Archive for the ‘Discipline’ Category

My Introduction To Sociology   no comments

Posted at 8:57 am in Sociology

I have chosen the topic of cryptography on the web and the disciplines of sociology and politics/political science (still undecided).

I decided the best way to start the process of research was to avoid looking at my topic in much depth and focus on grounding my knowledge in the two disciplines I’ve chosen. My reasoning was that this would better allow me to think about the cryptography within the context of my disciplines rather than read cryptography first and then need to refresh my understanding within new contexts of my chosen disciplines.

Whilst I am still undecided as to whether I will choose political science (a more theoretical approach to the nature of politics) or simply politics (closer to political history) but I am certain of my decision to examine the discipline of sociology. Having previously been heavily cognition/neurology oriented within psychology and less socially minded I felt this was a perfect opportunity for self development and so the choice of sociology was a ‘no-brainer’. Whilst psychology might be often associated with sociology, being that they are both social sciences, my particular psychological background means sociology is by all means a good distance outside my comfort zone.

I searched initially for “undergraduate sociology reading list[s]” and located an undergraduate reading list from City University London, University of Warwick and Brunel University London all of which touted Ken Plummer’s Sociology: The Basics as providing a sturdy foundation for undergraduate students. As such, this has been my first textbook on the topic of sociology.

The book establishes a basic description of sociology as a lens through which to view, examine and interpret the world. It is noted that “social” in sociology can have two similar but distinct interpretations. The first interpretations is “social” meaning the social ‘entity’ or ‘agent’. The second interpretation recognises “society” as a cumulative entity comprised of multiple agents. To make an analogy; this is the difference between describing the ways in which individual birds in a flock are influenced by their surroundings and describing the seemingly single entity that all the birds, moving together, appear to form.

In this way sociology offers two key opportunities. The first is to discuss issues such as the nature of culture, religion, ethics and any facet of social life in an both an abstract and society wide sense. The second is to allow for observations to be made of the ways these abstract concepts may influence the social world of the individual agents. In this way the discipline of sociology appears to be inherently interdisciplinary in and of itself; drawing on everything from medicine to theology in order to adequately represent the complex nature of social interactions.

I have encountered several topics of interest that I will research further:

Modernity: the discussion of the sociology of “modern” societies. In particular the idea of “multiple modernities”: as societies have advanced together technologically many have diverged in their modernisations forming new cultural and societal differences. The ways in which these differences interact with differing modernisation is the subject of this specific approach.

Discourse/Discourse analysis: The approach of analysing communication. This can be done from a variety of perspective to achieve ends. These ends include making theories about the interactions of humans or to further contextualise cultural expression within a wider societal context.

I am looking into what politically oriented undergraduate text would offer the strongest foundation and have identified several potential candidates using a similar approach of consulting University undergraduate pre-/reading lists:




Written by Kieran Rones on October 15th, 2012

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Future Society VII   no comments

Posted at 11:58 am in Sociology

It’s great that people are becoming more aware of these problems:

Written by ad4g11 on February 18th, 2012

Quick Digital Economy Act Scribble   no comments

Posted at 12:39 am in Economics,Law,Sociology

Have just been reading up on the Digital Economy Act, and its various ramifications. I have created a scribble that seems to me to show one of the key points – that only jumped out at me as I was doodling – that once again, the web has made Januses of us. I think that most of us are both copyright holders and copyright ‘acquirers.’

And in this case, the ISPs aren’t necessarily bad – if you are a struggling writer, musician or artist then if they are called upon to help you protect what you would think of as yours, you’re not really going to complain. (Speaking as someone whose household gets to buy stuff from royalties coming in from the British Performing Society.) However, most struggling artists, musicians and writers are (perhaps because they’re struggling , perhaps because it’s part of the creative process), also avid ‘collectors’ of what they might not necessarily have paid for… Obviously the issue is far more complex than this.

Certainly BT and TalkTalk have requested the review because of concerns about privacy (n.b. BT and TalkTalk took up a diametrically opposite stance on this very issue when it came down to Phorm and RIPA – perhaps they are now more wary of some of these issues). It certainly brings to the fore the issue of what is property on the web, what is private property on the web, and how far a government should allow intrusion into people’s lives in order to monitor or recover what might be defined as private.

