The Modern Firm: Organizational Design for Performance and Growth

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.

Customer Reviews:

Stunning Perspective

By Warren Miller "Warren D. Miller - Equity Analyst" - April 15, 2006

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... read more

could be much better edited and organised

By Seeker "a viewer" - August 9, 2005

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

Strategic Framework to Understand a Firm, Strategy and Environment

By Ashok A - August 30, 2005

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... read more

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