Thursday, March 23, 2017

Prof. Martin Shubik - Biography and Contribution

Martin Shubik is a mathematical economist at Yale and a pioneer of game theory and the "Edgeworthian revival" in general equilibrium theory.

His birthday is 24 March 1926.

Shubik was born in New York City in 1926. But, he received his early education in England. Then he moved to Canada where he graduated with a B.A. in mathematics and  an M.A. in political economy from the University of Toronto in 1947. Shubik joined  Princeton University in 1949, and received a Ph.D. in economics in 1953 under the supervision of Oskar Morgenstern, one of the founding fathers of game theory. The class notes Shubik took of Morgenstern’s lectures and in the correspondence with him throughout the years shows the influence of Morgenstern on him. Shubik made  life-long contributions to game theory and its application to economic problems.

Major Works of Martin J. Shubik

"A Business Cycle Model with Organized Labor Considered", 1952, Econometrica.

"A Comparison of Treatments of a Duopoly Problem", 1955, Econometrica.
"Market Form: Intent of the firm and market behavior", 1957, ZfN.
"Edgeworth Market Games", 1959, in Luce and Tucker, editors, Contributions to the Theory of Games IV.
Strategy and Market Structure, 1959.

"Objective Functions and Models of Corporate Optimization", 1961, QJE.
"Approaches to the Study of Decision Making Relevant to the Firm", 1961, J of Business [cwls]
"Some Experimental Non-Zero Sum Games with Lack of Information About the Rules", 1962, Management Science [cwls]
"Incentives, Decentralized Control, the Assignment of Joint Costs and Internal Pricing", 1962, Management Science. [cwls]
"Game Theory and the Study of Social Behavior", 1964, in Shubik, editor, Game Theory and Relate Approaches.
"Quasi-Cores in a Monetary Economy with Non-Convex Preferences", with L.S.Shapley, 1966, Econometrica. [cwls]
"Concepts and Theories of Pure Competition", with L.S. Shapley, 1967, in Shubik, editor, Essays in Mathematical Economics.

"Ownership and the Production Function", with L.S. Shapley,  1967, QJE. [cwls]
"Simulation of  Socio-Economic Systems", 1967, General Systems [cwls]
"Toward a Study of Bidding Processes Part IV: Games with Unknown Costs", with J.H. Griesmer and R.E. Levitan,  1967, Naval Research Logistics Quarterly [cwls]
"Game Theory: Economic Applications", 1968, IESS [cwls]
"Extended Edgeworth Bargaining games and Competitive Equilibrium", 1968, Metroeconomica.[cwls]
"A Further Comparison of Some models of Duopoly", 1968, Western EJ. [cwls]
"Welfare, Static and Dynamic Solution Concepts", 1968, Décision: Agrégation et Dynamique des Ordres de Préférence [cwls]
"Pure Competition, Coalitional Power and Fair Division", with L.S.Shapley,1969, IER. [cwls]
"On Market Games",with L.S.Shapley, 1969, JET. [cwls]
"On the Core of an Economic System with Externalities" with L.S.Shapley, 1969, AER.
"Price Strategy Oligopoly with Product Variation" with L.S.Shapley, 1969, Kyklos. [cwls]
"Voting, or a Price System in a Competitive Market Structure", 1970, APSR [cwls]
"Game Theory, Behavior and the Paradox of the Prisoner's Dilemma: Three solutions", 1970, Journal of Conflict Resolution.
"The Bridge Game Economy: An example of invisibilities", 1971, JPE. [cwls]
"Pecuniary Externalities: A game theoretic analysis", 1971, AER. [cwls]
"The Dollar Auction Game: A paradox in non-cooperative behavior and escalation", 1971, J of Conflict Resolution
"Games of Status", 1971, Behavioral Science [cwls]
"Price Variation Duopoly with Differentiated Products and Random Demand" with R. Levitan, 1971, JET [cwls]
"Noncooperative Equilibria and Strategy Spaces in an Oligopolistic Market" with R. Levitan, 1971,  in Kuhn and Szego, editors, Mathematical  Models of Action and Reaction [cwls]
"An Experiment with Ten Duopoly Games and Beat-the-Average Behavior", with Martin Riese, 1971 [pdf]
"On the Scope of Gaming", 1972, Management Science [cwls]
"Price Duopoly and Capacity Constraints", with R. Levitan, 1972, IER [cwls]
"The Assignment Game, I: The core" with L.S.Shapley, 1972, Int Journal of Game Theory. [pdf]
"Fiat Money and Noncooperative Equilibrium in a Closed Economy", 1972, Int Journal of Game Theory.
"Commodity Money, Credit and Bankruptcy in a General Equilibrium Model", 1972, Western EJ.
Models, Simulations and Games: a survey, with G.D. Brewer, 1972
"Fiat Money in an Economy with One Nondurable Good and No Credit (A Noncooperative Sequential Game)." with W. Whitt, 1973,  in A. Blaquiere, editor, Topics in Differential Games [cwls]
"Commodity Money, Oligopoly, Credit and Bankruptcy in a General Equilibrium Model", 1973, Western EJ. [cwls]
"Information, Duopoly and Competitive Markets: A sensitivity analysis", 1973, Kyklos. [cwls]
"The Core of a Market Game with Exogenous Risk and Insurance", 1973, New Zealand Economic Papers [cwls]
"The General Equilibrium Model: Barter and Trust, or Mass Markets with Money and Credit", 1974, Econ Record [cwls]
"Money, Trust and Equilibrium Points in Games in Extensive Form", 1975, ZfN [cwls]
"Oligopoly Theory, Communication, and Information", 1975, AER
"Competitive Equilibrium, the Core, Preferences for Risk and Insurance Markets", 1975, Econ Record
"The General Equilibrium Model is Incomplete and Not Adequate for the Reconciliation of Micro and Macro-economic Theory", 1975, Kyklos
Games for Society, Business and War, 1975.
The Uses and Methods of Gaming, 1975.
"A Non-Cooperative Model of a Closed Economy with Many Traders and Two-Bankers", 1976, ZfN.
"Competitive Outcomes in the Cores of Market Games" with L.S. Shapley, 1976, IJGT
"Trade Using One Commodity as a Means of Payment" with L.S. Shapley, 1977, JPE.
"Competitive and Controlled Price Economies: the Arrow-Debreu model revisited", 1977, in Schwodiauer, editor, Equilibrium and Disequilibrium in Economics.
"An Example of a Trading Economy with Three Competitive Equilibria", 1977, with L.S. Shapley, JPE
"Competitive Equilibrium Contingent Commodities and Information", 1977, J of Finance
"The Optimal Bankruptcy Rule in a Trading Economy using Fiat Money", with C. Wilson, 1977, ZfN.

"A Theory of Money and Financial Institutions", 1978, Economie Appliquee.
"Trade and Prices in a Closed Economy with Exogenous Uncertainty, Different Levels of Information, Money and Compound Futures Markets", with P. Dubey, 1977, Econometrica
"A Closed Economic System with Production and Exchange Modelled as a Game of Strategy"  with P. Dubey, 1977, JMathE
"A Closed Economy with Exogenous Uncertainty, Different Levels of Information, Money, Futures and Spot Markets" with P. Dubey, 1977, IJGT
"The Nucleolus as a Noncooperative Game Solution", with H.P. Young, 1978, in Ordeshook, editor, Game Theory and Political Science.
"Duopoly with Price and Quantity as Strategic Variables", with R. Levitan, 1977, IJGT
"A Theory of Money and Financial Institutions: The Noncooperative Equilibria of a Closed Trading Economy with Market Supply and Bidding Strategies." with P. Dubey, 1978, IJGT
"Bankruptcy and Optimality in a Closed Trading Mass Economy Modelled as a Non-Cooperative Game", with P. Dubey,1978, JMathE
The War Game, with G. Brewer, 1979.

