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Book Reviews
2001
REFERENCES
Andrews, K. 1980. The concept of corporate strategy. Homewood, IL: Irwin.
competitive
Porter, M. E. 1980. Competitive strategy: Techniques for analyzing industries and competitors. New York: Free Press.
Porter, M. E. 1996. What is strategy?
Review 74(6): 61-78.
Harvard Business
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Academy of Management
Review
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2001
Book Reviews
tices may also have had an impact on the workto contribute discretionary
ers' willingness
effort.
Opportunity to participate implies that the organization trusts and values the input of the
employee and that the worker is seen as a resource rather than a commodity. To the worker,
being valued and trusted are important and satisfying benefits granted by the employer. Further, many of the incentives included in this
analysis (e.g., employment security, promotion
opportunities, assistance with work-family issues, and increased wages) are very strong indicators (whether intentional or not) of the organization's concern for and commitment to the
welfare of the employee. Employers, through
provision of these scarce incentives (in today's
work world), may actually be seen by employees
as benefactors. Blau's (1963) concept of social
obligation shows that it is quite plausible (perhaps made more likely because of diminishing
existence of the traditional psychological contract) that human resource practices perceived
by employees to be of high value will elicit from
those employees the desire to enjoy the continued benefit of such practices. Such continued
benefit is dependent upon their continued employment with the employer, and continued employment is dependent on the contribution that
employees make to the organization. Therefore,
it is in the employees' best interests to perform
and contribute in such a manner as to ensure
the continuation of these benefits-in
short, to
contribute greater or discretionary effort.
Further, social reciprocity norms have been
posited to facilitate the attainment of commitment and behavior consistent with that commitment (Howard, 1995). Reciprocity has been suggested to be a ubiquitous and powerful social
convention (Webley & Lea, 1993), as well as an
antecedent of positive organizational behaviors
(Brief & Motowidlo, 1986). Intuitively, it seems
clear that social obligation will be engendered
through the perception of the organization as a
benefactor to whom some degree of allegiance
and loyalty, in the form of performance and contribution, is owed. The greater the perceived
commitment of the "benefactor" organization to
the employee, the stronger the influence of reciprocity norms is on employees to provide discretionary effort. So, in addition to the opportunity to contribute greater effort, employees may
be psychologically compelled by factors inher-
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REFERENCES
Bailey, T. 1993. Organizational innovation in the apparel
industry. Industrial Relations, 32: 30-48.
Blau, P. M. 1963. Critical remarks on Weber's theory of authority. American Political Science Review, 57: 305-316.
Brief, A. P., & Motowidlo, S. J. 1986. Prosocial organizational
behaviors. Academy of Management Review, 11: 710725.
Griffin, R. W. 1991. Effects of work redesign on employee
perceptions, attitudes, and behavior: A long-term investigation. Academy of Management Journal, 34: 425-435.
Howard, D. J. 1995. "Chaining" the use of influence strategies
for producing compliance behavior. Journal of Social
Behavior and Personality, 10: 169-185.
Webley, P., & Lea, S. E. 1993. The partial unacceptability of
money in repayment for neighborly help. Human Relations, 46: 65-76.
July
model is, for the most part, descriptive and involves the integration of a number of theoriesmainly network theory, the resource-based theory
of the firm, and transaction cost economics-to
buttress the structure. The framework is illustrated with a host of well-developed cases studies
spanning a number of different industries.
Just as Porter attempted to "managerialize"
industrial organization, one can say that Rugman and D'Cruz are doing a bit of the same with
the loose collection of theories that attempt to
explain the complex structures we see operating
around multinational enterprises (MNE). In this
sense I would not view the flagship firm model
as an alternative to Porter but, rather, another
useful toolkit for trying to understand, in a consistent manner, how specific industries and subgroupings within industries are structured. As is
rightly pointed out in the book, Porter's theory
loses validity when one tries to stretch it to accommodate the microlevel strategic concerns of
firms. But Rugman and D'Cruz's approach also
suffers when used to address issues that do not
fit conveniently into the structure. This is not a
criticism of their thesis as incorrect; rather, the
book does not complete the theoretical circle.
Hence, we should view its publication as a midpoint in the development of the theory. Perhaps
it will spark additional work to fill in the gaps
and push the authors' ideas further.
We can see where there are gaps in the flagship firm approach by analyzing how the development of Microsoft would be dealt with. According to the theory, the f flagship firm is in a
strategic leadership position, maintaining responsibility for the development and operation
of the network. We could, quite easily, see how
such an approach might fit with our understanding of the operations of Microsoft. However, if we
go back to the 1980s, the flagship firm would
have been IBM, with Microsoft as one of the "key
suppliers"-whereas
today IBM would be one of
the "key customers." At some point in the 1980s,
this market changed, and the power positionthe center of gravity, so to speak-flipped
to
Microsoft's favor. This is a critical issue for the
theory. Like many approaches, it serves as an
excellent description of a static position but
strains to accommodate complex dynamic evolution. Certainly, a story could be told that somehow
makes the Microsoft story fit the theory, but Rugman and D'Cruz's framework has yet to be ex-