Economists From The United States

"Inside a big experiment, there are little experiments."

"The innovation leader’s job is to execute a disciplined experiment."

"A company's ability to innovate, improve, and learn ties directly to the company's value."

"If we can stop, listen, and think about what others are seeing in us, we have a great opportunity. We can compare the self that we want to be with the self that we are presenting to the rest of the world. We can then begin to make the real changes that are needed to close the gap between our stated values and our actual behavior."

"Organizations are not designed for innovation. Quite the contrary, they are designed for ongoing operations."

"The Great Western Disease is that we fixate on the future at the expense of enjoying the life we're living now."

"Today, organizations are competing in complex environments so that an accurate understanding of their goals and the methods for attaining those goals is vital. The translates an organization’s mission and strategy into a comprehensive set of performance measures that provides the framework for a strategic measurement and management system."

"Ten years ago we had a very simple yet powerful idea—call many of the greatest thinkers in the world, ask them each to write a chapter sharing their vision for the future of leadership, and put together an edited book titled The Leader of the Future."

"The Leader of the Future 2 is divided into five parts. In Part One, our book begins where it should, with Peter Drucker’s vision of leadership... Part Two, "Leading in a Diverse World," begins with the recognized world authority on building a learning organization. "Systems Citizenship" presents MIT’s Peter Senge at his best, as he challenges us to understand systems, implement systems intelligence, and build partnerships that are a mandate for the new millennium... Part Three, "Leading in a Time of Crisis and Complexity," begins with Ron Heifetz of Harvard’s Kennedy School. Ron describes new approaches to solving leadership dilemmas as he challenges leaders in "Anchoring Leadership in the Work of Adaptive Progress"... Part Four, "Leading Organizations of the Future," shows how changing context has an impact leadership needs, demanding changes in leadership styles. Charles Handy is one of the great social philosophers of our time... Part Five, "The Quality and Character of the Leader of the Future," begins with one of the most influential thought leaders in history, Stephen Covey. In "Leading in the Knowledge Worker Age.""

"The more we are committed to believing that something is true, the less likely we are to believe that its opposite is true, even in the face of clear evidence that shows we are wrong."

"People who believe they can succeed see opportunities where others see threats."

"Successful people become great leaders when they learn to shift the focus from themselves to others."

"Innovation plans, by contrast, are loaded with assumptions. Sure, some hard facts are available, but more is unknown than known. The past is no longer precedent. Thus, the innovator's job cannot be to deliver a proven result; it must be to discover what is possible, that is, to learn, by converting assumptions into knowledge as quickly and inexpensively as possible."

"Companies are in the midst of a revolutionary transformation. Industrial age competition is shifting to information age competition. During the industrial age, from 1850 to about 1975, companies succeeded by how well they could capture the benefits from economies of scale and scope. Technology mattered, but, ultimately, success accrued to companies that could embed the new technology into physical assets that offered efficient, mass production of standard products."

"Lasting goal achievement requires lots of time, hard work, personal sacrifice, ongoing effort, and dedication to a process that is maintained over years."

"A reverse innovation is any innovation that is adopted first in the developing world."

"Industrial age companies created sharp distinctions between two groups of employees. The intellectual elite—managers and engineers—used their analytical skills to design products and processes, select and manage customers, and supervise day-to-day operations. The second group was composed of the people who actually produced the products and delivered the services. This direct labor work force was a principal factor of production for industrial age companies, but used only their physical capabilities, not their minds. They performed tasks and processes under direct supervision of white-collar engineers and managers. At the end of the twentieth century, automation and productivity have reduced the percentage of people in the organization who perform traditional work functions, while competitive demands have increased the number of people performing analytic functions: engineering, marketing, management, and administration. Even individuals still involved in direct production and service delivery are valued for their suggestions on how to improve quality, reduce costs, and decrease cycle times..."

"The Organization of the Future presents the latest and best thinking of acclaimed visionaries and practitioners who ponder the future of human enterprise everywhere -- in government, business, and community. Supported by two giants -- Peter Drucker opens the book, and Charles Handy closes it -- the authors within provide their own perspectives on tomorrow, in thoughtful, to-the-point chapters. Together they underscore where, when, and how organizations and their leaders must evolve, not only to survive but also to prosper. In The Organization of the Future, the contributors show:"

"Of all possible resources that a firm might possess, its knowledge base has perhaps the greatest ability to serve as a source of sustainable differentiation and hence competitive advantage."