The Aggressive Conservative Investor, 1979
"The Capital Stock Modified Competitive Equilibrium", 1980, in Kareken and Wallace, Models of Monetary Economies.
Market Structure and Behavior, with R.E. Levitan, 1980.
"Efficiency Properties of Strategic Market Games: An Axiomatic Approach"  with P. Dubey and A. Mas- Colell, 1980, JET [cwls]
"Efficiency of Cournot-Nash Equilibria in Strategic Market Games" with P. Dubey and A. Mas- Colell, 1980.
"A Strategic Market Game with Price and Quantity Strategies" with P. Dubey, 1980, ZfN

The Aggressive Conservative Investor, with M.J. Whitman, 1980.
Market Structure and Behavior, with R.E. Levitan, 1980.
Game Theory in the Social Sciences: Concepts and solutions, 1981.
Game Theory Models and Methods in Political Economy", 1981, in Arrow and Intriligator, editors, Handbook of Mathematical Econ, Vol. I - intro
"Competitive Valuation of Cooperative Games", with R.J. Weber, 1981, Mathematics of Operations Research.
"Information Conditions, Communication and General Equilibrium", with P. Dubey, 1981, Mathematics of Operations Research
"Perfect or Robust Noncooperative Equilibrium: A Search for the Philosophers Stone?", 1981, in  Essays in Game Theory and Mathematical Economics
"Society, Land, Love or Money", 1981, JEBO
"The Strategic Audit: A Game Theoretic Approach to Corporate Competitive Strategy", 1983,  Management and Decision Economics
"Approximate Cores of Replica Games and Economies, Part I & II" with M. Wooders, 1983,  Mathematical Social Sciences
"Perfect Competition in Strategic Market Games with Interlinked Preferences" with P. Dubey, 1985, Econ Letters
"A Note on Enough Money in a Strategic Market Game with Complete or Fewer Markets", 1985, Econ Letters
"The Cooperative Form, the Value, and the Allocation of Joint Costs and Benefits", 1985, in Young, editor, Cost Allocation
"A Strategic Market Game with Transactions Costs" with J. Rogawski, 1986, Math Soc Sciences
"The Many Approaches to the Study of Monopolistic Competition", 1986, European ER
"A Note on the 'Corelessness' or Antibalance of a Game" with S. Weber, 1986, IJGT
"Strategic Market Game: A Dynamic Programming Application to Money, Banking and Insurance", 1986, Math Soc Sciences
"Near-Markets and Market Games" with M. Wooders, 1986, ESQ [pdf]
"The Revelation of Information in Strategic Market Games", with P. Dubey and J. Geanakoplos, 1987, JMathE
"What Is an Application and When Is Theory a Waste of Time?", 1987, Management Science
"The Unique Minimal Cash Flow Competitive Equilibrium", 1987, Econ Letters
"Revenge and Rational Play" with B. Nalebuff, 1988
"Gaming: Theory and Practice, Past and Future", 1989, Simulation and Games
"Gold, Liquidity and Secured Loans in a Multistage Economy, Part I: Gold as Money" with S. Yao, 1989, J of Economics
"Gold, Liquidity and Secured Loans in a Multistage Economy, Part II: Many Durables, Land and Gold" with S. Yao, 1990, J of Economics
"A Strategic Market Game with Complete Markets", with S. Sahi, R. Amir and S. Yao, 1990, JET
"The Transactions Cost of Money (A Strategic Market Game Analysis)" with S. Yao, 1990, Math Soc Sciences
"The Transactions Trust Demand for Money", 1990, J of Economics
"The Capital Asset Pricing Model as a General Equilibrium with Incomplete Markets" with J. Geanakoplos, 1990, Geneva Papers on Risk & Insurance
"A Game Theoretic Approach to the Theory of Money and Financial Institutions." 1990, in Friedman and Hahn, editors, Handbook of Monetary Economics
"A Strategic Market Game of a Finite Exchange Economy with a Mutual Bank", with J. Zhao, 1991, Math Soc Sciences
"A Strategic Market Game with a Mutual Bank with Fractional Reserves and Redemption in Gold (A
Continuum of Traders)", with D. Tsomocos, 1992, J of Economics
"On Matching Book: A Problem in Banking and Corporate Finance" with M.J. Sobel, 1992, Management Science
The Theory of Money and Financial Institutions, 1993.
"Repeated Trade and the Velocity of Money", with P. Dubey and S. Sahi, 1993, JMathE
"Prominence, Symmetry, or Other?", 1994, Games & Econ Behav.
"Some Dynamics of a Strategic Market Game with a Large Number of Agents" with J.M. Miller, 1994, J of Economics
"Construction of Stationary Markov Equilibria in a Strategic Market Game" with I. Karatzas and W.D. Sudderth, 1994, Math of Operations Research
"Why Equilibrium? A Note on the Noncooperative Equilibria of Some Matrix Games", 1996, JEBO
"Trade with Assignats or Landbank Money: Equilibria in a Finite-Person Strategic Market Game", with  A.K. Jayawardene, 1997, JMathE
"A Theorem on the Number of Nash Equilibria in a Bimatrix Game" with T. Quint, 1997, IJGT
"Some Simple Games for Teaching and Research. Part 1: Cooperative Games" [cwls]
"Game Theory, Complexity, and Simplicity. Part III: Critique and Prospective", 1998, Complexity [cwls]
"Terrorism, Technology and Socio-economics of Death", 1998 [pdf]
"Clubs, Near Markets and Market Games," with M.Wooders, 2000, Fields Institute Communications.
"The Theory of Money", 2000 [cwls]
"Default in a General Equilibrium Model with Incomplete Markets" with P. Dubey and J. Geanakoplos [cwls]
"Fiat Money and the Efficient Financing of the Float, Production and Consumption. Part I: The Float" [cwls]
"War Gaming in the Information Age: theory and purpose" with Paul Bracken, 2001, Naval War College Review [pdf]

"Accounting and Economic Theory", 2002 [ssrn]
"Is economics the next physical science?" with J.D. Farmer and E. Smith, 2005, Physics Today
"Everyone-a-Banker or the Ideal Credit Acceptance Game: Theory and Experimental Evidence" with J. Huber and S. Sunder,
"An Economy with Personal Currency: Theory and evidence" with M. Angerer, J. Huber and S. Sunder, 2008
"Proposal for a Federal Employment Reserve Authority", 2009 [levy]
"The Present and Future of Game Theory", 2011 [cowles]
"Simecs, Ithaca Hours, Berkshares, Bitcoins and Walmarts", 2014

The Guidance of an Enterprise Economy
By Martin Shubik, Eric Smith

Saturday, March 4, 2017

Creativity Techniques - Bibliography

GORDON, W. J. J. Synectics: the development of creative capacity. New York: Harper & Row, 1961.

RHODES, M. Analysis of creativity. Phi Delta Kappan, v. 42, n. 7, p. 305-310, 1961.

ARNOLD, J. E. Useful creativity techniques. In: PARNES, S. (Ed.). Sourcebook for creative thinking. New York: Charles Scribner’s Sons, 1962. p. 127-138.

OSBORN, A. F. Applied imagination. 3rd ed. New York: Scribner, 1963.

ROHRBACH, B. Creative by rules - method 635, a new technique for solving problems. Absatzwirtschaft, v. 12, p. 73-53, 1969.

ZWICKY, F. Discovery invention, research through the morphological approach. New York: Macmillan, 1969.

DE BONO, E. Lateral thinking: creativity step by step. New York: Harper & Row, 1970.


TORRANCE, E. P. Can we teach children to think creatively? The Journal of Creative Behavior, v. 6, p. 114-143, 1972.

TORRANCE, E. P. Creativity in the classroom. Washington: National Education Association, 1977.

MANSFIELD, R. S.; BUSSE, T. V.; KREPLKA, E. J. The effectiveness of creativity training. Review of Educational Research, v. 48, p. 517-536, 1978.

BARRON, F.; HARRINGTON, D. M. Creativity, intelligence, and personality. Annual Review of Psychology, v. 32, p. 439-476, 1981..

VANCE, M. Storyboarding. In: VANCE, M. Creativity. Illinois: Nightengale-Conant, 1982.

ALTSHULLER, G. S. Creativity as an exact science: the theory of the solution of inventive problems. New York: Gordon and Breach, 1984.

GARDNER, H. Creativity: a interdisciplinary perspective. Creativity Research Journal, v. 1, p. 8-26, 1988.

GEIS, G. T. Making companies creative. In: KUHN, R. L (Ed.).  Handbook for creative and innovative managers. New York: McGraw-Hill, 1988. p. 25-33.

GRUBER, H. E. The envolving systems approach to creative work. Creativity Research Journal, v. 1, p. 27-59, 1988.

STERNBERG, R. J.; LUBART, T. I. An investment theory of
creativity and its development. Human Development, v.
34, p. 1-31, 1991.

WOODMAN, R. W.; SAWYER, J. E.; GRIFFIN, R. W. Toward a theory of organizational creativity. Academy of Management Review, v. 18, p. 293-321, 1993.

CONEY, J.; SERNA, P. Creative thinking from an information processing perspective: a new approach to mednick’s theory of associative hierarchies. The Journal of Creative
Behavior, v. 29, p. 109-130, 1995.

COUGER, J. D. Creative problem solving and opportunity finding. Danvers: Mass., Boyd & Fraser Pub., 1995.

ROOZENBURG, N. F. M.; EEKELES, J. Product design: fundamentals and methods. Chichester: Wiley, 1995.

AMABILE, T. M. et al. Assessing the work environment for creativity. Academy of Management Journal, v. 39, p. 1154-1184, 1996.


ENGLE, D. E.; MAH, J. J.; SADRI, G. An empirical comparison of entrepreneurs and employees: Implications for innovation. Creativity Research Journal, v. 10, n. 1, p. 45-49, 1997. s15326934crj1001_5.

MUMFORD, M. D.; WHETZEL, D. L.; REITER-PALMON, R. Thinking creatively at work: organization influences on creative problem solving. The Journal of Creative Behavior, v. 31, n. 1, p. 7-17, 1997.


SMITH, G. F. Idea-generation techniques: a formulary of active ingredients. The Journal of Creative Behavior, v. 32, n. 2, p. 107-133, 1998.


