The Modern Firm: Organizational Design for Performance and Growth [Paperback]

John Roberts (Author)

Book Description

ISBN-10: 0198293755 | ISBN-13: 978-0198293750 | Publication Date: October 11, 2007

Business firms around the world are experimenting with new organizational designs, changing their formal architectures, their routines and processes, and their corporate cultures as they seek to improve their current performance and their growth prospects. In the process they are changing the scope of their business operations, redrawing their organization charts, redefining the allocation of decision-making authority and responsibility, revamping the mechanisms for motivating and rewarding people, reconsidering which activities to conduct in-house and which to out-source, redesigning their information systems, and seeking to alter the shared beliefs, values and norms that their people hold.
In this book, John Roberts argues that there are predictable, necessary relationships among these changes that will improve performance and growth. The organizations that are successful will establish patterns of fit among the elements of their organizational designs, their competitive strategies and the external environment in which they operate and will go about this in a holistic manner.

The Modern Firm develops powerful conceptual frameworks for analyzing the interrelations between organizational design features, competitive strategy and the business environment. Written in a non-technical language, the book is nevertheless based on rigorous modeling and draws on numerous examples from eighteenth century fur trading companies to such modern firms such as BP and Nokia. Finally the book explores why these developments are happening now, pointing to the increase in global competition and changes in technology.

Written by one of the world's leading economists and experts that will improve performance and growth. The organizations that are successful will establish patterns of fit among the elements of their organizational designs, their competitive strategies and the external environment in which they operate and will go about this in a holistic manner.

Editorial Reviews

Review

"Best business book of the year...deserves to be a classic... Nobody, it can now be said, is fully fit to run a modern firm until they have read The Modern Firm."--The Economist

"I am aware of no book that does a better job of integrating rigorous economic reasoning with a rich understanding of how firms operate. Economists, sociologists, organization and strategy scholars, as well as practicing managers, can all learn from the insights on strategy and organization contained in this very fine book."--Joel Podolny, Dean of Yale School of Management

"It is interesting, which isn't something you can say about many business books."--The Times of London

"[This] is a book for people looking for a deeper understanding of the modern firm --and enjoying the experience. As one of the world's foremost experts on economics and management, Roberts writes in an engaging style that makes the new ideas readily accessible to a wider business audience."--Bengt Holmstr�m, Paul A. Samuelson Professor of Economics, MIT

"At BP we have found John Roberts' ideas and concepts to be powerful, and we have used them in addressing the issues we face. The holistic approach he advocates to organizational design is very much in line with my own thinking. I am pleased that these ideas have been made available in a systematic fashion in this timely book."--Sir John Browne, Group Chief Executive, BP plc

"There are plenty of books on management and leadership that explain what leading firms do. This one explains why. The penetrating insights in The Modern Firm can profitably be applied to a wide variety of strategy and organization problems. Roberts, an economist of the first rank, offers us a practical, readable discussion, without mathematical notation. The Modern Firm should be required reading for corporate leaders and their advisers."--Jonathan Day, Partner, McKinsey & Company

About the Author

John Roberts holds the John H. Scully Professorship in Economics, Strategic Management and International Business in the Graduate School of Business at Stanford University. He has published over seventy scholarly articles in academic journals in a variety of areas in economic theory and game theory and their application to problems in industrial competition and management. He has also written numerous case studies of businesses and co-authored the seminal textbook on the economics and management of firms (Economics, Organization and Management, Prentice Hall 1992).

Product Details

• Paperback: 336 pages
• Publisher: Oxford University Press, USA (October 11, 2007)
• Language: English
• ISBN-10: 0198293755
• ISBN-13: 978-0198293750
• Product Dimensions: 8.4 x 5.4 x 1.1 inches
• Shipping Weight: 14.9 ounces (View shipping rates and policies)
• Average Customer Review: 4.3 out of 5 stars  See all reviews (11 customer reviews)
• Amazon Best Sellers Rank: #297,949 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

9 of 9 people found the following review helpful:

5.0 out of 5 stars Stunning Perspective, April 15, 2006

By 

Warren Miller "Warren D. Miller - Equity Analyst" (Lexington, VA United States) - See all my reviews
(REAL NAME)   

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This review is from: The Modern Firm: Organizational Design for Performance and Growth (Clarendon Lectures in Management Studies) (Hardcover)

This book nicely mixes perspectives from economics, organization theory, and strategic management. The writing style is lucid and accessible, unlike many books by academics. It is clear that Dean Roberts has been thinking about these issues for many years.