John Stuart Mill wrote:

‘The things once there…mankind, individually or collectively, can do with them as they please. They can place them at the disposal of whomsoever they please, and on whatever terms…Even what a person has produced by his individual toil, unaided by anyone, he cannot keep, unless by the permission of society. Not only can society take it from him, but individuals could and would take it from him, if society…did not…employ and pay people for the purpose of preventing him from being disturbed in his possession..’ (From Heilbroner, p.129).

Mill saw that the principle of private property had not had a fair trial, and that reform could make changes to outdated laws, without recourse to outright revolution. He feared that Communism would stifle individual thinking and feared ‘whether there would be any asylum left for individuality of character; whether public opinion would not be a tyrannical yoke; whether the absolute dependence of each on all, and the surveillance of each by all, would not grind all down into a tame uniformity of thoughts, feelings, and actions…no society in which eccentricity is a matter of reproach can be in a wholesome state.’ (Heilbroner, .p132).

The doodle is JUST a doodle, it’s not good graphic design and it’s very messy.

Digital Economy Act doodle

Written by me1g11 on December 31st, 2011

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Economics Overview Part 1   no comments

Posted at 10:16 am in Economics

Economics is a social science or discipline that analyses the production, consumption and distribution of goods and services, or from another perspective, ‘wealth.’ It often asks what is valuable at any one point in time by evaluating the worth of goods and services as they are exchanged. (Drawing on the notion of a point in time, and what we know about the modern capabilities of quantum computing, might suggest that any failure to properly understand where value lies and of what it consists, in immensely complex chains – for example in stock-market deals – could result in hugely disastrous market crashes.) Where this evaluation may be difficult to accomplish (for a number of reasons) this would seem to make economics a normative discipline. Schumacher suggested that its models and theories are based on value systems and embedded views of human nature and referred to meta-economics, as some of these values are not made explicit in the discussion of wealth and its distribution.

Schumacher actually compared two different economic systems in order to illustrate this point: one was the western ‘materialist’ system where the standard of living is measured by the amount of annual consumption – and which therefore seeks to achieve maximum consumption along with optimal patterns of production. The other was a Buddhist economics based on the notion of the ‘right livelihood’ and the ‘middle way’ – aiming for the maximum of human well-being with optimal patterns of consumption.

It is interesting that presently there seems to be more media attention given to research on economic notions of ‘well-being’ and even the search for drivers of happiness.


Economics emerged in and around the 17th century, in line with a value system that differed markedly from those in existence in medieval times. Until then most of what was needed to survive was produced and exchanged locally, within ‘tribes’ or local populations. Robert Heilbroner makes a distinction between markets, where food, materials for building shelter, and clothing might be traded, and ‘the market system’. (The Worldly Philosophers, p.27.) ‘For the market system is not just a means of exchanging goods; it is a mechanism for sustaining and maintaining an entire society.’ Markets existed, and not just for barter, but generally, profit was frowned upon (seen as ungodly) and there were severe restrictions on those who attempted to sell to promote their own self-interest.

There are of course, examples of early traders who did undergo long voyages, (and thus were trading globally) but the suggestion is that these voyages were an end in themselves, and as much about discovery and adventure – ceremonial, bonding and social voyages – rather than for the ultimate motive of profit. A corollary to this might be that these ends are still in existence today (i.e. the bonding of the boardroom, the religious pursuit of profit, Thatcher’s yuppies who took to heart the free market forces and the limitation of the state’s role, and took the role of competitive individualism as their mantra for professional activities.)

In line with the emergence of economics, Beinhocker says, of the period between 1750 and the mid-eighteenth century,

‘According to data compiled by the Berkeley economist, J.Bradford DeLong, it took 12,000 years to inch from the $90 per person hunter-gatherer economy to the roughly $150 per-person economy of the Ancient Greeks in 1000 BC. It wasn’t until 1750 AD, when world gross domestic product (GDP) per person reached around $180 that the figure had finally managed to double from our hunter-gatherer days 15,000 years ago. Then in the mid-eighteenth century something extraordinary happened-world GDP per person increased around 37-fold in an incredibly short 250 years to its current levels of $6,600…’ (p.9).

