Category Archives: Business & Management

Historicising Business Strategy

Evolving Ideas about Business Strategy

by Pankaj Ghemawat (NYU Stern, USA and IESE Business School, Spain)


This paper updates an earlier article published in Business History Review that concluded that by the second half of the 1990s, there had been a profusion of new, purportedly practical ideas about strategy, many of which embodied some explicit dynamics. This update provides several indications of a drop-off since then in the rate of development of new ideas about strategy but also a continued focus, in the new ideas that are being developed, on dynamics. And since our stock of dynamic frameworks has, based on one enumeration, more than doubled in the last fifteen to twenty years, updating expands both the need and the empirical basis for some generalizations about the types of dynamic strategy frameworks—and strategy frameworks in general—that managers are likely to find helpful versus those that they are not.

Source: Business History Review 90, 1-23 (DOI:

Review by Kyle Bruce (Macquarie University, Australia)

Editor’s note

Ghemawat’s 2017 paper below should not be read in isolation but as part of a round table organized at Harvard Business School that brought together historians and management scholars to discuss the origins of ideas in business and management. The results of the round table were published as a special edition of the Business History Review. In this sense, Ghemawat’s contribution to the special issue and its discussion by Chris McKenna (in the same special issue) came to an independent yet similar conclusion to that expressed by Nobel laureate Robert Shiller, who suggested “that in the age of social information networks, economists need to rethink how and why information really spreads.” (See a summary of Shiller’s ideas in The Role of Narratives in Economics).

It is laudable that the executive editors of the Business History Review created a space to disseminate the results of the round table through the journal. However, as you will read below, Kyle Bruce questions whether this is the right way to engage other management scholars in business history as, strictly speaking, the contribution by Ghemawat would be found wanting as scholarly work of international standing.

A final note is that in its comments to Ghemawat, even McKenna gets it wrong by pointing to Lotus 1-2-3 as the first spreadsheet. It actually was VisiCalc.

Having said that, the aim in this space is to generate academic debate through a blog format. So by all means do chip in.

Bernardo Bátiz-Lazo
General Editor NEP-HIS & Editorial Board member, Business History Review.

As a historian and teacher of strategy and, moreover, as a close follower of Ghemawat’s work, I was very much looking forward to his recent update of his 2002 BHR paper on the history of the sub-discipline. I habitually invoke the decade-and-a-half old piece as background reading for my Executive MBA strategy students and hitherto have experienced little, if any, pushback from students typically cagey about the words “theory” or “history”. Regrettably, I am not so sure the updated paper under review here will escape unscathed for the simple reason that it is pretty tough to follow. Let me explain.

After briefly overviewing the 2002 paper that in essence discerned a profusion of new ideas about strategy – particularly those embodying a more dynamic approach – dating from the early to mid-80s, Ghemawat introduces his new findings. After a big peak in the mid-90s, there has been a marked drop-off in new ideas, but dynamics “is a sustained interest focus of strategic innovation rather than one of passing interest” (p. 5; emphasis added). So far, so good you might think, but I started to worry about the phraseology (“strategic innovation”?) attendant on the use of analytical tools from strategy and adjacent sub-disciplines to make sense of his findings; namely, “what should one make of the drop-off overall and the shift toward more attention to dynamics? And what, if anything, should be done?” (p. 8).

Pankaj Ghemawat

Pankaj Ghemawat

Unless the strictures concerning the dreaded “so what?” question have been lifted in history journals such as BHR, I could not discern after several reads a compelling argument as to why readers should be at all bothered by the findings presented? For students of the strategy-as-practice literature, for instance, the suggestion there’s fewer models and frameworks out there for practising managers to employ is not a concern given they probably don’t use them anyway. For my MBA students who routinely complain of framework fatigue, again, the theory drop-off is not a problem. And so, for me, the remainder of the paper was rather superfluous and unnecessarily complex. Curiously, I think Ghemawat makes it so when he concludes that while it’s certain there’s been a drop-off in the “rate of development of big new strategy ideas/frameworks, it is much harder to be definite about the welfare implications” (p. 10; emphasis added). For me, this conclusion renders redundant both the ensuing “what is to be done” question he poses, as well as the next eight-and-half pages of the article devoted to “a critical assessment of frameworks new and old” (p. 2).

