It’s election time and the end of conference season, I suppose.
But isn’t it always the conference season? The AoM deadline is around the corner and it’s probably a good time to plan for the year ahead. A while back, Teppo posted about which are the best strategy conferences. This generated some nice discussion but this might be a good time to return to the question. However, rather than stating my opinion, in the spirit of the election season, let me put the question to you in the poll below. (you can see the results after you vote. Note that the order is randomized)
I’m reporting from another great ACAC conference. This conference featured retrospectives marking the 30 year anniversaries for Nelson and Winter’s book and Lippman and Rumelt’s article. Kudos to Bill and the organizing committee for putting it together.
A starting similarity in the two is that they were both directly intended to influence conversations in economics and both missed their marks. For example, about 1% of the cites for Lippman and Rumelt were in top Econ journals – despite the fact that the article appeared in the Bell Journal of Economics. Lippman & Rumelt recorded a video specifically for the occasion Read the rest of this entry »
One of my favorite conferences is the BYU-University of Utah Winter Strategy Conference. Nice and small. Great locations. Skiing. The conference is next week in Snowbird. Here’s the lineup.
Just a reminder to anyone interested (or out of the loop): the deadline to submit something for the October 5-7 Strategic Management Society conference is in two days (Feb 23). This year’s theme is “Strategy in Transition” (here’s the call for proposals). I like SMS’s approach of requesting paper “proposals” (essentially extended abstracts rather than full papers): easier on both the reviewers and authors.
My verdict on SMS? I like the conference. It is quite pricey (the conference fee is a hefty $1000+), but generally the sessions are good. And most of all, it’s fun to interact and meet up with strategy colleagues, co-authors and friends in a somewhat smaller setting (not quite the zoo that the Academy of Management can be — SMS is far more targeted).
And, as a bonus, the locations tend to be excellent. I attended the Rome SMS conference in 2010 and this year’s conference will be held in Prague. Maybe we’ll live blog from the conference this year.
Last week I had the great good fortune to attend the Max Planck Institute at Leipzig’s first conference on Rigorous Theories of Business Strategies in a World of Evolving Knowledge. The conference spanned and intense four days of presentations, exploration, and discussion on formal approaches to business strategy. Participants were terrific and covered the scholarly spectrum: philosophers, psychologists, game theorists, mathematicians, and physicists. Topics included cooperative game theory, unawareness games, psychological micro-foundations of decision making, and information theory. It was heartening to see growth in the community of formal theorists interested in strategy and my guess is that the event will spawn interesting new research projects and productive coauthoring partnerships. (Thanks to our hosts, Jurgen Jost and Timo Ehrig for organizing and sponsoring the conference!)
If one had to pick a single, overarching theme, it would have to be the exploration of formal approaches to modeling agents with bounded rationality. For example, I presented on subjective equilibrium in repeated games and its application to strategy. Others discussed heuristic-based decision making, unawareness, ambiguity, NK-complexity, memory capacity constraints, the interaction of language and cognition, and dynamic information transmission.
Over the course of the conference, it struck me just how offensive so many of my colleagues find the rationality assumptions so commonly used in economic theory. Of course, rational expectations models are the most demanding of their agents and, as such, seem to generate the greatest outrage. What I mean to convey is the sense that displeasure with these kinds of modeling choices go beyond dispassionate, objective criticism and into indignation and even anger. If you are a management scholar, you know what I mean.
Thus, at a conference such as this, we spend a lot of time reminding ourselves of all the research that points to all the limitations of human cognition. We detail how humans suffer from decision processes that are emotional, memory constrained, short-sighted, logically inconsistent, biased, bad at even rudimentary probability assessment, and so on. Then, we explore ways to build formal models in which our agents are endowed with “more realistic” cognitive abilities.
Perhaps contrary to your intuition, this is heady stuff from a modeler’s point-of-view: formalizing stylized facts about real cognition is seen as a worthy challenge … and discovering where the new assumptions lead is always amusing. From the perspective of many management scholars, such theories are more realistic, better able to explain observations of shockingly stupid decisions by business practitioners and, hence, superior to the silly, overly simplistic models that employ a false level rationality.
I am not mocking the sentiment. In fact, I agree with it. Indeed, none of the economists I know dispute the fact that human cognition is quite limited or that perfect rationality is an extreme and unrealistic assumption. (This isn’t to say there aren’t those who believe otherwise but, if there are, they are not acquaintances of mine.) On the contrary, careers have been made in game theory by finding clever ways to model some observed form of irrationality and using it to explain some observed form of decision failure. If this is the research agenda then, surely, we have hardly scratched the surface.
Yet, as I thought about it during the MPI conference last week, it dawned on me that our great preoccupation with irrational agents is misdirected. That animals as cognitively limited as us often, if not typically, fail to achieve rational consistency in our endeavors is no puzzle. What else would you expect? Rather, the deep mystery is how agents so limited in rational thought invent democracy, create the internet, land on the moon, and run purposeful organizations that succeed in a free market. Casual empiricism suggests that the pattern of objective-oriented progress in the history of mankind is too pervasive to ascribe to dumb luck. Even at the individual level, in spite of their many cognitive failings, the majority of people lead purposeful, productive lives.