The evolution of economics:

Earlier it was called political economy, but then it was suggested in the 19th century that ‘economics’ as the short form of economic ‘science’ seemed to suggest a wider scope for the subject.

There are basic contrasts between micro and macro economics – where the micro involves households, individuals and firms and macro looks at ‘entire’ economies and growth, unemployment, fiscal policy, inflation etc.. Normative economics looks at prescriptions – how economics should work, while positive economics looks at describing what occurs. As suggested above, the distinction between these two might not be as clear-cut as one might expect.

There is also economic theory and applied economics, rational and behavioural economics, mainstream and heterodox economics, econometrics (where economic theories are tested empirically, i.e. through observation, as opposed to via controlled experiments) and experimental economics.

Classical political economy

Adam Smith’s The Wealth of Nations described land, labour and capital as the three drivers of production and wealth. He also recognised that the division of labour could create great efficiencies, while perhaps causing problems for the common man whose world view was created by the day to day features of his job.  Smith was the originator of resource allocation theory, suggesting that in a competitive but self-regulating space, resource owners will deploy these most profitably – resulting in an equal rate of return and satisfaction of economic needs of the people. The market was seen as a ‘mechanism’ (note Newtonian tone) acting as an ‘invisible hand’ paradoxically leading people selfishly pursuing their own interests to create social benefit. Self-regulation meant that the market was its own guardian, and didn’t need the interference of government. Prices are kept from ranging away from the cost of production via public demand. The market also encouraged risk, creativity and invention. Smith also referred to two laws: the law of accumulation and the law of population. Via the accumulation of capital society could benefit as money was invested in more machinery and means of production. However, while more machinery would mean more workers, which would in turn mean higher wages that would then dissolve profits – the law of population meant that ‘the demand for men, like that for any other commodity, necessarily regulates the production of men.’

Other early  political economists were Malthus, John Stuart Mill and David Ricardo. Ricardo (writing just after the introduction of the Corn Laws, which practically broke Britain, in order to protect the landowners’ interests) looked at the distribution of income and conflict among landowners, workers, and capitalists. Ricardo saw that resources such as land are limited, and would result in problems emerging from the growth of population and capital, keeping wages and profits down while increasing rents. He grasped that the interests of landowners and capitalists were at odds and that the landowners were at war with the community. This position made Ricardo very popular with industrialists…

At a time when people were starting to question whether nationhood could be linked to population numbers, Malthus saw that human populations tended to increase, outstripping food production. One increase was geometric while the other was arithmetic. He also questioned the idea that a market economy could naturally create employment, suggesting (like Keynes in the 1930s) that savings (Smith’s accumulation) would create unemployment as countermanding spending. Malthus’ views were very unpopular. Malthus’ view was that, ‘Famine seems to be the last, the most dreadful resource of nature. The power of population is so superior to the power of the earth to provide subsistence…that premature death must in some shape or form visit the human race.’

It is of note that (as Beinhocker points out, p.17), while some modern economists generally agree that economics should be studied as a complex system, and others agree that it has much in common with the idea of evolution, it was, of course, Malthus who inspired Darwin’s thinking, and that in fact much of our thinking about evolution derives from early economic ideas on wealth and population.

It is often important to account for the analogies and metaphors inherent in and between disciplines as these can account for some circularities and blind passages that seem to recur. Just as cognitive psychology might have suffered in part from its reductionistic reliance on the ‘brain as computer’ analogy (when the sorts of computers referred to in the analogy were created in order to attempt to replicate just one small part of how our minds work), so it is possible that thinking on economics might have been held back by earlier hesitation about exploring ideas about complex adaptive systems. There have been many works written on this subject: Veblen, Alfred Marshall, Schumpeter and Hayek, Nelson and Winter, for example, but it is generally agreed that mainstream economics has mostly been concerned with the model of economics as a form of self-governing mechanical system.