"Today, organizations are competing in complex environments so that an accurate understanding of their goals and the methods for attaining those goals is vital. The translates an organization’s mission and strategy into a comprehensive set of performance measures that provides the framework for a strategic measurement and management system."

"Industrial age companies created sharp distinctions between two groups of employees. The intellectual elite—managers and engineers—used their analytical skills to design products and processes, select and manage customers, and supervise day-to-day operations. The second group was composed of the people who actually produced the products and delivered the services. This direct labor work force was a principal factor of production for industrial age companies, but used only their physical capabilities, not their minds. They performed tasks and processes under direct supervision of white-collar engineers and managers. At the end of the twentieth century, automation and productivity have reduced the percentage of people in the organization who perform traditional work functions, while competitive demands have increased the number of people performing analytic functions: engineering, marketing, management, and administration. Even individuals still involved in direct production and service delivery are valued for their suggestions on how to improve quality, reduce costs, and decrease cycle times..."

"Companies are in the midst of a revolutionary transformation. Industrial age competition is shifting to information age competition. During the industrial age, from 1850 to about 1975, companies succeeded by how well they could capture the benefits from economies of scale and scope. Technology mattered, but, ultimately, success accrued to companies that could embed the new technology into physical assets that offered efficient, mass production of standard products."

"The more you hardwire a company on total quality management, [the more] it is going to hurt breakthrough innovation... The mindset that is needed, the capabilities that are needed, the metrics that are needed, the whole culture that is needed for discontinuous innovation, are fundamentally different."

"Here we were at Davos, moderating a discussion on value innovation, and yet only one European, Hasso Plattner [the founder and CEO of SAP AG], was on the panel. This raised the question, ‘Why aren’t there more European CEOs and companies worth listening to on this subject?’ What is the problem in Europe? The answer that kept coming back is this: Europe is strong in science and technology, but weak in connecting innovation and commerce."

"In the United States, international business still means the U.S. and the rest of the world. Here it is different. We wanted to learn about the reality of international business and understand the role and scope of strategy within that."

"We have worked together for the last 20 years, first in America and now at INSEAD in France, with time also spent in Asia along the way. From the get-go, we shared an intellectual curiosity to understand what it takes to stand apart and create strong profitable growth. In search of an answer to this question, we looked back more than 100 years and across more than 30 industries. Contrary to common thought, we did not find any permanently excellent companies, nor permanently excellent industries in our research. What we did find, however, were smart strategic moves. And the strategic move that we found matters centrally is to create blue oceans. Blue oceans allow companies to stand apart and create strong profitable growth. This led to our book, Blue Ocean Strategy. Even before Blue Ocean Strategy was released, it broke Harvard Business School Press's historical record for most foreign licenses ever obtained."

"Their recent publication, Blue Ocean Strategy (2005), is a summation of a decade of articles on value innovation, including one in the Harvard Business Review. Kim and Mauborgne have presented themselves as unashamed strategic iconoclasts. The thinking behind most business strategy sees the agents as either individual companies or industries as a whole. The scene for strategic activity is essentially fixed and finite. Analogies were often made with the field of battle or the theater of war. Some strategists went further in borrowing military symbols. They talked about headquarters rather than the corporate head office. The battlefield was fixed in area; no new land could be added to it or created. Any struggles that took place were zero-sum games. These conflicts were intense and bloody (in figurative terms), staining red the ground on which they were fought."

"In recent years economists and historians have increasingly turned their attention to modern economic institutions. Economists such as Edward S. Mason, A. D. H. Kaplan, John Kenneth Galbraith, Oliver E. Williamson, William J. Baumol, Robin L. Marris, Edith T. Penrose, Robert T. Averitt, and R. Joseph Monsen, following the pioneering work of Adolph A. Berle, Jr., and Gardiner C. Means, have studied the operations and actions of modern business enterprise. They have not attempted, however, to examine its historical development, nor has their work yet had a major impact on economic theory. The firm remains essentially a unit of production, and the theory of the firm a theory of production."

"The other economy [or "periphery economy"] is populated by relatively small firms. These enterprises are the ones usually dominated by a single individual or family. The firm's sales are realized in restricted markets. Profits and retained ... Techniques of production and marketing are rarely as up to date as those in the center."

