The Modern Firm: Organizational Design for Performance and Growth

by John Roberts

Book Overview

Business firms around the world are experimenting with new organizational designs, changing their formal architectures, their routines and processes, and their corporate cultures as they seek to improve their current performance and their growth prospects. In the process, they are changing the scope of their business operations, redrawing their organization charts, redefining the allocation of decision-making authority and responsibility, revamping...

• Format: Hardcover
• Language: English
• ISBN: 0198293763
• ISBN13: 9780198293767
• Release Date: June 2004
• Publisher: Oxford University Press, USA
• Length: 336 Pages
• Weight: 1.20 lbs.
• Dimensions: 0.9" x 5.8" x 8.8"

Customer Reviews

A succint summary of today's management dilemas

The modern firm debates around the theme of organisation of companies. Though not a long book it is rigorous and densely written taking more time to read than just flipping through the pages. The book has a simple structure in 7 chapters. The first two chapters are a mere introduction to the book and to some general concepts. 3 and 4 are devoted to the core theory, and the last 3 are the practical examples. The two main topics of the book are: the nature and purpose of the firm and the motivation of the firm. The first, discusses from a variety of perspectives what is traditionally known as "make-or-buy", should the company be more or less integreated; relating to the agency problem and the Coase-theorem. Prof. Roberts does not give any solution but a framework to decide depending on each ones case. Since some activities cannot be externalised in a simple manner, the second tackles the issue of motivation, exposing the main factors to be accounted into motivating employees and linking those to the design of a firm structure. 5 and 6 are the practical part of the book where the author divides companies in two camps: those organised for performance and those organised for growth. Whilst there are not that many examples nor statistical relevant data, the author makes a strong point that both goals cannot be achieved with the same structure since control mechanisms, goal-setting, etc. might be completely different in each onset. The last chapter reminds the role of management in the decision on structure and its reponsibility. The book manages in its last chapters to make a good balance between readibility and structure analysis to bring its points home. Readers prefering a more scholastic view on the subjects of chapters 3 and 4 might prefer a book like "Economics of Strategy" from Dranove et al.

Stunning Perspective

This book nicely mixes perspectives from economics, organization theory, and strategic management. The writing style is lucid and accessible, unlike many books by academics. It is clear that Dean Roberts has been thinking about these issues for many years. Even though he was trained as a classical economist, he seems to have shed some of the baggage that the neoclassical paradigm imposes. That is important to the relevance of his ideas in this age of the resource-based view of the firm (see the collected readings edited by Nicolai J. Foss), the importance of entrepreneurship and innovation (Schumpeterian/Austrian economics), and evolutionary economics (An Evolutionary Theory of Economic Change by Richard Nelson and Sid Winter, 1982). In contrast to the traditional notion that firms within an industry are homogeneous and compete only on price, a stream of empirical research going back to 1991 (Richard P. Rumelt in Strategic Management Journal) has found that rates of return vary more within industries than across them. That makes the case for heterogeneity, not homogeneity. It also speaks to the importance of differentiation among firms. Most important, it opens up the discussion to such vital topics as a firm's unique capabilities, its routines, its culture, and its architecture, all of which Dean Roberts addresses in this remarkable book. His perspective is not the final one, of course. What we know about that miraculous black box called the firm continues to evolve. But Dean Roberts has made a stunning contribution to what we know. In our own work valuing private equity, we use key precepts of this book every day. I recommend The Modern Firm without hesitation or qualification.

Rich Compendium of Contemporary Management Theory

This work sums up most of the salient advances in management theory and microeconomics of the last decade. Before you read it, you should have some understanding of game theory and strategic management, otherwise you may miss the significance of the arguments put forward. For the prepared reader this book is a compendium of thinking on creative management at the cutting edge of this discipline. I have the habit of marking my books in two ways. First; I highlight passages to make important concepts easier to find again. Second; I mark my books with tags so that the most important of these can be accessed rapidly without having to page through the volume. The exercise of thinking about the choices I shall make for highlighting and tagging is a way of helping to consolidate the material in my memory; and - ironically - this exercise at times makes the highlighting and tagging redundant. Now, what am I to do when the book is so rich in material, when it is comprised of such fertile intellectual soil, when so pregnant with insights and meaning, that almost every paragraph needs to be highlighted, and every second page tagged? Of course, I lower the threshold for highlighting and tagging. And, to ensure that much rich material is not forgotten for its quantity, or buried for its density, I read this book a second time. Only one negative note: Roberts is given to outlandish Americanisms. Anyone sensitive to good English usage will find it difficult to prevent the occasional grammatical shocks from spoiling their reading pleasure. For example; "Absent efficient Coasian bargaining or complete contracting, coordinating across business to handle the externalities will require cooperation in the sense used in Chapter 3..." What he means is: "In the absence of efficient Coasian bargaining..." 'Absent' is not a prepositional phrase. It is an adjective. What a pity it is that the copy editors of the Oxford University Press didn't repair these mistakes. They give rise, however, to aesthetic problems for the most part. Once the reader becomes aware of Robert's idiosyncratic linguistic lapses, his meaning becomes clear. For its content, the book is strongly recommended.

A business book of the year according to The Economist

To put it simply - a good mix of what every firm needs to do and how firms can do 'stuff' that makes them unique.