This leads me to remind readers that economists invented the rational expectations model precisely because it was the only option that came anywhere close to explaining observed patterns in economy-level reactions to changes in government policies. This, even though the perfect rationality assumption is axiomatically false. There you have it.
Which leaves open the challenge of identifying which features of human cognition lead to persistent patterns of success in highly unstable environments. I conjecture that our refined pattern recognition abilities play a role in this apparent miracle. Other candidates include our determination to see causality everywhere we look as well as our incredible mental flexibility. Social factors and institutions must be involved — and, somewhere in there, a modicum of rationality and logic. After all, we did invent math.
At the recent Strategic Management Society meetings in Miami, I attended a session devoted to creating an SMS strategy certificate. (Apparently this is an ongoing initiative that started a year ago or so, although I hadn’t been paying attention.) The idea is to offer a written exam that consultants can take (for a fee) in order to become SMS-certified strategists. (I would put in links to the SMS website for all this–they even have a forum where members can view the tentative list of exam topics and leave comments–but the hamsters that power the site appear either to be on strike or allergic to Chrome.)
My first reaction to this proposed exam was to be reminded of the old story about the grocer who observes a shopper sniffing the meat for freshness and responds, “Lady, could you pass that test?” They had a laundry list of topics forming a kind of core and then planned “electives” in different specialized areas of strategy. Many of the topics are things I’ve heard of but don’t know much about. Others are things that I know about but believe to be vacuous or fatally flawed. It looked like a flat-file version of one of those giant multicolored management textbooks used by undergraduate business majors, which have always depressed me with their pretension and lack of coherence. I’m not sure if I espied Miles and Snow’s categories among the topics flashing by on the Powerpoint, but they did have SWOT analysis, generic strategies, the BCG matrix, vision/mission statements, and a variety of other forms of management Laetrile. Can you imagine being certified in SWOT? In vision statements? It’s almost as embarrassing as Louisiana’s tests for licensing flower arrangers that were mostly repealed under pressure from the Institute for Justice.
Perhaps to maintain buy-in from the heavily academic constituency of SMS, the program is being sold as having no effect on academic curricula or research. The influence is supposed to go entirely from academia to consulting and practice, with no one’s course being pressured to meet the certification content.
It was a peculiar meeting in the Neptune room of the Loews. A working group had been beavering away on a proposed curriculum for a year and was ostensibly soliciting our feedback, but 1) didn’t want to engage in the specifics of what they had come up with and 2) didn’t really want to address the basic question of whether the whole enterprise makes sense. Those in charge took notes on what the people in the room said but it felt like one of those government “request for public comment” setups, where the fix is in and no meaningful reconsideration of the project is possible. One person told me afterward that he had never been in a meeting with such an undercurrent of fear and suppressed tension. There was indeed a whiff of preference falsification in the air.
I was as diplomatic as possible, but expressed some of my concerns. Afterwards, a few people commented to me that they thought that this was a terrible idea but had expected/hoped that its intrinsic hideousness would have killed it off by now. I see no signs of such a spontaneous abortion. Rather, the meetings keep going on and the “process” keeps rolling forward, despite the instantaneously queasy feeling it causes in everyone with whom I discuss it.
Why would the SMS want to do this?
There are dozens of academic strategy conferences these days. Mike’s post about the HBS Strategy conference made me think about other excellent strategy conferences. Here are some thoughts on a few of my favorites:
- BYU-Utah Winter Strategy conference. I’m biased – but this conference is really fantastic. It is in its 13th year, I think. The conference is usually limited to around 30 scholars – nice and small. Presenters get plenty of time to present (not your usual 10-15 min slots) and the discussants do a brilliant job (Joel Baum has delivered some classic discussant comments at this conference over the years). The panels are usually on the latest and greatest in strategy, involving top scholars (I believe all my co-bloggers have been to this conference at some point or another). I like the informality of the conference – lots of down-time and opportunities to informally interact with others (on the ski slopes etc). Next year’s conference will be at Snowbird.
- Academy of Management. Academy is a bit of a zoo – lots of people, cramped, short presentation slots, etc. But – it still is a fantastic venue for interesting panels, professional development workshops, debates etc – and a chance to meet up with friends and co-authors.
- Organization Science Winter Conference. I haven’t been to OSWC for a while – but it is a great conference. The location (usually Steamboat Springs) can be a bit tough to get to – but the resort and environment is fantastic for productive interactions.
- Strategic Management Society. Going on this week in Miami. The conference alternates between a location in the US and an international location (usually Europe). The conference is a bit pricey. But, good stuff nonetheless.
- Atlanta Competitive Advantage Conference (ACAC). Haven’t been yet but have heard great things.