complex adaptive business

[David Breecker]

Thought this would interest some of you (especially the description of MS's Windows strategy):

Creating Strategy in an Unknowable Universe
http://hbswk.hbs.edu/item.jhtml?id=5387&t=finance
In his book The Origin of Wealth, Eric D. Beinhocker argues that a radical new view sees economics as a highly dynamic and evolving system with implications for companies and organizations everywhere. An excerpt.

And BTW, while I'm recommending reading, Richard Dawkins' new book, An Ancestor's Tale, has a great technical description of what I'll call computational phylogenetics.  I'm struggling through it, but someone out there will actually enjoy it ;-)
db

dba | David Breecker Associates, Inc.
www.BreeckerAssociates.com
Abiquiu:     505-685-4891
Santa Fe:    505-690-2335

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[Bill Eldridge]

David Breecker wrote:

> Thought this would interest some of you (especially the description of
> MS's Windows strategy):
>  
> *Creating Strategy in an Unknowable Universe
> *http://hbswk.hbs.edu/item.jhtml?id=5387&t=finance
> <http://hbswk.hbs.edu/item.jhtml?id=5387&t=finance>In his book /The
> Origin of Wealth/, *Eric D. Beinhocker* argues that a radical new view
> sees economics as a highly dynamic and evolving system with
> implications for companies and organizations everywhere. An excerpt.
>  

70 years too late? ;-)

 From my thesis:
Coase (1937, in Foss, et al. 2000) referenced the advantage of a firm
over the market in leveraging incomplete contracts and managerial
discretion to provide low-cost controlled experiments. Extending the
idea, "Suppose that the market, that is, a system of legally independent
agents and no central direction, was to organize controlled
experimentation with a complex production system. What would be the
costs of organizing this, that is, why would there be 'costs of
discovering what the relevant prices are' in this situation?" (Foss, et
al., 2000:133). This controlled experimentation has an interesting
similarity to offshoring opportunities -- low barrier to entry, low
switching costs, variable labor pools available, reasonable
infrastructure and resources. Depending on the level of commitment,
make-or-buy decisions may be required to enter the agreement, or
"attributes" may be overt or hidden outcomes of the contract or
experiment itself which gain definition over time using repetition and
feedback. The company offshoring might not even see itself as
experimenting -- it may be simply doing business, a practical art in
which we learn from doing.
....
Edith Penrose in The Theory of the Growth of the Firm (1959) created the
resource-based theory of the firm (Besanko, 2004). She focused on how
firms grow and sees the internal usage of resources as services leading
to productive opportunities (rather than resources in and of
themselves). Improved usage of internal resources frees up unused
capability, while the act of producing creates production-related
knowledge (Best & Garnsey, 1999). Her path dependency was not just that
situations were based upon past experience -- managers' assessment of
opportunities were restricted by their experience as well (Hilliard, 2004).
=============================

At the same time, the diverse portfolio approach had horrible results
when the diversification
was far removed from core competences (Porter's analysis for one). Of
course Microsoft
sits on hundreds of standards initiatives, waiting for the "right ones"
to take off. At a higher
strategic level, it becomes more difficult to hedge your bets because of
the resources involved
and path dependencies - it's hard to be Microsoft and Apple at the same
time, they're simply
different mindsets.

> And BTW, while I'm recommending reading, Richard Dawkins' new book, An
> Ancestor's Tale, has a great technical description of what I'll call
> computational phylogenetics.  I'm struggling through it, but someone
> out there will actually enjoy it ;-)
> db
>  
> dba | David Breecker Associates, Inc.
> www.BreeckerAssociates.com <http://www.BreeckerAssociates.com>
> Abiquiu:     505-685-4891
> Santa Fe:    505-690-2335
>  
>  
> ------------------------------------------------------------------------
>
> ============================================================
> FRIAM Applied Complexity Group listserv
> Meets Fridays 9a-11:30 at cafe at St. John's College
> lectures, archives, unsubscribe, maps at http://www.friam.org

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