Even though he was trained as a classical economist, he seems to have shed some of the baggage that the neoclassical paradigm imposes. That is important to the relevance of his ideas in this age of the resource-based view of the firm (see the collected readings edited by Nicolai J. Foss), the importance of entrepreneurship and innovation (Schumpeterian/Austrian economics), and evolutionary economics (An Evolutionary Theory of Economic Change by Richard Nelson and Sid Winter, 1982).

In contrast to the traditional notion that firms within an industry are homogeneous and compete only on price, a stream of empirical research going back to 1991 (Richard P. Rumelt in Strategic Management Journal) has found that rates of return vary more within industries than across them. That makes the case for heterogeneity, not homogeneity. It also speaks to the importance of differentiation among firms. Most important, it opens up the discussion to such vital topics as a firm's unique capabilities, its routines, its culture, and its architecture, all of which Dean Roberts addresses in this remarkable book.

His perspective is not the final one, of course. What we know about that miraculous black box called the firm continues to evolve. But Dean Roberts has made a stunning contribution to what we know. In our own work valuing private equity, we use key precepts of this book every day. I recommend The Modern Firm without hesitation or qualification.

16 of 21 people found the following review helpful:

3.0 out of 5 stars could be much better edited and organised, August 9, 2005

By 

Seeker "a viewer" (hong kong Hong Kong) - See all my reviews

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This review is from: The Modern Firm: Organizational Design for Performance and Growth (Clarendon Lectures in Management Studies) (Hardcover)

whilst there is certainly wisdom in the pages, the book could be much better edited and organised, e.g., some sections go 8 - 9 pages without any sub-headings, which could surely have made reading easier, a glossary will certainly help too, e.g. some words need to be reminded of their meaning: complementarity, risk-neurality etc etc., some footnotes are not neccessary, sometimes the footnotes are just some counter-examples or elaboration and should be included in the main body, and having footnotes at chapter end instead of bottom of page is always silly,

at places this book is hard to digest, i wonder if those at the Economist are already academics conversant with the subject, if real managers are to choose, i doubt if they would pick this as book of the year

4 of 6 people found the following review helpful:

5.0 out of 5 stars Strategic Framework to Understand a Firm, Strategy and Environment, August 30, 2005

By 

Ashok A (Hyderabad, India) - See all my reviews

This review is from: The Modern Firm: Organizational Design for Performance and Growth (Clarendon Lectures in Management Studies) (Hardcover)

The Modern Firm discusses the interrelations between organizational design, competitive strategy, and the business environment. This book is a very very difficult read. If you have read Good to Great and expect the read to be anywhere as easy as that then you are mistaken. This book is very dense and most of the readers will not be able to finish it. Economist reviewer perhaps has a wonderful background to read such stuff with ease (for having given the book of the year award) or should have atleast known the author and his ideas well. It could be good college text book for detailed read or a week long course by the author - but as a self-read I would rate it very low.

*** Update: 21 Jan 2011 ***

I had originally rated this book 3 stars. I have upgraded it to 5 stars now. Why? This book is difficult reading and needs time to read and understand. Only in my second reading did I really start 'getting' it all together. The systems based approach - think through every act you do for consequences (something I learnt the hard way in my business - where giving incentives in the wrong way hurt the company way too much). The author examines the relationship between organizational designs, strategy, and external environment and how organizations that are successful will establish patterns of fit among these elements in a holistic manner. Towards the end the author confesses that he doesn't have any 'best practice' fits all solution but that we (the practitioners) need to carefully listen to our business and respond appropriately. The book provides you the intellectual framework to approach the organizational design aspect along with the inter-relationship with strategy and environment - but we will need to apply it intelligently to our business. An absolute masterpiece!