PUCCIO, G. J.; MURDOCK, M. C.; MANCE, M. Current developments in creative problem solving for organizations: a focus on thinking skills and styles. Korean Journal of Thinking & Problem Solving, v. 15, p. 43-76, 2005.

AMABILE, T. M. Componential theory of creativity. Boston: Harvard Business School, 2012. Harvard Business School Working Paper, n. 12-096

Kleidson Daniel Medeiros Leopoldino, Mario Orestes Aguirre González, Paula de Oliveira Ferreira,
José Raeudo Pereira, Marcus Eduardo Costa Souto. "Creativity techniques: a systematic literature
review," Product: Management & Development, Vol. 14 nº 2 December 2016, pp.95-100 

Creativity - Research Evolution

Rhodes’s 4P model:
 The model embraces four interdependent variables, consisting of the person, process, product and press. His work served as a pioneering agent in creativity research and development in describing the creative process, the research supported several studies.

Gorden, synectics and the creative process

W.J.J. Gorden, a psychologist, assessed the behaviour of engineering scientists during the invention process, and came to the conclusion, derived from his assessment, that certain behavioural changes (“psychological state”) take place immediately before a discovery occurs. This observation led to the formulation of the synectics technique. The technique, as briefly described, catalyses certain “psychological states” that improve new-idea generation by means of utilising “metaphors” and “manipulation”. Extensive evidence exists of increased creative performance due to the application of the synectics technique.

More specifically, then, what managerial practices affect creativity? They fall into six general categories: challenge, freedom, resources, work-group features, supervisory encouragement, and organizational support. These categories have emerged from more than two decades of research focused primarily on one question: What are the links between work environment and creativity?
How to Kill Creativity
Teresa Amabile
Harvard Business Review, THE SEPTEMBER–OCTOBER 1998 ISSUE

McFadzean (2000:15) manages to conclude and summarise the traits of the creative person as follows:

• A desire to achieve a goal or winning attitude
• A high level of motivation, dedication and commitment
• A high level of self-confidence, not risk aversive and accepting of failure
• The ability to link different (unrelated) elements or entities
• The assimilation of negativities regarding failed projects or attempts
• An ability to shift existing paradigms and assess different perspectives
• Problem and opportunity conceptualisation in a different or new frame of mind
• A “single minded” vision or road map
• A working style that induces hard work and relaxation in order to enhance incubation
• The ability to determine whether individual or group creativity should take place.

Pretoria, South Africa November 2003

The Nature of Creativity: Contemporary Psychological Perspectives
Robert J. Sternberg
CUP Archive, 27-May-1988 - Medical - 454 pages

Teresa Amabile, Harvard Business Review, THE SEPTEMBER–OCTOBER 1998 ISSUE

Encyclopedia of Creativity, Volume 1
Mark A. Runco, Steven R. Pritzker
Academic Press, 1999 - Psychology - 1300 pages

Componential Theory of Creativity
Teresa M. Amabile
Harvard B School Working Paper 2012

Thursday, March 2, 2017

Theories of Leadership - Research Perspective

The content needs to be enriched from research perspective. Presently it is biased towards to practice perspective.

The article describes various leadership theories briefly.

In leadership theory, three studies are considered as seminal and important. In Iowa leadership studies, authoritarian, democratic and laissez-faire leadership concepts were proposed and investigated for their effect on aggressive and apathetic behavior on the part of followers. Laissez-faire approach resulted in more aggressive behavior, authoritarian style resulted in more apathetic behavior and democratic style was in between the two.

In Ohio leadership studies, a questionaire was used  on air force commanders and members of bomber crews as well as other leaders and the responses were subjected to factor analysis. Two factors emerged out of the analysis and were given the names of consideration and initiating structure.  They became more popular as task orientation and people orientation.

In Michigan studies, 12 pairs of high-producing and low-producing sections of an insurance company were studied. The conclusion was that high-producing sections were supervised in a general rather than close supervisory style and supervisors were people centered. In the case of low-producing section, the supervision was more close and task oriented.

The presently identified theories of leadership have their genesis in these studies in identifying the determinants of leadership and effective leadership.

Theories of leadership are provided in two categories: Traditional and modern. Traditional theories are: 1. Trait theory 2. Exchange theory 3. Contingency theory 4. Path goal theory.

Trait Theories of Leadership:

Trait theories identify traits or characteristics that help in leadership.

Leaders were more intelligent than the average of the group being led, but, interestingly, the leader is not the most intelligent of the group.

Emotion quotient (EQ) characteristics such as empathy, graciousness, optimism, and being able to read the nonverbal cues in social situation are associated with effective leaders. The leader should be able to assess himself as an able person (Self efficacy).

From trait theory, this approach moved towards skills theory.

From the trait theories, a list of skills categorized as technical, conceptual and human skills needed for effective management or leadership are specified. Yukl further identified that skills such as creativity, organizing ability, persuasiveness, diplomacy and tactfulness, knowledge of the task, and the ability to speak well contribute to leader success.

Competencies is another version of trait theory.

In the language of competencies, the following competencies were identified as having a relation to leadership effectiveness.

1. Drive, or the inner motivation to pursue goals (achievement motivation).

2. Leadership motivation - the use of socialized power to influence others to succeed.

3. Integrity, the idea includes truthfulness and the will to translate words into deeds.

4. Self-confidence exhibited through impression management

5. Leading others to feel confident.

6. Intelligence – ability to process information, analyze alternatives, and discover opportunities.

7. Knowledge of the business – ideas relevant to the business are initiated.

8. Emotional Intelligence: self-monitoring personality, ability to adapt to circumstances as needed.

Exchange and Group Theories of Leadership

According to this group of theories, a leader provides more benefits/rewards than burdens/costs for followers.

In a group, members make contributions at a cost to themselves and receive benefits at a cost to the group or other members. Interaction continues because members find the social exchange mutually rewarding.

(If every member of the group has to get more reward than his personal cost, the group must have synergy. The individual contributions result in bigger output due to the synergy)

In this group of theories, some analyzed the relationship between leader and the followers as one consisting of dyads, leader and each follower.  One idea that emerged from this thinking  is that leader behavior changes with subordinate behavior. When subordinates are not performing very well, leaders tend to emphasize the task and initiate structure to improve the performance. With subordinates who are doing a good job, consideration to people becomes the dominant behavior.

Some scholars in this group, emphasize the role of subordinates and this means subordinates have to be trained to be good followers so that group comes out successful. Followers have to support the leader and make leader look good.

Another aspect of leadership brought out by this line of theory is that subordinates who are committed and who expend a lot of effort for the unit are rewarded with more of the leader’s potential resources than those who do not display these behaviors. “Thus over a time the leader develops an “in-group” and an “out-group” of subordinates and these two groups are treated in different ways. The in-group reports fewer difficulties in their relationship with the leader and the out-group people have more complaints and grievances.

In this line of thought is also the idea, perceived similarity between the leader and the subordinate leads to higher quality leader-subordinate relationship.

In another dimension of this theory, it is stated that leaders try to change the self concept of the subordinate to improve the performance of the subordinate. At the same time subordinates also shape leader’s self concept or self schema through their responses.

Contingency Theory of Leadership

Fred Fiedler, presented a rigorous version of contingency theory wherein situation plays a part in leadership process.

Fiedler described the favorableness of a situation using three dimensions.

1. The leader-member relationship – cordial or opposing

2. The degree of task structure at hand – structured or unstructured

3. Leader’s position power – Formal authority of the leader

Fiedler found that when situation is very favorable or unfavorable, authoritarian leadership style delivered better results. When the situation is moderately favorable or unfavorable, human oriented or democratic leadership delivered better results. As in majority of the case, the situation will be in the middle ground, democratic leadership style is the more popular and appropriate style. 

Fiedler also came out with cognitive resource theory (CRT) of leadership. According to CRT

1. More intelligent leaders develop better plans, decisions, and action strategies than less intelligent leaders.

2. Intelligence contributes more strongly to group performance if the leader is directive and the group members are motivated and supportive of the leader.

3. Interpersonal stress distracts the leader from the task and the leader’s intelligence will contribute more highly if the leader has relatively stress-free relationship with superiors and subordinates.

Path-Goal Leadership Theory

According to this theory leaders have to understand the goals of the followers and prescribe a path that promises the fulfillment of goals to the followers.

The theory asserts that leader behavior will be acceptable to followers to the extent that the followers see such behavior as either an immediate source of satisfaction or as instrumental to future satisfaction.

Leadership behavior will be motivational and increase the effort of the followers to the extent that (1) it makes satisfaction of follower needs contingent on effective performance of the tasks planned by the leader and (2) it complements the environment of subordinates by providing the coaching, guidance, support, and rewards which are necessary for effective performance and which may otherwise be lacking in subordinates or in their environment.

Leaders can exhibit the following types of behavior as they feel appropriate to a situation. Same person can exhibit all the behaviors as appropriate.