Although it seems that Smith, Malthus and Ricardo were opposed to one another, in fact it seems that partially where they differed was at the level of focus that they applied their thinking to. However, they saw social systems driven by the search for profit, market roles, a place for government and the force of competition. They also applied their thinking to technology. Smith described in great detail the ways in which pins were made, and how the division of labour and application of technology had their part in this process, but his thinking seemed to focus on a closed technological system. Malthus and Ricardo however were present when technology started to explode upon the scene, as more innovation came in, (the steam engine, the spinning jenny, iron working) it became apparent that with such innovation might come an upset to the ordered mechanisms of self-governing economies.

John Stuart Mill (worth writing about in far more detail) differed from these three thinkers in that he came of a more utopian approach. The social changes that were fostering early economic thinking had produced factories where social conditions were utterly appalling. Worse, because of an insistence on mechanism and natural law, it seemed to some that these appalling conditions were just a natural consequence of the market, and that while there was horror running through the fabric of these workplaces, it was akin to that of ‘nature red in tooth and claw:’ impersonal laws at work with no need for intervention.

Mill, following Robert Owen, Saint-Simon and Fourier, was convinced that a better way could prevail. Rather than encouraging the lower classes to revolt as did the Communists, utopian idealists wished to persuade those who held the power to change their ways, to reform. While the means of production might be functioning according to the laws described by Smith, Malthus and Ricardo, what happened to what was produced was actually down to a number of factors that could be controlled – and was not subject to natural law.

Future Society VI   no comments

Posted at 11:33 am in Sociology

The only constant is change. Heraclitus, 500 BC

A global crisis was predicted by Prof Beddington at the Sustainable Development UK 2009 conference because of the 50% food and energy jump, rise of 30%  of fresh water need and climate change by 2030 when the population will reach 8 billion. The United Nations Environment Programme predicts widespread water shortages across Africa, Europe and Asia by 2025. The amount of fresh water available per head of the population is expected to decline sharply in that time.

In the introduction of the Future Society envisioned by the Science Community report the following problems are identified:  In its “Japan Vision 2050”, the Science Council of Japan (SCJ) points to “global environmental degradation”, “population growth” and “the widening North-South divide” as major global problems of the 21st century that seriously threaten the sustainability of human society. As a way of solving these global problems, the SCJ proposes that steps should be taken to achieve a “balance between environment and economy“. In recent years, the creation of innovations has been attracting interest in many countries. This is due to the expectation that breakthroughs forged by science, technology and innovation could solve these major global problems of the 21st century, and could achieve sustainability for humankind.

The ideal society envisioned in the year 2025 will be a society in which people can live in health and safety, a society in which highly advanced information technology (IT) systems are widely used, a society in which Nature has been restored and local communities revitalized, a society in which efforts are made to solve the problems of the global environment and energy, and a society in which a suitable response has been found for the problems of water and food supply. This Report highlights innovations that should be promoted with a view to realizing this vision.

The suggested solutions are presented in 2 chapters out of which we only selected some of them:

  1. The ideal society of the future and the innovations to be promoted
    To achieve a society in which everybody can live in good health by the year 2025, society will need to be given the means to address the problems of declining birthrates, aging and population shrinkage.
    Biotechnology, information technology, and others must be integrated with a view to creating innovations that offer sufficient levels of medical and health care.
    Here, I must add my short article written for the Bionanotechnology lecture about this life-saving technology.

By integrating the development of artificial rainfall technology, desalination plants powered by solar batteries, water-retentive gel technology, and others, it will be possible to prevent desertification and create green areas in deserts.

By launching satellites that can convert solar energy into microwaves and transmitting those microwaves to Earth, photovoltaic power will be generated in outer space and the power used on Earth as a clean and efficient form of energy.

A voice-recognition portable automatic translation device will be developed to assist smooth communication between people from different parts of the world, greatly enhancing cross-cultural understanding.