After several reads of these aforementioned pages, I could not really follow or appreciate the “irreversibility” and “uncertainty” dimensions utilised to assess how dynamic current frameworks really are. However, I felt comforted when Ghemawat concludes that “quite a few” of said frameworks “seem subject to some practical limitations” (p. 19). This comfort was short-lived, though, when he finishes the paper with the frustrating and seemingly throwaway line that the way forward, as it were, “is to shift some attention away from the chronologies of frameworks to historiography that attempts to assess them in some fashion” (p. 21). I immediately asked myself: “well, why didn’t he just do this, then??”


For me, and I trust also BHR readers, a historiographical piece embodying intellectual history, actor-network theory, or sociology of scientific knowledge to account for the “trials of strength” in strategy theory, the tension between contributions from the academy and those from business practice, and the current fascination with dynamics, would have been an easier and more interesting read. Like much being published in business and management history journals of late, Ghemawat’s paper is short on actual history and, notwithstanding the final sentence, even short on how to DO history. I was left wondering why this paper was published in this journal and asking myself what this paper’s place tells me about BHR? I have no answers for these questions but look forward to some in due course.


Ghemawat, P. (2002) “Competition and Business Strategy in Historical Perspective”, Business History Review 76(1): 37-74. (DOI:

Coming back to @PostOffice #Savings? The #east-west comparative.

Postal financial services, development and inclusion: Building on the past and looking to the future


Gonzales d’Alcantara ( Emeritus Professor of Econometrics at the University of Antwerp and d’Alcantara Economic Consulting

Paul H. Dembinski ( ) University of Fribourg, Switzerland

Odile Pilley, ( International Consultant, formerly with International Bureau of the Universal Postal Union

Abstract: Post offices, inherited from the Industrial Revolution, were monolithic telephone and postal administrations. They were intimately linked to the fabric of nations and made significant contributions to state finances. From the 1960s onwards, integrators, such as UPS and FEDEX, started offering end-to-end express services, thus challenging the postal monopoly in new high added value services. Gradually, the liberalization paradigm gained ground. Telecommunications and sometimes financial services were spun off from postal operations. More recently, new policies and priorities started to emerge especially on the development agenda where financial inclusion has become a top priority in the developing world. The question to be addressed is which role, if any, the posts play or could play in ensuring inclusion. Despite an exceptionally scarce research in the field, this paper provides an overview of how these shifts in paradigm have affected postal policy, the postal financial services regulatory framework, the status of the organizations delivering those services and the offerings themselves in developing as well as in developed countries. After a research review, including the regulatory dimension, the paper focuses on how postal financial services institutions in their legal framework have developed bringing to the fore a panorama of a dozen of promising transformations of financial postal services in developing countries.


Review by Mark Crowley

This paper by d’Alcantara, Dembinski and Pilley was circulated byNEP-HIS on 2014-09-12. The approach is unique in the sense that it seeks to compare the nature of Post Offices in Europe and the developing world, focusing primarily on their role in the savings movement. Its historical approach shows how the western Post Offices developed as a movement that sought to encourage thrift among a profligate working class, whereas in the developing world, the development of a Postal Savings movement was more in line with the growing financial markets across these nations, and the desire for individual customers to express choice in their banking processes. Moreover, it effectively shows how, following a crisis in trust experienced in the banking industry, more people across both the developed and developing world are turning to the government-backed Post Office as a safe haven for their savings in response to the perceived dangers of investing in private banks.


Citing the latter nineteenth century as the beginning of the Post Office savings movement, with British Prime Minister William Gladstone’s initiative to open a Post Office Savings Bank, this paper demonstrates that the influence of the government over consumer spending has long roots. The authors deftly show that certainly in its embryonic stages, the Post Office savings movement in developed countries focused on the provision of a secure place for working-class savings, while also encouraging thrift. Building on the lack of trust displayed by the working-class towards other alternatives, such as friendly societies, and their exclusion from private sector banks, the savings option offered by Post Offices had fertile ground on which it could flourish.              
gladstone 2