1. Directive leadership: Leader decides the path and directs the followers.

2. Supportive leadership: Leaders friendly.

3. Participative leadership: Leader asks for and uses suggestions of followers.

4. Achievement oriented leadership: Leader sets challenging goals and shows confidence that followers will attain those challenging goals.

The activities of leader can be explained in the following steps.

1. Recognizing and arousing followers’ needs for outcomes over which the leader has some control.

2. Increasing the personal payoffs to followers for task accomplishment. This could mean providing payoffs which the follower desires.

3. Making the path to those payoffs (goals - *path-goal theory) easier to travel by coaching and direction.

4. Helping followers clarify their expectations.

5. Reducing frustrating barriers.

6. Increasing opportunities for personal satisfaction contingent on effective performance.

Path goal theory focuses on two aspects, goals of the subordinates and the path that is to be traveled for achieving those goals. Leader has to contribute to both of them or either of them at any point in time to be the leader.

Modern Theories

Charismatic Leadership Theories

Robert House suggested that charismatic leaders are characterized by self confidence and confidence in subordinates, high expectations for subordinates, ideological vision, and the use of personal examples. Followers identify with leader and his mission, exhibit extreme loyalty to and confidence in the leader, emulate leader’s values and behavior, and derive self esteem from their relationship with the leader. The leaders foster attitudinal, behavioral and emotional changes in their followers. Charismatic leaders produce performance in followers beyond expectations.

Transformational Leadership Theory

Transactional leadership involves an exchange relationship and can be interpreted as guiding followers to produce according to their values, beliefs.

Transformational leaders shift the values, beliefs and even needs of their followers. Transformation leaders help their organization and followers deliver an output that is far better or higher than than the historical trend based estimated output.

Transformational leaders have the following characteristics

1. They identify themselves as change agents.

2. They are courageous.

3. They believe in people.

4. They are value driven

5. They are life long learners.

6. They have the ability to deal with complexity, ambiguity and uncertainty.
7. They are visionaries (have grand plans).

Social Cognitive Approach to Leadership

The cognitive approach emphasizes understanding. A leader has to understand himself, his needs, and his behavior and also has to understand the environment that includes followers, their needs and behaviors. Leadership is coming out with plans and actions that are acceptable to followers and achieve the objectives of the group.

The steps in this approach can be described as:

1. The leader identifies the environmental variables that control his behavior.

2. The leader spares his time to work with the subordinate to discover the personalized set of environmental contingencies that regulate the subordinate’s behavior.

3. The leader and subordinate jointly attempt to discover ways in which they can manage their individual behavior to produce more mutually reinforcing and organizationally productive outcomes.
4. The leader enhances the efficacy of subordinates through setting up successful experiences (coaching), modeling, positive feedback, and persuasion, and psychological and physiological arousal. The increased efficacy leads to performance improvement. The success of the subordinates can in turn lead to leadership efficacy through the increased confidence in leader as well as appropriate subordinate behavior to reward his leader.

Conclusions that Emerge from Synthesis of Theories

Leadership theories are not mutually exclusive. Each theory to an extent supplements or complements other theories. Leaders are better individuals in various traits compared to average followers. Leaders have to provide value to followers. Their effectiveness does not depend only on their traits and performance. The behavior of followers is also an important variable in determining the outcome of the organization. Hence group responsibility needs to be stressed to attain the outcomes or objectives of the group rather the role of leader alone. Leaders have to be coaches and they have to take interest in developing their subordinates' capabilities.

Reference and Source

Luthans, Fred, Organizational Behavior


Phd Thesis

Communicative Leadership
Solange Hamrin
Mid Sweden University

Updated  4 March 2017,  8 January 2012

Friday, November 11, 2016

Role of Intuition in Managerial Decision Making - Brief Literature Review

Antecedents of Effective Decision Making: A Cognitive Approach

Allard C.R. van Riel
Hans Ouwersloot
Jos Lemmink
Faculty of Economics and Business Administration, Maastricht University, The Netherlands


P1: There will be a positive relationship between the amount of information available to the
decision-maker and the extent to which decision-makers are likely to make use of rational
analysis to increase useful knowledge.

P2: There will be a positive relationship between the perceived importance of tacit knowledge
to the solution of a decision problem and the extent to which decision-makers are likely to use
their intuition to increase knowledge utility.

P3: There will be a positive relationship between the perceived structuredness of the decision
context and the extent to which a decision-maker is likely to use rational analysis to increase
knowledge utility.

P4: There will be a negative relationship between the perceived structuredness of the decision
problem and the extent to which decision-makers are likely to use their intuition to increase
knowledge utility.

P5: There will be a positive relationship between the perceived complexity of the decision
problem and the extent to which a decision-maker is likely to make use of rational analysis to
increase knowledge utility.

P6: There will be a positive relationship between the perceived complexity of the decision
problem and the extent to which decision-makers are likely to use their intuition to increase
knowledge utility.

P7: There will be a negative relationship between perceived time pressure and the extent to
which the decision-maker is likely to use rational analysis to increase knowledge utility.

P8: There will be a positive relationship between perceived need for justification of individual
decisions, and the extent to which the decision-maker is likely to use rational analysis to
increase knowledge utility.

P9: There will be a negative relationship between perceived need for justification of individual
decisions and the extent to which the decision-maker is likely to use intuition to increase
knowledge utility.

P9: There will be a negative relationship between perceived need for justification of individual
decisions and the extent to which the decision-maker is likely to use intuition to increase
knowledge utility.

P10: The extent to which a decision-maker will be able to increase knowledge utility by making
use of rational analysis will be moderated by various bounds imposed on the rationality of the

P11a: The extent to which a decision-maker will be able to increase knowledge utility by
making use of intuitive cognition will be moderated by the presence of valid individual
experience or expertise in the mind of the decision-maker.

P11b: There will be a positive relationship between the extent to which the area of expertise, or
the domain within which the decision-maker acquired experience, match the decision-problem,
and the validity of experientially gathered knowledge.

P11c: The extent to which a decision-maker will be able to increase knowledge utility by
making use of intuitive cognition will be moderated by the amount of turbulence in a decision
problem domain.

P11d: There will be an inverse relationship between the extent to which the decision-maker was
emotionally involved while acquiring the experience, and the objective validity of the
experientially gathered knowledge.

A Research Agenda for Future

A range of issues requires further research.
In the first place, the conceptual model that was developed should be operationalized. Reliable measurement instruments must be developed, allowing a quantification of the relations between constructs.

Second, to confirm the proposed independence of the two cognitive systems, and to obtain insight in the relative effects of various antecedents and moderators on decision-making effectiveness, the model should be empirically validated and refined.

Third, research into the information requirements and validity of the hybrid style of active sense making, which seems to play a pervasive role in dynamic and complex business environments, as well as in scientific and medical problem solving, is now of great importance.

Fourth, various task characteristics have been identified and studied in many
different research streams and research is needed to increase and systematize the existing
knowledge. Interaction and/or hierarchical effects should also be investigated.

Fifth, the outcome variables need to be carefully operationalized and measured.


Academy of Management Review. January 2007, Vol. 32 Issue 1, p33-54.

Like other authors, we view the process of intuition as relating to the domain of the “nonconscious” information processing system (e.g., Epstein 1990, 1994, 2002; Kahneman, 2003).

We view learning as an input to intuition effectiveness, but do not see intuition as a learning process per se.

we conceptualize intuition both by its process (which we refer to as intuiting), as well as its outcome (which we term intuitive judgments)

our review of the various literature on intuition has tended to
converge on four characteristics that make up
the core of the construct: intuition is a (1) nonconscious
process (2) involving holistic associations
(3) that are produced rapidly, which (4)
result in affectively charged judgments. We explore
these characteristics in detail below.

Proposition 1: Individuals who can bring complex, domain-relevant schemas to bear on a problem are more likely to make effective intuitive decisions than those who employ heuristics and simpler, domain-independent schemas.

Proposition 2: Explicit learning will positively influence the effectiveness of intuitive decision making through the formation of complex, domain relevant schemas.

Proposition 3a: The relationship between explicit learning and the formation of complex, domain-relevant schemas will be strengthened when individuals engage in focused, repetitive practice over long periods of time.
Proposition 3b: The relationship between
explicit learning and the formation
of complex, domain-relevant
schemas will be strengthened when
individuals perform in the presence of
“kind” learning structures (rapid and
accurate feedback and exacting consequences).

Proposition 4: Implicit learning will
positively influence the effectiveness
of intuitive decision making through
the formation of complex, domainrelevant

Proposition 5: The relationship between
implicit learning and the formation
of complex, domain-relevant
schemas will be enhanced when individuals
focus attention on the stimulus

Proposition 6: As the problem structure
associated with a task becomes more
judgmental, the effectiveness of intuitive
decision making will increase.

Proposition 7: The relationship between
environmental uncertainty and
the effectiveness of intuition is mediated
by judgmental task characteristics.

Proposition 8: The relationship between
complex, domain-relevant schemas
and the effectiveness of intuitive
decision making is moderated by task
characteristics such that as tasks become
more judgmental, the strength of
the relationship will increase.