"[[The largest corporations] present a spongy target to possible attacks by environmental enemies. Their strongest protection against future threat comes from having successfully met past threats. When the demand for a major commodity falters, center firms can concentrate their energies on other products while experimenting with new lines. When a new technology portends revolutionary potential for home industries, center firms use their financial and technical resources to embrace it. If raw material prices began to rise, center firms can integrate backward, and supply themselves. When rising labor costs pose a substantial threat, automation, cybernation or self-service may provide long-run relief, depending on the industry. Expensive production labor must now contend with easily financed capital substitution in industries where center firms dwell."

"Given a choice between efficiency and employment, most economists favor efficiency."

"In recent years economists and historians have increasingly turned their attention to modern economic institutions. Economists such as Edward S. Mason, A. D. H. Kaplan, John Kenneth Galbraith, Oliver E. Williamson, William J. Baumol, Robin L. Marris, Edith T. Penrose, Robert T. Averitt, and R. Joseph Monsen, following the pioneering work of Adolph A. Berle, Jr., and Gardiner C. Means, have studied the operations and actions of modern business enterprise. They have not attempted, however, to examine its historical development, nor has their work yet had a major impact on economic theory. The firm remains essentially a unit of production, and the theory of the firm a theory of production."

"Center firms differ from periphery firms in terms of economic size, organizational structure, industrial location, factor endowment, time perspective, and market concentration."

"The new economy [or "center economy"] is composed of firms large in size and influence. Its organizations are corporate and bureaucratic; its production processes are vertically integrated through ownership and control of critical raw material suppliers and product distributors; its activities are diversified into many industries, regions, and nations... Firms in the large economy serve national and international markets, using technologically progressive systems of production and distribution…"

"This book is... devoted to the study of economic policies to enhance the quality of life. Our willingness to embark on so considerable a subject only reflects our conviction that economists as a body have already made sufficient headway on these problems to make such an undertaking worthwhile."

"When the “environmental revolution” arrived in the 1960s, economists were ready and waiting. The economic literature contained an apparently coherent view of the nature of the pollution problem together with a compelling set of implications for public policy. In short, economists saw the problem of environmental degradation as one in which economic agents imposed external costs upon society at large in the form of pollution. With no “prices” to provide the proper incentives for reduction of polluting activities, the inevitable result was excessive demands on the assimilative capacity of the environment. The obvious solution to the problem was to place an appropriate “price,” in this case a tax, on polluting activities so as to internalize the social costs. Marshall and Pigou had suggested such measures many decades earlier. Moreover, pollution and its control through so-called Pigouvian taxes had become a standard textbook case of the application of the principles of microeconomic theory. Economists were thus ready to provide counsel to policy makers on the design of environmental policy."

"The price-tax conditions necessary to sustain the Pareto optimality of a competitive market solution under the assumed convexity conditions are tantamount to standard Pigovian rules, with neither taxes imposed upon, nor compensation paid to, the victims of externalities."

"How much do you think it costs to go to college? Most people are likely to answer by adding together their expenditures on tuition, room and board, books, and the like, and then deducting any scholarship funds they may receive. Suppose that amount comes to $15,000. Economists keep score differently. They first want to know how much you would be earning if you were not attending college. Suppose that salary is $20,000 per year. This may seem irrelevant, but because you give up these earnings by attending college, they must be added to your tuition bill. You have that much less income because of your education. On the other side of the ledger, economists would not count all of the university’s bill for room and board as part of the costs of your education. They would want to know how much more it costs you to live at school rather than at home. Economists would count only these extra costs as an educational expense because you would have incurred these costs whether or not you attend college. On balance, college is probably costing you much more than you think. And, as we will see later, taking opportunity cost into account in any personal planning will help you to make more rational decisions."

"In the late 1930s, E.S. Mason wrote a series of papers which established the research programme which became industrial organisation. Many of these papers discussed the lessons for antitrust policy from the Robinson/ Chamberlin revolution. Although these papers made some proposals for a strengthening of antimonopoly measures, it is clear that there is a decisive break between the emerging Harvard school the old J.B. Clark/ Marshallian preoccupation with freedom and openness of competition, which Mason refers to as "antiquated and inadequate.""

"In order for a writer to produce something which is original and correct, it is not absolutely necessary that his predecessors have been wrong."