The paper also documents the differences between the supervisory natures of the Post Office Savings activities in developing countries, comparing them to that in the developed world. Citing the Asian and Latin American examples, the authors show that the levels of government control over the activities of postal savings banks were significantly more than that in the developed world, with the respective central banks exerting a supervisory role over postal and financial affairs. In the developed world, following with the liberalisation of financial services, the level of central government control over deposits made in postal savings banks has significantly diminished, with initiatives to delegate the administration of post office banking activity to private banks. Although responsibility is still being underwritten by central government (with Bank of Ireland UK as the example for postal savings in the UK) the level of micro-management previously present has now diminished.

d’Alcantara, Dembinski and Pilley also document the necessity of a world legal framework and understanding to evolve with the growing influence of the postal savings movement, especially in the developed world. Citing the aim for legal and financial autonomy to be awarded to postal savings institutions as part of the United Nations millennium goals, it effectively demonstrates the challenges that both the developed and the developing world face in terms of striking the right balance to facilitate the effective supervision of the financial system at a time when the role of private investment banks have been criticised for their excessive risk taking. While many countries in the west still pride themselves on liberal nature of their governments and markets, the definition of this is likely to change in the name of ensuring proportionality and responsibility concerning financial affairs in an age when consumer confidence in private banks is at an all-time low.


While seeking to emphasise the differences between the postal savings movement in the developed and developing world, this paper also draws on examples of convergence. In the period after the 2008 world financial crisis, there has been evidence that consumers, once more, have come back to the government-backed Post Office savings banks in response to not only their anger about the actions of private banks, but also the perception that government-backed savings institutions are safer in terms of securing deposits during periods of financial crisis. For example, in 2008, much resentment was created in the UK when the government bailed out banks deemed “too big to fail”, costing the taxpayer billions of pounds. While such action ensured that the deposits of savers were guaranteed, many responded angrily that taxpayer’s money was being used to save banks that had shown financial irresponsibility on such a grand scale.

post office uk

The paper ends on an optimistic note for the savings movement in Asia, with particular reference to China. In noting that the Chinese Postal Savings Bank is the fourth largest in China, with its customer base expanding beyond the traditional labouring classes to include students and businesspeople, the authors argue that this has been a triumph for the postal savings movement in the world’s most populous country. While it is worth noting that the level of central government control over all banks in China is possibly significantly more than in any other developed nation, it is a point well made that in a country with a flourishing middle class population, it is the postal savings movement that seems to be gaining the biggest traction.

posb china


d’Alcantara, Dembinski and Pilley covered a huge chronological and geographical period in their analysis, and have effectively compared the nature of the postal savings movement in the developed and developing world. Perhaps an area that could be explored further is the western government’s ideas of financial liberalisation as a principle that stops short of a full-scale privatisation of Post Office counters (which include financial services)? For example, Margaret Thatcher, despite pursuing a very ambitious privatisation programme in the 1980s, stopped short of privatising Post Office counters, despite taking steps to remove the ‘Giro’ from government control. Deeming the issue to be too much of a political hot potato, Thatcher left financial services at the Post Office largely untouched, encouraging only the intervention of private banks to compete for the option of underwriting (with the support of government) Post Office financial services. Today, both in the US and the UK, Post Office counters, and individual postmasters complain vehemently about their struggle for survival in the face of growing competition from private banks that now include the offers of financial services by supermarkets, and initiatives that have reduced the numerous functions of Post Office counters, including direct debit payments. Perhaps the question the authors could explore is why do western governments, while taking efforts to remove services from the Post Offices (such as bill payments) do not embark on a full scale privatisation, whereas in developing countries, where the extent of government control over the savings movement, including postal savings, is significantly stronger, the movement appears to be going from strength to strength?

Further Reading

Booth, Alan and Mark Billings, ‘Techno-nationalism, the Post Office and the creation of Britain’s National Giro’ in B Bátiz-Lazo, J.C. Maixé-Altés and P. Thomes Technological Innovation in Retail Finance: International Historical Perspectives (Abingdon: Routledge, 2011).

Campbell-Kelly, Martin, ‘Data Processing and Technological Change’ Technology and Culture, 39, 1 (Jan. 1998), pp. 1-32.

Campbell Smith, Duncan, Masters of the Post: The Authorized History of Royal Mail (London: Penguin, 2011).