Peters, J. T., Hammond, K. R., & Summers, D. A. 1974. A note
on intuitive vs. analytic thinking. Organizational Behavior
and Human Performance, 12: 125–131.

Isaack, T. S. 1978. Intuition: An ignored dimension of management.
Academy of Management Review, 3: 917–922.

Isenberg, D. J. 1984. How senior managers think. Harvard
Business Review, 62(6): 81–90.

Agor, W. A. 1986. The logic of intuition: How top executives
make important decisions. Organizational Dynamics,
14(3): 5–18.

Simon, H. A. 1987. Making management decisions: The role
of intuition and emotion. Academy of Management Executive,
1(1): 57– 64.

Blattberg, R. C., & Hoch, S. J. 1990. Database models and
managerial intuition: 50% model - 50% manager. Management
Science, 36: 887– 899.

Bowers, K. S., Regehr, G., Balthazard, C., & Parker, K. 1990.
Intuition in the context of discovery. Cognitive Psychology,
22: 72–110.

Behling, O., & Eckel, N. L. 1991. Making sense out of intuition.
Academy of Management Executive, 5(1): 46 –54.

Schoemaker, J. H., & Russo, J. E. 1993. A pyramid of decision
approaches. California Management Review, 36(1): 9 –31.

Denes-Raj, V., & Epstein, S. 1994. Conflict between intuitive
and rational processing: When people behave against
their better judgment. Journal of Personality and Social
Psychology, 66: 819 – 829

Sloman, S. A. 1996. The empirical case for two systems of
reasoning. Psychological Bulletin, 119: 3–22.

Shapiro, S., & Spence, M. T. 1997. Managerial intuition: A
conceptual and operational framework. Business Horizons,
40(1): 63– 68.

Burke, L. A., & Miller, M. K. 1999. Taking the mystery out of
intuitive decision making. Academy of Management Executive,
13(4): 91–99.

Khatri, N., & Ng, H. A. 2000. The role of intuition in strategic
decision making. Human Relations, 53: 57– 86.

Woolhouse, L. S., & Bayne, R. 2000. Personality and the use of
intuition: Individual differences in strategy and performance
on an implicit learning task. European Journal of
Personality, 14: 157–169.

Updated  14 November 2016, 15 November 2012

Wednesday, November 9, 2016

Role of Values in Shaping Organizational Culture - A Brief Literature Review

Organisational Values as "Attractors of Chaos”: An Emerging Cultural Change to Manage Organisational Complexity

Dolan S.L, Garcia S., Diegoli S, Auerbach A
Working paper // Department d'Economica i Empresa, UPF, 485.
Year 2000


The parameters that characterize a complex environment:




Fuzzy Logic

Chaos theory tries to understand the relation between chaos and order. In this way, it is
possible to follow both directions, from order to chaos, or from chaos to achieve order.

In the first case of order to chaos, the system passes through a period of uniformity (order) to oscillation cycles and to turbulence and chaos, until it self-organises. Conversely, the chaos -to-order analysis uses an element called "strange attractors", a phenomenon that absorbs or catches the system’s final status of order.

A strange attractor concept has two behaviour patterns:

1. It is deterministic because it defines the system behaviour. In mathematical terms, one should say that the attractor is the system limit. The “limit function” represents the situation where the system tends to be, instead of determining its path

2. It is chaotic because such behaviour is unforeseeable; it's impossible to know where the system limit is moving through at each moment.

The most important thing to notice is that the presence of a "strange attractor" guiding a system’s behaviour is what distinguishes between chaos and randomness. A random situation is totally unforeseeable, whereas in a chaos situation the system’s set of future behaviour possibilities can be approximately predicted.

We're proposing that chaos cannot be controlled, but it can be guided by behaviour parameters, which we prefer to call "values". Value become the "strange attractors" of the chaos theory in organizations.

According to authors,  companies are not the product of deterministic rules and regulations, but rather they are product of chaotic dynamics that should be guided by establishing and incorporating values.

There are four inter-connected trends associated with an increase in the complexity and
uncertainty in companies, namely,

1. The need for quality and customer orientation.
2. The need for professional autonomy and responsibility.
3. Need for transformational leaders instead of “bosses”.
4. The need for flatter, more agile organisation structures.


In the early 20th Century, Management by Instruction MBI was necessary due to the characteristics of assembly-line production. In expected stable environments,  the objective was to maximize quantity through rationality and discipline, managers instructed and employees obeyed.  [Also when new systems were designed by engineers and managers, instructions have to be given by the designers and others have to follow them to operate the system to get the output for which they were designed].

As members of the organization use a system repeatedly, they understand the system's working as well as its current idiosyncracies better than either designers or top level managers and hence Management by Objectives (MBO) is more suitable approach.

Management by Value's (MBV’s) function is to absorb the organisational complexity that comes from its increasing change adaptation necessities in highly turbulent environments where centralized design departments alone cannot come with adequate solutions. Especially to provide a
vision through directing the strategic action to where the company aims to be in the future, its attractor (vision is an attractor). The explanation of these approaches shows that in turbulent environments, neither instructions nor simple objectives can guarantee organisational success. The company has to accept the chaotics and must develop the capability  of self-organising. Its capacity of self organisation comes directly from the fact that its internal components have a set of shared values and their independent actions or in line with shared values.


The word "value" can be understood in many ways. Axiology is the study of values; for ancient Greeks, axios meant guidance. Consider values as strategic references indicating that acting in one way is more appropriate to achieve goals than behaving otherwise.

Values can also be categorized into two main groups: finals and instrumentals. Final values can be explained as existential objectives, or, the answer to the question, “What do you/your company intend to be/achieve in the future?” The answer, often embodied in the corporate mission statement, can be economic benefits, excellence in products and services, customer or employee satisfaction, personal fulfilment, happiness, and so on. To achieve these final values, one must define the instrumental ones. Actually, it's necessary to clarify the set of the instrumental values that will be used to reach the future. Instrumental values can be organised in two groups: ethical and competence values
(Rockeach, 1973). The ethical values refer to the conduct, the means that are justified to achieve the final values). Usually, these are associated with social values such as honesty, integrity, sincerity, and loyalty (social values are related to behaviors that lead to social outcomes or effects on others in the society or relations). Competence values are more individualistic and have to do with the personal activity, and beahaviour related to personal outcomes  necessary to achieve final values, or to be competitive. Examples include creativity, patience, flexibility, order, intelligence, and health. Instrumental values are the system internal values that will lead or organise the chaotic system to its self-government and self-organisation.

Competence values can be either control oriented or development oriented. Depending on their balance, they are responsible for expanding or disciplining organisation processes. Efficiency, discipline, responsibility or punctuality are examples of control-oriented values. Trust, creativity, freedom, or having fun on the job are examples of development-oriented values. The two sets of values have to coexist in a balanced manner. Values oriented toward development are essential to create new opportunities for action. These include self-learning, initiative, diversity, self-organisation, and flexibility. The control values, on the other hand, are also necessary to maintain and bring together the various organisational sub-systems. Thus, they guide such activities as centralization, planning, order, certainty, and obedience.

Organisational Changes

Adaptive organisational  changes occur when the company is redirecting its internal processes in order to become more competitive. On the other hand, significant changes that cause reconfigurations
and transformations are the cultural recreation of new beliefs and values that are responsible for defining the organisation’s collective identity. The transformational change does not only establish new rules of interaction with the environment but mainly define new political and internal interactive rules, such as employee autonomy.


True leadership of a progressive 21st century company must operate through values.


Anne Reino

Rokeach's  definition of values “A value is an enduring belief that a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct or endstate of existence” (Rokeach, 1973: 5). Rokeach (1973) distinguishes between two types of individual values: instrumental values (modes of conduct) and terminal values (end-states of
existence). Terminal values are self-sufficient end-states of existence that a person strives to achieve (e.g. wisdom and comfortable life). Instrumental values (e.g. honesty, helpfulness) describe behaviours that facilitate attainment of terminal values.

Roe and Ester (1999) stress that holders of values are not necessarily individuals but may also be groups of people (e.g. organisation, occupational group, subculture, etc). Like an individual holds several values, so do organisations. Thus we have reached the issue of organisational values.

Enz defines organisational values as “the beliefs held by an individual or group regarding means and ends that organisations “ought to” or “should” identify in the running of the enterprise, in choosing what business actions or objectives are preferable to alternate actions, or in establishing organisational objectives” (Enz, 1988: 287).

 Values enable members’ activity through self-control and social mechanisms and being clearly communicated to organisational members, they will become the criteria for making decisions and choices in everyday work (Vadi, 2000). Organisational values may replace the traditional control mechanism within an organisation and they have an impact on human resource management (Vadi, 2000).

Some authors (e.g. Argyris, Schon) distinguish values “in use” from “espoused” values (Meglino, Ravlin, 1998). Values are socially desirable and therefore there is a pressure to express ideal values publicly (“espoused values”) whether or not they are held internally (“in use”). In case of organisations, there could be a great difference between the values expressed publicly and those which are actually shared inside an organisation. In some organizations, values are communicated and used informally and therefore at least partly held unconsiously.  That makes the question of studying internally held values even more complicated.