"There seems to be a general consensus among informed observers that genuine cases of predation are very rare birds."

"We cannot simply rely on a program of pollution abatement in country A [the polluting country] for this would impose costs on A with no offsetting benefits to the polluting country. The OECD’s Polluter-Pays-Principle is thus inconsistent with our insistence on a Pareto improvement. Mutual gains to the countries necessarily require the victim country B to make some payments to A."

"The term monopoly as used in the law is not a tool of analysis but a standard of evaluation. Not all trusts are held monopolistic but only" bad" trusts; not all restraints of trade are to be condemned but only" unreasonable" restraints."

"Edith Penrose has been one of the most significant economists of the second part of the twentieth century. Her contribution to the theory of the firm has reinvented and productively developed the classical tradition in economics. It has informed the currently dominant resource/knowledge-based theory of the firm. Penrose's contribution, however, extends to a great variety of areas, to include industry organization, strategic management, international business, human resource management, economics of innovation and technological change, history, methodology, macroeconomics, and much more."

"The current emphasis on price policy, as against price, as a proper object of study represents recent economic reflection on the significance of expectations, uncertainties, market control, and the position of price as one among many selling terms. Policy implies some degree of control over the course of events and, at the same time, the use of judgment as to the probable consequences of alternative lines of action. In perfect markets, whether monopolistic or competitive, price is hardly a matter of judgment and where there is no judgment there is no policy. The area of price policy, then, embraces the deliberative action of buyers and sellers able to influence price; that is to say, it covers practically the whole field of industrial prices."

"The size of a firm influences its competitive policies in a number of ways. In the first place the scale of its purchases and sales relative to the total volume of transactions in the firm's market is one indication of the extent of its market control. Taken in conjunction with other data it may throw a good deal of light on price and production policies. Certain authorities, on the other hand, brush aside figures on the relative size of firms as irrelevant and emphasize the decisive importance of the elasticity of the firm's demand curve. 3 It would no doubt be extremely convenient if economists knew the shape of individual demand and cost curves and could proceed forthwith, by comparisons of price and marginal cost, to conclusions regarding the existing degree of monopoly power. The extent to which the monopoly theorists, however, refrain from an empirical application of their formulae is rather striking."

"In recent years economists and historians have increasingly turned their attention to modern economic institutions. Economists such as Edward S. Mason, A. D. H. Kaplan, John Kenneth Galbraith, Oliver E. Williamson, William J. Baumol, Robin L. Marris, Edith T. Penrose, Robert T. Averitt, and R. Joseph Monsen, following the pioneering work of Adolph A. Berle, Jr., and Gardiner C. Means, have studied the operations and actions of modern business enterprise. They have not attempted, however, to examine its historical development, nor has their work yet had a major impact on economic theory. The firm remains essentially a unit of production, and the theory of the firm a theory of production."

"Mrs Penrose was a senior economist in the Merrill/ Johns Hopkins research into the growth of firms and her book was much looked forward to. She does indeed make wise observations, out of her research and her wide reading, about various things which happen, or may happen, in a growing business... A theory of the growth of firms surely should involve generalizations about their economic environment, or, in other words, just those questions about the (equilibrium) structures of industries which the author rules out of court at the start."

"In recent years economists and historians have increasingly turned their attention to modern economic institutions. Economists such as Edward S. Mason, A. D. H. Kaplan, John Kenneth Galbraith, Oliver E. Williamson, William J. Baumol, Robin L. Marris, Edith T. Penrose, Robert T. Averitt, and R. Joseph Monsen, following the pioneering work of Adolph A. Berle, Jr., and Gardiner C. Means, have studied the operations and actions of modern business enterprise. They have not attempted, however, to examine its historical development, nor has their work yet had a major impact on economic theory. The firm remains essentially a unit of production, and the theory of the firm a theory of production."

"The basic hypothesis is that, while the total supply of entrepreneurs varies among societies, the productive contribution of the society's entrepreneurial activities varies much more because of their allocation between productive activities such as innovation and largely unproductive activities such as rent seeking or organized crime. This allocation is heavily influenced by the relative payoffs society offers to such activities. This implies that policy can influence the allocation of entrepreneurship more effectively than it can influence its supply. Historical evidence from ancient Rome, early China, and the Middle Ages and Renaissance in Europe is used to investigate the hypotheses."