Crowley, Mark J. Saving for the Nation: The Post Office and National Consumerism, c1860-1945’ in Erika Rappaport, Sandra Dawson and Mark J Crowley (eds.), Consuming Behaviours: Identity, Politics and Pleasure in Twentieth Century Britain (forthcoming Bloomsbury, 2015).

Slavery and the Modern World

The transatlantic slave trade and the evolution of political authority in West Africa

by: Warren C. Whatley (


I trace the impact of the trans-Atlantic slave trade on the evolution of political authority in West Africa. I present econometric evidence showing that the trans-Atlantic slave trade increased absolutism in pre-colonial West Africa by approximately 17% to 35%, while reducing democracy and liberalism. I argue that this slavery-induced absolutism also influenced the structure of African political institutions in the colonial era and beyond. I present aggregate evidence showing that British colonies that exported more slaves in the era of the slave trade were ruled more-indirectly by colonial administrations. I argue that indirect colonial rule relied on sub-national absolutisms to control populations and extract surplus, and in the process transformed absolutist political customs into rule of law. The post-colonial federal authority, like the colonial authority before it, lacked the administrative apparatus and political clout to integrate these local authorities, even when they wanted to. From this perspective, state-failure in West Africa may be rooted in a political and economic history that is unique to Africa in many respects, a history that dates at least as far back as the era of the transatlantic slave trade.

URL: EconPapers: Africa

Review by Stephanie Decker

Last Sunday 12 Years a Slave (2013) won best picture at the Oscars ceremony. A timely reminder that slavery remains a subject of contemporary relevance. But researchers have also been concerned with the long-term impact of slavery on the modern world, with some, like Bill Cooke (2003), arguing that ante-bellum plantation slavery was one of the earliest instances of modern management. If you are wondering why people draw this parallel, have a look at this infographic: 

Spot the difference: slave owners and modern managers. Source:

The careful management of slavery and the slave trade meant that slavery produced a large number of records, and in particular, statistically relevant material. But these figures are often sketchy and frequently problematic to assess Africa’s economic development. This remains a problem even for twentieth century quantitative sources as Morten Jerven has shown in his recent book Poor Numbers (2013).

Notwithstanding the inherent difficulties of using statistics for African history, Warren Whatley’s working paper (distributed in a special issue of Nep-His on 2013-11-07) contributes to a growing literature in economic history which seeks to show the effects of an historical event (loosely defined) on the institutional development of a region. The main assumption underlying this research is “path dependence”, and that these “initial conditions” determine subsequent institutional weaknesses which in turn affect economic development. Inspired by the influential work of Acemoglu, Johnson & Robinson (AJR) on the colonial origins of institutions (2001) and the reversal of fortunes (2002), a new line of research was developed by Nathan Nunn (2008, 2009) on the impact of the slave trade on the long-term determinants of economic development. Warren Whatley’s paper takes a slightly different approach to the literature, but this paper develops a similar argument.

Overall, when Africa’s poor long-run economic performance is attributed to its institutional weaknesses, there are, broadly speaking , three major explanations. AJR (2001) famously argued that the imposition of colonialism, which was a form of conquest and thus an illegitimate form of rule, created extractive institutions in non-settler colonies. However, Gareth Austin (2008) has also pointed out that it is not that easy to label all non-settler colony institutional frameworks as purely extractive, e.g. in West African peasant agriculture. An alternative explanation is of course that it was not so much colonial institutions that were extractive, but the trans-Atlantic slave trade. It is hard to argue with the essentially extractive nature of enslavement, but the question is whether it had a long-term effect.

Statistics on African development are often flawed even for twentieth century historical data

The third explanation is labour scarcity (Hopkins, 1973; Austin, 2008), which Whatley seems to find compelling, but links to the slave trade as an economic shock in a way that is hard to follow. Confusingly, he suggests that the slave trade would provide evidence for the labour scarcity hypothesis, but evades the question of whether the slave trade created labour scarcity (which he appears to be saying on p. 4) or whether it exacerbated it to the point of being a major economic shock (more likely in my view). As he also evades the question of why a territory chooses to export a crucial resource that is already scarce, Because if labour was already scarce but was exported nevertheless, one could argue that political institutions were already dysfunctional before the trans-Atlantic slave trade. Not only does the working paper claim to show that slave exports are a better explanation of cross-sectional variation than environmentally induced labour scarcity (p. 4), but that is also shows that the slave trade caused the spread  of absolutism (i.e. authoritarian political systems, p. 6). It is questionable whether cross-sectional data can be used as evidence of a process that took place over a period of time (more than a century, in this case).  This snap-shot of one point in time also does not appear suitable to prove causality, only correlations (p. 12). It is equally plausible that predatory states facilitated the slave trade, an argument that is easily supported by the geographic distribution of specific slave ports.