Methods of organisational values research 

One has two possibilities to do research in the field of organisational values – the choice is between using either qualitative or quantitative research methodology.

Qualitative methods are very often used as a starting point of investigation as they may help to develop conceptual frameworks. Content analysis, focus groups discussions, in-depth interviews, critical incident technique and mapping value systems are but a few of the methods used in the first phase of research to clarify the range of organisational values relevant to the study.

Quantitative research methods are considered to be useful in values research as they enable us to compare the values of different organisations and assess the relationships between different factors.

Several authors have developed questionnaires and scales for measuring organisational values. Hofstede et al, (1990) constructed a questionnaire that consisted of 135 precoded questions, 57 of which dealt with the subject of organisational values.  The Organisational Culture Profile (OCP) was worked out by O’Reilly et al (1991). OCP consists of 54 statements about the organisational values to be rated. The degree to which organisational values are shared can be investigated by the intercorrelation among raters, using a variation of the Spearman-Brown general prophecy formula.  The third instrument for measuring organisational values, the Focus instrument, was developed by Van Muijen et al (1999). This instrument is based on Quinn’s Competing value model which describes four organisational culture orientations: support, innovation, rules, and goal orientation (Van Muijen et al, 1999). These values clusters are similar to OCP culture dimensions (innovative, stable, respect of people, outcome oriented, detail oriented team oriented, aggressive) and those of Hofstede and his colleagues’ questionnaire.

Understanding Organizational Culture: A Key Leadership Asset  

Fred C. Lunenburg Sam Houston State University

 The competencies and values of employees and leaders play a key role in determining the effectiveness and success of an organization.

The concept of organizational culture was first noted as early as the Hawthorne studies (Mayo, 1933; Roethlisberger & Dickson, 1939), which described work group culture.  It was not until the early 1980s, however, that the topic came into its own.

Changing Organizational Culture

The following components are likely to be involved in the culture change cycle (Frost, 1991): (a) external enabling conditions, (b) internal permitting conditions, (c) precipitating pressures, (d) triggering events, (e) cultural visioning, (f) cultural change strategy, (g) culture change action plans, (h) implementation of interventions, and (i) reformulation of culture.


Mitja Gorenak, International School for Social and Business Studies, Slovenia,
Suzana Košir, International School for Social and Business Studies, Slovenia
Management, Knowledge and Learning, International Learning 2012.

Svetlik (2004, p. 323) says that organizational values are values that are being pushed forward by the management and have proven itself as a good foundation for development of organization. Same author also says that organizational values are intended to inspire employees with creative energy that will push organization forward towards desired goals. Cingula (1992, pp. 499–500) sees organizational values as: “what people within organization think is good for organization, what needs to happen within organization and what might be needed within organization in the future”. He also says that due to mentioned above organizational values reflect the mission and strategic goals of the organization.

The research question: To see if there is any correlation between how organizational values are stated within organization and how organization performs in its sector.

Data used in this article is a part of a much wider survey that included 303 companies within Slovenia. Companies were randomly selected

Among all organizations there are 65,2 % of those that have organizational values explicitly noted within the organization, 76,4 % of those that have organizational values implicitly shown within organization and 61,4 % of those organizations that do not have organizational values noted within organization and are slightly above average of the sector.

Overall we can say that How are organizational values stated within your organization influences Organizational performance – combined with a 5 % risk interval.

Structural Approach to Changing Organizational Cultural Values 

Mohammad Essawi Al-Qasemi Academic College of Education P.O. Box 124, Baqa El-Gharbieh 30100, Israel
Oleg Tilchin Al-Qasemi Academic College of Education P.O. Box 124, Baqa El-Gharbieh 30100, Israel
International Journal of Business and Social Science,  Vol. 3 No. 20, Special Issue – October 2012

The goal of changing organizational culture and the ways of its attaining are determined by a functional approach. Function approach decides which values are to be changed to attain the new goals,  A structural approach examines the process of changing the values and its effect on behavior. We may say it is concerned with interdependencies between  levels (elements) of culture.

The  process of value internalization by employees can be realized as a result of performance of corresponding behavioral tasks.

The desired organization's values are interdependent. It means that internalization of some value by employees may require prior internalization of one or several values preceding this value. Consequently, value interdependence entails the order of internalizing the values.

Change of organizational cultural values is guided by a leader of an organization and  leadership team members serving as change agents. The leader should delegate organizational accountability  for changing the organizational cultural values to a leadership team. Then, he should assign individual responsibility  for changing the values to the team members according to the determined extent of accountability. The team members in  turn have to guide each individual employee to  internalize the desired organizational values.

A Structural Approach to Changing Organizational Culture Values                                               

 The goal of the structural approach is to provide effective internalization of desired organizational values by employees through a determined order of realizing this process.
 According to the approach, changing organizational cultural values involves: building structure of  desired values of organizational culture, determining the order of internalization of the values by employees, forming behavioral tasks performance which is needed for internalizing the values, providing effective performance of behavioral tasks, and monitoring of the value internalization process. The approach is realized by the following sequence:

 Building the structure of the desired organizational culture values 

The structure of the desired values caused by their relations may be represented by an ordered set  (vi, vj), if internalizing value vi is required prior to internalizing value vj. The values may also be represented by a network when two or more values are to be internalized parallelly before another value is internalized.

Performance of the behavior tasks by employees. 

The result of a task's performance by an employee is represented by a behavioral cultural norm.  It serves as explicit exercise of value which is implicit in its essence. The measure of task performance varies from zero (the task is not performed) to one (the task is performed completely). The meanings of the measure are determined by the member of the leadership team. A value is internalized by an employee, if all tasks needed for internalizing the value are performed completely. Therefore, required state of the value is equal to the quantity of the tasks which should be performed for its internalizing.

In case of resistance to change, creation of constructive confrontation processes of internalizing desired organizational values by employees through use of different stimulation and facilitation mechanisms is to be employed.

Monitoring of the value internalization process 

 Determining the fitness of current states of internalizing of the values by employees to their required states is realized by the step. The step involves the following:
 Calculating the extent of internalizing a desired value by an employee. Internalizing the desired value requires performance of a set of tasks. Consequently, the extent of internalizing the desired value is the sum of performance measures of suitable behavioral tasks.

Core Values and Beliefs: A Study of Leading Innovative Organizations

S. Sai Manohar • Shiv R. Pandit
J Bus Ethics (2014) 125:667–680

15 leading innovative organizations are chosen. Between 50 and 60 respondents in each organization in the ratio 1:2:3 top, middle, and first line managers participated in the study. A total of 1,100 questionnaires were administered to executives in 15 organizations, 794 complete responses
were received, which worked out to achieving a response rate of 72.18 % for the whole survey

The ‘‘Innovation Culture Questionnaire’’ sought responses and compared six key areas of culture: Organizational Climate, Leadership, Core Values, Customer Focus, Creativity, and Envisioning Future at each of these organizations. In addition an ‘‘Innometer’’ tool was used to measure the success rate of innovation at these organizations. The findings of this study suggest that innovative
organizations have a common set of core values and beliefs that are responsible for the consistent success of these organizations.

Core Values

Regardless of the innovation activity they might be engaged in, they all seemed to be very concerned with seven values in their day-to-day operations: (1). Intense customer focus; (2).Product quality; (3). Innovation leadership; (4). Striving to be a pioneer in the industry; (5). Profits; (6). Organizational
agility; and (7). Emphasis on cutting edge technology

Impact of Core Values on Performance

A regression analysis between core values of highly innovative organizations and success rate of new products launched by them reveals that when core values increases by 1 unit, success rate increases by 30 units. This shows that there is a significant relationship between core values of an organization and success rate of new products launched by the organization. The R value is 0.678, which indicates a high degree of correlation.

Balanced Organizational Values: From Theory to Practice

Ivan Malbasˇic´ • Carlos Rey • Vojko Potocˇan
J Bus Ethics (2015) 130:437–446

This article addresses the issue of balancing of organizational values by providing an initial
empirical study which examines relationships between three different value models when tested on a sample of Fortune 100 companies.

Barrett (1998) advocated that balance in organizations is as important as in individual lives. Accordingly, he offered a tool called The Balanced Needs Scorecard, which represents the primary needs of an organization: corporate survival (profits, finance, and funding), corporate fitness
(productivity, quality, and efficiency), and customer/supplier relations (sales, service, and product excellence).

Quinn and Rohrbaugh (1983) presented the competing values framework (CVF model), the most famous concept of balanced values, in order to explain different types of values existing in different organizations.

Schwartz’s values model (Schwartz 1992) defines ten different motivational types of values represented by 56 specific values. What is unique in Schwartz’s values model is that motivational types of values form a circular structure on the basis of the dynamic relations between them;
in this mode of representation compatible types of values are next to each other, and conflicting types of values are positioned opposite each other.