2. Conditions, environments and systems for creating innovations

Deepening our understanding of science and technology, investigating “social
technology” and the nature of systems that allow science and technology to fully demonstrate their social character

Teachers’ ability to pass down the pleasure and fun of learning to their students should be fostered

Written by ad4g11 on December 15th, 2011

Future Society V   no comments

Posted at 11:52 am in Sociology

As we pointed out in our previous post, there is an imbalance between the technological overdevelopment and the social underdevelopment in our society. As the number of young unemployed reaches a record level in the UK and as the education taxes increase, the situation is not becoming any clearer and confusion and uncertainty reigns. We are going to explore the main factors of these problems and some solutions to them in the following and next post.

Globalization, Uncertainty and Youth in Society by Hans-Peter Blossfeld, Erik Klijzing, Melinda Mills and Karin Kurz published in 2005 seemed to predict the economical problems facing the world 3 years later. The main factors are:

  • internalization of markets
  • liberalization within nations
  • accelerated diffusion of knowledge and the spread of global networks that are connecting all kinds of markets on the globe via new information and communication technologies
  • rising importance of markets and their dependece on random shocks occuring somewhere on the globe ( e.g. major scientific discoveries, technical inventions, new consumer fashions, major politcal or economical upsets)

The authors mention that the markets are becoming more dynamic and more less predictable. The national institutions meant for reducing this uncertainty are employment, education and family systems as it can be seen in the figure below.

In the next post we will look at the 2007 Future Society envisioned by the Science Community of Japan report to find solutions to these global problems and to diminish uncertainties.

Written by ad4g11 on December 7th, 2011

Globalisation and The Long Tail   no comments

Posted at 10:19 pm in Economics,Sociology

Globalisation refers to the how the world is ‘shrinking’ culturally and economically. How the world is changing from different nations managing themselves to one big world trading ideas, people, products and money. There are many global companies such as MacDonalds that exists everywhere! There are a number of advantages and disadvantages to globalisation. Sometimes it can be seen as a good thing that benefits small businesses by giving them access to a larger market, such as through the Internet. However, sometimes it can also be seen as a bad thing, for example with the outsourcing of work to poorer countries and buying materials for production in poorer countries to save money which can affect the local and national economy.

The Long Tail – Chris Anderson

The tail refers to the long end of the curve on the graph that depicts the popularity of all products. As you can see from the image above, ‘the head’ is short and contains the most popular of products. These are things that everyone wants, think of it is the top 40 songs in the charts. ‘The tail’ is much longer and consists of every other product in existence (or every song that is not in the top 40!). These things are much less popular, but there is a lot more of them. Money can be made by just selling products from the long tails, you would sell maybe one of each product rather than millions of one product as is seen in ‘the head’.

Companies do still aim for a business model that targets ‘the head’ rather than the long tail. For example radio stations tend to play the popular music at that moment in time, but there is a suggestion from Chris Anderson that the radio is dead.

Why the radio is dead:

  1. Radio stations need money so they need advertising and therefore need listeners. To get the most listeners you need to appeal to the majority who like what is popular at that moment in time (‘the head’).
  2. The rise of technology in the form of MP3 players. You can listen to any music you want at home, on your PC, on my personal MP3 player and even take that into your car and connect it to a modern car stereo.

Chris Anderson also suggests that “The Long Tail is full of crap.” Which is it…It does contain everything! But the compelling thing about the long tail is that there is something for everybody that they would not be able to find and purchase otherwise.

The Internet and the Long Tail

The internet has given us unprecedented ability to access products never before available so quickly and easily. The Internet is the best example of how globalisation can reach everyone. Someone who makes Doggles (goggles for dogs), or other niche items, can become a millionaire.

A real shop on the high street may have trouble making money if it was taking advantage of the long tail. Not just for the reason that it cannot reach as many customers as an online shop, but for more practical reasons that it would be difficult to sort through all of the many niche products. Being able to search through the ‘crap’ and filter to get to the information you actually want is very much a benefit you can see online. Social media may also help with this, we often see suggestions for other items we might like on online shops like Amazon. Folksonomies consisting of lots of tags collaboratively created may also assist with finding things you want and things that are similar to it.

Does the Internet bring down the barriers for businesses?

Eric Schmidt on the long tail

Is Globalisation good for the small business?