But causality becomes a really thorny issue with claims such as: “British colonies that exported more slaves were ruled more indirectly by colonial administrations (p. 6).” While in itself a nonsensical statement (slave trade and indirect rule in formal British colonies did not co-exist in time), it is based on the argument that slavery-induced institutions persisted throughout the colonial era and beyond. Nowhere in the paper is this demonstrated convincingly, and the evidence and analysis in figure 2 that supposedly support this claim are deeply anachronistic.

Figure 2 tries to show that the impact of the slave trade continued its influence throughout the colonial period, by linking slave exports to indirect rule (with post-colonial states as the unit of analysis – why not use colonial states?). The slave trade peaked in the eighteenth century, while indirect rule was only developed in the late nineteenth century and continued into the first half of the twentieth century. Post-colonial states (the unit of analysis) were created in the latter part of the twentieth century, and were often criticised for their total lack of connection to pre-colonial polities. These phenomena were not co-existing, and unless one assumes that an institutional framework that had its inception during the slave trade carried through colonialism into independent states, it really makes no sense connecting two sets of data separated by a century via a unit of analysis that did not even exist until much later still.  The argument of the paper is to prove that the slave trade had a long run historical legacy because of institutional inertia and path dependence, but figure 2 does not prove this, and instead just assumes this to be true without considering alternative explanations.

Labour scarcity due to environmental constraints is a far more straightforward explanation, and pretty much spans the entire time period under consideration. It is quite simply the most parsimonious argument, as it does not require any postulated mechanism that carries the institutional shock of the slave trade through colonialism into the post-colonial period. That seems to take the cause-effect relation seriously, whereas this “causal history” simply presents logical tautologies by equating institutions with historical legacies (p. 6), thus making the mechanism (institutions) the same as the effect (long-run historical legacies). And suddenly causation in history seems no longer that complicated.

In summary, I have two major issues with this research: firstly how “causal” history understands institutions (making it both the explanation and what is to be explained), and secondly how the evolution of institutions (diachronic) is supposedly tested by cross-sectional data (synchronic). Causal history in fact dispenses with history and substitutes it with path dependence. But this kind of institutional history has very little to say about why and how institutions change. This is an area in which history could make a real contribution, but not if institutions are reduced to static phenomena. Claims such as that “the political structure of many post-colonial nation-states in Africa is rooted in a political history that […] stretched […] back [to] the era of the transatlantic slave trade” are obviously appealing but remain difficult to prove.


Acemoglu, D., Johnson, S. & Robinson, J.A. (2001). “The Colonial Origins of Comparative Development: An Empirical Investigation.” The American Economic Review 91(5): 1369-1401.

Acemoglu, D., Johnson, S. & Robinson, J.A. (2002). “Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution.” The Quarterly Journal of Economics 117(4): 1231-1294.

Austin, G. (2008). “The ‘reversal of fortune’ thesis and the compression of history: Perspectives from African and comparative economic history.” Journal of International Development 20: 996–1027.

Cooke, B. (2003). “The Denial of Slavery in Management Studies.” Journal of Management Studies 40(8): 1895-1918.

Hopkins, A.G. (1973). An Economic History of West Africa, London: Longman.

Jerven, M. (2013). Poor Numbers: How We Are Misled by African Development Statistics and What to Do about It, Cornell Studies in Political Economy, Ithaca, N.Y.: Cornell University Press.

Nunn, N. (2008). “The Long-Term Effects of the African Slave Trades.” The Quarterly Journal of Economics 123(1): 139-176.

Nunn, N., Wantchekon L. (forthcoming). “The Slave Trade and the Origins of Mistrust in Africa.” The American Economic Review.


Brit Steve McQueen becomes first black director to win Best Picture for “12 Years a Slave”. Source: The Independent (2014-3-3