An alternative view regarding this question was proposed by Cardona and Rey
(2008) in a model called Management by missions (MBM),
with the idea of distributing the corporate mission to all
company levels. The basic line of reasoning of these
authors is that OV must ‘‘be seen as being encompassed
within the concept of the mission’’ (Cardona and Rey 2008,
p. 86), based on the anthropological foundations of the
company and not only under a psychosocial view. Thus,
OV should consider a taxonomy of values based on organizational
mission fulfillment that are grouped into four
different categories. These four categories are seen as
representing different and sometimes opposed values that
are necessary to carry out the organizational mission, and
they are (Cardona and Rey 2008, p. 94):
(a) Business values—refer to the organization’s business
and profit-making activity (e.g., perseverance,
efficiency, professionalism, results orientation),
(b) Relational values—promote quality in interpersonal
relations (e.g., communication, team work, respect
for people),
(c) Development values—aimed at differentiating and
continuously improving the company (e.g., innovation,
creativity, learning, continuous improvement),
(d) Contribution values—aimed at doing more for stakeholders
than strictly required by the business relationship
(e.g., customer satisfaction, interest in people,
social responsibility).

A fundamental challenge of the chosen research area is the
question whether the aforementioned models of OV do
represent the balance that is pursued in the contemporary
business field. we state
following research question:
How does literature taxonomies of balanced values
(psychosocial and mission-based) fit the values that
are actually pursued by companies in the business

 Among the 100 largest companies on that
list, 94 of them had publicly released their OV on the
official company website. These companies indicated 446
concrete (specific) OV, and all further results of our
research are related to these companies.

In determining which OV are most relevant for observed
companies, methods of content analysis, descriptive statistics,
and a classification method have been used.

After determining OV of the researched companies, each
of the identified specific OV was classified into a specific
category of values, according to the all three observed values
models: (A) CVF model, (B) Schwartz’s values model, and
(C) Mission-based model of OV. This has enabled the
comparison of three different value models, in order to
conclude which of these models is most appropriate for
researching balanced values in contemporary business

In their work, Yilmaz and Ergun operationalized the
degree of imbalance as the sum of the absolute values of
the pair-wise differences between the different categories
(of values). Following a similar method, we took the differences
between the score of each category (of values) and
overall average score of all value categories.

 In order to answer the proposed research
question and achieve the objective of the research, we have
calculated the degree of imbalance of values for each of the
three observed value models, and they were: (A) 2.206 for
CVF model, (B) 1.982 for Schwartz’s values model, and
(C) 0.404 for Mission-based model of OV. Since a higher
degree score means a greater imbalance among values in the
observed companies, these results indicate that the Missionbased
model of OV is more representative of balance
between OV in contemporary business espoused values than
the other two models.

Papers Presented and Discussed during 2016 - 17 Fellow Program Course

Organisational Values as "Attractors of Chaos”: An Emerging Cultural Change to Manage Organisational Complexity
Dolan S.L, Garcia S., Diegoli S, Auerbach A
Working paper // Department d'Economica i Empresa, UPF, 485.
Year 2000

Anne Reino

Understanding Organizational Culture: A Key Leadership Asset
Fred C. Lunenburg Sam Houston State University

Mitja Gorenak, International School for Social and Business Studies, Slovenia,
Suzana Košir, International School for Social and Business Studies, Slovenia
Management, Knowledge and Learning, International Learning 2012.

Structural Approach to Changing Organizational Cultural Values
International Journal of Business and Social Science,  Vol. 3 No. 20,Special Issue – October 2012

Core Values and Beliefs: A Study of Leading Innovative Organizations
S. Sai Manohar • Shiv R. Pandit
J Bus Ethics (2014) 125:667–680

Balanced Organizational Values: From Theory to Practice
Ivan Malbasˇic´ • Carlos Rey • Vojko Potocˇan
J Bus Ethics (2015) 130:437–446

Additional Reading

Understanding Human Values
Milton Rokeach
Free Press, 1979
Simon and Schuster, 30-Jun-2008 - Psychology - 230 pages

This volume presents theoretical, methodological, and empirical advances in understanding, and also in the effects of understanding, individual and societal values.

The Value of Corporate Values
strategy+business: Corporate Strategies and News Articles on Global Business, Management, Competition and Marketing
Summer 2005 / Issue 39 (originally published by Booz & Company)

Tuesday, November 8, 2016

Resource Based View - Brief Literature Review

A Resource-based View of the Firm

Graduate School of Business Adfnitiistration, The University oi
Michigan, Ann Arbor, Michigan, U.S.A.
Strategic .Management Journal, Vol.5, 171-180 (1984)

The resource-based view of the Firm provides a basis for addressing some key issues in the formulation of strategy for diversified firms, such as:

(a) On which of the firm's current resources should diversification be based?
(b) Which resources should be developed through diversification?
(c) In what sequence and into what markets should diversification take place?
(d) What types of firms will it be desirable for this particular firm to acquire?

Specifically, the following propositions will be argued:
1. Looking at firms in terms of their resources leads to different immediate insights than the traditional product perspective. In particular, diversified firms are .seen in a new light.

2. One can identify types of resources which can lead to high profits. In analogy to entry barriers, these are associated with what we will call resource position barriers.

3. Strategy for a bigger firm involves striking a balance between the exploitation of existing resources and the development of new ones. In analogy to the growth-share matrix, this can be visualized in what we will call a resource-product matrix.

4. An acquisition can be seen as a purchase of a bundle of resources in a highly imperfect market. By basing the purchase on a rare resource, one can ceteris paribus maximize this imperfection and one's chances of buying cheap and getting good returns.

A resource position barrier to be valuable, it should translate into an entry barrier in at least one market. So, an entry barrier without a resource position barrier leaves the firm vulnerable to
diversifying entrants, whereas a resource position barrier without an entity barrier leaves the
firm unable to exploit the barrier. There is thus a nice duality between the two concepts, corresponding to the duality between products and resources.

The firms need to find those resources which can sustain a resource position barrier, which no one currently has, and where they have a good chance of being among the few who succeed in building
one. They have to look at resources which combine well with what they already have and in
which they are likely to face only a few competitive acquirers.

This paper has attempted to look at firms in terms of their resources rather than in terms of their products. .Resource position barriers were defined as partially analogous to entry barriers. On the
basis of this definition, a model of firms as trying to develop such barriers perhaps through products in which already strong resources support less strong resources is indicated. This mechanism is extended to the resource-product matrix.

The author added that nothing is known as yet about the practical difficulties involved in identifying resources (products are easy to identify), and also to what extent one in practice can combine capabilities across operating divisions, or about how one can set up a structure and systems which can help a firm execute these strategies. The new focus on technology in strategy, the increasing tendency for firms to define themselves in terms of technologies, and the setting up of cross-divisional strategic
organizations (Texas Instruments, 1971), technology groups, and arenas (General Electric, 1981) seem to indicate that objectives like the above are strived for, although perhaps implicitly, in several firms.

Firm Resources and Sustained Competitive Advantage

Jay Barney, Texas A&M University
Journal of Management
1991, Vol. 17, No. 1,99-120

The research which focused on identifying attractive external opportunities, implicitly  has adopted two simplifying assumptions. First, these environmental models of competitive advantage have assumed that firms within an industry (or firms within a strategic group) are identical in terms of the strategically relevant resources they control and the strategies they pursue (Porter, 1981;
Rumelt, 1984; Scherer, 1980). Second, these models assume that should resource heterogeneity develop in an industry or group (perhaps through new entry), that this heterogeneity will be very short lived because the resources that firms use to implement their strategies are highly mobile (i.e., they can be bought and sold in factor markets). These two assumptions have been very fruitful in clarifying our understanding of the impact of a firm's environment on performance.

The resource based view of the firm, which is investigating the role of internal factors (strengths and weaknesses)  substitutes two alternate assumptions in analyzing sources of competitive advantage. First, this model assumes that firms within an industry ( or group) may be heterogeneous with respect to the strategic resources they control. Second, this model assumes that these resources may not be perfectly mobile across firms, and thus heterogeneity can be long lasting. The resource-based
model of the firm examines the implications of these two assumptions for the analysis
of sources of sustained competitive advantage.

A firm is said to have a competitive advantage when it is implementing a value creating strategy not simultaneously being implemented by any current or potential competitors or when some firms using the strategy are unable to duplicate the benefits of this strategy.. A firm is said to have a sustained competitive advantage when it is implementing a value creating strategy not simultaneously being implemented by any current or potential competitors and when these other firms are unable to duplicate the benefits of this strategy over a long period of time.   Following Lippman and Rumelt (1982) and Rumelt (1984) a competitive advantage is sustained only if it continues to exist
after efforts to duplicate that advantage have ceased. In this sense, this definition of sustained competitive advantage is an equilibrium definition (Hirshleifer 1982)

In his recent work, Porter (1985) introduced the concept of the value chain to assist managers in isolating potential resource-based advantages for their firms. The  resource-based View of the firm
developed in this papger pushes this value chain logic further  by examining the attributes that resources isolated by value chain analyses must possess in order to be sources of sustained competitive advantage (porter, 1990).