Yes and no, it depends on what you are selling. There is the potential for more sales through having greater access to a wider market. This is especially true for niche items and products where in some situations they may sell nothing if they are not based near their market. The Internet definitely assists with globalisation based on geography. There is also the benefit that selling products online is very cheap to set up and use. Google Analytics is also a nice tool to assist with marketing and improving your own business website.

However, with the benefits of reaching more people, large businesses will also receive this benefit. Large businesses may be able to give better prices due to mass production, but this shouldn’t effect niche businesses where large businesses do not offer so many niche products.

Written by Gemma Fitzsimmons on December 6th, 2011

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Summary of social cognition   no comments

Posted at 4:21 pm in Psychology

Over the last few weeks, I have learned much about social cognitive, social identity, social representations, and discursive perspectives. In particular, I have looked further into social perception, attitudes, self and identity. I have found it very interesting to see how within the same topics, different models coexist to describe the same thing. In my previous posts, I have also tried to highlight the common ground as well as the differences between these models.

As I began reading, it became clear to me that the so-called individual cannot be properly and fully understood in abstract isolation from the social. Even in the most minimal of social groups constructed in the laboratory, the group has meaning because of the network of social relationships in which participants are implicated.

I have also come to conclusion that humans do actively construct their own social environment. Exactly how this is done, people seem to differ in their own opinion. Some resting on a realist philosophy of science suggests that it is possible to build a theoretical knowledge of the world which resembles truth. They assert that some theoretical accounts can be judged to be more true than others. However the discursive perspective does not accept that view, and differences between different theoretical accounts arbitrated, by recourse was to empirical data. Rather, one account prevails over another because of the attitude of the social and political processes of negotiating shared understandings of the world, not because of its greater truth value.

I cannot decide between the two viewpoints. However, what is clear to me is that social psychology cannot proceed without all thorough and more adequate analysis of the truth and reality. The bottom line from me is, it may well be the case that one theoretical or empirical account of the social issue prevails because of the social and political processes of negotiating shared understanding rather than because of the ability of data, but that date are themselves are also an important part of the way in which understandings are negotiated.

Written by Mandy Lo on December 1st, 2011

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Who am I?   no comments

Posted at 4:10 pm in Psychology

This week I have been reading around the subject of self and identity, which is concerned with how the everyday concept of self has been theorised in social psychology.

Social cognitive models describe self as a piece of knowledge and considers how particular kinds of self representation are assessed in different situations. There seems to be a lengthy discussion on the ideal and the ought self as opposed to the actual self. Discrepancies between the ideal and the actual or the ought and the actual are said to be responsible for the positive or negative effects on self-esteem. The plan is that people have for achieving this eternity of cells in the future, as well stay current discrepancies from them, are considered to be important contributors to people’s experience of themselves in the present. In addition, it is noted that people engage in processes of self-evaluation and self regulation, the assessment of how one is doing compared to others, and intentional efforts to modify aspects of one’s self. All these models have something to do with the ways in which the knowledge that people have about themselves becomes a relevant in particular circumstances, and how these guides are their behaviour accordingly.

On the other hand, social identity as a contrasting model considers how the social groups of which we are members impact on our sense of self. According to this model, all experiences in children live Kurds continuously from interpersonal to intergroup interaction. It is believed that there is the further we move towards the intergroup situation, the more depersonalise our sense of self becomes. In other words, we begin to think of ourselves more and more in terms of those characteristics that we share with other group members. This in turn is closely linked to personal attitudes and perception of group identity.

This new model has led to further research into ways that people share representations of self within the groups. In particular, they consider the ways in which socially shared representations of the self and of the social groups that contribute to one’s sense of identity shape the context within which people develop their self concepts. Of course, individuals may differ in the extent to which elements of particular social representations are incorporated into their self concepts, the importance of social representations in forming a shorter and vermin surrounding these selves means that social representations cannot be reduced to individual difference variables.

