Professor Arie Lewin: ‘I’m Looking forward to Being Surprised!’

Arie Y. Lewin, is Professor of Strategy and International Business at Duke University Fuqua School of Business and for the past 18 years has been the  Director of The Center for International Business Education and Research (CIBER). He gave an honorary lecture  on ‘Dynamics of Online Marketplaces for STEM Talent: Innovation 2.0’ on the third day of the April Conference and spoke to HSE News service about his impressions of the conference, emerging economies marketing trends and other perspectives.

— How do you see your cooperation with HSE developing? What possible areas of research could there be?

— Well I am very interested in emerging economies because the journal that I’ve agreed to be the editor in chief, Management and Organization Review(MOR), started life focusing on China and my condition was that if I become the editor I wanted to expand its coverage to all emerging economies so it would not be a journal just focused on  China. It is about advancing management research across all the emerging economies. I really believe that the way Russian managers organize and manage has to reflect the realities of the institutional configuration of Russia, its history and its ideological and cultural values.  Of course the same is true for China and other countries. So if MOR is to advance the field of management, it must seek to understand what differentiate effective Russian managers from counterparts in other emerging economies and from those in in developed economies. Unfortunately most of the literature on strategy and management is dominated by American research or more broadly Western management literature. Somehow MOR should be open to indigenous management theories and practices. There must be some very well managed Russian companies who are organized differently from well managed American companies. In China I see well-managed companies that do not follow US best practices because they must manage under different conditions, such as, lack of trust. In China for historical reasons people do not have trust in one another, a condition that has built up over 3,000 years of surviving under central authority of successive emperors and in modern times under 67 years of the central authority of Communist Party.

— You said that Russian managers had to deal with history. What are the biggest challenges modern managers face? Are there any new competencies maybe?

— I do not consider myself expert on Russia. I do recall that when the Fuqua School of Business at Duke University, undertook to train Russian managers, (under a grant from Mr Fuqua), it was a surprise for the Russian managers, to discover the concept of profit and how profits are generated. I still remember the discussions when the Russian managers learned the concept of profit and their response, ‘so this is the money that the capitalists are stealing from the workers!’. No doubt that Russian managers have come a long way from that kind simplistic ideological thinking about the concept of profit. I am confident that in the current environment some Russian managers find ways to operate very effectively under an institutional and regulatory environment, which requires them to manage quite differently from their counterpart in America.   I may not be well informed, but so far I am not aware of case studies of uniquely outstanding Russian companies. Of course anecdotal stories abound including some very important research cases of joint ventures with Russian partners, but insightful rigorous academic clinical research are very rare or non-existent. In contrast, I have seen some very informative case studies on Chinese indigenous management. Today I described one example about how the Haier Company has learned, through a trial and error process, to become an open innovation organization.

I have no clear idea of how such case studies would be executed in Russia. Primarily because management scholars in Russia may not have the requisite training that constitute the building blocks of strategy and management PhD education in the US.   I am very interested to have HSE join in hosting the second annual MOR Research Frontiers Conference in 2016, on the theme of "The Knowledge Creation and Innovation in the SME Ecology”. The working assumption is that small or medium size companies which survive in the long run must have found organization forms and management strategies for combining ordinary resources to accomplish extraordinary outcomes. Yet this important idea remains largely unexplored!

— Why do you think that’s so?

— Because in Russia as in China the focus has been on large companies or SOEs. To government policy makers it may not seem exciting to study the ecology of SMEs.  I do not recall the exact statistics but, in China and the United States, the SME ecology constitutes a major source of employment in the economy, yet there is no concerted effort to undertake research on the SME ecology. The one exception being the enormous effort to undertake research on entrepreneurs and entrepreneurship.

— Professor Lewin you have a reputation as an academic innovator as indicated by the Academy of Management OMT (Organization and Management Theory) division award of the Inaugural Martin Trail Blazer Award. Having founded Organization Science and later serving as Editor in Chief of the Journal of International Business Studies and taking it to the next level why did you accept to be Editor in Chief of Management and Organization Review?

— Assuming the Editorship of Management and Organization Review from Anne Tsui the founding editor is for me an honour, a privilege and a daunting challenge. Having been the founding editor of Organization Science, Editor of JIBS and 18 years as Director of the Center for International Business Education and Research at Duke University have reinforced my view that the great heterogeneity observed in the practice and theories of strategy, management, organizations, competitive advantage, is to a great extent due to differences in country founding conditions, history, culture and evolutionary journey from low to high endowment. My guiding editorial philosophy is to first find the ‘jewel’ in a paper. MOR senior Editors and reviewers hopefully will then be successful in guiding the authors to feature the idea in the paper that ultimately will published in MOR.

The dominant US business education model and dominant social science research paradigms largely ignore the reality that managers, business leaders, in other cultures are framing and implementing management and organization solutions under the fundamental limitations of human bounded rationality first defined by Herbert Simon and the Carnegie School. Bounded rationality applies universally to all individuals and organizations be they Russians, Chinese or American. Much of the research in International business has focused on the Multi National Enterprises. But very little research has focused on Small and medium–sized enterprises in emergent economies or on MNEs originating from emerging economies.

I expect that MOR will become a blend of several leading journals in Management, Strategy, International Business, Sociology, Political Science, and Organization Behaviour with a keen focus on the context of emerging economies.  Several papers highlighting these phenomena are in process and are on track to appear in 2015 and subsequent years.

— What is your interest in Russia?

— Research on the organization and management of Russian companies is tied to MOR aspiration to take a leadership role in advancing research on indigenous theories of management. Secondly I am interested in in a more general puzzle. Why are most emerging economies expected to eventually hit the middle income trap? China is predicted to hit the middle income trap by the 2030. Russia may have already reached the middle income trap. I am particularly interested in how can emerging economies avert the middle income trap through investments and other initiatives intended to unleash knowledge creation and innovation as levers of economic development. That requires understanding, among other factors, the institutional barriers to innovation.

— How do you see the future of business education in Russia and worldwide? Should there be a universal training model or should it be specific to each country?

— I think it would be a mistake to ‘copy exact’ the American dominant logic. There is a paper coming out in MOR that argues that because vast majority, if not all, business schools around the world have adopted the American model a homogeneity and similarity in management education has been built up and manages around the world, including Russian managers,  are all following similar principles of strategy and organization. Therefore we should not expect to observe variation in management practices in such countries as Russia or China. It is my fervent hope that when this paper is published in MOR it will unleash a wide ranging dialog and debate. Basically, I think there are good reasons why Russian managers manage the way they do and some have become very effective. However, I am not aware of case studies of Russian companies that document Russian managerial approaches that are equally effective, in some unique way, to best western managers. As a student of Herbert Simon, the first Nobel Prize winner in Economics (1978) who’s not an economist, I am always cognizant that ‘bounded rationality’ is the fundamental limitation on management action - there’s only so much that one person can do. Since lay persons design and manage organizations the many possible solutions to bounded rationality cannot just be the American way of strategy and organization design. I strongly believe that managers in other countries have invented equally effective, or more effective, management approaches to strategy and management that are uniquely Russian, Chinese or Brazilian, etc., that we don’t know about because we haven’t researched them. I’m looking forward to being surprised!