Not all firm resources hold the potential of sustained competitive advantages. To have the potential, a firm resource must have four attributes: (a) it must be valuable (must have utility to  exploit opportunities and/or neutralizes threats in a firm's environment), (b) it must be rare among a firm's current and potential competition, (c) it must be imperfectly imitable, and (d) there cannot be strategically equivalent substitutes for this resource that are valuable.

The model presented by J.B. Barney is


1. Firm Resource Heterogeneity            

2. Firm Resource Immobility

Characteristics of resources that provide competitive advantage

Imperfect Imitability
-History Dependent
-Causal Ambiguity
-Social Complexity


Sloan School of Management, Massachusetts Institute of Technology, Cambridge,
Massachusetts, U.S.A.
Strategic Management Journal, Vol. 16, 171-174 (1995)

During 1988 - 1989,  the 1984 paper started to have an impact on the academic side of the field. This happened after a couple of other papers had clarified the nature of the 'markets' for resources (Barney,
1986a; Dierickx and Cool, 1989; Wernerfelt, 1989). Shortly thereafter, survey papers were
 written (Connor, 1991; Mahoney and Pandian, 1992), In the year 1990, the Harvard Business
Review published an article ( Prahalad, C. K. and G. Hamel (May-June 1990).
'The core competence of the corporation'. HBR, pp. 79-91) which presented many of the ideas on
a compelling managerial style. In particular, Prahalad and Hamel picked up the 'stepping stone' strategy advocated by Wernerfelt (1984) and elaborated in the NEC example (originally from Business Week, 1981)

RBV became popular because it was consistent with classic business policy in the Harvard Business School tradition (Andrews, 1971). The resource based view 1984 paper was an attempt to build a consistent foundation for the classic theory of business policy. Consistent with this, many central aspects of strategic reasoning have been reinterpreted in light of a resource-based perspective (Peteraf, 1993; Amit and Schoemaker, 1993; Connor, 1991;

Is the resource-based view here to stay?
Many aspects of strategic management can be thought about without reference to firm heterogeneity.
But there are some aspect which need to take account differences in resource endowments. Therefore, one can do better strategic management by also taking into account differences in firms' resource


DANNY MILLER Ecole des Hautes Etudes Commerciales, Montreal, and Columbia University JAMAL SHAMSIE New York University
 Academy of Management Journal 1996, Vol. 39, No. 3. 519-543.

Categorizing Resources

Several researchers have attempted to derive resource categorization schemes. Barney (1991) suggested that resources could be grouped into physical, human, and capital categories. Grant (1991) added to these financial, technological, and reputational resources.

In this article we revisit a pivotal one of these criteria—barriers to imitability—to develop our own typology: Property-Based and  Knowledge-Based Resources

Examples of property-based resources are enforceable long-term contracts that monopolize scarce factors of production, embody exclusive rights to a valuable technology, or tie up channels of distribution.

Knowledge-based resources allow organizations to succeed not by market control or by precluding competition, but by giving firms the skills to adapt their products to market needs and to deal with competitive challenges. Economic rents accrue to such skills in part because rivals are ignorant of why a firm is so successful. It is often hard to know, for example, what goes into a rival's creativity or teamwork that makes it so effective. Such resources may have what Lippman and Rumelt (1982) called "uncertain imitability": they are protected from imitation not by legal or financial barriers, but by knowledge barriers.

Themes of the Paper

A key theme of this article is that the benefits of property-based resources are quite specific and fixed and thus, the resources are appropriate mostly for the environment for which they were developed.

Knowledge-based resources, on the other hand, often tend to be less specific and more flexible. For example, a creative design team can invent products to meet an assortment of market needs. Such resources can help a firm respond to a larger number of contingencies (Lado & Wilson, 1994). Many knowledge-based resources are in fact designed to cope with environmental change.

Two varieties of each category: discrete resources and bundled, or systemic, resources are proposed. Discrete resources stand alone and have value more or less independent of their organizational contexts. Exclusive contracts or technical skills are examples of such resources. Systemic resources, on the other hand, have value because their components are part of a network or system.

Because property-based resources are primarily designed to provide an organization with a high degree of control, they are likely to be of most value in stable or predictable settings where the objects of control maintain their relevance

Hypothesis 1: Discrete property-based resources will produce superior financial performance in predictable environments but will not do so in uncertain environments.

Hypothesis 2: Systemic property-based resources will produce superior financial performance in predictable environments but will not do so in uncertain environments.

Hypothesis 3: Discrete knowledge-based resources will produce superior financial performance iri uncertain environments but will not do so in predictable environments.

Systemic knowledge-based resources may take the form of integrative or coordinative skills required for multidisciplinary teamwork

Hypothesis 4: Systemic knowledge-based resources will produce superior financial performance in uncertain environments but will not do so in predictable environments

The sample consisted of the seven major Hollywood film studios from 1936 through 1965. These studios included MGM, Twentieth Century-Fox, Warner Brothers, Paramount, United Artists, Universal, and Columbia.

Hypothesis 2 was borne out for three of the four performance measures:

Hypothesis 3 was borne out for all four indexes of performance:


AUGUSTINE A. LADO, Clarkson University
NANCY G. BOYD, University of North Texas
PETER WRIGHT, University of Memphis
MARK KROLL, Louisiana Tech University
Academy of Management Review
2006, Vol. 31, No. 1, 115–131.

Our overarching claim is that, as a theoretical perspective, the RBV is attuned to addressing
the paradoxical challenges of creating and sustaining superior firm performance. This claim is
grounded in an alternative view holding that paradox in scientific inquiry is “intrinsic and
indelible” (Poundstone, 1988: 18). Some of the RBV paradoxes might reflect endogenous factors—that is, they are embedded in RBV logic itself, reflecting the paradoxical nature of theory
building and science (e.g., Poundstone, 1988; Rosen, 1994). Additionally, other RBV paradoxes
might reflect exogenous factors—that is, the paradoxes within the theory enable scholars to
explore and gain a better understanding of our surrounding world (e.g., DiMaggio, 1995; Quinn
& Cameron, 1988; Starbuck, 1988). Thus, we identify and explain various RBV paradoxes and discuss how their use can foster knowledge and understanding.


Villanova School of Business, Villanova University, Villanova, Pennsylvania, U.S.A.
Strategic Management Journal
Strat. Mgmt. J., 29: 745–768 (2008)

Tested the following hypotheses

Hypothesis 1: The value of the resource capability combinations that a firm exploits will
be positively related to its competitive advantage.

Hypothesis 2: The rareness of the resource capability combinations that a firm exploits will
be positively related to its competitive advantage.

Hypothesis 3: A firm’s competitive advantage will be positively related to its performance.

Hypothesis 4: A firm’s competitive advantage will mediate the relationship between the value
of the resource-capability combinations that the firm exploits and its performance.

Hypothesis 5: A firm’s competitive advantage will mediate the relationship between the rareness
of the resource-capability combinations that the firm exploits and its performance.

A sample of micro- and nanotechnology firms was surveyed from the fall of 2003 through the spring of 2004.

Due to its widespread use, Barney’s (1997) typology (financial, human, organizational, and physical resources and capabilities) was identified  as an appropriate starting point. After consulting with five
senior-level executives at five different technology firms, the category ‘intellectual resources and
capabilities’ was added to the typology to make it more comprehensive and relevant to micro- and
nanotechnology firms.

A questionaire was developed.

From these
511 respondents, 117 completed surveys were received, reflecting a response rate of 22.9 percent,
a response rate that compares favorably with similar studies in the field (Alreck and Settle, 1985).
Factor analysis was done to identify valuable, rare, inimitable and non substitutable resources possessed by the firms from the answers to the questionaire items.

Support is concluded for Hypotheses 1, 2 and 3.
No support for hypothesis 4.
Partial support for hypothesis 5.

New directions of development of resource-based view in creating a competitive advantage

Iwona Otola, Zuzanna Ostraszewska and Agnieszka Tylec
Business Management Dynamics
Vol.3, No.2, Aug 2013, pp.26-33

The conceptual model presented in the paper:

Resources - dynamic capabilities - relations – competitive advantage

In the a three dimensional conceptual model is proposed.  The first dimension is
the base of resources and competencies in the firm. However, there are no universal sets of resources and competencies that would guarantee and maintain the permanent competitive advantage. Furthermore, variability and turbulent environment necessitates and elastic and adaptive approach to strategic management of firms. Configuration of the resources and competencies should be flexible and variable in time in order to ensure best possible adjustment to variable conditions in the environment. In consequence, the second dimension is represented by the dynamic processes that occur in the firm. The dynamic processes which allow for reconfiguration and replenishment of the resources and their integration and renewed creation point to the ability of firm's learning in order to generate competitive advantage. The third dimension is the partnership with firms in creating supply chains. The relationships allow for synergy effects in the form of combined resources and competencies of the firms involved in these relationships.  Functioning of organization in the network of inter-organizational relationships is regarded as an important element of the process of organizational learning since the entities learn by cooperation with others, observation and importing good practices from others (Nowicka-Skowron and Pachura, 2009).