 major types of business systems.
o Work built around empirical observation of 6 economies: many economies
are unclassifiable.
o Theory underpinning the framework is underspecified.
o Amendments in 2007: leaves challenges untouched and invites new
questions.
- The field has not succeeded in building a general, unified theory of global business
systems.
- Most of the work has been built around the specific context of the West & Japan.
- Key challenge: we know much too little about the institutional characteristics of the
rest of the world.
The world’s business systems: a comparison
Data
- Balance between feasibility in terms of data availability and relevance in terms of
coverage of global economic activity.
- 61 economies, accounting for 93.5% of world GDP.
- Data combined the key institutional categories identified in 7 major works on
varieties of capitalism.
1
,Cluster analysis
- 9 clusters:
o Socialist economies.
o Emerging economies.
o Arab oil-based economies.
o Advanced city economies.
o Advanced emerging economies.
Chile & Turkey.
Israel & South Africa.
Korea & Taiwan.
o European peripheral economies.
Southern European economies.
Central European economies.
o Liberal market economies.
o Coordinated market economies.
Classical CMEs.
CMEs with a twist.
o Highly coordinated economies.
Implications
- 6 implications:
o Findings represent a step toward understanding the global varieties of
business systems that a unified business systems theory needs to explain.
o Hall and Soskice did capture an important pattern by distinguishing CMEs and
LMEs.
o Support Whitley’s contention that there are at least 6 major business systems
in the world.
o At least some of the labels used in the field are empirically valid, but probably
part of the same clusters.
Limited institutional variance among poorer emerging markets.
Question why poorer countries are structurally similar might be
answered by a default mode of organizing societies that have not
experienced profound modernization and attendant institutional and
economic development.
Future inclusion of culture.
o Advanced emerging economies combine low geographic proximity with
relatively high institutional similarity.
Question whether there may be one particular institutional trajectory
towards high economic development for countries that have neither
oil nor are cities.
o Clusters raise questions about the validity of state-led capitalism as a type of
business system.
Conclusion, limitations and additional avenues for future research
- Limitations:
2
, o Analysis represents a snapshot: cannot speak to the question of institutional
change, convergence and divergence.
o Identified types may not be stable over time.
o Measurement error is likely to have occurred.
Expert judgement.
Data from less developed economies.
Least likely for OECD countries: good data & prior research have
established a fairly clear picture.
o It is possible that important dimensions of variation are missing.
o Efforts to gain a comparative understanding of different business systems
have been based on the assumption that variations can be understood
through the relative position of economies on a range of shared scales.
However, it is possible that some of the most interesting differentiators may
be unique to specific contexts.
- Future research:
o Repeat studies at meaningful intervals.
o Extend the scope to include further countries.
Managing competences in entrepreneurial technology firms: a comparative institutional
analysis of Germany, Sweden and the UK
Casper & Whitley
Introduction
- National patterns of specialization are created by comparative institutional
advantages in governing the organizational competences needed to innovate within
particular technological fields.
- We need to link institutional arrangements to the ways that companies develop
different kinds of technologies in emerging industries at the subsectoral level.
- Core issues faced by entrepreneurial technology firms (developing skills, hiring &
firing, coordinating technology development with external actors) are strongly
influenced by the skill formation and labor market institutions.
Key management issues facing entrepreneurial technology firms
- Two kinds of technological risks that affect managerial priorities:
1. Appropriability risks: ease with which competitors can imitate innovations,
managed through patent and copyright protection or through controlling
complementary assets.
2. Competence destruction risks: volatility and uncertainty of technical
development that vary greatly between technologies.
- To offset high technical or market uncertainty, most firms competing to create
radical innovations in markets where winners of innovation races can expect to
capture a relatively large share of emerging markets focus on technology areas in
which appropriability regimes through copyright and patent protection are quite
strong.
- The two kinds of technological risk tend to be inversely related.
- Firms in subsectors combining high levels of technical uncertainty with low
appropriability risks:
3
, o Change R&D competences quickly.
o Project-based.
o High levels of competence destruction create knowledge investment
problems.
- Firms in subsectors that combine lower levels of technological uncertainty with
greater appropriability risks:
o Likely to attempt to integrate new technologies with other assets that
generate firm-specific advantages.
o Firms attempt to develop learning economies or create tacit knowledge
embedded within project teams that are difficult for other firms to mimic.
o High organizational complexity: managers need to encourage employees to
collaborate in developing organization-specific capabilities: long-term
employment, consultative work place arrangements.
- 5 technologically dynamic subsectors:
1. Standard software: created for large homogenous markets where demand for
customization is low.
2. Therapeutics biotechnology: high scientific intensity; closely dependent upon
new scientific knowledge of generic biological phenomena and processes.
3. Middleware software: firms compete to develop new interface technologies that
are used to link the basic architecture of communication networks to standard
application software.
4. Enterprise software: consists of software platforms or modules that are
extensively customized for individual clients.
5. Platform biotechnology: create enabling technologies that are sold to other
research labs.
Institutional frameworks and competency development
- The way that managers deal with problems varies between market economies with
different institutional frameworks.
- Coordinated market economies (CMEs):
o Encourage competence-enhancing patterns of work organization.
o High levels of non-market coordination through credit-based finance, strong
business associations and state supported technical standards setting and
technical development.
o Favor development of managerial commitments needed for employees to
willingly make firm-specific knowledge investments that are not easily
saleable on open labor markets.
o Strong interest in developing long-term career structures for skilled
employees.
o Comparative institutional advantage: creating clusters of organizationally
complex collaborative firms developing firm-specific competences in
cumulative technologies.
o Comparative institutional disadvantage: governance of radically innovative
project-based firms focused on developing competence-destroying
technologies with high failure risks.
- Liberal market economies (LMEs):
o Hire-and-fire used to create large external labor markets for most skills.
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