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‡ Competitive achievement and success

² Activity and work
² Efficiency and practicality
² Science and rationality
‡ Individual personality and value of self
² Freedom
² Equality
² Democracy
‡ Progress
² Material comfort
‡ Humanitarianism
² Moral orientation
‡ Nationalism and Patriotism
² Racism and group superiority

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‡ High value of work

‡ High value of education
‡ High status of business persons
‡ Importance of collectivity
‡ Emphasis on cooperation and harmony
‡ Emphasis on family
‡ De-emphasis on individual
‡ Accommodation to existing realities
‡ Patience
‡ Respect for authority
‡ Long time frame for success
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‡ Short time frame O Long time frame

‡ Competition O Cooperation
O Zaibatsu
O Keiretsu

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² Success of organization oriented system

English Electric - bought the skills that were readily available

Hitachi - bought the capacity to acquire skills

‡ Historically - American - Organization oriented capacity to acquire

skills confined to managerial structure not extended
to shop floor
‡ Organization Oriented
² Labor from a marketed commodity to a corporate asset:
‡ Collective and cumulative learning
² Organizational control as opposed to market control - owe its revenues
Financial commitment

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‡ Late nineteenth and early twentieth Century

² Managerial revolution
i. Creation of teams of salaried personnel to plan and coordinate
production and distribute
ii. Separation of legal ownership of corporate assets from control over
the allocation of corporate resource and revenues

² Technological Advances
‡ Metal working
‡ Chemistry
‡ Electronics
² Economies of scale and scope
² Investment in R&D facilities
² Marketing capabilities

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‡ First Industrial Revolution
² Machine based - shop floor experience important
‡ Second industrial revolution
² systematic formal education a virtual necessity
‡ Separation of ownership from control
² fragmentation of ownership among hundreds/thousands of shareholders
‡ Eliminate craft control
² Taking skills off the shop floor and vesting all skill formation in
managerial personnel
² Separated future manager from future workers
² Mass production - by high wages
‡ Great depression - 1930
² Massive layoff of shop floor works
‡ Post war
² Cooperation of government and industry

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‡ 1960s Foreign Competition

² Weaken financial commitment individual investors to institutional
investors gave way to market control
‡ 1960 -Wall street - trading in securities integration of
stock and bond markets
‡ 1970- Financial liquidity than financial commitment
‡ Stock options to Top management - stock based incentives
weakened their incentive to choose innovative investment
strategies
² boosting short term profits
² reduced the retained earnings
‡ Integration of ownership and control
² top managers - separate from rest of organisation structure
‡ 1990 average US $ 3.1 million
salary Germany $ 0.8 million
Japan $ 0.5 million
‡ 1990s compete byc
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‡ 1990s
² American - financially driven basis - resemblance to the British
² Managerial capitalism
‡ Craft control
² skilled workers
² specialized division of labour
‡ Automobile industry
² almost complete neglect of R&D
² control of family ownership
‡ Financiers based in the city of London
‡ New Aristocracy
² wealth was based on financial activities
² social connections and acquired reputation

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‡ Valued study of science - no interest in application to

industry
‡ Anti industry bias of British elite educational system
‡ Head offices in London far away from industrial production
‡ Aristocracy that was anti-technology
‡ Integration of ownership and control
‡ Organizational barrier
² strategic decision makers and technology specialists (provincial
universities)
‡ Relied more on market coordination than management
coordination

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‡ 1920s - Recession
‡ Compelled debt-ridden firms to combine through amalgamation into
larger enterprises under centralized management control
‡ Shared ownership divorced from management control
‡ Public shareholders -exercise market control
Reap the returns of past rather than reinvest for the future

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‡ 1980 - international competition and capital movements

‡ advanced the power of market control and eroded financial
commitment
‡ stock exchange dominated culture
‡ Extract value rather than create value
‡ Centrality of organizational learning to sustained economic
development
‡ Organistion-oriented measures of performance modern accounting
systems do not provide

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‡ Regard investment in people as well the returns - as current

expenses that adversely affect current profits
‡ Era - prefer downsizing to investing
‡ Market oriented A/C systems measure
² economic failures as eco success
² eco success as eco failure
‡ Theory of market economy
² Neo-classical economics

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