Finally, I have touched on the work of social constructionist. Some seem to believe that the conditions of contemporary life are undermining the notion of an integrated and stable self. However, others have also argued that the constructed the nature of the self is being reviewed in the ordinary experiences of everyday life, and is provoking the prices as the ontological basis of cells apparently unravels. Therefore, the challenge for people in this world is to construct a sense of identity which does not require the self to be a faithful reflection of inner capacities and qualities but which, rather, sees the self as a constructed achievement of relational social life.

Moving on

This is my last reading based post on this blog. In view of the time left, my next blog will focus on summarising and recollecting what I have learned so far, and will begin to move towards a synthesis version of all the information presented. In particular, these will be discussed or analysed in relation to E learning.

Written by Mandy Lo on December 1st, 2011

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Business Economics Week 3   no comments

Posted at 9:27 pm in Economics,Uncategorized

This week I start by looking at business strategy from the perspective of economics. There are basic economic principles underpinning the determination, choice and evaluation of business strategy.

As mentioned in my post on management studies from a few weeks’ back, right strategies (the ways in which organizations address their fundamental challenges over the medium to long-term) are crucial for businesses to survive and beat the competition. Strategic-minded thinking includes comprehensive consideration and reflection upon a business’ mission statement and its vision. For both economists and management theorists, therefore, the aims of a business determines its strategy. Equally relevant, however, for both disciplines are internal capabilities and industry structure/conditions.

Like management theory, economists adopt Porter’s five forces model of competition (Michael Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors, 1980) which set out to identify those factors which are likely to affect an organization’s competitiveness. These five forces are:

• The bargaining power of suppliers
• The bargaining power of buyers
• The threat of potential new entrants
• The threat of substitutes
• The extent of competitive rivalry

I will be returning to these five forces next week in the context of considering, specifically, how they apply to the effects of the Web. In the meantime, it is worth pointing out that the five forces model does have limitations. For example, it is a largely static model whereas conditions change over time requiring strategy to evolve over time. Notably, also, Porter’s model suggests that success is dependent on competition rather than the potential for collaboration and cooperation (such as with those downstream vertically from a supplier).

Value chain analysis is also closely linked to the five forces model (according to the definition of Sloman, Hinde and Garratt, value chain “shows how value is added to a product as it moves through each stage of production from the raw material stage to its purchase by the final consumer”). Analysis of the value chain involves evaluating how each of the various operations within and around an organization contributes to the competitive position of the business). Ultimately it is these value-creating activities, which can be primary or support activities, that shape a firm’s strategic capabilities.

Turning to growth strategy, it is worth making a nod here to vertical integration (this will become more relevant when considering the effects of the Web in facilitating disintermediation of value chains over the next two weeks). There are a variety of reasons why forward or backward vertical integration might lead to cost savings (such as through economies of scope and scale), including: production economies; coordination economies; managerial economies; and financial economies. The major problem with vertical integration as a form of expansion is that the security it gives the business may reduce its ability to respond to changing market demands.

Other points of comparison and dissimilarity between management and economics can start to be drawn. For example, a point of difference is economics’ focus on theories related to short-term/long-term profit maximization. There is much debate among economists about whether profit-maximizing theories of the firm are unrealistic (largely due to a lack of information or lack of motivation). This focus is where costs concepts and graphs (demand curves in particular) come in.

A more practical illustration given by Sloman, Hinde and Garratt in respect of the search for profits is the video games war where there are high costs, but also high rewards, from a long-term perspective. In considering the secret of success in the market, online gaming capability and global connectivity are significant factors. Moreover, connection to the internet has facilitated a move towards the use of consoles as ‘digital entertainment centres’, in which users can download content. These developments are likely to continue as long as broadband internet connectivity improves and remains fairly cheap to use.

Finally, in economics, there are various theories of strategic choice (such as cost leadership, differentiation and focus strategy). These strategies can be combined. For example, Amazon had a clear niche market focus strategy – to sell books at knockdown prices to online customers – and this has become a mass market with the spread of the Web and due to lower costs.

Next week, I want to move the focus firmly onto the impact of the Web on business competition as I move on from broad principles of management/economics to specifics. I will kick off with a consideration of Google’s business model.

Written by amk1g10 on November 28th, 2011

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